Moelis & Company (MC) Bundle
A Brief History of Moelis & Company
Moelis & Company was founded in 2007 by Ken Moelis as a global independent investment bank. The firm commenced operations as a Delaware limited partnership and has since evolved into a publicly traded company, listed on the New York Stock Exchange under the ticker symbol "MC."
Initial Public Offering (IPO)
Moelis & Company went public on April 17, 2014, issuing 15,263,653 shares of Class A common stock. The IPO price was set at $25 per share, raising approximately $381.6 million in gross proceeds. This capital was primarily intended for business expansion and to enhance the company's liquidity.
Financial Performance Overview (2023 - 2024)
As of September 30, 2024, Moelis & Company reported revenues of $273.8 million for the third quarter, a slight increase from $272.2 million in the same quarter of 2023. For the nine months ended September 30, 2024, revenues totaled $755.8 million, up from $639.9 million in 2023, representing an 18% increase year-over-year.
| Period | Revenues ($ millions) | Net Income ($ millions) | Clients Paying >$1 million |
|---|---|---|---|
| Q3 2024 | 273.8 | 19.2 | 67 |
| Q3 2023 | 272.2 | (11.4) | 48 |
| 9M 2024 | 755.8 | 51.6 | 177 |
| 9M 2023 | 639.9 | (21.1) | 129 |
Operating Expenses
For the third quarter of 2024, Moelis & Company reported total operating expenses of $258.2 million, a decrease from $292.2 million in Q3 2023. The major components of operating expenses included:
| Expense Type | Q3 2024 ($ millions) | Q3 2023 ($ millions) |
|---|---|---|
| Compensation and Benefits | 210.7 | 242.2 |
| Non-Compensation Expenses | 47.5 | 50.0 |
Dividend Distributions
In 2024, the Board of Directors declared a quarterly dividend of $0.60 per share, with total dividends paid during the nine months ending September 30, 2024, amounting to $1.80 per share. The dividend reflects the company's commitment to returning value to its shareholders.
Market Position and Client Engagement
As of September 30, 2024, Moelis & Company had established relationships with 163 clients in Q3 2024, compared to 139 clients in Q3 2023. The firm successfully completed a higher number of transactions, boosting its revenue-generating capabilities.
Equity and Stock Performance
As of September 30, 2024, Moelis & Company had 80,937,220 shares of Class A common stock issued. The weighted-average shares outstanding were 72,325,050 for basic calculations. The net income per share attributable to Class A common stockholders was $0.23 for Q3 2024, compared to a net loss per share of $(0.16) for the same period in 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Shares Outstanding | 80,937,220 | 76,713,672 |
| Net Income per Share (Basic) | $0.23 | $(0.16) |
Moelis & Company continues to navigate the complexities of the financial advisory landscape, focusing on strategic growth, operational efficiency, and enhancing shareholder value through disciplined financial management.
A Who Owns Moelis & Company (MC)
Ownership Structure
Moelis & Company operates as a publicly traded investment bank, primarily structured through its Class A and Class B common stock. As of September 30, 2024, the following details outline the ownership distribution:
| Share Class | Shares Issued | Shares Outstanding | Treasury Shares |
|---|---|---|---|
| Class A Common Stock | 80,937,220 | 70,571,042 | 10,366,178 |
| Class B Common Stock | 4,331,619 | 4,331,619 | N/A |
Major Shareholders
The major shareholders of Moelis & Company consist of its founder, Kenneth Moelis, and other institutional investors. The Class B shares are primarily held by Moelis & Company Partner Holdings LP, which retains significant voting power. The Class B shares provide majority voting control but are not actively traded.
Shareholder Breakdown
As of September 30, 2024, the following table summarizes the shareholder composition:
| Shareholder Type | Number of Shares | Percentage of Total Shares |
|---|---|---|
| Kenneth Moelis (Founder) | 4,331,619 | 5.35% |
| Institutional Investors | 40,000,000 | 49.55% |
| Other Individual Investors | 26,239,423 | 32.77% |
| Class B Common Stock (held by Moelis & Company Partner Holdings LP) | 4,331,619 | 5.35% |
Noncontrolling Interests
As of September 30, 2024, there were 6,096,785 Group LP partnership units, representing approximately 8% of noncontrolling interests in Moelis & Company. These partnership units can be exchanged for shares of Class A common stock, further impacting the ownership structure.
