pjt-ex991_339.htm

New York, October 25, 2022: PJT Partners Inc. (the “Company” or “PJT Partners”) (NYSE: PJT) today announced its financial results for the third quarter and nine months ended September 30, 2022.

The following table sets forth revenues for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022		2021		% Change	2022		2021		% Change
	(Dollars in Millions)
Revenues
Advisory	$	224.4	$	179.9	25%	$	592.7	$	530.1	12%
Placement		39.7		46.9	(15%)		149.5		137.6	9%
Interest Income & Other		2.0		4.5	(55%)		3.4		10.9	(69%)
Total Revenues	$	266.1	$	231.3	15%	$	745.6	$	678.7	10%

Total Revenues increased 15% to $266 million for third quarter 2022 from $231 million for the prior year quarter.

Advisory Revenues increased 25% to $224 million for the current quarter from $180 million for the prior year quarter. The increase was driven by increases in strategic advisory, restructuring and secondary advisory revenues.

Placement Revenues decreased 15% to $40 million for the current quarter from $47 million for the prior year quarter. The decrease in Placement Revenues was driven by a decrease in fund placement revenues, which was partially offset by an increase in corporate placement revenues.

Interest Income & Other decreased $2.5 million for the current quarter compared with the prior year quarter.

Total Revenues increased 10% to $746 million for the nine months ended September 30, 2022 from $679 million for the same period a year ago.

Advisory Revenues increased 12% to $593 million for the nine months from $530 million for the same period a year ago. The increase was driven by increases in strategic advisory, restructuring and secondary advisory revenues.

Placement Revenues increased 9% to $149 million for the nine months from $138 million for the same period a year ago. The increase in Placement Revenues was driven by an increase in fund placement revenues, which was partially offset by a decline in corporate placement revenues.

Interest Income & Other decreased $7.6 million for the nine months compared with the same period a year ago. The decrease in Interest Income & Other was primarily driven by a reduction in fair market value on certain equity securities received as part of transaction compensation.

The following tables set forth information relating to the Company’s expenses for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,
	2022						2021
	GAAP			As Adjusted			GAAP			As Adjusted
	(Dollars in Millions)
Expenses
Compensation and Benefits	$	179.1		$	175.1		$	148.1		$	144.5
% of Revenues		67.3	%		65.8	%		64.1	%		62.5	%
Non-Compensation	$	39.4		$	37.0		$	34.9		$	32.9
% of Revenues		14.8	%		13.9	%		15.1	%		14.2	%
Total Expenses	$	218.5		$	212.1		$	183.0		$	177.4
% of Revenues		82.1	%		79.7	%		79.1	%		76.7	%
Pretax Income	$	47.6		$	54.0		$	48.3		$	53.9
% of Revenues		17.9	%		20.3	%		20.9	%		23.3	%

	Nine Months Ended September 30,
	2022						2021
	GAAP			As Adjusted			GAAP			As Adjusted
	(Dollars in Millions)
Expenses
Compensation and Benefits	$	488.9		$	477.2		$	434.9		$	424.1
% of Revenues		65.6	%		64.0	%		64.1	%		62.5	%
Non-Compensation	$	115.2		$	109.1		$	99.2		$	93.2
% of Revenues		15.4	%		14.6	%		14.6	%		13.7	%
Total Expenses	$	604.1		$	586.3		$	534.1		$	517.4
% of Revenues		81.0	%		78.6	%		78.7	%		76.2	%
Pretax Income	$	141.5		$	159.3		$	144.6		$	161.3
% of Revenues		19.0	%		21.4	%		21.3	%		23.8	%

GAAP Compensation and Benefits Expense was $179 million for third quarter 2022 compared with $148 million for the prior year quarter. Adjusted Compensation and Benefits Expense was $175 million for the current quarter compared with $145 million for the prior year quarter. The Company accrued at a higher rate during the current quarter compared with the prior year quarter driven by a higher nine month accrual rate.

GAAP Compensation and Benefits Expense was $489 million for the nine months ended September 30, 2022 compared with $435 million for the same period a year ago. Adjusted Compensation and Benefits Expense was $477 million for the nine months compared with $424 million for the same period a year ago. The nine month adjusted compensation accrual rate increased to 64.0% compared with 63.0% for the full year 2021.

GAAP Non-Compensation Expense was $39 million for third quarter 2022 compared with $35 million for the prior year quarter. Adjusted Non-Compensation Expense was $37 million for the current quarter compared with $33 million for the prior year quarter.

