MOELIS & CO, 10-Q filed on 11/3/2023
Quarterly Report
v3.23.3
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2023
Oct. 19, 2023
Entity Registrant Name Moelis & Co  
Entity Central Index Key 0001596967  
Document Type 10-Q  
Document Period End Date Sep. 30, 2023  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Interactive Data Current Yes  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Trading Symbol MC  
Entity File Number 001-36418  
Entity Tax Identification Number 46-4500216  
Entity Address, Address Line One 399 Park Avenue  
Entity Address, Address Line Two 4th Floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10022  
City Area Code 212  
Local Phone Number 883-3800  
Title of 12(b) Security Class A Common Stock  
Security Exchange Name NYSE  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
Class A Common Stock    
Entity Common Stock, Shares Outstanding   66,664,740
Class B Common Stock    
Entity Common Stock, Shares Outstanding   4,489,778
v3.23.3
Condensed Consolidated Statements of Financial Condition - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Assets    
Cash and cash equivalents $ 147,452 $ 206,794
Restricted cash 766 745
Receivables:    
Accounts receivable, net of allowance for credit losses of $1,554 and $1,729 as of September 30, 2023 and December 31, 2022, respectively 25,512 47,825
Accrued and other receivables 21,032 8,514
Total receivables 46,544 56,339
Deferred compensation 22,219 15,100
Investments 197,655 265,245
Right-of-use assets 175,041 152,341
Equipment and leasehold improvements, net 62,544 57,152
Deferred tax assets 436,057 429,649
Prepaid expenses and other assets 32,195 33,504
Total assets 1,120,473 1,216,869
Liabilities and Equity    
Compensation payable 186,659 243,176
Accounts payable, accrued expenses and other liabilities 27,890 11,929
Amount due pursuant to tax receivable agreement 304,780 302,356
Deferred revenue 4,191 7,708
Lease liabilities 216,862 192,762
Total liabilities 740,382 757,931
Commitments and Contingencies (See Note 11)
Treasury stock, at cost; 10,154,907 and 9,076,77 shares at September 30, 2023 and December 31, 2022, respectively (449,376) (403,857)
Additional paid-in-capital 1,537,157 1,412,795
Retained earnings (accumulated deficit) (716,747) (560,690)
Accumulated other comprehensive income (loss) (4,761) (4,529)
Total Moelis & Company equity 367,086 444,495
Noncontrolling interests 13,005 14,443
Total equity 380,091 458,938
Total liabilities and equity 1,120,473 1,216,869
Class A Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 768 730
Class B Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share $ 45 $ 46
v3.23.3
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Accounts receivable, allowance for credit losses $ 1,554 $ 1,729
Treasury stock, shares 10,154,907 9,076,777
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 76,819,647 73,063,181
Common stock, shares outstanding 66,664,740 63,986,404
Treasury stock, shares 10,154,907 9,076,777
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 4,489,778 4,635,898
Common stock, shares outstanding 4,489,778 4,635,898
v3.23.3
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenues $ 272,179 $ 233,506 $ 639,870 $ 778,114
Expenses        
Compensation and benefits 242,231 160,437 536,264 477,166
Occupancy 7,181 6,022 19,887 18,099
Professional fees 13,525 6,048 25,378 15,933
Communication, technology and information services 11,709 9,971 33,758 28,858
Travel and related expenses 8,394 7,389 28,575 24,398
Depreciation and amortization 2,014 1,918 6,023 5,798
Other expenses 7,151 6,672 20,988 21,187
Total expenses 292,205 198,457 670,873 591,439
Operating income (loss) (20,026) 35,049 (31,003) 186,675
Other income and (expenses) 9,943 2,625 6,060 (2,656)
Income (loss) before income taxes (10,083) 37,674 (24,943) 184,019
Provision (benefit) for income taxes 1,286 9,115 (3,891) 38,009
Net income (loss) (11,369) 28,559 (21,052) 146,010
Net income (loss) attributable to noncontrolling interests (637) 2,947 (2,012) 15,720
Net income (loss) attributable to Moelis & Company (10,732) 25,612 (19,040) 130,290
Class A Common Stock        
Expenses        
Net income (loss) attributable to Moelis & Company $ (10,732) $ 25,612 $ (19,040) $ 130,290
Weighted-average shares of Class A common stock outstanding        
Basic (in shares) 68,752,061 65,873,976 68,260,558 65,684,485
Diluted (in shares) 68,752,061 69,829,338 68,260,558 70,183,414
Net income (loss) per share attributable to holders of shares of Class A common stock        
Basic (in dollars per share) $ (0.16) $ 0.39 $ (0.28) $ 1.98
Diluted (in dollars per share) $ (0.16) $ 0.37 $ (0.28) $ 1.86
v3.23.3
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ (11,369) $ 28,559 $ (21,052) $ 146,010
Foreign currency translation adjustment, net of tax (838) (4,580) (249) (9,949)
Other comprehensive income (loss) (838) (4,580) (249) (9,949)
Comprehensive income (loss) (12,207) 23,979 (21,301) 136,061
Less: Comprehensive income (loss) attributable to noncontrolling interests (702) 2,567 (2,029) 14,881
Comprehensive income (loss) attributable to Moelis & Company $ (11,505) $ 21,412 $ (19,272) $ 121,180
v3.23.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flows from operating activities    
Net income (loss) $ (21,052) $ 146,010
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Bad debt expense (benefit) 720 2,717
Depreciation and amortization 6,023 5,798
Equity-based compensation 125,194 96,767
Deferred tax provision (3,652) 29,009
Other (10,967) 4,915
Changes in assets and liabilities:    
Accounts receivable 21,753 (20,891)
Accrued and other receivables (12,563) 22,836
Prepaid expenses and other assets 1,355 (23,369)
Deferred compensation (7,115) (7,031)
Compensation payable (57,405) (299,083)
Accounts payable, accrued expenses and other liabilities 17,308 (49,062)
Deferred revenue (3,556) (960)
Dividends received 3,092 2,936
Net cash provided by (used in) operating activities 59,135 (89,408)
Cash flows from investing activities    
Purchases of investments (149,173) (286,870)
Proceeds from sales of investments 224,591 295,045
Purchases of equipment and leasehold improvements (11,414) (3,928)
Net cash provided by (used in) investing activities 64,004 4,247
Cash flows from financing activities    
Payments for dividends and tax distributions (137,481) (129,779)
Payments for treasury stock purchases (45,519) (146,290)
Payments under tax receivable agreement   (248)
Other proceeds (15) 1,900
Net cash provided by (used in) financing activities (183,015) (274,417)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash 555 (12,490)
Net increase (decrease) in cash, cash equivalents, and restricted cash (59,321) (372,068)
Cash, cash equivalents, and restricted cash, beginning of period 207,539 521,014
Cash, cash equivalents, and restricted cash, end of period 148,218 148,946
Cash paid during the period for:    
Income taxes, net 2,317 74,696
Other non-cash activity    
Class A Partnership Units or other equity converted into Class A Common Stock 308 7,795
Dividends in kind 16,684 15,304
Forfeiture of fully-vested Class A Partnership Units or other equity units 82  
Corporate Joint Venture    
Changes in assets and liabilities:    
Dividends received $ 3,092 $ 2,936
v3.23.3
Condensed Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Common Stock
Class A Common Stock
Common Stock
Class B Common Stock
Treasury Stock
Additional Paid-In Capital
Retained Earnings (Accumulated Deficit)
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interests
Balance at beginning of the period at Dec. 31, 2021 $ 478,299 $ 685 $ 47 $ (256,320) $ 1,280,498 $ (535,282) $ (560) $ (10,769)
