MOELIS & COMPANY Q2 2026 Earnings Call

Good afternoon, and welcome to the Moelis & Company earnings conference call for the second quarter of 2026. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. To begin, I turn the call over to Mr. Matt Tsukroff. Please go ahead. Good afternoon, and thank you for joining us for Moelis & Company's second quarter 2026 financial results conference call.

On the phone today are Navid Mahmoodzadegan, CEO and co-founder, and Chris Callesano, chief financial officer. Before we begin, I would like to note that the remarks made on this call may contain certain forward-looking statements, which are subject to various risks and uncertainties, including those identified from time to time in the risk factor section of Moelis & Company's filings with the SEC. Actual results could differ materially from those currently anticipated. The firm undertakes no obligation to update any forward-looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures, when presented together with comparable GAAP measures, are useful to investors to compare our results across several periods and to better understand our operating results.

The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Regulation G is provided in the firm's earnings release, which can be found on our investorrelations.moelis.com. I'll now turn the call over to Navid.

Thank you, Matt, and good afternoon, everyone. Appreciate your being with us today. The second quarter was another strong period for our firm. We reported revenues of $409 million, up 12% year-over-year. For the first half of 2026, revenues were $729 million, an increase of 9% from the prior year period. These results represent record revenues for both the quarter and the first half, driven by higher average fees per completed transaction and meaningful contributions from the businesses we have built and expanded in recent years. Collectively, our non-M&A businesses generated record revenues in the first half, led by capital markets and the growing contribution from private capital advisory. Since our last earnings call, we've advised on a number of notable transactions.

These include Taylor Morrison's $8.5 billion sale to Berkshire Hathaway, Magnolia Oil & Gas's $4.1 billion acquisition of WildFire Energy, AtaiBeckley's $3.8 billion sale to Eli Lilly, and Bridgepoint's acquisition of Kayne Anderson Real Estate. Beyond M&A, we advised Office Properties Income Trust on its $2.4 billion restructuring, Carlyle on its continuation vehicle for content partners, and we served as active bookrunner and lead placement agent on Doncasters' $1.1 billion IPO and concurrent private placement. Despite market volatility driven by the war in the Middle East, concerns about private credit redemptions, and the evolving impact of AI, client engagement and transaction activity has remained strong. At the end of the second quarter, our announced pipeline had increased over 80% versus the prior year period. In addition, new business origination accelerated in the second quarter, and we entered the back half of the year with a record total pipeline.

Let me turn to each of our businesses. In M&A, market conditions continued to improve in the second quarter. Accessible financing and strong equity market performance are supporting increased transaction activity, while the strategic need for scale and a more constructive regulatory environment are driving greater interest in larger transactions. This is evident in our performance and pipeline, which includes a higher number of opportunities advising larger cap clients and substantially higher average fee opportunities. While industry-wide sponsor M&A activity has remained modest year-to-date, our sponsor business continues to perform well. In the first half, announcement activity in our sponsor M&A business grew meaningfully over the prior year period, and our overall sponsor pipeline remains strong.

We are encouraged by this and are confident in our ability to support our sponsor clients across a variety of market environments, given our broad capabilities, including continuation vehicles and bespoke private capital raising. In capital markets, our expanded capabilities continue to drive meaningful growth. Our capital markets business achieved record second quarter and first-half revenues driven by constructive market conditions, strong demand for late-stage growth and pre-IPO financings, and healthy IPO activity. We remain active across the public markets, with further IPO activity expected later this year. At the same time, demand for hybrid and structured financing solutions is robust. To support this growth, we've continued to invest in our capital markets platform. On our last earnings call, we referenced two managing director hires who have now joined our team. One brings deep expertise in debt capital markets and private credit.

The second will help establish our securitization capabilities, expanding our offering into structured products and enabling us to provide clients with asset-backed financing solutions across the capital structure. Turning to private capital advisory, our PCA franchise was a meaningful contributor to our revenue growth in the first half of the year, and the team has significant momentum in deal completions and new client mandates. The market for GP-led secondaries remains very active, and its growth is structurally supported by sponsor liquidity needs and institutional investor demand for exposure to seasoned private market assets. To address this opportunity, we've aggressively expanded our GP-led secondaries capabilities, achieving critical mass with seven dedicated managing directors, including one MD who will be joining shortly.