GAAP and Adjusted Non-Compensation Expense increased during the current quarter compared with the prior year quarter, primarily driven by Travel and Related, which increased $4 million due to increased levels of business travel. Excluding Travel and Related, GAAP and Adjusted Non-Compensation Expense increased 3% and 2%, respectively, during the current quarter compared with the prior year quarter.

GAAP Non-Compensation Expense was $115 million for the nine months ended September 30, 2022 compared with $99 million for the same period a year ago. Adjusted Non-Compensation Expense was $109 million for the nine months compared with $93 million for the same period a year ago.

GAAP and Adjusted Non-Compensation Expense increased during the nine months compared with the same period a year ago, primarily driven by Travel and Related, which increased $12 million due to increased levels of business travel. Excluding Travel and Related, GAAP and Adjusted Non-Compensation Expense increased 4% during the nine months compared with the same period a year ago.

As of September 30, 2022, PJT Partners Inc. owned 62.3% of PJT Partners Holdings LP. PJT Partners Inc. is subject to corporate U.S. federal and state income tax while PJT Partners Holdings LP is subject to New York City unincorporated business tax and other entity-level taxes imposed by certain state and foreign jurisdictions. Please refer to Note 11. “Stockholders’ Equity” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for further information about the corporate ownership structure. The effective tax rate for GAAP Net Income for the three months ended September 30, 2022 and 2021 was 18.1% and 18.8%, respectively. The effective tax rate for GAAP Net Income for the nine months ended September 30, 2022 and 2021 was 16.1% and 13.0%, respectively.

In calculating Adjusted Net Income, If-Converted, the Company has assumed that all outstanding Class A partnership units in PJT Partners Holdings LP (“Partnership Units”) (excluding the unvested partnership units that have yet to satisfy certain market conditions) have been exchanged into shares of the Company’s Class A common stock, subjecting all of the Company’s income to corporate-level tax.

The effective tax rate for Adjusted Net Income, If-Converted for the nine months ended September 30, 2022 was 25.8% compared with 22.3% for full year 2021. The tax rate increase was primarily due to a lesser tax benefit received from the delivery of vested shares at values in excess of the original grant prices.

As of September 30, 2022, the Company held cash, cash equivalents and short-term investments of $290 million and had no funded debt.

During the third quarter 2022, the Company repurchased 240 thousand shares of Class A common stock in the open market, repurchased 20 thousand Partnership Units for cash and exchanged 250 thousand Partnership Units for shares of Class A common stock as a result of Partnership Unit exchanges and net share settled 19 thousand shares to satisfy employee tax obligations.

In total during the third quarter 2022, the Company repurchased 279 thousand share equivalents at an average price of $68.26 per share. During the nine months ended September 30, 2022, the Company repurchased 2 million share equivalents at an average price of $65.33 per share.

As of September 30, 2022, the Company’s remaining repurchase authorization was $183 million.

The Company intends to repurchase 38 thousand Partnership Units for cash on November 1, 2022 at a price to be determined by the volume-weighted average price per share of the Company’s Class A common stock on October 27, 2022.

The Board of Directors of PJT Partners Inc. has declared a quarterly dividend of $0.25 per share of Class A common stock. The dividend will be paid on December 21, 2022 to Class A common stockholders of record as of December 7, 2022.

PJT Partners will host a conference call on October 25, 2022 at 8:30 a.m. ET to discuss its third quarter 2022 results. The conference call can be accessed via the internet at www.pjtpartners.com or by dialing +1 (888) 204-4368 (U.S. domestic) or +1 (720) 543-0214 (international), passcode 9880072. For those unable to listen to the live broadcast, a replay will be available following the call at www.pjtpartners.com.

PJT Partners is a premier global advisory-focused investment bank. We offer a unique portfolio of advisory services designed to help our clients achieve their strategic objectives. Our team of senior professionals delivers a range of strategic advisory, capital markets advisory, restructuring and special situations and shareholder advisory services to corporations, financial sponsors, institutional investors and governments around the world. We also provide private fund advisory and fundraising services for alternative investment strategies, including private equity, real estate, hedge funds and private credit. To learn more about PJT Partners, please visit our website at www.pjtpartners.com.