Balance at beginning of the period (in shares) at Dec. 31, 2021   68,518,779 4,686,344 (5,873,180)        
Changes in Equity                
Net income (loss) 73,594         65,715   7,879
Equity-based compensation 37,067 $ 33     20,949     16,085
Equity-based compensation (in shares)   3,305,692            
Other comprehensive income (loss) (764)           (687) (77)
Dividends declared and tax distributions (45,647)       5,572 (44,935)   (6,284)
Treasury Stock Purchases (97,929)     $ (97,929)        
Treasury Stock Purchases (in shares)       (2,021,455)        
Class A Partnership Units or other equity converted into Class A Common Stock 150       (774)     924
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)   446 (446)          
Equity-based payments to non-employees 45       45      
Other 100             100
Balance at end of the period at Mar. 31, 2022 444,915 $ 718 $ 47 $ (354,249) 1,306,290 (514,502) (1,247) 7,858
Balance at end of the period (in shares) at Mar. 31, 2022   71,824,917 4,685,898 (7,894,635)        
Balance at beginning of the period at Dec. 31, 2021 478,299 $ 685 $ 47 $ (256,320) 1,280,498 (535,282) (560) (10,769)
Balance at beginning of the period (in shares) at Dec. 31, 2021   68,518,779 4,686,344 (5,873,180)        
Changes in Equity                
Net income (loss) 146,010              
Treasury Stock Purchases $ (146,290)              
Treasury Stock Purchases (in shares) (3,174,093)              
Balance at end of the period at Sep. 30, 2022 $ 444,902 $ 730 $ 46 $ (402,610) 1,378,700 (536,852) (9,670) 14,558
Balance at end of the period (in shares) at Sep. 30, 2022   73,010,881 4,635,898 (9,047,273)        
Balance at beginning of the period at Mar. 31, 2022 444,915 $ 718 $ 47 $ (354,249) 1,306,290 (514,502) (1,247) 7,858
Balance at beginning of the period (in shares) at Mar. 31, 2022   71,824,917 4,685,898 (7,894,635)        
Changes in Equity                
Net income (loss) 43,857         38,963   4,894
Equity-based compensation 30,856       27,620     3,236
Equity-based compensation (in shares)   27,949            
Other comprehensive income (loss) (4,605)           (4,223) (382)
Dividends declared and tax distributions (42,490)       5,331 (44,073)   (3,748)
Treasury Stock Purchases (34,902)     $ (34,902)        
Treasury Stock Purchases (in shares)       (821,966)        
Class A Partnership Units or other equity converted into Class A Common Stock 7,495 $ 11     9,211     (1,727)
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)   1,005,267            
Equity-based payments to non-employees 15       15      
Balance at end of the period at Jun. 30, 2022 445,141 $ 729 $ 47 $ (389,151) 1,348,467 (519,612) (5,470) 10,131
Balance at end of the period (in shares) at Jun. 30, 2022   72,858,133 4,685,898 (8,716,601)        
Changes in Equity                
Net income (loss) 28,559         25,612   2,947
Equity-based compensation 28,844       25,572     3,272
Equity-based compensation (in shares)   102,721            
Other comprehensive income (loss) (4,580)           (4,200) (380)
Dividends declared and tax distributions (41,642)       4,401 (42,852)   (3,191)
Treasury Stock Purchases (13,459)     $ (13,459)        
Treasury Stock Purchases (in shares)       (330,672)        
Class A Partnership Units or other equity converted into Class A Common Stock 150 $ 1 $ (1)   171     (21)
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)   50,027 (50,000)          
Equity-based payments to non-employees 89       89      
Other 1,800             1,800
Balance at end of the period at Sep. 30, 2022 444,902 $ 730 $ 46 $ (402,610) 1,378,700 (536,852) (9,670) 14,558
Balance at end of the period (in shares) at Sep. 30, 2022   73,010,881 4,635,898 (9,047,273)        
Balance at beginning of the period at Dec. 31, 2022 458,938 $ 730 $ 46 $ (403,857) 1,412,795 (560,690) (4,529) 14,443
Balance at beginning of the period (in shares) at Dec. 31, 2022   73,063,181 4,635,898 (9,076,777)        
Changes in Equity                
Net income (loss) 3,563         3,666   (103)
Equity-based compensation 59,638 $ 34     48,656     10,948
Equity-based compensation (in shares)   3,396,802            
Other comprehensive income (loss) 284           256 28
Dividends declared and tax distributions (46,031)       5,711 (46,097)   (5,645)
Treasury Stock Purchases (44,526)     $ (44,526)        
Treasury Stock Purchases (in shares)       (1,057,278)        
Class A Partnership Units or other equity converted into Class A Common Stock 226 $ 3 $ (1)   (1,101)     1,325
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)   240,027 (146,120)          
Equity-based payments to non-employees 18       18      
Balance at end of the period at Mar. 31, 2023 432,110 $ 767 $ 45 $ (448,383) 1,466,079 (603,121) (4,273) 20,996
Balance at end of the period (in shares) at Mar. 31, 2023   76,700,010 4,489,778 (10,134,055)        
Balance at beginning of the period at Dec. 31, 2022 458,938 $ 730 $ 46 $ (403,857) 1,412,795 (560,690) (4,529) 14,443
Balance at beginning of the period (in shares) at Dec. 31, 2022   73,063,181 4,635,898 (9,076,777)        
Changes in Equity                
Net income (loss) (21,052)              
Treasury Stock Purchases $ (45,519)              
Treasury Stock Purchases (in shares) (1,078,130)              
Balance at end of the period at Sep. 30, 2023 $ 380,091 $ 768 $ 45 $ (449,376) 1,537,157 (716,747) (4,761) 13,005
Balance at end of the period (in shares) at Sep. 30, 2023   76,819,647 4,489,778 (10,154,907)        
Balance at beginning of the period at Mar. 31, 2023 432,110 $ 767 $ 45 $ (448,383) 1,466,079 (603,121) (4,273) 20,996
Balance at beginning of the period (in shares) at Mar. 31, 2023   76,700,010 4,489,778 (10,134,055)        
Changes in Equity                
Net income (loss) (13,246)         (11,974)   (1,272)
Equity-based compensation 33,581       30,817     2,764
Equity-based compensation (in shares)   13,662            
Other comprehensive income (loss) 305           285 20
Dividends declared and tax distributions (46,922)       5,488 (45,434)   (6,976)
Treasury Stock Purchases (230)     $ (230)        
Treasury Stock Purchases (in shares)       (6,132)        
Class A Partnership Units or other equity converted into Class A Common Stock 76       71     5
Equity-based payments to non-employees 15       15      
Balance at end of the period at Jun. 30, 2023 405,689 $ 767 $ 45 $ (448,613) 1,502,470 (660,529) (3,988) 15,537
Balance at end of the period (in shares) at Jun. 30, 2023   76,713,672 4,489,778 (10,140,187)        
Changes in Equity                
Net income (loss) (11,369)         (10,732)   (637)
Equity-based compensation 31,975 $ 1     29,179     2,795
Equity-based compensation (in shares)   105,975            
Other comprehensive income (loss) (838)           (773) (65)
Dividends declared and tax distributions (44,528)       5,485 (45,486)   (4,527)
Treasury Stock Purchases (763)     $ (763)        
Treasury Stock Purchases (in shares)       (14,720)        
Class A Partnership Units or other equity converted into Class A Common Stock 6       7     (1)
Equity-based payments to non-employees 16       16      
Other (97)             (97)
Balance at end of the period at Sep. 30, 2023 $ 380,091 $ 768 $ 45 $ (449,376) $ 1,537,157 $ (716,747) $ (4,761) $ 13,005
Balance at end of the period (in shares) at Sep. 30, 2023   76,819,647 4,489,778 (10,154,907)        
v3.23.3
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Class A Common Stock            
Dividends declared per share of Class A common stock $ 0.60 $ 0.60 $ 0.60 $ 0.60 $ 0.60 $ 0.60
v3.23.3
Organization and Basis of Presentation
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation
1.
ORGANIZATION AND BASIS OF PRESENTATION

