10-Q · May 4, 2026
Lazard reported Q1 2026 results with revenue of $672.98 million, missing estimates by 6.46%, and EPS of $0.42, falling short of expectations by 17.65%. The company faced a challenging operating environment with…
Earnings analysis · 10-Q
LAZ earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Lazard delivered $807.669 million of Q2 GAAP net revenue, up 1% year over year, as 23% Asset Management adjusted-revenue growth and AUM of $284.650 billion offset a 9% Financial Advisory decline. Profitability…
Read full summary
Lazard delivered $807.669 million of Q2 GAAP net revenue, up 1% year over year, as 23% Asset Management adjusted-revenue growth and AUM of $284.650 billion offset a 9% Financial Advisory decline. Profitability deteriorated sharply: GAAP operating margin fell 7.0 percentage points to 4.7%, while net income attributable to Lazard declined to $4.808 million from $55.346 million, pressured by compensation, non-compensation expense and a 63.5% tax rate. Liquidity remains substantial at approximately $1.100 billion of cash and cash equivalents, but operating cash flow remained negative at $16 million for the first half and the Campbell Lutyens acquisition adds execution and funding demands.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $0.03
What stood out
-
Revenue grew modestly as Asset Management offset Advisory
GAAP net revenue rose 1% year over year to $807.669 million, while adjusted net revenue increased 2% to $786.466 million. The reported revenue increase was driven by a $59 million, or 22%, increase in asset-management fees, including incentive fees.
-
AUM and Asset Management fees accelerated
Asset Management adjusted net revenue increased 23% to $331.308 million, with adjusted management fees up 23% to $310 million. Total AUM reached $284.650 billion at June 30, up $30.350 billion, or 12%, from $254.300 billion at December 31.
-
Positive first-half flows support AUM base
Total AUM added $7.391 billion of net flows in the first half, including $7.086 billion in equity and $889 million in alternatives. Second-quarter AUM had $27.111 billion of market appreciation, partly offset by $1.614 billion of net outflows and $1.067 billion of FX depreciation.
-
Operating cash use improved and liquidity remains sizable
Operating cash outflow improved to $16 million for the first six months from a $168 million outflow a year earlier. Cash, cash equivalents and restricted cash ended at $1.303 billion, and the company had approximately $210 million of unused credit lines.
-
Capital-return authorization expanded
The company repurchased 1,180,585 shares for the first half at an average $43.79 per share and declared a $0.50 quarterly dividend on July 22. After a new $200 million authorization, total remaining repurchase capacity was approximately $257 million.
-
Private-markets acquisition adds growth avenue
Lazard expects the Campbell Lutyens transaction to close in the second half of 2026. The transaction has $460 million of initial consideration, $115 million deferred consideration and up to $85 million of earn-out consideration.
What to watch
-
Advisory weakness drove a sharp segment profit decline
Financial Advisory adjusted net revenue fell $46 million, or 9%, to $445.319 million as lower M&A transaction fees more than offset broader market activity. Segment adjusted operating income dropped $48 million, or 40%, to $73.443 million and margin fell to 16.5% from 24.8%.
-
Expense growth caused material margin compression
Company operating income declined $55.478 million, or 60%, to $37.603 million, and the GAAP operating margin compressed to 4.7% from 11.7%. Adjusted operating margin fell to 8.3% from 14.1% as the adjusted compensation ratio rose to 69.9% from 65.5%.
-
Elevated tax rate severely reduced quarterly earnings
The quarterly effective tax rate was 63.5%, versus 34.1% a year ago, principally from geographic earnings mix and a catch-up adjustment related to share-based incentive-compensation tax benefits. Net income attributable to Lazard fell to $4.808 million from $55.346 million.
-
Acquisition introduces execution and cash-use risk
The pending Campbell Lutyens acquisition requires $460 million of initial consideration, $115 million deferred consideration and up to $85 million in earn-out payments; a termination could require a $50 million fee. The quarter also included $8.808 million of acquisition-related expense.
-
Cash declined amid capital returns and fixed debt
Net cash used in operating activities was $16 million in the first half and financing activities used $278 million, reducing cash, cash equivalents and restricted cash by $368 million to $1.303 billion. Senior-debt principal remained $1.700 billion.
-
No material risk-factor updates; market sensitivity remains
Item 1A states there were no material changes from risk factors in the Form 10-K for the year ended December 31, 2025. Nonetheless, management quantifies residual investment sensitivity: a 10% adverse equity-market move would reduce the hedged investment portfolio by approximately $1.9 million.
Management's outlook
The 10-Q provides no quantitative revenue or EPS guidance. Management expects the Campbell Lutyens acquisition to close in the second half of 2026, subject to regulatory approvals and customary conditions; stated consideration includes $460 million at closing, $115 million deferred and up to $85 million of earn-out consideration.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.