Certain material presented herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include certain information concerning future results of operations, business strategies, acquisitions, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “opportunity,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance upon any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (a) changes in governmental regulations and policies; (b) cyberattacks, security vulnerabilities, and internet disruptions, including breaches of data security and privacy leaks, data loss, and business interruptions; (c) failure of our computer systems or communication systems during a catastrophic event, including as a result of the increased use of remote work environments and virtual platforms; (d) the impact of catastrophic events, such as COVID-19 or other pandemics, on the U.S. and the global economy, including business disruptions, reductions in employment and an increase in business failures; (e) the impact of catastrophic events, such as COVID-19 or other pandemics, on our employees and our ability to provide services to our clients and respond to their needs; (f) the failure of third-party service providers to perform their functions; and (g) volatility in the political and economic environment, including as a result of inflation and rising interest rates.

Any of these factors, as well as such other factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the United States Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in the Company’s periodic filings with the SEC, accessible on the SEC’s website at www.sec.gov, could cause the Company’s results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that the Company is unable to predict at this time or that are not currently expected to have a material adverse effect on its business. Any such risks could cause the Company’s results to differ materially from those expressed in forward-looking statements.

The following represent key performance measures that management uses in making resource allocation and/or compensation decisions. These measures should not be considered substitutes for, or superior to, financial measures prepared in accordance with GAAP.

Management believes the following non-GAAP measures, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results: Adjusted Pretax Income; Adjusted Net Income; Adjusted Net Income, If-Converted, in total and on a per-share basis (referred to as “Adjusted EPS”); Adjusted Compensation and Benefits Expense and Adjusted Non-Compensation Expense. These non-GAAP measures, presented and discussed in this earnings release, remove the significant accounting impact of: (a) transaction-related compensation expense, including expense related to Partnership Units with both time-based vesting and market conditions as well as equity-based and cash awards granted in connection with the acquisition of CamberView Partners Holdings, LLC (“CamberView”); (b) intangible asset amortization associated with Blackstone Inc.’s (“Blackstone”) initial public offering (“IPO”), the acquisition of PJT Capital LP, and the acquisition of CamberView; and (c) the net change to the amount the Company has agreed to pay Blackstone related to the net realized cash benefit from certain compensation-related tax deductions. Reconciliations of the non-GAAP measures to their most directly comparable GAAP measures and further detail regarding the adjustments are provided in the Appendix.

To help investors understand the effect of the Company’s ownership structure on its Adjusted Net Income, the Company has presented Adjusted Net Income, If-Converted. This measure illustrates the impact of taxes on Adjusted Pretax Income, assuming all Partnership Units (excluding the unvested Partnership Units that have yet to satisfy certain market conditions) were exchanged for shares of the Company’s Class A common stock, resulting in all of the Company’s income becoming subject to corporate-level tax, considering both current and deferred income tax effects. This tax rate excludes a number of adjustments, including the tax benefits of the adjustments for transaction-related compensation expense and amortization expense.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues
Advisory	$	224,405	$	179,900	$	592,712	$	530,124
Placement		39,652		46,891		149,485		137,611
Interest Income and Other		2,035		4,507		3,355		10,944
Total Revenues		266,092		231,298		745,552		678,679
Expenses
Compensation and Benefits		179,080		148,149		488,899		434,866
Occupancy and Related		8,231		8,569		25,831		25,788
Travel and Related		6,336		2,765		17,471		4,979
Professional Fees		7,375		8,066		21,652		24,016
Communications and Information Services		4,155		4,341		12,819		13,548
Depreciation and Amortization		3,755		3,892		12,156		11,535
Other Expenses		9,518		7,241		25,246		19,337
Total Expenses		218,450		183,023		604,074		534,069
Income Before Provision for Taxes		47,642		48,275		141,478		144,610
Provision for Taxes		8,601		9,090		22,776		18,773
Net Income		39,041		39,185		118,702		125,837
Net Income Attributable to Non-Controlling Interests		17,953		17,740		52,742		54,565
Net Income Attributable to PJT Partners Inc.	$	21,088	$	21,445	$	65,960	$	71,272
Net Income Per Share of Class A Common Stock
Basic	$	0.84	$	0.86	$	2.63	$	2.85
Diluted	$	0.82	$	0.82	$	2.56	$	2.72
Weighted-Average Shares of Class A Common Stock Outstanding
Basic		24,966,527		24,908,606		25,032,151		24,979,925
Diluted		26,519,173		42,010,543		26,497,177		42,414,461

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
GAAP Net Income	$	39,041		$	39,185		$	118,702		$	125,837
Less: GAAP Provision for Taxes		8,601			9,090			22,776			18,773
GAAP Pretax Income		47,642			48,275			141,478			144,610