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

•
An equity method investment in MA Financial Group Limited ("MA Financial", previously known as Moelis Australia Limited), a public company listed on the Australian Securities Exchange.
v3.23.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting — The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's condensed consolidated financial statements. As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

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

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

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

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

 

•
the measurement and realization of deferred taxes;

 

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

 

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

 

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

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

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of September 30, 2023 and 2022, is presented below.

 

 

September 30,

 

 

2023

 

2022

Cash

 

$

22,974

 

$

72,385

Cash equivalents

 

 

124,478

 

 

75,861

Restricted cash

 

 

766

 

 

700

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

 

$

148,218

 

$

148,946

 

Additionally, as of December 31, 2022, the Company held cash of $109,646 and cash equivalents of $97,148.

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

Included in the accounts receivable balances at September 30, 2023 and December 31, 2022 were $4,764 and $9,462, respectively, of long-term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. Long-term receivables generated interest income of $45 and $96 for the three months ended September 30, 2023 and 2022, respectively, and $168 and $525 for the nine months ended September 30, 2023 and 2022, respectively.

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

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

The following tables summarize credit loss allowance activity for the three and nine months ended September 30, 2023 and 2022:

 

 

Three Months Ended September 30, 2023

 

Three Months Ended September 30, 2022

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,201

 

$

567

 

$

1,768

 

$

2,488

 

$

131

 

$

2,619

Charge-offs, foreign currency translation and other adjustments

 

(113)

 

 

(779)

 

 

(892)

 

 

(1,140)

 

 

—

 

 

(1,140)

Recoveries

 

(619)

 

 

(18)

 

 

(637)

 

 

(1,098)

 

 

(10)

 

 

(1,108)

Provision for credit losses

 

539

 

 

776

 

 

1,315

 

 

3,242

 

 

493

 

 

3,735

Allowance for credit losses, ending balance

$

1,008

 

$

546

 

$

1,554

 

$

3,492

 

$

614

 

$

4,106

 

 

 

Nine Months Ended September 30, 2023

 

Nine Months Ended September 30, 2022

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,136

 

$

593

 

$

1,729

 

$

2,621

 

$

202

 

$

2,823

Charge-offs, foreign currency translation and other adjustments

 

(116)

 

 

(779)

 

 

(895)

 

 

(1,366)

 

 

(68)

 

 

(1,434)

Recoveries

 

(1,941)

 

 

(48)

 

 

(1,989)

 

 

(2,670)

 

 

(99)

 

 

(2,769)

Provision for credit losses

 

1,929

 

 

780

 

 

2,709

 

 

4,907

 

 

579

 

 

5,486

Allowance for credit losses, ending balance

$

1,008

 

$

546

 

$

1,554

 

$

3,492

 

$

614

 

$

4,106

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

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

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

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Assets that are in development and have not yet been placed in service are generally classified as “Construction in Progress” and are reclassified to the appropriate category when the associated assets are placed in service. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.

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

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

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

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

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

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

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

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

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

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

We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require

a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments.

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

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

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

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three and nine months ended September 30, 2023 and 2022, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three and nine months ended September 30, 2023 and 2022, no such amounts were recorded.

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

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
v3.23.3
Recent Accounting Pronouncements
 9 Months Ended
Sep. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Recent Accounting Pronouncements
3.
RECENT ACCOUNTING PRONOUNCEMENTS

 

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. The Company has evaluated ASU 2022-03 and does not expect its adoption to have a material impact to the Company's condensed consolidated financial statements.

In October 2023, the FASB issued ASU No. 2023-06, "Disclosure Improvements" ("ASU 2023-06"). ASU 2023-06 will amend a variety of disclosure requirements as a result of the SEC's disclosure updates and simplification initiatives. Since ASU 2023-06 addresses a variety of topics, each amendment of ASU 2023-06 becomes effective on the date the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company has evaluated ASU 2023-06 and does not expect its adoption to have a material impact to the Company's condensed consolidated financial statements.
v3.23.3
Fixed and Intangible Assets
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
Fixed and Intangible Assets
4.
FIXED AND INTANGIBLE ASSETS

 

Equipment and leasehold improvements, net consists of the following:

 

 

 

September 30,

 

December 31,

 

 

2023

 

2022

Office equipment

 

$

18,217

 

$

16,157

Furniture and fixtures

 

 

14,452

 

 

14,386

Leasehold improvements

 

 

62,365

 

 

61,293

Construction in progress

 

 

9,614

 

 

1,438

Total

 

 

104,648

 

 

93,274

Less: Accumulated depreciation and amortization

 

 

(42,104)

 

 

(36,122)

Equipment and leasehold improvements, net

 

$

62,544

 

$

57,152

 

Depreciation and amortization expenses for fixed assets totaled $2,014 and $1,918 for the three months ended September 30, 2023 and 2022, respectively, and $6,023 and $5,798 for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, there were $1,273 and $1,639 of costs capitalized, net of $1,598 and $1,232 of accumulated amortization, respectively, within prepaid expenses and other assets on our condensed consolidated statements of financial condition related to the implementation of cloud computing arrangements. The amortization expense of the capitalized costs was $122 for each of the three months ended September 30, 2023 and 2022, respectively, and $366 for each of the nine months ended September 30, 2023 and 2022, respectively. The amortization expense was recorded within communication, technology and information services on the condensed consolidated statements of operations.
v3.23.3
Investments
 9 Months Ended
Sep. 30, 2023
Investments, All Other Investments [Abstract]  
Investments
5.
INVESTMENTS

Investments Measured at Fair Value

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

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

Fair Value of Financial Assets

The fair value of the Company's financial assets as of September 30, 2023, have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

60,040

 

$

—

 

$

60,040

 

$

—

Money market funds

 

53,834

 

 

—

 

 

53,834

 

 

—

Certificates of Deposit

 

10,604

 

 

—

 

 

10,604

 

 

—

Total financial assets included in cash and cash equivalents

 

124,478

 

 

—

 

 

124,478

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

150,309

 

 

—

 

 

150,309

 

 

—

Total financial assets included in investments

 

150,309

 

 

—

 

 

150,309

 

 

—

Total financial assets

$

274,787

 

$

—

 

$

274,787

 

$

—

During the nine months ended September 30, 2023, the Company liquidated its equity investments measured at fair value. Therefore, there were no unrealized gains or losses on equity securities held at the reporting date for the three and nine months ended September 30, 2023. Unrealized losses of $1,055 and $9,991 were recognized on equity investments measured at fair value and held at the reporting date for the three and nine months ended September 30, 2022. For sovereign debt securities measured at fair value and held at the reporting date, unrealized gains of $1,108 and $132 were recognized for the three months ended September 30, 2023 and 2022, respectively, and, for the nine months ended September 30, 2023 and 2022, unrealized gains of $1,136 and unrealized losses of $234 were recognized, respectively. All gains and losses were recognized in other income and expenses on the condensed consolidated statement of operations. The cost basis of the investments recorded at fair value shown in the preceding table and included in investments on the condensed consolidated statement of financial condition was $149,173 as of September 30, 2023.

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:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

55,938

 

$

—

 

$

55,938

 

$

—

Money market funds

 

41,210

 

 

—

 

 

41,210

 

 

—

Total financial assets included in cash and cash equivalents

 

97,148

 

 

—

 

 

97,148

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

205,779

 

 

—

 

 

205,779

 

 

—

Common stock

 

12,149

 

 

12,149

 

 

—

 

 

—

Warrants

 

153

 

 

153

 

 

—

 

 

—

Total financial assets included in investments

 

218,081

 

 

12,302

 

 

205,779

 

 

—

Total financial assets

$

315,229

 

$

12,302

 

$

302,927

 

$

—

The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $234,546 as of December 31, 2022.

Investments Held at Cost

In 2020 and 2021, the Company made investments in the sponsors (collectively referred to herein as "Atlas Crest Sponsors") of several Atlas Crest Investment Corp. entities (each an "Atlas Crest Entity" and collectively referred to as "Atlas Crest Entities"), each a special purpose acquisition company ("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 were measured at cost less impairment and were included in investments on the condensed consolidated statements of financial condition. During 2022, the remaining Atlas Crest Entities were wound up and the remainder of the Company's investments were liquidated.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s condensed consolidated statements of financial condition. As of September 30, 2023 and December 31, 2022, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $47,346 and $47,164, respectively. The Company's share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operation.

During the nine months ended September 30, 2023 and 2022, MA Financial declared dividends, of which the Company received $3,092 and $2,936, respectively. The Company accounted for the dividends as returns on investment and reduced the carrying value of the investment in MA Financial by the amount of dividends received.

From time to time, MA Financial may issue shares in connection with a transaction or employee compensation which reduces the Company's ownership interest in MA Financial and can result in dilution gains or losses. Such gains or losses are recorded in other income and expenses on the condensed consolidated statements of operation.
v3.23.3
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
6.
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three and nine months ended September 30, 2023 and 2022 are presented below.

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

(dollars in thousands, except per share amounts)

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$

(10,732)

 

 

$

25,612

 

 

$

(19,040)

 

 

$

130,290

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

 

 

$

(10,732)

 

 

$

25,612

 

 

$

(19,040)

 

 

$

130,290

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

 

68,752,061

 

 

 

65,873,976

 

 

 

68,260,558

 

 

 

65,684,485

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

 

(b)(c)

 

—

 

(b)

 

3,955,362

 

(b)(c)

 

—

 

(b)

 

4,498,929

Weighted average shares of Class A common stock outstanding—diluted

 

 

 

68,752,061

 

 

 

69,829,338

 

 

 

68,260,558

 

 

 

70,183,414

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

(0.16)

 

 

$

0.39

 

 

$

(0.28)

 

 

$

1.98

Diluted

 

 

$

(0.16)

 

 

$

0.37

 

 

$

(0.28)

 

 

$

1.86

 

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 75,038,275 and 75,704,676 shares for the three months ended September 30, 2023 and 2022, respectively, and 74,483,243 and 76,276,345 shares for the nine months ended September 30, 2023 and 2022. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units

(including any tax impact). For the three and nine months ended September 30, 2023 and 2022, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

(b) Certain RSUs assumed to be issued as Class A common stock pursuant to the treasury stock method were antidilutive and therefore excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended September 30, 2023 and 2022, there were 0 and 135,534 RSUs that would have been included in the treasury stock method calculation if the effect were dilutive, respectively, and 11,615 and 4,625 RSUs for the nine months ended September 30, 2023 and 2022, respectively.