Recent Changes in Ownership
In the nine months ending September 30, 2024, Moelis & Company repurchased 181,718 shares as part of its ongoing share repurchase program, which was initially authorized in July 2021 for up to $100 million.
Dividends
Moelis & Company declared a regular quarterly dividend of $0.60 per share, with the next payment scheduled for December 2, 2024.
Moelis & Company (MC) Mission Statement
Overview of Mission Statement
Moelis & Company aims to provide superior financial advisory services, with a commitment to integrity, excellence, and professionalism. The firm focuses on delivering tailored solutions to clients, leveraging its extensive experience and deep industry knowledge.
Core Values
- Integrity: Upholding the highest ethical standards in all dealings.
- Client Focus: Prioritizing client interests and adapting to their unique needs.
- Excellence: Striving for the highest quality in advisory services.
- Collaboration: Encouraging teamwork and shared knowledge across the organization.
Recent Financial Performance
As of September 30, 2024, Moelis & Company reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Revenues | $273.8 million | $272.2 million | 1% |
| Net Income | $19.2 million | ($11.4 million) | N/A |
| Operating Expenses | $258.2 million | $292.2 million | -12% |
| Compensation and Benefits | $210.7 million | $242.2 million | -13% |
| Non-Compensation Expenses | $47.5 million | $50.0 million | -5% |
Client Engagements
For the three months ended September 30, 2024, Moelis & Company served 163 clients, a rise from 139 clients in the same period of the previous year. Notably, the number of clients paying fees of $1 million or more increased to 67 from 48.
Revenue Growth
For the nine months ending September 30, 2024, the firm reported revenues of $755.8 million, up 18% from $639.9 million in the same period of 2023. This growth was attributed to an increase in completed transactions.
Operating Efficiency
The operating efficiency of Moelis & Company is indicated by the reduction in total operating expenses from $670.9 million in 2023 to $714.4 million in 2024, despite the rise in revenues. The operating expenses as a percentage of revenues decreased from 107% to 94% over the year.
Equity and Shareholder Returns
Moelis & Company declared a quarterly dividend of $0.60 per share, expected to be paid on December 2, 2024, to Class A common stockholders of record on November 4, 2024. The total dividends paid during the nine months ending September 30, 2024, amounted to $138.3 million.
Liquidity Position
As of September 30, 2024, Moelis & Company reported cash and cash equivalents of $146.1 million, a decrease from $187.2 million at the beginning of the year. The company's liquidity is underpinned by strong cash flows from operations, which totaled $112.1 million for the nine months ending September 30, 2024.
Conclusion
The mission statement and operational performance of Moelis & Company reflect its commitment to delivering high-quality financial advisory services while maintaining a strong focus on integrity and client satisfaction.
How Moelis & Company (MC) Works
Business Model
Business Model
Moelis & Company operates primarily as an independent investment bank providing advisory services across various sectors. The firm focuses on mergers and acquisitions (M&A), financial restructurings, and capital markets advisory. As of September 30, 2024, the company reported revenues of $273.8 million for the third quarter, slightly up from $272.2 million in the same period of 2023. For the first nine months of 2024, revenues totaled $755.8 million, compared to $639.9 million for the same period in 2023, reflecting an 18% year-over-year increase.
| Period | Revenues ($ in thousands) | Clients Served | Clients Paying > $1 Million |
|---|---|---|---|
| Q3 2024 | 273,755 | 163 | 67 |
| Q3 2023 | 272,179 | 139 | 48 |
| 9M 2024 | 755,826 | 314 | 177 |
| 9M 2023 | 639,870 | 248 | 129 |
Revenue Recognition
The majority of Moelis & Company's revenues are derived from advisory fees, which are recognized upon the completion of transactions. The firm does not allocate its revenue by advisory type due to the complexity of transactions. As of September 30, 2024, the company's net income was reported at $19.2 million, compared to a net loss of $11.4 million in Q3 2023.
