Title

Presentation

Moelis & Company beats earnings expectations. Reported EPS is $0.64, expectations were $0.57.

Operator: Good afternoon, and welcome to the Moelis & Company Earnings Conference Call for the First Quarter 2025. To begin, I’ll turn the call over to Mr. Matt Tsukroff.

Matt Tsukroff: Good afternoon, and thank you for joining us for Moelis & Company’s first quarter 2025 financial results conference call. On the phone today are Ken Moelis, chairman and CEO, and Chris Calisano, 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 Factors 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. A reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm’s earnings release, which can be found on our investor relations website at investors.moelis.com. I will now turn the call over to Chris to discuss our results.

Chris Calisano: Thanks, Matt. Good afternoon, everyone. On today’s call, I will go through our financial results and then Ken will comment further on the business. We achieved revenues of $307 million in the first quarter, representing an increase of 41% over the prior year period. The revenue increase is attributable to growth in M&A and capital markets versus the prior year period. Moving to expenses, our first quarter compensation expense ratio was 69%. As the year progresses, our compensation ratio will depend on the trajectory of revenues and the pace and magnitude of hiring throughout the year. Our first quarter non-comp ratio was 19%. The quarterly year-over-year growth in non-compensation dollars is primarily attributable to increased costs associated with our investment in client conferences, many of which occurred during the first quarter.

As indicated previously, we currently anticipate the full-year growth of non-compensation expense to be approximately 15%. Moving to taxes, our underlying corporate tax rate was 29.5% for the quarter before the discrete tax benefit related to the vesting of equity awards. Adding in this discrete benefit resulted in an overall net tax benefit for the quarter. Regarding capital allocation, the board declared a regular quarterly dividend of $0.65 per share. And lastly, we continue to maintain a strong balance sheet with no funded debt. I will now turn the call over to Ken.

Ken Moelis: Thanks, Chris, and welcome to your first earnings call as CFO. As we finished the first quarter, we had record new business origination and a record pipeline. Our go-to-market, including the maturation of our strategies, finished the quarter with a very bullish point of view for 2025. However, a new wave of volatility introduced into the capital markets post-April 2nd has definitely slowed M&A transaction activity. Although the scale and timeframe are hard to predict, we believe this is a temporary phenomenon, and we are planning our business accordingly. The silver lining is that no matter the outcome, our clients will need strategic advice and will turn to our team to help them better understand their capital needs and how they can adapt or transform their business models.

We continue to invest in the growth of our private funds advisory business. Following the announcement earlier this year of a senior banker to lead the team, we have a robust pipeline of additional senior talent and expect to have more news on that in the coming weeks. Private capital solutions and continuation vehicles will continue to be an important liquidity tool for sponsors, and our goal is to be the market leader in the space. We also remain focused on adding talent to fill other areas of strategic importance to the firm. A technology-focused managing director based in Europe recently joined the firm and one focused on business services in Europe will also join shortly. We’re optimistic about the road ahead and are well-positioned. Remember, there are no tariffs on relationships, and the world-class advice we deliver to our clients every day.

We have no debt and a strong cash position. Our talent, breadth of experience, and culture of collaboration are stronger than ever before. With that, I’ll open it up for questions. Thank you.

Operator: We will now begin the question and answer session. Your first question comes from the line of Devin Ryan from Citizens. Your line is open.

Devin Ryan: Great. Hi, Ken. Hi, Chris. Welcome. First question, Ken. Great to hear about obviously the backlogs where they are right now and appreciate in a pretty uncertain moment here. So, I guess, there’s still a little bit of TBD on the year. But I’m curious just with the backlogs, you know, at what point do they get canceled versus just pushed out? And then I guess I’m just trying to think through there are a lot of competing forces here. Sponsors have a lot of pressure on them. To do something with kind of the long duration of their portfolios today. So I feel like there’s a lot of pressure there. At the same time, you know, volatile asset prices make it challenging. So just love to get a sense of, you know, how the backlog kind of moves from here and what potentially would cancel them if at all.

Ken Moelis: It’s a tough question to answer. It’s a very specific policy dynamic that’s going on right now. You know, the reason I believe it’s temporary is because it’s in control. I’m not saying it might not work out to be exactly what the markets want, but it is in the control of the administration. Whereas, you know, I look back to prior problems like COVID and even the GFC back in ’08. They seemed to be outside the control of it. And COVID definitely was, we didn’t know what was gonna happen, and it was very hard to, you know, know when the end would come. We’ve lost some from the quarter-end backlog that I talked about. We have lost some. Strategics might be quicker to put down their pencils on supply chain affected transactions.

Sponsors will put things on hold. I think the go-to-market on sponsors that need liquidity are probably timing, you know, those can’t hold them forever. The sponsor liquidity backlog has been there for a while, and people are gonna have to push to market. So I’d say the majority of those, I think, are on delay and pushback just because they have to be. But there are some transactions that have gotten shelved, and, you know, we do know we no longer have them in backlog. So our backlog is down from $331 million as a result of it. And it’s really hard to say. You know? What the effect of the day-to-day volatility is. You have two things, the policy volatility and then the market volatility and pricing. Interest rate volatility. So that’s all taken a toll on it.

But for now, you know, we’ve lost some, but I would say the vast majority are in pushback, I think. Or, you know, time frame pushback.

Devin Ryan: Yep. Got it. Okay. Thanks, Ken. Really helpful. And then just to follow-up on the restructuring business. Just great to get a little bit of a flavor for what you guys are seeing there, kind of whether there’s been any tone shift just with, you know, some of the uncertainty in the markets, anything around tariffs. I’m not sure if anything has changed there. And just the trajectory of kind of new mandates coming in in that business as well.

Ken Moelis: I think, again, the first quarter, it’s a tale. Remember, the tariff thing was April 2nd. So you sort of have a first quarter in which you were going along in a different world than the next two or three weeks before this call. So I’d say the first quarter restructuring was kind of flat. It was what we were expecting, which was there’s a good economy. There’s a strong consumer. Interest rates seem to be coming down. So we weren’t expecting a big year out of restructuring. And you’re talking about a two to three-week period since then in which, yes, there are lots of conversations starting to develop about things that might happen, but haven’t happened but could happen. So, yeah, that conversation is picking up. Have there been a substantial increase in mandates due to events around April 2nd?

I’d say no. I’d call it an increase of significant conversation. More so, I think, it’s in the capital market side where people are companies are trying to figure out if they’ve gotta fund inventory purchases, supply chain transactions. That have tariffs associated with them. So working capital, financing has, you know, has gone up. They have to actually finance the acquisition of supply chain goods that might have gone up a significant amount due to tariffs, etcetera. I think there’s almost been more conversation around financing options than goes than, you know, this idea of going straight to restructuring. And that’s why we kinda combine the two when we talk about it because they kinda subsume each other. That’s where we are. I think financing is probably the primary thing being talked about, not quite yet to restructuring.

Devin Ryan: Yeah. Very interesting. I’ll leave it there, but thanks, Ken. I appreciate it.

Ken Moelis: Thanks, Devin.

Operator: Your next question comes from the line of Ken Worthington from JPMorgan. Your line is open.

Ken Worthington: Hey. Great. Good afternoon. Thanks for taking the questions. Ken, I would love to hear your thoughts when thinking about the volatility and the impact looking at things three ways. One is sort of geographic. US versus Europe and Asia, any sort of differences that volatility has sort of brought out I know it’s really recent, but thus far, sponsor versus non-sponsor and then big versus small. What you’d guess is, like, what sort of more resilient, what’s more vulnerable, you know, what are your thoughts and, you know, to the extent you’ve heard, what have you heard?

Ken Moelis: And, Ken, I think what you’re asking me is post-April 2nd. Right? Because they’re two different only second.

Ken Worthington: Yeah. Yeah. Sorry. Yeah. Yeah.

Ken Moelis: So look, I actually think again, I always say the US is the most dynamic. But I think, you know, Europe is an interesting market. Post-April 2nd, they’ve been less affected. They’re trading better. They don’t have some of the supply chain issues. So you know, I think transactions in Europe haven’t hiccuped as much. There are obviously fewer transactions to begin with. But they’re not directly in the line of fire right now. And there have been some indications that the economies in Europe are gonna spend some capital and take some actions that I think could be actually positive for Europe. So I’ll say that. That’s a three-week read. Remember, I’m reading the tea leaves while they’re still, you know, falling off the tree, I would say.