The team's early success is a testament to both the quality of talent we have hired and our collaborative model, where our sector bankers work closely with our PCA team to deliver exceptional client solutions. We are now expanding the business into complementary areas and have hired one managing director to launch our LP-led secondaries capability, and another to develop our promoted co-investment expertise. Both of these areas will be important in building a comprehensive platform that serves the full PCA ecosystem. In capital structure advisory, we enter the second half of the year with high levels of engagement. Liability management continues to dominate deal activity, and while well-positioned borrowers can still access capital, increasing lender selectivity is making refinancing more challenging for some highly levered companies.

We are beginning to see AI create differentiation among software businesses. We expect that demand for liability management as well as capital market solutions will pick up for certain companies as the sector continues to evolve. Combined with the strength of our technology franchise, we are well-positioned to support our clients as their needs develop. In addition, we are expanding our CSA team with an MD hire who will further enhance sponsor and creditor coverage when joining later this year. This brings me to our investment in talent, which continues to be one of our highest strategic priorities. To summarize since our last earnings call, we have hired four managing directors, which include the two PCA hires and one CSA MD already mentioned, and an MD in Europe focused on infrastructure.

This brings our total lateral MD hires year to date to 12, in addition to the 13 internal promotions announced at the beginning of the year. Recruiting exceptional bankers is a core priority. We are excited about the quality of senior talent that is joining our firm. Finally, we continue to make meaningful progress deploying AI across the firm. These tools are becoming increasingly embedded in our workflows and are enhancing the quality of our client engagement. We remain optimistic that growing adoption of AI tools will increase the efficiency and productivity of our business. In closing, I'm very pleased with the way our firm is performing. I expect a strong second half of the year.

With the best talent and most comprehensive capabilities across products and sectors in our firm's history, we continue to be focused on delivering exceptional outcomes for clients, executing our strategic growth priorities, and creating long-term value for our shareholders. With that, I'll pass the call to Chris to review our financial results in more detail.

Thanks, Navid, good afternoon, everyone. As Navid noted, second quarter revenues were $409 million, up 12% from the prior year period. First half revenues were $729 million, up 9% year-over-year. Growth in full current year periods was driven primarily by capital markets and private capital advisory, partially offset by declines in capital structure advisory. For the first half of the year, our business mix was approximately two-thirds M&A, and one-third non-M&A. Turning to expenses. Our adjusted compensation ratio for both the second quarter and first half of 2026 was 65.8%, compared with 69% in both prior year periods. As we have stated previously, we expect to make continued progress on our compensation ratio this year with the magnitude of improvement depending on full-year revenues, senior hiring, and the competitive market for talent.

Adjusted non-compensation expenses were $66.5 million in the second quarter, resulting in a 16.2% non-compensation expense ratio. For the first half of the year, our adjusted non-compensation expenses were $134 million, representing a non-compensation expense ratio of 18.3%. The main drivers of the expense growth in both the second quarter and first half of the year are attributable to increased business and client activity, including higher deal-related T&E, expenses associated with client conferences, and underwriting syndication costs from our expanding public equity capital markets capabilities. Additionally, we continue to invest in technology and data, including AI and increased occupancy to support the growth of the business. We expect our quarterly non-comp expenses to be in the mid to high $60 million range for the remainder of the year.

Our adjusted pre-tax margin was 18.6% for the second quarter and 17% for the first half of 2026, an improvement compared with 17.6% and 16% respectively in the prior year periods. Our effective tax rate for the quarter was 29.1%, roughly in line with the second quarter of 2025. Turning to capital allocation. The board declared a regular quarterly dividend of $0.65 per share, consistent with the prior period. In the second quarter, we repurchased approximately 337,000 shares on the open market at an average price of $64.43 per share. During the first half of the year, we have repurchased approximately 2.3 million shares through open market repurchases and net share settlements for a total cost of approximately $141 million. Including the dividend declared today, we will have returned approximately $246 million of capital to shareholders with respect to the first half of 2026.

Finally, we ended the quarter with a strong cash position of $481 million and no debt. With that, we can open the line for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again.

We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Devin Ryan with Citizens Bank. Your line is open. Please go ahead.

Hey, guys. This is Neil on for Devin. My first question is on Moelis progressing upstream in deal size. Obviously you've had some increasing success winning roles on some of the larger strategic transactions, which appears to be becoming a more important part of the franchise. Can you talk a little bit about the key drivers of that progress and where you're focusing your efforts to kind of sustain that?