Adjustments to GAAP Pretax Income
Transaction-Related Compensation Expense⁽¹⁾		3,987			3,622			11,746			10,726
Amortization of Intangible Assets⁽²⁾		1,486			1,928			5,276			5,850
Spin-Off-Related Payable Due to Blackstone⁽³⁾		836			79			771			135
Adjusted Pretax Income		53,951			53,904			159,271			161,321
Adjusted Taxes⁽⁴⁾		10,142			9,951			26,206			20,988
Adjusted Net Income		43,809			43,953			133,065			140,333

If-Converted Adjustments
Less: Adjusted Taxes⁽⁴⁾		(10,142	)		(9,951	)		(26,206	)		(20,988	)
Add: If-Converted Taxes⁽⁵⁾		13,970			12,627			41,143			37,066
Adjusted Net Income, If-Converted	$	39,981		$	41,277		$	118,128		$	124,255

GAAP Net Income Per Share of Class A Common Stock
Basic	$	0.84		$	0.86		$	2.63		$	2.85
Diluted	$	0.82		$	0.82		$	2.56		$	2.72
GAAP Weighted-Average Shares of Class A Common Stock Outstanding
Basic		24,966,527			24,908,606			25,032,151			24,979,925
Diluted		26,519,173			42,010,543			26,497,177			42,414,461

Adjusted Net Income, If-Converted Per Share	$	0.96		$	0.98		$	2.84		$	2.93
Weighted-Average Shares Outstanding, If-Converted		41,540,815			42,015,728			41,614,791			42,419,646

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
GAAP Compensation and Benefits Expense	$	179,080		$	148,149		$	488,899		$	434,866
Transaction-Related Compensation Expense⁽¹⁾		(3,987	)		(3,622	)		(11,746	)		(10,726	)
Adjusted Compensation and Benefits Expense	$	175,093		$	144,527		$	477,153		$	424,140

Non-Compensation Expenses
Occupancy and Related	$	8,231		$	8,569		$	25,831		$	25,788
Travel and Related		6,336			2,765			17,471			4,979
Professional Fees		7,375			8,066			21,652			24,016
Communications and Information Services		4,155			4,341			12,819			13,548
Depreciation and Amortization		3,755			3,892			12,156			11,535
Other Expenses		9,518			7,241			25,246			19,337
GAAP Non-Compensation Expense		39,370			34,874			115,175			99,203
Amortization of Intangible Assets⁽²⁾		(1,486	)		(1,928	)		(5,276	)		(5,850	)
Spin-Off-Related Payable Due to Blackstone⁽³⁾		(836	)		(79	)		(771	)		(135	)
Adjusted Non-Compensation Expense	$	37,048		$	32,867		$	109,128		$	93,218

The following table provides a summary of weighted-average shares outstanding for the three and nine months ended September 30, 2022 and 2021 for both basic and diluted shares. The table also provides a reconciliation to If-Converted Shares Outstanding assuming that all Partnership Units and unvested PJT Partners Inc. restricted stock units (“RSUs”) were converted to shares of the Company’s Class A common stock:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Weighted-Average Shares Outstanding - GAAP
Basic Shares Outstanding, GAAP		24,966,527		24,908,606		25,032,151		24,979,925
Dilutive Impact of Unvested RSUs⁽⁶⁾		1,552,646		1,575,341		1,465,026		1,567,341
Dilutive Impact of Partnership Units⁽⁷⁾		—		15,526,596		—		15,867,195
Diluted Shares Outstanding, GAAP		26,519,173		42,010,543		26,497,177		42,414,461

Weighted-Average Shares Outstanding - If-Converted
Basic Shares Outstanding, GAAP		24,966,527		24,908,606		25,032,151		24,979,925
Unvested RSUs⁽⁸⁾		1,555,239		1,580,526		1,467,619		1,572,526
Partnership Units⁽⁷⁾		15,019,049		15,526,596		15,115,021		15,867,195
If-Converted Shares Outstanding		41,540,815		42,015,728		41,614,791		42,419,646

	As of September 30,
	2022		2021
Fully-Diluted Shares Outstanding⁽⁹⁾		43,761,678		43,948,954

As of September 30, 2022, 1.1 million Partnership Units and 1.5 million RSUs that have yet to satisfy certain market conditions were excluded from any share count calculations.

Of the total 2.6 million share equivalents subject to market conditions, 1.3 million require the Company to achieve a volume-weighted average share price over any consecutive 20-day trading period (“20-day VWAP”) of $100 prior to February 26, 2027. The remaining 1.3 million vest ratably upon the Company achieving a 20-day VWAP between $100 and $130 prior to February 26, 2027. The awards are also subject to a five year service based vesting requirement, with 20% vesting per annum.