Asia, I haven’t seen. Obviously, China, Asia is gonna be very different. And I don’t know that I have enough data to tell you what happens to Hong Kong, Asia, Japan, Asia, by the way, seems pretty there’s a lot of optimism around Japan as a market. But, again, we’re early on, and I assume China’s gonna be you know, there’s gonna be without resolution. There’ll be a lot of difficulties out of China. I know you said big versus small. What was the second I think if you’re it depends on the sector. Right? If you’re American-based, if you’re not a supply chain-oriented transaction, a lot of that’s going forward. There is a lot of financing available. The private credit is out there looking to put capital to work. The bank market is a little more difficult.

But private credit is out there. And if you have a healthcare business in the United States that’s not affected by the supply chain, you’re probably gonna get your transactions done, and that’s both strategic and sponsor. I would actually think that it’s more of what sector you’re talking about than strategic versus sponsor. Are you affected and when I say affected, I think there are people now trying to figure out, you know, kind of third derivatives of if, you know, if there’s no containers shipped for another month because of the tariffs. You know, you’re starting to think a second and third derivative. So I think the effects might get more widespread than people think. But right now, I don’t see a big difference in those so long as you’re talking about the effect of the supply chain.

And I would say that kinda goes to your big versus small. Which it’s very hard to have, you know, you don’t have a lot of big companies that don’t have a supply chain that, you know, is complicated. By just by the characterization of being large companies, they have a very good chance of encountering a supply chain issue that would cause a transaction to go on hold. I think it’s because it’s such a digital outcome on the policy it’s very hard to underwrite. People, companies, and sponsors can underwrite uncertainty. But not when it’s digital. And in the total outcome of the administration, I think. So, yeah, a lot of those are gonna go on hold, and it’s gonna it really starts with is your supply chain affected are you affected by the supply chain?

I think that’s where it breaks.

Ken Worthington: Okay. Great. I feel like that was three questions. So I won’t be a big over queue. I appreciate it.

Ken Moelis: Alright. Thanks, Ken.

Operator: Your next question comes from the line of James Yaro from Goldman Sachs. Your line is open.

James Yaro: Good afternoon. Thanks for taking the questions. So I just wanted to touch again quickly on CEO confidence. Ken, you’ve been through plenty of cycles and so you’ve seen various exogenous shocks. Maybe you could just help us think about how long it has taken on average, perhaps, in historic episodes that you think are most similar to this? With this sort of exogenous shock? Before CEOs come back to the table and engage in M&A transactions.

Ken Moelis: Well, I’m trying to I’m now trying to think of a good analogy, you know, you’re supposed to have a forty-year history and come up with a great analogy and I’m not I don’t have a great one because the last two or three I remember are COVID, regional banking, even the Fed hiking interest rates, the GFC before that, And you can even go back to some of the let’s say, you know, I remember when the Iraq war, you know, you know, shut down it. People were out on roadshows and you kinda blew a whistle and said, everybody come back. This was in by the way, this was the first Iraq war. And you just you just sent the signal out. Everybody come home. There’s nothing to do until we figure out what’s gonna happen here. But that was a more complicated decision.

I really believe this My gut on this is it will be a short sharp, because there will be a policy outcome. That policy outcome could be very negative, or it could move on very quickly. And I think it’s in control. Right? We’re not waiting to see you know, is COVID a disease that will rampage throughout the planet you know, and have no solution? You know, we’re we sort of have could call it off tomorrow if they wanted to. Right? You go back almost with some shocks in the system. So it is a directed policy decision My belief is that if you tell me somebody snapped their fingers and they and all of the policy was settled, I believe M&A would return very rapidly. Very rapidly. People have growth plans. They have strategic things they wanna affect.

Even what I just talked about about our own firm. I mean, we have a deal slowdown and yet we are very actively hiring in private capital advisory. We are hiring into our you know, we are hiring into a world that is going to be very active in M&A, and I think that tells you what I think about the world. You know, don’t don’t look what I say. Look what I do. And I am going to continue to put together a team that is ready to advise as soon as this policy situation is over. Because I think it will snap back pretty quickly. To an active deal market where people will want to will wanna execute on their plans that they’ve been waiting to execute on and got disrupted. So I think it’ll be pretty quick is the answer.