 

(c) The Company incurred a loss for the three and nine months ended September 30, 2023, and as a result the assumed issuance of any Class A common stock pursuant to the treasury stock method is antidilutive. There were 4,237,243 and 4,075,817 shares pursuant to the treasury stock method related to unvested RSUs that were excluded from diluted share count for the three and nine months ended September 30, 2023, respectively. If such shares were included, diluted Class A common stock outstanding would be 72,989,304 and 72,336,375 shares for the three and nine months ended September 30, 2023, respectively.
v3.23.3
Equity-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Equity-Based Compensation
7.
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 three months ended September 30, 2023 and 2022, the Company recognized expenses of $31,975 and $28,844, respectively, and $125,194 and $96,767 for the nine months ended September 30, 2023 and 2022, respectively.

The following table summarizes activity related to RSUs for the nine months ended September 30, 2023 and 2022.

 

Restricted Stock Units

 

2023

 

2022

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Average

 

 

 

Average

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

8,099,629

 

$

47.49

 

8,068,120

 

$

46.36

Granted

3,844,430

 

 

44.38

 

3,086,353

 

 

49.66

Forfeited

(317,022)

 

 

45.78

 

(258,621)

 

 

48.74

Vested

(3,736,851)

 

 

45.63

 

(2,995,349)

 

 

46.11

Unvested Balance at September 30,

7,890,186

 

$

46.83

 

7,900,503

 

$

47.72

 

The Company also issues partnership units that are intended to qualify as "profits interest" for U.S. federal income tax purposes ("Partnership Units") that, subject to certain terms and conditions, are exchangeable into shares of Moelis & Company Class A common stock on a one-for-one basis. These Partnership Units are recorded as noncontrolling interests in the Company's condensed consolidated statements of financial condition. Partnership Units generally vest over a service life of two to five years, however in certain arrangements the Partnership Units are granted without a service requirement, but do not have exchange rights until the second through fifth anniversaries of the grant-date. The expense for Partnership Units is recognized over the service period and reflects the fair value determined at grant-date, which may factor in other attributes, such as post-vesting restrictions. For the nine months ended September 30, 2023 and 2022, the Company granted 482,941 and 809,899 Partnership Units with grant-date fair values of $20,037 and $38,413, respectively.

 

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

 

As of September 30, 2023, the total compensation expense related to unvested RSUs and other stock-based awards not yet recognized was $174,873, which is expected to be recognized over a weighted-average period of 1.7 years.
v3.23.3
Stockholders Equity
 9 Months Ended
Sep. 30, 2023
Stockholders' Equity Note [Abstract]  
Stockholders Equity
8.
STOCKHOLDERS EQUITY

Class A Common Stock

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

As of September 30, 2023, there were 76,819,647 shares of Class A common stock issued, 10,154,907 shares of treasury stock, and 66,664,740 shares outstanding. 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.

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

 

Class B Common Stock

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

 

As of September 30, 2023, and December 31, 2022, 4,489,778 and 4,635,898 shares of Class B common stock were issued and outstanding, respectively, due primarily to the IPO and offering transactions, and Class B conversions described above.

Treasury Stock

During the nine months ended September 30, 2023 and 2022, the Company repurchased 1,078,130 and 3,174,093 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 $45,519 and $146,290, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of September 30, 2023 and 2022.

Share Repurchase Plan

In July 2021, the Board of Directors authorized the repurchase of up to $100,000 of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. The dollar value of shares that may yet be purchased under the program was $62,529 as of September 30, 2023.

Noncontrolling Interests

A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests (non-redeemable). As of September 30, 2023 and December 31, 2022, partners held 6,286,260 and 5,888,027 Group LP partnership units, respectively, representing a 9% and 8% 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 66,664,740 shares of Class A common stock outstanding as of September 30, 2023 (63,986,404 as of December 31, 2022), represents the controlling interest.
v3.23.3
Related-Party Transactions
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
Related-Party Transactions
9.
RELATED‑PARTY TRANSACTIONS

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

During the three months ended September 30, 2023 and 2022, the Company incurred $323 and $324, respectively, in aircraft lease costs to be paid to Manager, and $970 and $972 for the nine months ended September 30, 2023 and 2022, respectively.

Promissory Notes — As of September 30, 2023, there were $3,119 of unsecured promissory notes from employees held by the Company (December 31, 2022: $3,119). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes bear a fixed interest rate of 4.00%. During the nine months ended September 30, 2023 and 2022, the Company received no principal repayments and recognized interest income of $93 and $7, respectively, on such notes, which is included in other income and expenses on the condensed consolidated statements of operations. During the nine months ended September 30, 2022, the Company recognized $100 of compensation and benefits expense related to a tranche 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 $57 and $56 for the three months ended September 30, 2023 and 2022, respectively, and $168 and $166 for the nine months ended September 30, 2023 and 2022, respectively. The amount of the fee is based upon the estimated usage and related expense of all shared services between the Company and Moelis Asset Management LP during the relevant period, and will be assessed periodically by management as per the terms of the agreement. As of September 30, 2023 and December 31, 2022, the Company had no balances due to or from Moelis Asset Management LP.

Affiliated SPACs and SPAC Sponsors — As needed, the Company provided office space, secretarial, administrative, and other corporate services to Atlas Crest Entities. These services were provided to the Atlas Crest Entities upon consummation of their IPOs, in each case for a fee of $10 per month. These types of arrangements generally persisted with each Atlas Crest Entity until such Atlas Crest Entity consummated a business combination or was 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. For the three months ended September 30, 2023 and 2022, these fees totaled $0 and $30, respectively, and $0 and $90 for the nine months ended September 30, 2023 and 2022, respectively.

Revenues — From time to time, the Company enters into advisory transactions with affiliated entities, such as Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $0 and $4,644 for the three months ended September 30, 2023 and 2022, respectively, and $0 and $8,370 for the nine months ended September 30, 2023 and 2022, 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. For the nine months ended September 30, 2022, the Company earned revenues of $4,212 related to this transaction.
v3.23.3
Regulatory Requirements
 9 Months Ended
Sep. 30, 2023
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]  
Regulatory Requirements
10.
REGULATORY REQUIREMENTS

Under the SEC Uniform Net Capital Rule (SEC Rule 15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is $250. As of September 30, 2023, U.S. Broker Dealer had net capital of $134,056, which was $133,806 in excess of its required net capital. 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.

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.
v3.23.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
11.
COMMITMENTS AND CONTINGENCIES

Bank Lines of Credit — The Company maintains a $65,000 revolving credit facility which has a maturity date of June 28, 2024. Unless the lender issues a notice of termination at least 60 days prior to such maturity date, this facility will automatically extend to June 30, 2025. 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 September 30, 2023 and December 31, 2022, the Company had no borrowings under the credit facility.

As of September 30, 2023, the Company’s available credit under this facility was $64,194 as a result of the issuance of an aggregate amount of $806 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 with a credit period ending May 24, 2024 and a maturity date of May 24, 2025. 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 September 30, 2023.

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

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in thousands)

 

2023

 

2022

 

2023

 

2022

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

 $

6,473

 

 

 $

5,466

 

 

 $

18,212

 

 

 $

16,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash inflows/(outflows) for operating leases

 

 $

(4,520)

 

 

 $

(3,672)

 

 

 $

(16,934)

 

 

 $

(3,803)

 

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

 

 $

18,441

 

 

 $

822

 

 

 $

35,409

 

 

 $

2,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

12.09

years

 

 

12.97

 years

 

 

12.09

 years

 

 

12.97

 years

Weighted-average discount rate - operating leases

 

3.97

%

 

 

3.51

 %

 

 

3.97

%

 

 

3.51

%

During the three months ended September 30, 2023 and 2022, the Company received $1,573 and $2,314 of tenant improvement allowances, respectively, and $1,573 and $14,495 for the nine months ended September 30, 2023 and 2022, respectively. These cash receipts are included within net operating cash inflows/(outflows) for operating leases in the supplemental cash flow information above.

As of September 30, 2023, the future sublease income and maturities of our operating lease liabilities are as follows:

Fiscal year ended

 

Sublease Income

 

Operating Leases

Remainder of 2023

 

$

(204)

 

$

5,516

2024

 

 

(816)

 

 

25,248

2025

 

 

(408)

 

 

22,833

2026

 

 

—

 

 

21,614

2027

 

 

—

 

 

20,631

Thereafter

 

 

—

 

 

181,963

Total Payments

 

$

(1,428)

 

$

277,805

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

(1,346)

Less: Present value adjustment

 

 

(59,597)

Total

 

$

216,862

In April 2023, a lease commenced for office space that will replace the Company's existing space in Los Angeles. Upon commencement, $15,510 in right-of-use assets and operating lease liabilities were capitalized. In August 2023, a lease commenced to expand the Company's workspace at its headquarters at 399 Park Avenue in New York. Upon commencement, $17,259 in right-of-use assets and operating lease liabilities were capitalized.

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. 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.