Sure. Thanks, Neil. As I think most people are aware, the M&A market, certainly for the last number of quarters, has been geared more towards larger transactions. That's where a lot of the activity is, primarily up until this quarter in kind of the $5 billion-plus range. Interestingly enough, we noticed an upswing in kind of that next tier down, the $1 billion-$5 billion this quarter, both in the market data and in our own practice. We're going to watch that, but I'm optimistic that that could signal an expansion of the overall M&A market into more of the middle market. You're right, we're more active than we've been historically on larger transactions.

Part of that's because that's where the market activity is, but it's also because the investment in talent we've made, both laterally and with respect to our internal talent development, a lot of that hiring and the people who have joined our firm maturing on our platform, creating critical mass in some of our spaces, enhancing and expanding our product capabilities. It's all of that coming together to really support larger cap, bigger fee opportunities. I think on top of that, as an institution, I think we're doing a better job of really focusing and organizing and marshaling our resources around bigger cap opportunities. I think it's a combination of the market. It's a combination of the maturation of the talent that we've assembled at the firm, as well as organizational focus.

Great. For my follow-up, could I ask a question on the rising cost of senior talent? How is the increasingly competitive environment affecting your hiring plans, and the returns you require when adding senior bankers? Are there any particular industries, geographies, or products that you guys are targeting?

Sure. Look, it's definitely competitive out there. The market for hiring world-class talented bankers, both in sectors and products and geographies, is certainly very competitive. Retaining our talent is also very competitive marketplace out there. We put a lot of care, attention, and effort on both of those things, retention and recruitment. What we're really looking for and what we're really focusing on is best-in-class talent that's consistent with the culture, that's going to add to the culture, and wants to be part of a collaborative culture and firm. If you look at the 12 MDs we've hired this year laterally, about five of those are in various sectors, including energy and industrials and healthcare, et cetera. Seven of those MDs are product bankers sitting across M&A and PCA and capital markets, et cetera. We like that balance and mix in our lateral hiring.

We also love the balance and mix of this internal talent development. We promoted about 13 MDs this year, there's a good balance and mix there between internal talent promotion, lateral hiring, and I suspect as we roll forward here, we're going to try to kind of keep both of those engines humming in terms of further developing our talent and adding to our MD population.

Your next question comes from the line of Michael Brown with UBS. Your line is open. Please go ahead.

Okay, great. Thanks for taking my questions. Navid, you talked about the fact that the backlog continues to rise. You've got a record backlog now. Maybe as we talk about or think about the second half here, looks like revenue typically would rise about 37% in the second half versus the first half. We look at the last three years. Understandably, you don't have a crystal ball and the market can shift quickly. Assuming the base case kind of plays out here and you look at your backlog, can that seasonal second half pickup play out this year similar to the prior years?

Look, I don't want to make any specific predictions around the second half of this year playing out exactly the way they have played out in future or past, I should say, back halves. Look, I will say this. I mentioned our overall pipeline is at a record level as of the end of the second quarter. Even more importantly, within that overall pipeline, because that overall pipeline is a combination of both things we're working on that haven't yet got to deal announcement and deal announcements that are waiting to close. Within that overall pipeline, the thing that's very encouraging about our back half and gives us a lot of visibility is the announced pipeline. That announced pipeline sitting here today is up 80% versus where it was a year ago. At the exact same time of the year.

All of that gives us confidence in addition to the new business review activity, the general feeling we're getting from our bankers who are in the trenches working on deals that the second half of the year is shaping up to come together quite nicely. We're encouraged by that. We'll obviously have to see and play it out and see what the market will support, but we feel really good about the overall level of activity.

Okay, great. Thanks for those thoughts. Maybe just to double-click a little bit on the kind of software space and maybe a little bit of extra focus on the sponsor side there. Jon Gray talked a little bit about what they're seeing in their ecosystem in terms of kind of three different buckets in the kind of AI disrupted world, and they talked about kind of companies that are beneficiaries of AI, the AI unaffected companies, and then those where there's more uncertainty and a lot of activity focused on the first two buckets. Then how are kind of sponsors approaching a lot of the uncertainty at this juncture?

Obviously, a lot has kind of happened over the last few months. It's curious how some of those conversations have developed. I'm sure there's some pockets of the software space that are active, perhaps things like take privates. Again, some of the AI winners can be more active, but can that offset some of the traditional software LBOs that were so common in the prior few years?