James Yaro: Okay. That’s super clear. Maybe just another one on restructuring here. So you know, I think within restructuring, you’ve seen a lot of the activity over the recent years be driven by liability management. I think a significant portion of that has been refinancing of sponsor portfolio company, Debtstax. So let’s just say we do end up with a harder landing. How would you think about the trajectory for restructuring that? Revenue? Obviously, liability management exercises are shorter in duration. And chapter eleven and traditional bankruptcy are longer and the fees are back end weighted. So how would you think about the path for restructuring in a weaker economic scenario if that is what we end up with?

Ken Moelis: I think a lot of it would be liability management. I believe as opposed to the restructuring environment, let’s say, you go back ten years ago in the GFC and there’s so much more equity inside of in most sponsor deals now have more than fifty percent of the purchase price and equity. It just leaves you a lot of value to go to private capital or alternative sources and structure some pretty interesting securities to extend out the runway and try to figure out, is this a temporary shot to the system? And as I said, everybody would prefer high-cost debt. To chapter eleven. There’s no choice between those two. And I just think that you don’t have an over-levered well, when I say you don’t have an over-levered balance sheet, you might have leveraged vis a vis the cash flow.

But, you know, some of these companies were valued at fifteen to eighteen times EBITDA. So they may have cash flow difficulties, but the valuation, the amount of equity put in under the value I think, will make liability management a very interesting part, and that will be where all the activity is, I think. Unless you have a tremendously unexpected continuation of tariffs that are so difficult that it actually does disrupt the whole global order for a long period of time. That would be the alternative that, you know, we really do have a long-term very punitive tariff system that really does disrupt American business. I don’t expect that.

James Yaro: Okay. Super clear. Just one ticky tacky one. Could you give us the split of revenue this quarter perhaps across M&A, cap markets, and restructuring?

Ken Moelis: It’s about two-thirds M&A and one-third cap markets and restructuring. And again, I’m gonna combine those two because they really are a blendable item.

James Yaro: Okay. Thanks so much.

Operator: Your next question comes from the line of Brendan O’Brien from Wolfe Research. Your line is open.

Brendan O’Brien: Good afternoon. Thanks for taking my questions. You know, I just wanna talk about the recruiting backdrop. I know that recruiting this year was expected to be focused on a build-out of your private capital advisory team, which it sounds like you’re off to a good start on. But given an activity to start the year has been a bit slower, I just wanted to get a sense as to whether you’re seeing any improvement in the recruiting environment and whether you might look to lean in more aggressively than you expected at the start of the year.

Ken Moelis: Again, you’re talking about a three-week period. And so, you know, because the first quarter, everybody’s pretty bullish. It was gonna be a great year for everybody. I haven’t seen a dramatic change in the last three weeks. I think it would be too soon for almost for me to see it. But, you know, we’re seeing good talent. I think, again, one of the things I always talk about is we are an unlevered company with a lot of excess capital. Most of the big banks are very heavily levered. Whether, you know, they are deposit institutions with, you know, nine to one leverage. And so I do think as if the world stays this volatile, I continue to believe that talent will leave nine to one levered institutions that have, you know, mismatched deposits versus assets and liabilities and are very shaky in a volatile you know, I think people have learned that no matter what you’re told, those balance sheets are not as clean as they’re portrayed, and it’s a shaky volatile world.

As I said, if you were ten to one levered right now, I don’t know any asset that I own that’s not down ten percent since April 2nd. So you’d have to wonder about how you can be ten to one levered and say, you know, and be confident in your balance sheet. So I think we’ll be the beneficiary of that. It’s one of the reasons we keep a very strong balance sheet. We know it’s attractive to that banker that is looking where to place their lifetime, their family, and their lifetime future career. And I think more and more people look at it and go, yeah. That’s where I wanna be. So we keep that’s one of the reasons we do keep our balance sheet so strong. And I don’t see a big change right now. We’re gonna go after the private capital advisory situation very hard.

We’ll fill in, but we were always planning on filling in some of our other places, but you’ll see us be strong in private capital. And I think we have a good line of sight into some very strategic hires right now that I can’t talk about.

Brendan O’Brien: That was crazy. And then for my follow-up, I just wanted to touch on the comp ratio. Understand there’s a lot of unknowns at the moment, and the accrual is sort of a reflection of like, the bifurcated potentially outcomes of this year. I was hoping you could help us or help frame how to think about the level of revenue growth needed to keep your conference year on year or maybe, like, what the breakeven point is?

Ken Moelis: You know, I’m gonna try to stay away from the algorithm. Last year, we were at a point where, you know, we had invested a lot in the tech group and we had made so much investment, we had to give you a road map. I was very nervous that we were giving you the right road map because there’s so many movable there’s so many movable things. So I don’t wanna I’m not gonna try to get back into that because it will how fast we hire people, how long this stays, how rapidly you know, if this is a six-week downturn, and then it rapidly springs back like I’m saying, I’m gonna continue to build pretty significantly for what I think are a strong next twelve months. Is really what I wanna do anyway. So I think it’s just too volatile, and there are too many moving parts for me to give you an algorithm.

But, you know, our intention is to get the comp ratio down while building a great business. And that is I don’t I just don’t wanna get caught into some algorithm that doesn’t match the opportunity or the volatility inherent in the market.

Brendan O’Brien: Totally fair. Thanks for taking any questions.

Ken Moelis: Thanks.

Operator: Your next question comes from the line of Mike Brown from Wells Fargo Securities. Your line is open.

Mike Brown: Great. Thanks. Good afternoon. Ken, I just wanted to dive into 2Q here. We’re just a few weeks into the quarter. Certainly a much more volatile environment. Can you maybe just give us a little bit of views into the quarter relative to 1Q? It’s not easy from really anyone’s perspective, but maybe you can shine a light on how to think about the revenue potential just based on either what you can see in terms of the deals that are set to close and which ones you maybe have some greater confidence in. Contribution of non-M&A, just some color relative to Q1 would be helpful as we think about the near term. Thank you.

Ken Moelis: So things you know, we’re getting pushed out. Some things are getting delayed that we thought would be in Q2, and we don’t think and then there are some that are dying. Like I said, our pipeline is down. Not dramatically, but it’s down from March 31st. Interestingly, there are some things that were announced and are in the process of closing. So it’s not like there’s a shutdown on the quarter. But the quarter we’re having trouble getting our hands on exactly when things we thought were gonna get pushed in the market are gonna go to market. It’s difficult for us to know that as well. So I would just say it’s things are being pushed out. It’s not it’s I don’t look at it as horror. It’s not horrible. It’s not as it’s not as bad as the volatility of the market, which would imply in terms of just, you know, how difficult it is for people to understand what’s going on.

Because again, things that were announced during the first quarter will close in the second. But there’s many things getting pushed out. So I’m gonna leave it at that, which is, you know, I don’t think it’s disastrous but it’s not as good as I was hoping it was gonna be.

Mike Brown: Okay. Yeah. That’s fair. Wanted to maybe follow-up on the talent question. So with this M&A upswing being pushed out, perhaps this tariff-related turmoil is quick. But if it’s not and the eventual recovery is kind of slower with more friction starts and maybe just a bit weaker overall or more spread out. I’m interested to hear about how do you think about protecting the margins, investing in the talent, building up the private capital business, what do you do in terms of retaining talent? Do you take a closer look at the mix of talent that you currently have and what the opportunities are? And do you kind of reassess or maybe do some rightsizing? Just could talk through that a little bit for us. Thank you.

Ken Moelis: We would look at all the above, which we do look at every year. We do believe that the private capital by the way, we’re I think we’re transitioning the name. So it’s private funds advisory. We’re thinking of transitioning the name. So you know, these names get confusing, but it is the group that does the secondaries. And I think that’s an important part of the world, by the way. So we’re not gonna slow down. We think that is key. And maybe even as the M&A environment in the IPO market gets more difficult, like you said, if you think they’re going to be in a difficult mode, you wanna have that asset that expertise and go to market. So that’s very important. And then we’re gonna fight to keep all our good talent. We think in the last couple of years, what we did in technology and energy and then our existing fantastic people in and by the way, in industrial we hired some great people, our media, our healthcare franchises, we’re extremely happy with where the fourth quarter came in, where the first quarter was trending to, you know, up 41% I think was the number.

Those are not bad numbers. If a policy event didn’t happen on April 2nd and it’s you can’t you can’t put it on the sidelines and come back and just say, well, you know, everybody come back. You know? We sent you we sent you out. We’re on vacation. We put together an extraordinary go-to-market team, and we’re gonna protect it. Unless we see something that is so awful that we think it extends out over a period of time. And I can’t imagine that a policy decision over tariffs is that item. This is not you know, a world war, maybe a world tariff war, but it’s not a it’s I believe it is a policy issue that’s going on and not a fundamental degradation of business and especially the transaction business.

