PERELLA WEINBERG THIRD QUARTER 2026 EARNINGS - PERELLA WEINBERG PARTNERS

Explicit Guidance:

• Full-Year 2026 Compensation Ratio: Management remains committed to a 67% adjusted compensation ratio for the full year, despite potential deal slippage into 2027.
• Full-Year 2026 Non-Compensation Expense: On track for a single-digit percent decrease compared to 2025.
• Full-Year 2026 Tax Rate: Excluding RSU vesting benefits, the underlying adjusted tax rate is expected to remain in the "low to mid-30% range" for the remainder of 2026 (Q4 2026 rate was 29.5% on an if-converted basis).
• Capital Allocation: No specific buyback or dividend guidance provided beyond the announcement of a quarterly dividend of $0.07 per share; share repurchases remain temporarily limited to prioritize strategic investments.

Business-Segment Outlook:

• M&A Business: Expected to continue strong momentum into 2027, with the U.K. combined business (Gleacher Shacklock) demonstrating "accelerating client dialogue" post-acquisition closure on September 1.
• Restructuring: Revenue may remain below record 2025 levels but the pipeline is "continuing to build" with engagement on large, complex situations.
• Client Coverage & Talent: Expectations to continue adding partners and managing directors over the next 12–18 months to broaden client coverage and product capabilities; currently, >30% of the partnership has been with the firm less than three years.
• Product Lines: Strategic focus on "selectively" adding product capabilities that are client-attractive.
• Geographic Focus: Geographical expansion expected to be "cautious" unless a compelling opportunity arises, as clients prefer "travel with them" rather than local presence.

Market and Competitive Outlook:

• Transaction Volume Outlook: Expectation of ~70 mega-cap ($10B+) transactions in 2026; primary growth driver identified in the $1B–$5B transaction segment (approx. 1,000 transactions), where fee realization and percentages are viewed as "up significantly" versus 2020–2021 levels.
• Deal Conversion Timing: A portion of the announced and pending backlog (up 3x YoY) is expected to convert to revenue in 2027, with specific deals closing in the "early part of 2027."
• Industry Dynamics: Anticipated to see "healthy fee levels" in the mid-market segment as the firm acts as a "natural hedge to asset inflation" amidst rising valuations.

Macro / Industry Outlook:

• Interest Rates: Management expects to be in a "higher rate environment" over the next 12 months. Sees markets capable of absorbing a 50–75 bps increase in Fed funds (trajectory), with volatility only anticipated in the event of a "gap step up" or violent move.
• Rate Impact Sensitivity: Highly levered transactions (including some Private Equity) may be impacted; however, most strategic corporate clients have healthy balance sheets and are less rate-sensitive.
• Capital Availability: Believes there is a "surfeit of capital" in the marketplace; the primary constraint on deal volume is valuation gaps rather than capital availability.
• Political Environment: No evidence of clients accelerating or delaying deals due to upcoming midterms; activity is expected to follow a "base case" absent policy surprises.
• Sector Specifics: Energy sector expected to look "good" for engagement and pipeline going into 2027 despite recent volatility.

Strategic Initiatives:

• M&A & Acquisitions: Continuing the strategy of "brick by brick" scaling via internal development and selective acquisitions; no active sale process initiated and no intention to sell the firm.
• Organic Growth: Focus on scaling the business model through partner promotions and hires consistent with the brand.
• Acquisition Integration: The combined U.K. business (Gleacher Shacklock) is showing early validation with six announced transactions since September 1.

Risks and Headwinds to Outlook:

• Rate Volatility: A "gap step up" in interest rates could impact valuations violently and disrupt transaction activity, particularly for highly levered deals.
• Policy Surprises: Unforeseen results from midterms or regulatory changes could force adjustments to the "base case" deal outlook.
• Ramp-Up Time: Revenue realization from new hires is subject to a ramp-up period ("takes time to hit the stride"), with >30% of the partnership being relatively new.
• Accounting Timing: Certain Q4 closings (e.g., $55M) were recognized in Q3; actual revenue recognition timing may shift results across quarters.

Management Tone on the Future:

• Confidence Level: High confidence heading into year-end and into 2027, driven by strong backlog metrics (A&P backlog up nearly 3x, total backlog up 30%) and broad-based client activity.
• Strategic Outlook: Management views the current decade as focused on "scaling what we know works," expressing "tremendous opportunities" despite being only 20 years into the firm's existence.
• Hedges: Explicitly notes that while "none of the announced pending backlog has closing risk," timing differences remain a factor for 2026 vs. 2027 revenue recognition.

Miscellaneous:

• Financial Position: Closed the quarter with $150 million in cash and no debt.
• Share Count: 79.5 million Class A shares and 18 million partnership units outstanding at quarter-end.
• Performance Metrics: Fee-paying client count up 50% YoY; fee events >$5M up nearly 80% YoY in Q3 2026.