We have reached an agreement on an Offer of Settlement ("The Settlement") with the Securities and Exchange Commission ("SEC") to resolve an administrative cease-and-desist proceeding regarding our practices relating to recordkeeping of business communications on messaging applications. The Settlement includes a civil penalty of $10,000, amongst other requirements. As a result, the Company recognized an expense of $10,000 for the nine months ended September 30, 2023, in other income and expenses in the condensed consolidated statements of operations.
v3.23.3
Employee Benefit Plans
 9 Months Ended
Sep. 30, 2023
Retirement Benefits [Abstract]  
Employee Benefit Plans
12.
EMPLOYEE BENEFIT PLANS

The Company covers substantially all U.S. salaried employees with a defined contribution 401(k) plan. Each salaried employee of the Company who has attained the age of 21 is eligible to participate in the 401(k) plan on their first day of employment. Any employer contributions to the 401(k) plan are entirely at the discretion of the Company. The Company accrued expenses relating to employer matching contributions to the 401(k) plan for the three months ended September 30, 2023 and 2022, in the amounts of $1,011 and $1,056, respectively, and $2,808 and $2,827 for the nine months ended September 30, 2023 and 2022, respectively.
v3.23.3
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
13.
INCOME TAXES

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

The Company’s provisions for income taxes were an expense of $1,286 and an expense of $9,115 for the three months ended September 30, 2023 and 2022, respectively. The Company's provisions for income tax were a benefit of $3,891 and an expense of $38,009 for the nine months ended September 30, 2023 and 2022. The income taxes for the aforementioned periods primarily reflects the Company’s allocable share of operating results from Group LP at the prevailing U.S. federal, state, and local corporate income tax rates and the effect of certain non-tax-deductible items, offset by the effect of the excess tax benefit recognized in connection with the delivery of equity-based compensation at an appreciated price above the grant date price for such equity. The excess tax benefits for the three months ended September 30, 2023 and 2022 were $1 and $417, respectively, and $3,360 and $9,063 for the nine months ended September 30, 2023 and 2022, respectively.

During the three months ended September 30, 2023, Group LP was selected for examination by the Internal Revenue Service for the tax year ended December 31, 2020. The Company’s tax years for 2022, 2021 and 2020 are generally subject to examination by the tax authorities. Tax examinations are monitored on an ongoing basis and adjustments to tax liabilities are made as appropriate.
v3.23.3
Revenues and Business Information
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Revenues and Business Information
14.
REVENUES AND BUSINESS INFORMATION

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

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

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

 

 

 

 

United States

$

234,471

 

$

192,020

 

$

536,134

 

$

629,344

Europe

 

19,153

 

 

18,209

 

 

61,309

 

 

99,496

Rest of World

 

18,555

 

 

23,277

 

 

42,427

 

 

49,274

Total

$

272,179

 

$

233,506

 

$

639,870

 

$

778,114

 

 

September 30,

 

December 31,

 

2023

 

2022

Assets:

 

 

 

 

 

United States

$

974,813

 

$

994,339

Europe

 

44,988

 

 

92,340

Rest of World

 

100,672

 

 

130,190

Total

$

1,120,473

 

$

1,216,869

 

As of September 30, 2023, and December 31, 2022, the Company had deferred revenues of $4,191 and $7,708, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the nine months ended September 30, 2023 and 2022, $7,378 and $4,471 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.
v3.23.3
Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events
15.
SUBSEQUENT EVENTS

The Company has evaluated subsequent events for adjustment to or disclosure in these condensed consolidated financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto other than the following. The Board of Directors of Moelis & Company has declared a dividend of $0.60 per share to be paid on December 22, 2023, to Class A common stockholders of record on November 13, 2023.
v3.23.3
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Accounting

Basis of Accounting — The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's condensed consolidated financial statements. As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Consolidation

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

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

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

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

 

•
the measurement and realization of deferred taxes;

 

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

 

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

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

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

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of September 30, 2023 and 2022, is presented below.

 

 

September 30,

 

 

2023

 

2022

Cash

 

$

22,974

 

$

72,385

Cash equivalents

 

 

124,478

 

 

75,861

Restricted cash

 

 

766

 

 

700

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

 

$

148,218

 

$

148,946

 

Additionally, as of December 31, 2022, the Company held cash of $109,646 and cash equivalents of $97,148.
Receivables

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

Included in the accounts receivable balances at September 30, 2023 and December 31, 2022 were $4,764 and $9,462, respectively, of long-term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. Long-term receivables generated interest income of $45 and $96 for the three months ended September 30, 2023 and 2022, respectively, and $168 and $525 for the nine months ended September 30, 2023 and 2022, respectively.

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

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

The following tables summarize credit loss allowance activity for the three and nine months ended September 30, 2023 and 2022:

 

 

Three Months Ended September 30, 2023

 

Three Months Ended September 30, 2022

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,201

 

$

567

 

$

1,768

 

$

2,488

 

$

131

 

$

2,619

Charge-offs, foreign currency translation and other adjustments

 

(113)

 

 

(779)

 

 

(892)

 

 

(1,140)

 

 

—

 

 

(1,140)

Recoveries

 

(619)

 

 

(18)

 

 

(637)

 

 

(1,098)

 

 

(10)

 

 

(1,108)

Provision for credit losses

 

539

 

 

776

 

 

1,315

 

 

3,242

 

 

493

 

 

3,735

Allowance for credit losses, ending balance

$

1,008

 

$

546

 

$

1,554

 

$

3,492

 

$

614

 

$

4,106

 

 

 

Nine Months Ended September 30, 2023

 

Nine Months Ended September 30, 2022

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,136

 

$

593

 

$

1,729

 

$

2,621

 

$

202

 

$

2,823

Charge-offs, foreign currency translation and other adjustments

 

(116)

 

 

(779)

 

 

(895)

 

 

(1,366)

 

 

(68)

 

 

(1,434)

Recoveries

 

(1,941)

 

 

(48)

 

 

(1,989)

 

 

(2,670)

 

 

(99)

 

 

(2,769)

Provision for credit losses

 

1,929

 

 

780

 

 

2,709

 

 

4,907

 

 

579

 

 

5,486

Allowance for credit losses, ending balance

$

1,008

 

$

546

 

$

1,554

 

$

3,492

 

$

614

 

$

4,106
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 condensed consolidated statement of operations. Investments held at cost are reported within investments on the condensed 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 condensed consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investment. The Company reflects its share of gains and losses of the investment in other income and expenses in the condensed consolidated statements of operations using the most recently available earnings data at the end of the period.
Leases

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

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

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Assets that are in development and have not yet been placed in service are generally classified as “Construction in Progress” and are reclassified to the appropriate category when the associated assets are placed in service. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.
Software

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

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

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

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

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

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

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

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

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

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

We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require

a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments.
Equity-based Compensation

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

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

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

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three and nine months ended September 30, 2023 and 2022, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three and nine months ended September 30, 2023 and 2022, no such amounts were recorded.

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

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
v3.23.3
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Summary of Cash, Cash Equivalents and Restricted Cash A reconciliation of the Company’s cash, cash equivalents and restricted cash as of September 30, 2023 and 2022, is presented below.

 

 

September 30,

 

 

2023

 

2022

Cash

 

$

22,974

 

$

72,385

Cash equivalents

 

 

124,478

 

 

75,861

Restricted cash

 

 

766

 

 

700

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

 

$

148,218

 

$

148,946
Summary of Credit Loss Allowance Activity

The following tables summarize credit loss allowance activity for the three and nine months ended September 30, 2023 and 2022:

 

 

Three Months Ended September 30, 2023

 

Three Months Ended September 30, 2022

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,201

 

$

567

 

$

1,768

 

$

2,488

 

$

131

 

$

2,619

Charge-offs, foreign currency translation and other adjustments

 

(113)

 

 

(779)

 

 

(892)

 

 

(1,140)

 

 

—

 

 

(1,140)

Recoveries

 

(619)

 

 

(18)

 

 

(637)

 

 

(1,098)

 

 

(10)

 

 

(1,108)

Provision for credit losses

 

539

 

 

776

 

 

1,315

 

 

3,242

 

 

493

 

 

3,735

Allowance for credit losses, ending balance

$

1,008

 

$

546

 

$

1,554

 

$

3,492

 

$

614

 

$

4,106

 

 

 

Nine Months Ended September 30, 2023

 

Nine Months Ended September 30, 2022

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,136

 

$

593

 

$

1,729

 

$

2,621

 

$

202

 

$

2,823

Charge-offs, foreign currency translation and other adjustments

 

(116)

 

 

(779)

 

 

(895)

 

 

(1,366)

 

 

(68)

 

 

(1,434)

Recoveries

 

(1,941)

 

 

(48)

 

 

(1,989)

 

 

(2,670)

 

 