Mike Brown: Okay. Great. Thanks for taking my questions, Ken.

Operator: Your next question comes from the line of Ryan Kenny from Morgan Stanley. Your line is open.

Ryan Kenny: Hey, good afternoon. Thanks for taking my question. I wanna follow-up on the comp ratio discussion earlier. Understand that you’re not giving us a formula this year, which makes a lot of sense given the uncertainty. But can you just clarify, was the 69% in the first quarter based on your revenue assumption for the full year as of March 31st, or is that your current expectation if this environment persists? Is it fair to assume that that could go up for the rest of the year?

Ken Moelis: Yes. I’ll have Chris answer, but as my understanding is the requirement is you take your best efforts guess and that’s that you know, on revenue and estimate for the year. So yeah.

Chris Calisano: Yeah. I mean, 69% for the quarter. It’s our best estimate. For the second quarter and the full year at this time. As Ken said, dependent on the trajectory of revenues and the hiring as we made investments in strategic areas like private fund advisory. But, yes, it’s our best estimate currently at this time.

Ryan Kenny: So it’s your best estimate after the tariff announcement, not as of March 31st?

Ken Moelis: Yes. Yes. It’s our best estimate given everything we know, and it includes even, you know, a pretty good hiring. You know, we wanna hire into private funds advisory. We know that, so we included that in there. And things may change, but that’s our best estimate given all the elements that we know and hope to succeed on and you know, the liberation day event.

Ryan Kenny: Alright. Great. Thank you.

Operator: Your next question comes from the line of Ben Rubin from UBS. Your line is open.

Ben Rubin: Hi. Thanks for taking my questions. Last week, you announced another senior hire for your tech franchise over in London. So I’m just curious, you know, what are you seeing from the tech team that you lifted out in 2023? Have they been performing better or worse than your original expectations? And maybe how does their product activity compare to your broader M&A business at large? Thanks.

Ken Moelis: Thank you for that question. The tech team has been a stunning success. I don’t wanna tell Jason that it’s better than I expected because then he’ll think I thought he wasn’t a good guy. I thought we hired a great team, and it’s been a great team. And I wish we didn’t have the April 2nd event because I think it would’ve shown how successful an operation that was. And by the way, the same with the energy I think people we quietly have hired a significant energy team that has an incredible backlog and is making real gains there as well. But the technology has been just a phenomenal addition. And what it’s done is, again, in the sponsor world, we wanna be important to sponsors. We want them to think okay. Is Moelis showing us their best and are we giving them enough?

You know, it’s kind of a bilateral trade. Right? I’ll bring the trade agreement into this with sponsors and advisers. Like, are we showing you too many good ideas and you’re not giving us back enough and that kinda goes on. It’s trade. And what the tech team does has added, like, six or seven thousand calls, idea calls, where we’re in the you know, over and above everything we were doing. So if we were important in the halls of sponsors, prior to that, not only are they producing significant revenue, backlog, but they’re also improving everybody else’s impact at the sponsor level. So it’s been phenomenal. So energy’s doing the same thing. So it’s been if I have to admit that it’s been even better than we thought when we did it.

Ben Rubin: Oh, that’s great to hear. I’m not gonna ask explicitly about the comp ratio, but is there any chance you could share the dollar impact to comp expense in the first quarter from the accelerated vesting of our retirement eligible bankers? Thanks. Maybe Chris.

Chris Calisano: Yeah. I mean, I think you’re gonna see that in the 10-Q. So the Q1 always has a higher fixed comp ratio due to the return eligible equity hitting all in Q1. I would say it’s about double the expense than a normal quarter. And so we also accrue an incentive comp. Right? It just means that there’s a higher proportion of fixed comp versus variable comp in the first quarter, and we balance it out over the year.

Ben Rubin: Great. Thanks, Chris.

Chris Calisano: Sure.

Operator: And there are no further questions at this time. I will now turn the call back over to Ken for closing remarks.

Ken Moelis: Thank you. Pleasure to be with you. You know, this is the first time I think we were first to go. And I think with the every you wanna be later and later. Maybe there’ll be a resolution before some other people tell you what’s going on in the world. In the whole tariff war. But look forward to seeing you, and hopefully, we’ll have this all behind us and talking about some brighter future. Thanks.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.