Key facts
- Lazard's second-quarter profit dropped 91% to $5 million, or 3 cents per share.
- The firm is restructuring its financial advisory business, replacing over 80 managing directors.
- Quarterly revenue for the advisory unit fell 9%, despite a strong M&A market.
- Lazard plans to establish a U.S. IPO advisory business.
- Asset management revenue increased 23% to $331 million, with total adjusted revenue up 2% to $786 million.
Lazard reported a significant 91% drop in second-quarter profit, missing Wall Street expectations, as it undertakes a restructuring of its financial advisory business. The firm replaced more than 80 managing directors between 2023 and 2025, affecting 40% of these positions, to bolster performance and focus on high-growth sectors like healthcare, industrials, and defense technology.
The advisory unit's revenue fell 9% despite a strong M&A market. CEO Peter Orszag acknowledged the revenue loss associated with the turnover but expects new hires and promotions to ramp up revenue through 2027. Lazard also plans to build a U.S. IPO advisory business, leveraging its existing European operations, to capitalize on the current boom in public listings.
Net income for the quarter was $5 million, or 3 cents per share, a sharp decline from $55 million, or 52 cents per share, a year earlier. This was partly due to an elevated tax rate, with a provision for income taxes at $24 million.
In contrast, Lazard's asset management division showed strength, with revenue climbing 23% to $331 million and total adjusted revenue rising 2% to $786 million, surpassing analyst estimates. The firm reported its best first-half net inflows in nearly 20 years and reached record assets under management, ending the quarter with $285 billion.