(99)

 

 

(2,769)

Provision for credit losses

 

1,929

 

 

780

 

 

2,709

 

 

4,907

 

 

579

 

 

5,486

Allowance for credit losses, ending balance

$

1,008

 

$

546

 

$

1,554

 

$

3,492

 

$

614

 

$

4,106
v3.23.3
Fixed and Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
Schedule of Equipment and Leasehold Improvements, Net

Equipment and leasehold improvements, net consists of the following:

 

 

 

September 30,

 

December 31,

 

 

2023

 

2022

Office equipment

 

$

18,217

 

$

16,157

Furniture and fixtures

 

 

14,452

 

 

14,386

Leasehold improvements

 

 

62,365

 

 

61,293

Construction in progress

 

 

9,614

 

 

1,438

Total

 

 

104,648

 

 

93,274

Less: Accumulated depreciation and amortization

 

 

(42,104)

 

 

(36,122)

Equipment and leasehold improvements, net

 

$

62,544

 

$

57,152
v3.23.3
Investments (Tables)
 9 Months Ended
Sep. 30, 2023
Investments, All Other Investments [Abstract]  
Summary of Fair value of Company's Financial Assets

Fair Value of Financial Assets

The fair value of the Company's financial assets as of September 30, 2023, have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

60,040

 

$

—

 

$

60,040

 

$

—

Money market funds

 

53,834

 

 

—

 

 

53,834

 

 

—

Certificates of Deposit

 

10,604

 

 

—

 

 

10,604

 

 

—

Total financial assets included in cash and cash equivalents

 

124,478

 

 

—

 

 

124,478

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

150,309

 

 

—

 

 

150,309

 

 

—

Total financial assets included in investments

 

150,309

 

 

—

 

 

150,309

 

 

—

Total financial assets

$

274,787

 

$

—

 

$

274,787

 

$

—
During the nine months ended September 30, 2023, the Company liquidated its equity investments measured at fair value. Therefore, there were no unrealized gains or losses on equity securities held at the reporting date for the three and nine months ended September 30, 2023. U

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:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

55,938

 

$

—

 

$

55,938

 

$

—

Money market funds

 

41,210

 

 

—

 

 

41,210

 

 

—

Total financial assets included in cash and cash equivalents

 

97,148

 

 

—

 

 

97,148

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

205,779

 

 

—

 

 

205,779

 

 

—

Common stock

 

12,149

 

 

12,149

 

 

—

 

 

—

Warrants

 

153

 

 

153

 

 

—

 

 

—

Total financial assets included in investments

 

218,081

 

 

12,302

 

 

205,779

 

 

—

Total financial assets

$

315,229

 

$

12,302

 

$

302,927

 

$

—
v3.23.3
Net Income (Loss) Per Share Attributable to Class A Common Shareholders (Tables)
 9 Months Ended
Sep. 30, 2023
Earnings Per Share [Abstract]  
Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three and nine months ended September 30, 2023 and 2022 are presented below.

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

(dollars in thousands, except per share amounts)

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$

(10,732)

 

 

$

25,612

 

 

$

(19,040)

 

 

$

130,290

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

 

 

$

(10,732)

 

 

$

25,612

 

 

$

(19,040)

 

 

$

130,290

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

 

68,752,061

 

 

 

65,873,976

 

 

 

68,260,558

 

 

 

65,684,485

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

 

(b)(c)

 

—

 

(b)

 

3,955,362

 

(b)(c)

 

—

 

(b)

 

4,498,929

Weighted average shares of Class A common stock outstanding—diluted

 

 

 

68,752,061

 

 

 

69,829,338

 

 

 

68,260,558

 

 

 

70,183,414

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

(0.16)

 

 

$

0.39

 

 

$

(0.28)

 

 

$

1.98

Diluted

 

 

$

(0.16)

 

 

$

0.37

 

 

$

(0.28)

 

 

$

1.86

 

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 75,038,275 and 75,704,676 shares for the three months ended September 30, 2023 and 2022, respectively, and 74,483,243 and 76,276,345 shares for the nine months ended September 30, 2023 and 2022. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units

(including any tax impact). For the three and nine months ended September 30, 2023 and 2022, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

(b) Certain RSUs assumed to be issued as Class A common stock pursuant to the treasury stock method were antidilutive and therefore excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended September 30, 2023 and 2022, there were 0 and 135,534 RSUs that would have been included in the treasury stock method calculation if the effect were dilutive, respectively, and 11,615 and 4,625 RSUs for the nine months ended September 30, 2023 and 2022, respectively.

 

(c) The Company incurred a loss for the three and nine months ended September 30, 2023, and as a result the assumed issuance of any Class A common stock pursuant to the treasury stock method is antidilutive. There were 4,237,243 and 4,075,817 shares pursuant to the treasury stock method related to unvested RSUs that were excluded from diluted share count for the three and nine months ended September 30, 2023, respectively. If such shares were included, diluted Class A common stock outstanding would be 72,989,304 and 72,336,375 shares for the three and nine months ended September 30, 2023, respectively.
v3.23.3
Equity-Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Summary of Activity Related to RSUs

The following table summarizes activity related to RSUs for the nine months ended September 30, 2023 and 2022.

 

Restricted Stock Units

 

2023

 

2022

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Average

 

 

 

Average

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

8,099,629

 

$

47.49

 

8,068,120

 

$

46.36

Granted

3,844,430

 

 

44.38

 

3,086,353

 

 

49.66

Forfeited

(317,022)

 

 

45.78

 

(258,621)

 

 

48.74

Vested

(3,736,851)

 

 

45.63

 

(2,995,349)

 

 

46.11

Unvested Balance at September 30,

7,890,186

 

$

46.83

 

7,900,503

 

$

47.72
v3.23.3
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Additional Leases Information See below for additional information about the Company’s leases.

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in thousands)

 

2023

 

2022

 

2023

 

2022

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

 $

6,473

 

 

 $

5,466

 

 

 $

18,212

 

 

 $

16,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash inflows/(outflows) for operating leases

 

 $

(4,520)

 

 

 $

(3,672)

 

 

 $

(16,934)

 

 

 $

(3,803)

 

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

 

 $

18,441

 

 

 $

822

 

 

 $

35,409

 

 

 $

2,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

12.09

years

 

 

12.97

 years

 

 

12.09

 years

 

 

12.97

 years

Weighted-average discount rate - operating leases

 

3.97

%

 

 

3.51

 %

 

 

3.97

%

 

 

3.51

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

As of September 30, 2023, the future sublease income and maturities of our operating lease liabilities are as follows:

Fiscal year ended

 

Sublease Income

 

Operating Leases

Remainder of 2023

 

$

(204)

 

$

5,516

2024

 

 

(816)

 

 

25,248

2025

 

 

(408)

 

 

22,833

2026

 

 

—

 

 

21,614

2027

 

 

—

 

 

20,631

Thereafter

 

 

—

 

 

181,963

Total Payments

 

$

(1,428)

 

$

277,805

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

(1,346)

Less: Present value adjustment

 

 

(59,597)

Total

 

$

216,862
v3.23.3
Revenues and Business Information (Tables)
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Schedule of Geographical Distribution of Revenues and Assets The following table disaggregates the revenues and assets based on the location of the office that generates the revenues or holds the assets, and therefore may not be reflective of the geography in which our clients are located.

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

 

 

 

 

United States

$

234,471

 

$

192,020

 

$

536,134

 

$

629,344

Europe

 

19,153

 

 

18,209

 

 

61,309

 

 

99,496

Rest of World

 

18,555

 

 

23,277

 

 

42,427

 

 

49,274

Total

$

272,179

 

$

233,506

 

$

639,870

 

$

778,114

 

 

September 30,

 

December 31,

 

2023

 

2022

Assets:

 

 

 

 

 

United States

$

974,813

 

$

994,339

Europe

 

44,988

 

 

92,340

Rest of World

 

100,672

 

 

130,190

Total

$

1,120,473

 

