Evercore (EVR) Q3 2026 earnings review
Evercore's revenue sets another record, but its overheads rise faster
Evercore earned more fees than in any previous quarter and paid staff a smaller share of them. Revenue excluding one-offs rose 13% against a year-ago quarter that had itself expanded 42%. Chief executive John Weinberg said the backlog is at record levels, and the firm advised Broadcom on financing $63 billion of AI computing for Anthropic.
| Revenue, excluding one-offs | $1,178M +13% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $4.28 +23% from a year ago |
| Pay as a share of revenue | 63.0% 65.0% a year ago |
| Full-year outlook for costs outside pay | Unchanged about 14.2% of revenue; 13.7% so far this year |
⚖️ Verdict: 🟢 Bullish
The story got better because the summer's two main worries both lost ground. Growth continued through a record comparison, and costs outside pay fell back from their spring high. One caution: those costs still rose 20% from a year ago, and share-sale fees fell by almost half from the spring.
The question now is whether the fourth quarter can match last year's $1.3 billion, its largest ever. One answer says a record backlog and the Warner Bros. Discovery closing in October make it likely. The other says the backlog has never been quantified, so nobody can check. The fourth-quarter numbers will tell.
🐂 Bull Case
Pay Took a Smaller Share of Revenue
Evercore's biggest cost is what it pays its bankers, and the share of revenue that goes to pay is the number that decides its profit margin. Finance chief Tim LaLonde reported that share at 63.0% of revenue this quarter, two percentage points below a year ago.
The ratio has fallen every year since 2023, LaLonde told analysts, and the nine-month figure of 63.5% is "our best estimate of the full year". Pay expense grew 9%, well behind revenue, so the firm kept a larger slice of each extra dollar.
- Pay as a share of revenue, full year: 67.6% in 2023, 65.7% in 2024, 64.2% in 2025
- Operating margin excluding one-offs: 22.9%, up 1.1 percentage points from a year ago
The other side is that the costs behind the ratio keep rising. The company named higher base salaries, more amortization of earlier deferred awards, and pay for new hires. The ratio fell because revenue outpaced those costs, not because the firm cut them.
What to watch: the full-year ratio in January against the 63.5% accrued so far. A figure at or below it would mean the year-end bonus pool did not take back this quarter's gains.
Growth Came From More Clients, Not Bigger Deals
Chief executive John Weinberg said large strategic deals still drive the merger market. The risk for Evercore has been that a few very large fees carry the firm.
This quarter the fee base widened: 324 advisory and underwriting fees, 21% more than a year ago. Fee revenue rose less quickly, so by our math the average fee fell about 5%.
Weinberg tied it to sponsor coverage: "higher year-to-date pitch activity, coupled with a continuously improving win rate". The EMEA advisory business, covering Europe, the Middle East and Africa, set a nine-month record. Sponsor activity "continues to run below historical levels", he said, so there is room to grow.
What to watch: the count of fees of at least $1 million next quarter, against 167 this quarter. A higher count with flat average fees would confirm the broader client base is paying.
Evercore Now Earns Fees Arranging Data-Center Debt
Independent advisers such as Evercore do not lend, so they have had little part in the fees from financing the AI build-out. Chief executive John Weinberg called debt advice "somewhat of a new muscle for us".
This quarter it produced two large mandates: Broadcom on a deal enabling Anthropic to deploy $63 billion of AI computing, and Nexus Data Centers on $15.6 billion of financing for its first data center.
This matters because businesses other than mergers brought in over 40% of revenue in the last four quarters, Weinberg said. He would not size the opportunity but said "that area is going to grow".
What to watch: a dollar figure for debt advisory revenue, never reported so far. Tens of millions a quarter would make financing a third fee source beside mergers and restructuring.
🐻 Bear Case
Costs Outside Pay Still Grow Faster Than Revenue
Finance chief Tim LaLonde presented the quarter's costs outside pay as an improvement: 14.1% of revenue, down 3.4 percentage points from the second quarter. He said the firm had made "the necessary investments in our business" to support its growth.
Measured against a year ago, the picture is the reverse. Non-compensation costs rose 20%, well ahead of revenue growth of 13%. So the ratio climbed almost a full percentage point, with the largest moves in technology and travel.
- Technology and information services: 4.0% of revenue, up 0.4 points, tied by LaLonde to "investments in technology, including AI initiatives"
- Travel: 2.6% of revenue, up 0.4 points on more activity, higher fares and more staff
This cuts against LaLonde's framing because he measures progress from a second quarter he called elevated by seasonal and episodic costs. Against a normal quarter the cost base still grows faster than the business. His only commitment is "a lower growth rate in non-comp expense over the next several years".
What to watch: fourth-quarter non-compensation costs against this quarter's $166 million. A higher figure on flat revenue would show the firm keeps adding cost regardless of what it earns.