Sure. Great. Thanks for the question, Mike. Well, look, if you go back and listen to our call from a quarter ago, we had a very similar construct that we laid out for how we thought the software disruption would play out, very similar to what you just mentioned, kind of three buckets. We believed at the time that the market was sort of painting a broad brush across all these different software companies. That over time, there'd be clear differentiation. That some of the companies in the software ecosystem would end up being net beneficiaries of AI. They would adopt and adapt to kind of the new world and thrive. A lot of those companies would be able to raise capital and do M&A and participate in growth vectors. We've seen some of that. We've actually engaged in software M&A this quarter.

We had a recent announcement sizable for this period of time software M&A transaction. We're definitely seeing some of that. Folks are starting to differentiate themselves. On the other end of the spectrum, I do think there's going to be some companies who are disrupted and potentially materially disrupted by artificial intelligence. It'll have a real impact on their businesses. Some of those companies sit within sponsors. Some of those companies have a fair amount of leverage. Our tech and CSA teams are all over those sets of opportunities to do work around balance sheets and liability management, et cetera. Again, the beauty of our model is very collaborative. When we identify opportunities and sponsors who need help with those kinds of situations, our sector teams and our product teams work hand in glove to bring those solutions to our sponsor clients.

I think in the middle, as you pointed out, I think there's going to be a bunch of companies where it's just too early to tell how this is going to play out. Some of those companies over time may take advantage of capital markets, trades, continuation vehicles, things of that nature as things develop for those companies. I agree. I think we're seeing that demarcation start to play out, or differentiation start to play out, I should say.

Your next question comes from the line of James Yaro with Goldman Sachs. Your line is open. You may now go ahead.

Good afternoon, all. Divya Murthy on behalf of James. First question which we had was how would you characterize where we are in the M&A cycle today, and how long can it continue to grow?

I appreciate the question. I think when you look at it, I still think we're in early innings of the M&A cycle. You look at the factors that are promoting M&A, the need for scale, technology disruption, the heavy investment that needs to go into staying out in front of technological trends. The vast number of companies that are still sitting within sponsor portfolios that need to get sold over time. Many companies that have been in sponsor portfolios for a very long time. At least for now, the regulatory environment that's more relaxed than it's been. I still think we're early days of a longest M&A cycle. Within that cycle, there'll be some ups and downs and periods of ups and downs in terms of the volume of activity.

I just think the forces that are promoting M&A are going to be around for a while.

Thank you for that. That makes sense. As a follow-up, could you help us think about your structural margin profile over time? When you weigh up a higher comp ratio but a lower non-comp ratio, how does this shake out and relative to your historic margin profile?

Let me start, and Chris can chime in as well. Look, I think as you've seen, we've done a good job of bringing our comp ratio back more into line with what we've traditionally seen. We've been investing very heavily in the platform in terms of world-class bankers, both on the product and sector side. I think we're still committed for sure to continuing to invest in that talent to serve our clients and create a great long-term business servicing those clients. We also appreciate that there is more room to kind of bring that comp ratio down over time, and we're committed to doing everything we can to do that, to create that balance between bringing that comp ratio down and continuing to invest in our business.

I think as our revenues grow, we'll be able to get more leverage over our non-MD cost base, and I think we'll get more leverage over our non-comp expenses. Chris, if you want to add to that.

Yeah. The only thing that I'd add is we do focus on margins, which obviously includes both comp and non-comp, and we target leverage over time. I'd note that our pre-tax margins have improved sequentially and over the prior year for both the quarter and year-to-date periods. And we've been improving our margins over the last several years.

Your next question comes from the line of Brennan Hawken with BMO. Your line is open. Please go ahead.

Thanks for taking my question. Navid, you spoke a bit to software and some of the potential issues there around some of the sponsor positions, but I'm more curious about the sponsor market more broadly. You guys have done a great job in pivoting, and you spoke to that earlier. But sponsor engagement is really important for your franchise. We've been waiting for that to improve for quite some time, and nobody really seems to have good answers as to why it hasn't. Do you have any theories, and what is it you're watching for to see some engagement pick up in that really important cohort?

Thanks for the question, Brennan. Engagement is very high with sponsors. There's no shortage of very intense engagement from our sponsor teams, our sector teams. Sponsors want to talk about deploying capital into new opportunities, and they absolutely want to talk about solutions to monetization and moving assets in their portfolios. There's no issue with engagement. The issue is really more around M&A in mostly the middle market. There are a bunch of companies that sponsors bought in kind of that period right before COVID as the market was heating up, and then certainly right after the reopening of the economy that were bought in a different rate environment with different growth outlook. You've seen disruption from technology in some of those spaces. The difficulty is not engagement.

The difficulty is for a segment of the universe of sponsor portfolio companies, we're not at the point yet where those companies can be exited at values that correspond with appropriate rates of return that the sponsors are expecting. It's going to take more time for some of those companies to kind of grow into valuations that will create that equation, a more positive equation for sponsor exits, or it's going to take more time for sponsor to decide this is the best it's going to get. I need to move these assets. I think things will improve over time. As I said, I think we're starting to see a little bit of improvement in some of the data in the $1 billion-$5 billion range.

I think over time, you'll start to see that drift down more in this heavy portfolio of companies, especially in that mid-market will start to move. The good news is even if that doesn't happen right away, we've built a very sizable capability in capital markets. There's lots of conversations around bespoke capital raising and creative solutions to get partial liquidity for sponsors on portfolio companies. We do a lot of that work, and now we have a world-class CV business, and we have lots of conversations and traction on working with sponsors around putting assets into longer-term vehicles.

For my follow-up, I'd actually love to drill down on what you just commented on with the growing PCA business. You guys have added several Managing Directors here in this business recently. It sounds like you got some good momentum. The comments in your prepared remarks were a constructive growing contribution. When you think about time frames for that business, and you think about the potential for the revenue per MD in that business versus the rest of Moelis, is the expectation it would be in line with the firm-wide numbers? How long do you think it'll take to get there? Is there a particular level of scale that you would need as far as number of MDs or whatnot? Thanks. Yeah. I think generally that business should be in line with the rest of our business on revenue per MD.

Parts of that business, again, we're now, I would say, soon to be in kind of three of the five components of PCA. Some of those PCA businesses like GP-led continuation vehicles, the time to market, the ramp to build some of that activity is pretty quick. One of the things I mentioned in our prepared remarks is this collaborative approach that we have where our sector bankers work closely with our PCA teams is creating a lot of early at-bats and early wins for our PCA team. You combine that with our deep sponsor relationships, that business is ramping up pretty quickly.

Other businesses like primary fundraising, which we're not quite in yet, but I hope to be in soon, will take longer to ramp up because the cycle for raising new funds, getting signed up to raise a fund, and actually raising that fund takes a little longer. Look, I think we've said over the next few years, we expect to have a sizable PCA business across hopefully most of the sectors of PCA, and everything we've seen so far about a year into it is we're well on our way to doing that.

Your next question comes from the line of Alex Bond with KBW. Your line is open. Please go ahead.

Hi, everyone. Natalie Null on for Alex Bond. I heard you mention that it was a record second quarter for capital markets. Can you talk a little bit more about how this compares relative to the last couple quarters, and any color on that group's performance and then the outlook for the rest of the year would be helpful.

Look, I appreciate the question. That group is doing an exceptional job. Our business in capital markets really spans both debt and equity, both public and private, and soon to be a business in securitization, which I mentioned earlier. That business is growing and dynamic. Great leadership, great team that we've built. Obviously, part of that business is partially dependent on the strength of the capital markets, and it's been a good environment here over the last few quarters.

I think as I said, long term, we see significant opportunity to continue to grow that business, and we are continuing to look for ways to kind of expand our capabilities there because we continue to see client demand for objective, aligned advice to help navigate these markets, to help navigate the private credit markets, to sit with companies and really help them find the best and cheapest and most aligned source of capital. We see just a big opportunity to continue to build that business.

Great. Then maybe one for Chris. I'm hoping you can add a little bit more color on the non-comp expense commentary. I appreciate the updated guide. Then maybe on AI tech spend in particular. It makes sense to invest there, wondering if maybe you can share when you expect to see some of the recent investments translate into operating leverage.

Sure. As I mentioned on the prepared remarks, much of the growth in non-comp is tied to increased business activity, and one of the primary drivers of the larger than expected growth in non-comp relates to increased underwriter syndication costs associated with our public equity capital markets business that Navid was just touching on. I would say excluding these distinct transaction-related expenses, the growth in our non-comp would be at the same rate as last year, which was our original forecast. Along with the other activity-related increases that we spoke about, we would expect our quarterly comp or non-comp expenses to be in the mid to high $60 million range for the remainder of the year. With respect to AI and the expenses, I know we monitor our AI usage across the firm.

However, currently many of our tools are on a fixed contract without any incremental or variable costs for increased tokens through the year, actually into part of next year. Of course, we'll continue to monitor that usage and see how those costs develop over time. For now, we're comfortable with our projected AI spend.

Natalie, just to add on to that on your question on productivity. Right now we're still in that phase of testing, adopting, deploying, getting these tools out in the hands of our bankers. I think the next phase of that, and that will continue, the next phase of that, which we're well underway is, as our bankers adopt these tools and implement them into our workflows, making sure that our bankers are talking to each other, they're spreading those best practices. I like to say at the end of the day, AI is going to be bottoms up. It's not going to be top down.

It's got to have to come from our bankers in the field in our different disciplines, incorporating that into their workflows, and then kind of spreading that gospel throughout the organization so that we can get the kind of productivity gains that I think will come, both in terms of efficiency. Even more importantly, I think the promise of AI, and we're really bullish on it, is I think it can make all of us better, more effective investment bankers at all different levels. If we can create more ideas, better ideas for our clients, give better advice, use those tools to do that, I think we can create more transactions and be more efficient in terms of our banker headcount. That's the goal, and that's what we're striving for. Still early days, though. Your next question comes from the line of Ryan Kenny with Morgan Stanley.

Your line is open. Please go ahead.

Hey, just want to follow up on the AI conversation there. Clearly there's some efficiency opportunities, but how do you think about the risks there, and how do you think about the idea that maybe the industry evolves, it all gets competed away, pitch decks have to come faster, clients expect more, the margins don't really improve? Are there any other risks as you think about AI?

Yeah, look, we spend a lot of time thinking about protecting our information, protecting our data. At the end of the day, our real competitive moat is the quality of our people, the quality of our relationships, and our information and data. Our teams, our legal teams, our IT teams, the committees that work on AI for us spend a lot of time thinking about the risks and how do we make sure that our client information and our own data is protected, and we preserve those competitive moats. Look, as I said, in terms of your second part of your question, I do think there's going to be an element of this that's going to be commoditized. We're all going to have access to a lot of the same tools.

I think how we use those tools and how we adopt those and how we incorporate those into our workflows is going to be part of what improves the performance of our company and our ability to execute with clients. If you look at previous technological innovations, spreadsheets, et cetera, the ability to create decks faster, all of the innovation that sort of happened mobile, all of those things I think made the industry better even though those were commoditized things that everyone had access to. I do think over time, investment bankers became better, more efficient, provided better advice, could do more transactions. There are many more transactions happening today per senior investment banker than you saw 20, 30 years ago. I think it can both be commoditized, also make all of us better and more efficient.

Shifting gears, I have a question on capital, which is cycle seems like it's building, sustainable, a lot of tailwinds ahead for the persistence of M&A. As you create more capital, how do you think about the uses there on dividend buyback, would you ever be open to being an acquirer?

Let me take those questions. I think as you all know, we tend to be pretty conservative when it comes to the balance sheet. We run the business with no debt and lots of excess cash. Our priorities are to continue to make sure we're investing in the long-term growth of the business, and serving our clients. Second, want to make sure we kind of protect the dividend. We obviously have a nice, healthy dividend and want to make sure that nothing happens to change that. I think our next order of priority after that is share repurchase. We look at that really carefully. As you've seen, we've been pretty aggressive, at least versus historical standards here over the last few quarters.

I suspect as we roll forward, we're going to continue to want to make sure we're largely mitigating the dilution that comes from equity that's issued as part of employee comp. I think that'll continue to be kind of the order of priorities as we roll forward in terms of capital. In terms of acquisitions, I think, look, as the hiring market has continued to be competitive, I do think being open-minded about acquisitions is the right approach, and we are open-minded. I do think we do strive to look at every opportunity that's out there. I think for us to actually do a sizable acquisition, I think there's three criteria that have to be part of that. First is it's got to be world-class talent that would add to our firm. Second, it's got to be consistent with our culture.

We're never going to do an acquisition that we think is going to diminish or impair our culture in any way. Cultural alignment's really important. We want those people who are going to be joining those firms to be equally excited about the long-term growth opportunity at our firm. Alignment on deal structure and deal terms is going to be absolutely critical. Really open-minded about acquisition opportunities, and if we find the right situation that checks all three of those boxes, we wouldn't hesitate to do something.

There are no further questions at this time. I will now turn the call back to Mr. Matt Tsukroff for closing remarks.

Really appreciate everyone joining us today. Enjoy the rest of your summers, and we'll talk to you soon. Thank you. This concludes today's call.

Thank you for attending. Goodbye.