$

1,216,869
v3.23.3
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Cash and Cash Equivalents        
Cash $ 22,974 $ 109,646 $ 72,385  
Cash equivalents 124,478 97,148 75,861  
Restricted cash 766 745 700  
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 148,218 $ 207,539 $ 148,946 $ 521,014
v3.23.3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Accounting Policies [Line Items]          
Cash $ 22,974,000 $ 72,385,000 $ 22,974,000 $ 72,385,000 $ 109,646,000
Cash equivalents 124,478,000 75,861,000 124,478,000 75,861,000 97,148,000
Long-term receivables 4,764,000   4,764,000   $ 9,462,000
Interest income from long-term receivables 45,000 96,000 $ 168,000 525,000  
Assets and Liabilities, Lessee          
Percentage of tax benefits payable to partners under tax receivable agreement     85.00%    
Remaining percentage of cash savings realized by the Company (as a percent)     15.00%    
Revenue and Expense Recognition and Equity-Based Compensation          
Minimum age of retiring employees required so that certain qualifying awards granted during employment will not be forfeited     56 years    
Consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited     5 years    
Minimum total age and consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited     65 years    
Income Taxes          
Unrecognized tax benefits 0 0 $ 0 0  
Income tax related interest and penalties $ 0 $ 0 $ 0 $ 0  
Minimum          
Accounting Policies [Line Items]          
Installment Period     3 years    
Minimum | Office Equipment and Furniture and Fixtures          
Assets and Liabilities, Lessee          
Useful lives 3 years   3 years    
Maximum          
Accounting Policies [Line Items]          
Installment Period     4 years    
Maximum | Office Equipment and Furniture and Fixtures          
Assets and Liabilities, Lessee          
Useful lives 7 years   7 years    
v3.23.3
Summary of Significant Accounting Policies - Summary of Credit Loss Allowance Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance $ 1,768 $ 2,619 $ 1,729 $ 2,823
Charge-offs, foreign currency translation and other adjustments (892) (1,140) (895) (1,434)
Recoveries (637) (1,108) (1,989) (2,769)
Provision for credit losses 1,315 3,735 2,709 5,486
Allowance for credit losses, ending balance 1,554 4,106 1,554 4,106
Short-term Receivables        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance 1,201 2,488 1,136 2,621
Charge-offs, foreign currency translation and other adjustments (113) (1,140) (116) (1,366)
Recoveries (619) (1,098) (1,941) (2,670)
Provision for credit losses 539 3,242 1,929 4,907
Allowance for credit losses, ending balance 1,008 3,492 1,008 3,492
Private Funds Advisory Receivables        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance 567 131 593 202
Charge-offs, foreign currency translation and other adjustments (779)   (779) (68)
Recoveries (18) (10) (48) (99)
Provision for credit losses 776 493 780 579
Allowance for credit losses, ending balance $ 546 $ 614 $ 546 $ 614
v3.23.3
Fixed and Intangible Assets - Schedule of Equipment and Leasehold Improvements, Net (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Equipment and Leasehold Improvements, Net    
Total $ 104,648 $ 93,274
Less: Accumulated depreciation and amortization (42,104) (36,122)
Equipment and leasehold improvements, net 62,544 57,152
Office Equipment    
Equipment and Leasehold Improvements, Net    
Total 18,217 16,157
Furniture and Fixtures    
Equipment and Leasehold Improvements, Net    
Total 14,452 14,386
Leasehold Improvements    
Equipment and Leasehold Improvements, Net    
Total 62,365 61,293
Construction in progress    
Equipment and Leasehold Improvements, Net    
Total $ 9,614 $ 1,438
v3.23.3
Fixed and Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Equipment and Leasehold Improvements, Net          
Depreciation and amortization expenses $ 2,014 $ 1,918 $ 6,023 $ 5,798  
Prepaid Expenses and Other Assets          
Equipment and Leasehold Improvements, Net          
Costs capitalized, net of accumulated amortization 1,273   1,273   $ 1,639
Accumulated amortization, net 1,598   1,598   $ 1,232
Communication, Technology and Information Services          
Equipment and Leasehold Improvements, Net          
Amortization expense of capitalized costs $ 122 $ 122 $ 366 $ 366  
v3.23.3
Investments - Summary of Financial Assets Recorded at Fair Value On Recurring Basis (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Fair value measurements    
Total financial assets included in cash and cash equivalents $ 124,478 $ 97,148
Total financial assets included in investments 150,309 218,081
Total financial assets 274,787 315,229
Sovereign Debt Securities    
Fair value measurements    
Total financial assets included in cash and cash equivalents 60,040 55,938
Total financial assets included in investments 150,309 205,779
Certificates of Deposit    
Fair value measurements    
Total financial assets included in cash and cash equivalents 10,604  
Warrants    
Fair value measurements    
Total financial assets included in investments   153
Money Market Funds    
Fair value measurements    
Total financial assets included in cash and cash equivalents 53,834 41,210
Common Stock    
Fair value measurements    
Total financial assets included in investments   12,149
Level 1    
Fair value measurements    
Total financial assets included in investments   12,302
Total financial assets   12,302
Level 1 | Warrants    
Fair value measurements    
Total financial assets included in investments   153
Level 1 | Common Stock    
Fair value measurements    
Total financial assets included in investments   12,149
Level 2    
Fair value measurements    
Total financial assets included in cash and cash equivalents 124,478 97,148
Total financial assets included in investments 150,309 205,779
Total financial assets 274,787 302,927
Level 2 | Sovereign Debt Securities    
Fair value measurements    
Total financial assets included in cash and cash equivalents 60,040 55,938
Total financial assets included in investments 150,309 205,779
Level 2 | Certificates of Deposit    
Fair value measurements    
Total financial assets included in cash and cash equivalents 10,604  
Level 2 | Money Market Funds    
Fair value measurements    
Total financial assets included in cash and cash equivalents $ 53,834 $ 41,210
v3.23.3
Investments - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Schedule of Investments          
Investments at fair value, cost basis $ 149,173   $ 149,173   $ 234,546
Dividends received     3,092 $ 2,936  
Corporate Joint Venture          
Schedule of Investments          
Dividends received     3,092 2,936  
Equity method investments 47,346   47,346   $ 47,164
Common Stock          
Schedule of Investments          
Unrealized gains (losses) on equity securities 0 $ (1,055) 0 (9,991)  
Sovereign Debt Securities          
Schedule of Investments          
Unrealized gains (losses) on debt Securities trading $ 1,108 $ 132 $ 1,136 $ (234)  
v3.23.3
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Numerator:        
Net income (loss) attributable to holders of shares of Class A common stock—basic $ (10,732) $ 25,612 $ (19,040) $ 130,290
Class A Common Stock        
Numerator:        
Net income (loss) attributable to holders of shares of Class A common stock—basic (10,732) 25,612 (19,040) 130,290
Add (deduct) dilutive effect of:        
Net income (loss) attributable to holders of shares of Class A common stock—diluted $ (10,732) $ 25,612 $ (19,040) $ 130,290
Denominator:        
Weighted average shares of Class A common stock outstanding—basic 68,752,061 65,873,976 68,260,558 65,684,485
Add (deduct) dilutive effect of:        
Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method   3,955,362   4,498,929
Weighted average shares of Class A common stock outstanding—diluted 68,752,061 69,829,338 68,260,558 70,183,414
Net income (loss) per share attributable to holders of shares of Class A common stock, basic        
Basic $ (0.16) $ 0.39 $ (0.28) $ 1.98
Net income (loss) per share attributable to holders of shares of Class A common stock, diluted        
Diluted $ (0.16) $ 0.37 $ (0.28) $ 1.86
v3.23.3
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Parenthetical) (Details) - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Class A Common Stock        
Earnings Per Share Basic [Line Items]        
Number of shares of common stock to be issued upon exchange of a partnership unit 1   1  
Fully diluted shares of common stock outstanding if all Class A partnership units were to be exchanged for common stock immediately following the reorganization 75,038,275 75,704,676 74,483,243 76,276,345
Number of shares of common stock outstanding if excluded treasury stock method shares were included 72,989,304   72,336,375  
Restricted Stock and RSUs        
Earnings Per Share Basic [Line Items]        
Number of antidilutive securities excluded from calculation of diluted income (loss) per share 0 135,534 11,615 4,625
Unvested Restricted Stock Units [Member]        
Earnings Per Share Basic [Line Items]        
Number of antidilutive securities excluded from calculation of diluted income (loss) per share 4,237,243   4,075,817  
v3.23.3
Equity-Based Compensation - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Compensation expenses $ 31,975 $ 28,844 $ 125,194 $ 96,767
Partnership Units, granted     482,941 809,899
Partnership Units, grant-date fair value     $ 20,037 $ 38,413
RSUs and Other Stock-based Awards        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Total compensation expense not yet recognized $ 174,873   $ 174,873  
Weighted average period to recognize compensation expense     1 year 8 months 12 days  
RSUs and Other Stock-based Awards | Minimum        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting period     4 years  
Partnership units vesting period     2 years  
RSUs and Other Stock-based Awards | Maximum        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting period     5 years  
Partnership units vesting period     5 years  
Performance Units        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Partnership Units, granted     100,722  
Partnership Units, grant-date fair value     $ 4,594  
