Moelis reports Q3 revenue up 13% to $426 million

Moelis & Company reported third-quarter 2026 revenue of $426 million, a 13% increase from a year earlier, as a 40% jump in mergers and acquisitions revenue helped offset weaker capital markets activity.

The independent global investment bank’s revenue for the first nine months reached a record $1.15 billion, up 10%. Average fees per completed transaction also set records for both periods as Moelis advised on larger, more complex assignments, CEO and co-founder Navid Mahmoodzadegan said on the earnings call.

Deal pipeline reaches record high

New-business origination and the announced deal pipeline each increased approximately 20% year over year, while the total pipeline reached a record high, Mahmoodzadegan said.

Strategic transactions drove the quarter’s M&A growth. Mahmoodzadegan credited investments in talent and capabilities with helping the firm secure more assignments from large corporate clients.

Sponsor activity remained muted overall, although Moelis believed it was capturing a larger share of that business. During the question-and-answer session, Mahmoodzadegan clarified that an approximately 30% increase in sponsor transactions during the first nine months referred to sponsor transactions generally, rather than only M&A.

The CEO remained constructive about dealmaking, citing demand for scale and growth, technology disruption and pressure on sponsors to return capital to investors. He also flagged volatility, geopolitical tensions, higher interest rates and uncertainty around artificial intelligence infrastructure financing as risks.

Announced deals typically convert into revenue at a high rate, he said, with regulatory issues among the main potential obstacles. Capital markets transactions are more sensitive to market conditions.

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Advisory expansion and recruiting

Capital structure advisory recorded one of its strongest quarters, according to Mahmoodzadegan. Liability management remained a major source of business, and he expects traditional restructurings to increase over time as lenders become less willing to extend approaching maturities.

Moelis was advising some leveraged software companies on potential liability management, though much of that work was still in its early stages. Mahmoodzadegan expects significant liability management activity over the next 12 to 18 months, noting that software represents a meaningful portion of debt maturities due in 2028 and 2029.

The firm also continued building its private capital advisory business. It has assembled seven managing directors focused on general-partner-led secondaries and hired three focused on primary fundraising. Revenue from the GP-led team was not yet meaningful this year or quarter, Mahmoodzadegan said, but a meaningful pipeline was developing for next year.

Across the firm, Moelis has hired 24 managing directors year to date, marking its most active recruiting year on record. Thirteen had joined, with the remaining 11 expected to arrive through the rest of 2026 and into 2027.

Expenses rise as compensation ratio falls

Moelis’ adjusted compensation ratio declined to 65.8% for both the third quarter and the first nine months. That compares with 66.2% and 68%, respectively, in the prior-year periods. Mahmoodzadegan continued to expect a lower full-year compensation ratio.

Adjusted non-compensation expenses increased 19% to $195 million for the first nine months. CFO Christopher Callesano attributed the increase to higher office occupancy costs, technology and data spending, and greater client activity. Moelis expects those expenses to rise approximately 19% for the full year compared with 2025.

Callesano said it was too early to offer a 2027 expense outlook, although technology costs could keep rising. The firm was also evaluating a tax provision taking effect next year that could add a few points to its tax rate, subject to several variables.

Moelis closed the quarter with $659 million in cash and no debt. Its board declared a quarterly dividend of $0.65 per share. Including that dividend, the firm expects shareholder returns related to the first nine months of 2026 to total approximately $318 million.

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