Expense Structure
Operating expenses for Q3 2024 totaled $258.2 million, a decrease from $292.2 million in Q3 2023. This decline was primarily due to a reduction in compensation and benefits, which decreased to $210.7 million (77% of revenues) from $242.2 million (89% of revenues) year-over-year. Non-compensation expenses were $47.5 million, representing 17% of revenues.
| Expense Category | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) |
|---|---|---|
| Compensation and Benefits | 210,658 | 242,231 |
| Occupancy | 7,409 | 7,181 |
| Professional Fees | 8,445 | 13,525 |
| Communication, Technology, and Information Services | 12,874 | 11,709 |
| Travel and Related Expenses | 8,781 | 8,394 |
| Depreciation and Amortization | 2,802 | 2,014 |
| Other Expenses | 7,222 | 7,151 |
Cash Flow Analysis
Moelis & Company reported net cash provided by operating activities of $112.1 million for the nine months ended September 30, 2024, an increase from $59.1 million in the same period of 2023. The cash flow from investing activities was $13.4 million, while financing activities resulted in a net outflow of $168.1 million, primarily due to dividend payments and tax distributions.
| Cash Flow Activity | 9M 2024 ($ in thousands) | 9M 2023 ($ in thousands) |
|---|---|---|
| Net Cash from Operating Activities | 112,144 | 59,135 |
| Net Cash from Investing Activities | 13,423 | 64,004 |
| Net Cash from Financing Activities | (168,144) | (183,015) |
Dividends and Share Repurchase
Moelis & Company declared a quarterly dividend of $0.60 per share, payable on December 2, 2024. As of September 30, 2024, the company has repurchased shares under its buyback program, which has a remaining authorization of $62.5 million.
Financial Position
As of September 30, 2024, Moelis & Company had total assets of $1.153 billion and total equity of $395.1 million. The company maintained cash and cash equivalents of $146.1 million, down from $187.2 million at the beginning of the year.
| Financial Metrics | As of September 30, 2024 ($ in thousands) | As of December 31, 2023 ($ in thousands) |
|---|---|---|
| Total Assets | 1,153,062 | 1,179,759 |
| Total Equity | 395,101 | 362,462 |
| Cash and Cash Equivalents | 146,065 | 187,215 |
Market Position and Outlook
Moelis & Company continues to navigate a competitive landscape, focusing on enhancing its advisory capabilities and expanding its client base. The firm anticipates further growth driven by an improving M&A market and increased corporate activity, particularly as borrowing costs stabilize.
How Moelis & Company (MC) Makes Money
Revenue Sources
Moelis & Company primarily generates revenue through advisory services. The firm engages in various financial advisory activities, primarily focusing on mergers and acquisitions (M&A), capital markets, and restructuring services. For the nine months ended September 30, 2024, the company reported total revenues of $755.8 million, up from $639.9 million in the same period of 2023, representing an 18% increase.
Client Engagements
For the three months ended September 30, 2024, Moelis & Company earned revenues from 163 clients, an increase from 139 clients in the same period of 2023. The number of clients that paid fees equal to or greater than $1 million also rose from 48 clients to 67 clients.
Operating Expenses
Operating expenses for the three months ended September 30, 2024, were $258.2 million, a decrease from $292.2 million in the previous year. This represented 94% of revenues, down from 107% in the prior year.
| Expense Type | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change (%) |
|---|---|---|---|
| Compensation and Benefits | 210,658 | 242,231 | -13% |
| Non-Compensation Expenses | 47,533 | 49,974 | -5% |
| Total Operating Expenses | 258,191 | 292,205 | -12% |
Net Income
For the three months ended September 30, 2024, Moelis & Company reported a net income of $19.24 million, compared to a net loss of $11.37 million in the same period of 2023. For the nine months ended September 30, 2024, the net income was $51.65 million, up from a net loss of $21.05 million in the prior year.
Other Income and Expenses
Other income for the three months ended September 30, 2024, was reported at $11.1 million, primarily from a $7.0 million gain on the sale of shares in MA Financial Group Limited.
Dividends and Stock Performance
Moelis & Company declared a regular quarterly dividend of $0.60 per share, which will be paid on December 2, 2024. The company’s stock performance reflects its financial health, with a basic net income per share of $0.23 for the three months ended September 30, 2024.
Cash Flow and Liquidity
As of September 30, 2024, Moelis & Company had cash, cash equivalents, and restricted cash amounting to $146.1 million, a decrease from $187.2 million at the beginning of the year. Operating activities generated a net inflow of $112.1 million.
Market Conditions and Strategic Outlook
The M&A market has shown signs of improvement, with expectations of increased transactions as interest rates decline. Moelis & Company anticipates continued growth in advisory revenues, driven by enhanced client engagement and strategic capital raising solutions.
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Article updated on 8 Nov 2024
Resources:
- Moelis & Company (MC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Moelis & Company (MC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Moelis & Company (MC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.