Percentage of maximum vesting of target units if pre-specified market conditions are achieved and service requirement are met     150.00%  
Performance Units | Minimum        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Partnership units vesting period     3 years  
Performance Units | Maximum        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Partnership units vesting period     5 years  
Class A Common Stock        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of shares of common stock to be issued upon exchange of a partnership unit 1   1  
Class A Common Stock | RSUs and Other Stock-based Awards        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of shares of common stock to be issued upon exchange of a partnership unit 1   1  
v3.23.3
Equity-Based Compensation - Summary of Activity Related to RSUs (Details) - Restricted Stock Units - $ / shares
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Number of Shares    
Unvested Balance at the beginning of the period 8,099,629 8,068,120
Granted 3,844,430 3,086,353
Forfeited (317,022) (258,621)
Vested (3,736,851) (2,995,349)
Unvested Balance at the end of the period 7,890,186 7,900,503
Weighted Average Grant Date Fair Value    
Unvested Balance at the beginning of the period $ 47.49 $ 46.36
Granted 44.38 49.66
Forfeited 45.78 48.74
Vested 45.63 46.11
Unvested Balance at the end of the period $ 46.83 $ 47.72
v3.23.3
Stockholders Equity - Additional Information (Details)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Nov. 30, 2014
Apr. 30, 2014
USD ($)
shares
Sep. 30, 2023
USD ($)
shares
Jun. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
USD ($)
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2023
USD ($)
shares
Sep. 30, 2022
USD ($)
shares
Dec. 31, 2022
shares
Jul. 31, 2021
USD ($)
Class Of Stock [Line Items]                        
Treasury stock, shares     10,154,907           10,154,907   9,076,777  
Treasury stock shares acquired (in shares)                 1,078,130 3,174,093    
Treasury stock shares acquired | $     $ 763 $ 230 $ 44,526 $ 13,459 $ 34,902 $ 97,929 $ 45,519 $ 146,290    
Number of units held by noncontrolling interest holders     6,286,260           6,286,260   5,888,027  
Group LP                        
Class Of Stock [Line Items]                        
Noncontrolling interests (as a percent)     9.00%           9.00%   8.00%  
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     76,819,647           76,819,647   73,063,181  
Treasury stock, shares     10,154,907           10,154,907   9,076,777  
Common stock, shares outstanding     66,664,740           66,664,740   63,986,404  
Number of shares of common stock to be issued upon exchange of a partnership unit     1           1      
Class A Common Stock | Share Repurchase Plan                        
Class Of Stock [Line Items]                        
Share value authorized for repurchase | $                       $ 100,000
Value of remaining shares authorized for repurchase | $     $ 62,529           $ 62,529      
Class B Common Stock                        
Class Of Stock [Line Items]                        
Increase in shares outstanding   36,158,698                    
Common stock, shares issued     4,489,778           4,489,778   4,635,898  
Common stock, shares outstanding     4,489,778           4,489,778   4,635,898  
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                    
v3.23.3
Related-Party Transactions - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Related-party transactions          
Compensation and benefits expense related to tranche of promissory note $ 242,231,000 $ 160,437,000 $ 536,264,000 $ 477,166,000  
Unsecured Promissory Notes          
Related-party transactions          
Compensation and benefits expense related to tranche of promissory note       100,000  
Related Party          
Related-party transactions          
Revenue from related parties 0 4,644,000 0 8,370,000  
Manager | Aircraft Lease Entered into During August 2014          
Related-party transactions          
Expenses 323,000 324,000 970,000 972,000  
Employees          
Related-party transactions          
Unsecured promissory notes from employees 3,119,000   $ 3,119,000   $ 3,119,000
Employees | Unsecured Promissory Notes          
Related-party transactions          
Interest rates (as a percent)     4.00%    
Principal repayments     $ 0 0  
Interest income recognized     93,000 7,000  
Moelis Asset Management LP          
Related-party transactions          
Fee for services 57,000 56,000 168,000 166,000  
Due from related party 0   0   $ 0
Atlas Crest Entities          
Related-party transactions          
Fee for services $ 0 $ 30,000 0 90,000  
Fee for services per month     $ 10,000    
MA Financial          
Related-party transactions          
Revenue from related parties       $ 4,212,000  
v3.23.3
Regulatory Requirements - Additional Information (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Regulatory Requirements    
Minimum net capital requirement $ 250  
U.S. Broker Dealer    
Regulatory Requirements    
Net capital 134,056 $ 91,960
Net capital in excess of required net capital $ 133,806 $ 91,710
v3.23.3
Commitments and Contingencies - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Aug. 21, 2023
Apr. 01, 2023
Dec. 31, 2022
Bank line of credit              
Available credit under the facility $ 64,194,000   $ 64,194,000        
Right-of-use assets 175,041,000   175,041,000       $ 152,341,000
Lease liabilities 216,862,000   216,862,000       192,762,000
Proceeds from tenant improvement allowances 1,573,000 $ 2,314,000 1,573,000 $ 14,495,000      
Revolving Credit Facility Due at May 24, 2024              
Bank line of credit              
Commitment amount 30,000,000   $ 30,000,000        
Maturity date     May 24, 2025        
Reference rate (as a percent)     Prime rate        
Borrowings under the credit facility 0   $ 0        
Available credit under the facility $ 30,000,000   $ 30,000,000        
Line of credit facility credit period to borrow capital     May 24, 2024        
Line of credit facility, frequency of payments     quarterly        
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 806,000   $ 806,000        
Fee on the outstanding balances (as a percent)     1.00%        
SEC Offer              
Bank line of credit              
Loss contingency, damages sought, value     $ 10,000,000        
Other Income and Expenses              
Bank line of credit              
Loss contingency accrual settlement     $ 10,000,000        
SOFR | Revolving Credit Facility              
Bank line of credit              
Interest rate margin (as a percent)     1.10%        
Prime | Revolving Credit Facility              
Bank line of credit              
Interest rate margin (as a percent)     (1.50%)        
Reference rate (as a percent)     Prime        
Secured Bank Line of Credit              
Bank line of credit              
Commitment amount $ 65,000,000   $ 65,000,000        
Minimum days to issue termination notice     60 days        
Maturity date     Jun. 30, 2025        
New Lease in Los Angeles              
Bank line of credit              
Right-of-use assets         $ 17,259,000 $ 15,510,000  
Lease liabilities         $ 17,259,000 $ 15,510,000  
v3.23.3
Commitments and Contingencies - Schedule of Additional Leases Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Supplemental Income Statement Information:        
Operating lease cost $ 6,473 $ 5,466 $ 18,212 $ 16,690
Cash paid for amounts included in the measurement of lease liabilities:        
Net operating cash inflows/(outflows) for operating leases (4,520) (3,672) (16,934) (3,803)
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period): $ 18,441 $ 822 $ 35,409 $ 2,773
Other Information        
Weighted-average remaining lease term - operating leases 12 years 1 month 2 days 12 years 11 months 19 days 12 years 1 month 2 days 12 years 11 months 19 days
Weighted-average discount rate - operating leases 3.97% 3.51% 3.97% 3.51%
v3.23.3
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases in Place (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sublease Income    
Remainder of 2023 $ (204)  
2024 (816)  
2025 (408)  
Total Payments (1,428)  
Operating Leases    
Remainder of 2023 5,516  
2024 25,248  
2025 22,833  
2026 21,614  
2027 20,631  
Thereafter 181,963  
Total Payments 277,805  
Less: Tenant improvement allowances (1,346)  
Less: Present value adjustment (59,597)  
Operating Lease, Liability $ 216,862 $ 192,762
v3.23.3
Employee Benefit Plans - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Retirement Benefits [Abstract]        
Minimum age required to be eligible to participate in the 401(k) plan     21 years  
Expenses accrued relating to employer matching contributions $ 1,011 $ 1,056 $ 2,808 $ 2,827
v3.23.3
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Tax Disclosure [Abstract]        
Provisions (benefit) for income taxes $ 1,286 $ 9,115 $ (3,891) $ 38,009
Excess tax benefit $ 1 $ 417 $ 3,360 $ 9,063
v3.23.3
Revenues and Business Information - Schedule of Geographical Distribution of Revenues and Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues $ 272,179 $ 233,506 $ 639,870 $ 778,114  
Total assets 1,120,473   1,120,473   $ 1,216,869
United States          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 234,471 192,020 536,134 629,344  
Total assets 974,813   974,813   994,339
Europe          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 19,153 18,209 61,309 99,496  
Total assets 44,988   44,988   92,340
Rest of World          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 18,555 $ 23,277 42,427 $ 49,274  
Total assets $ 100,672   $ 100,672   $ 130,190
v3.23.3
Revenues and Business Information - Additional Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Segment Reporting [Abstract]      
Deferred revenue $ 4,191   $ 7,708
Revenues recognized from opening balance of deferred revenues $ 7,378 $ 4,471  
v3.23.3
Subsequent Events - Additional Information (Details) - Subsequent Event
Nov. 02, 2023
$ / shares
Subsequent Event [Line Items]  
Dividends declared per share $ 0.6
Dividend payable date Dec. 22, 2023
Dividend payable record date Nov. 13, 2023