Share-Sale Fees Fell by Almost Half From Spring
Underwriting, helping companies sell new shares and convertible bonds, had its best quarter ever in the spring. Was that Evercore's own build or a strong listings market?
This quarter the market answered part of it: fees fell 43% from the spring record. The drop came from fewer deals, 12 against 26, as the company cited "an increase in the average fee size".
Fees of $55.6 million were still 27% above a year ago, and chief executive John Weinberg said healthcare listings were strong early in the quarter. But he also pointed to "a slowdown in some of the IPO activity going into the fourth quarter", a market Evercore does not control.
What to watch: fourth-quarter underwriting fees against last year's $43.7 million. Below it, the spring record was the market, not the franchise.
The Fourth Quarter Faces a $1.3 Billion Comparison
The last two quarters of 2025 were the largest in Evercore's history, so this half grows from a very high base. The third quarter cleared the first of those comparisons.
The harder comparison is next: last year's fourth quarter brought in $1.3 billion, about 10% above this quarter by our math. Finance chief Tim LaLonde said pull-forwards were "lower than normal", and the Warner Bros. Discovery fee, closed October 6, lands in the fourth quarter.
The record backlog is the main argument that Evercore can match it. But the firm has never put a number on it, and LaLonde would "stay away from predicting timing" of its conversion.
What to watch: fourth-quarter revenue against $1.3 billion. At or above it, Evercore has outgrown the 2025 peak, not just matched it.
Risks This Quarter Didn't Answer
Five standing concerns got no new numbers in the release or on the call, so they stay open until the quarterly filing arrives.
- Unpaid fees: the bad-debt allowance nearly doubled in the first half; the filing's receivables note will show whether it kept growing.
- Employment-tax provision: special charges rose $2.0 million this quarter, mixed with duplicate London office costs; Evercore "will adjust this estimate as appropriate in future periods".
- Robey Warshaw: the deferred payment to the sellers fell due on the first anniversary of the October 2025 closing; the filing will show how it was settled.
- Fund placement: large banks are moving into private capital advice; Evercore reported only "positive trends" and no revenue figure.
- Backlog: again described as record, still without a dollar figure in any period.
👓 Other Themes
Two Co-Presidents From January
Evercore named Nigel Dawn and Naveen Nataraj co-presidents from January 1, 2027. Chief executive John Weinberg said the job is to add "additional management capacity and leadership" as the firm grows in scale and global reach, and that both will keep spending significant time with clients. He also said the firm is not looking for another acquisition after Robey Warshaw.
Higher Rates Have Not Changed Client Talks
Chief executive John Weinberg said "dialogues and opportunities are not changing given interest rates at this time", though a faster rise could change that. He pointed to "a maturity wall coming up at 2028 and 2029" for buyout-owned companies, which would feed restructuring work if rates stay high. Industry-wide merger announcements remain healthy, he said, while sponsor and middle-market activity "continues to run below historical levels".
💲 Other KPIs
Still rising, but more slowly: 191 senior managing directors (SMDs) in investment banking, up 14% from a year ago. The spring count had grown 18%. Four of the 191 have committed but not yet joined, and chief executive John Weinberg said "more than 50 SMDs still ramping", so this bench's cost lands before its revenue. Total staff grew 12%, the fastest pace in this chart's window.
Cash and securities together reached $2.8 billion, up 14% from a year ago by our math. Debt stayed at $540 million. The balance grew even though Evercore returned $1.0 billion to shareholders in nine months, more than in any previous full year, so the business earns more cash than it pays out.
Down 2.6% from a year ago, the lowest count in five quarters. Evercore bought back 2.8 million shares over nine months for $886 million. By our math the smaller count added about three percentage points to growth in profit per share.
🔮 Guidance
Unchanged. Finance chief Tim LaLonde still aims for last year's 14.2%, "maybe something a little better", and the nine-month figure of 13.7% is already below it. By our math the target leaves room for a fourth-quarter ratio of about 15.5%, assuming revenue matches last year's fourth quarter. The spring quarter ran at 17.5%, so holding the year at 14.2% needed lower second-half costs, and this quarter delivered them.
New. LaLonde said the 63.5% accrued through September is the firm's "best estimate of the full year", and he is "hopeful that we can make additional progress". By our math that means the fourth quarter also runs near that level, above the 62.0% of last year's fourth quarter. The ratio has fallen each year since 2023, when it was 67.6%.
Unchanged. The board declared $0.89 a share, payable December 11, the same as the last two quarters after the 6% increase in the spring. Buybacks remain the larger channel, with $886 million of repurchases over nine months making up most of the $1.0 billion returned.
❓ Key Questions
How large is the record backlog in dollars?
Management has called the backlog record or near record for five quarters without a figure. