Lazard third-quarter net income falls to $29 million as adjusted revenue rises 11%

Lazard, Inc. (LAZ) said Thursday in a regulatory filing that it reported third-quarter 2026 U.S. GAAP net income of $29 million, or $0.26 per diluted share, compared with $71 million a year earlier.

Here's how the company did:

• Net revenue, U.S. GAAP: $814 million vs. $748 million a year earlier
• Adjusted net revenue: $805 million vs. $725 million a year earlier
• Net income, U.S. GAAP: $29 million vs. $71 million a year earlier
• Diluted EPS, U.S. GAAP: $0.26 vs. $0.65 a year earlier
• Diluted EPS, adjusted: $0.36 vs. $0.56 a year earlier

Adjusted figures are non-GAAP measures that the company reconciles to U.S. GAAP results in the filing. Adjusted net revenue rose 11% from a year earlier, while U.S. GAAP net revenue rose 9%.

For the first nine months, U.S. GAAP net revenue was $2,378 million, up 8% from $2,192 million a year earlier. Net income was $135 million, or $1.20 per diluted share, down 28% from $187 million.

Adjusted net revenue for the first nine months was $2,264 million, up 6%. Adjusted diluted earnings were $0.90 per share, down 45% from $1.64.

Here's how other Lazard segments did during the quarter:

• Financial Advisory net revenue, U.S. GAAP: $470 million, up 10% from a year earlier
• Asset Management net revenue, U.S. GAAP: $357 million, up 9% from a year earlier
• Adjusted Asset Management net revenue: $330 million, up 12%
• Average assets under management: $287 billion, up 11% from a year earlier

Financial Advisory revenue includes an amount pulled into the quarter for transactions that closed just after Sept. 30. The company said that amount is in line with its two-year average.

For the first nine months, Financial Advisory net revenue on a U.S. GAAP basis was $1,279 million, 1% lower than a year earlier.

During and since the third quarter, Lazard advised Emera on its announced merger with Canadian Utilities, for a combined enterprise value of approximately C$72 billion. It also advised Corteva Agriscience on its $50 billion spinoff of Vylor.

“Our Lazard 2030 strategy continues to progress as planned, with strong momentum firm-wide,” said CEO and Chairman Peter R. Orszag. “Financial Advisory delivered record third quarter revenue as the investments we have made in the business increasingly translate into results, while client activity and our forward indicators remain strong.”

Adjusted management fees in Asset Management were $321 million, 18% higher than a year earlier and 4% higher than the second quarter. Adjusted incentive fees were $1 million, compared with $9 million a year earlier.

Ending assets under management were $284 billion at Sept. 30, up 7% from a year earlier and roughly flat from June 30. The company reported market appreciation of $1.9 billion, net outflows of $2.3 billion and foreign exchange depreciation of $0.2 billion in the quarter.

For the first nine months, net inflows were $5.1 billion. U.S. GAAP Asset Management revenue for the period included a non-cash gain of $75.5 million on the sale and deconsolidation of the Edgewater management vehicles, which the adjusted figures exclude.

“Our third quarter results show increasing traction from efforts to reposition our businesses, with firm-wide adjusted net revenue up 11 percent year-over-year,” said CFO Tracy Farr. “We continue to advance initiatives to simplify and modernize our operating model and embed AI across the firm, with the goals of improving client outcomes, supporting a more effective way of working for our colleagues, and improving our margin over time.”

Compensation and benefits expense on a U.S. GAAP basis was $569 million, up 14% from $498 million a year earlier. The adjusted compensation ratio was 69.9%, compared with 65.5% in the third quarter of 2025.

As part of its Lazard 2030 vision, the company aims for an adjusted compensation ratio of 60% or below, with timing dependent on market conditions.

U.S. GAAP non-compensation expenses were $190 million, 9% higher than a year earlier. Adjusted non-compensation expenses were $156 million, 5% higher, and the adjusted ratio was 19.3%, compared with 20.5%.

The company's long-term target for the adjusted non-compensation ratio is between 16% and 20%, also dependent on market conditions.

The third quarter included $5.6 million in expenses tied to the departure of certain executive officers and $4.1 million related to the pending acquisition of Campbell Lutyens. The filing does not disclose the terms of that acquisition.

The provision for income taxes was $25 million in the quarter, an effective tax rate of 45.8% on a U.S. GAAP basis and 38.1% on an adjusted basis.

Lazard returned $88 million to shareholders in the quarter: $49 million in dividends, $33 million in share repurchases and $6 million for employee tax obligations on vesting equity. Over the first nine months, it repurchased 1.9 million shares at an average price of $43.68.

About $224 million remained on the company's share repurchase authorization as of Sept. 30. On Oct. 21, Lazard declared a quarterly dividend of $0.50 per share, payable Nov. 13 to holders of record on Nov. 2.

Cash and cash equivalents were $1,264 million at Sept. 30, and the company said its financial position remains strong.

The filing contains no new full-year financial guidance. It gives the Lazard 2030 targets, and the CEO said the new private capital advisory business, Lazard CL, launches in early November.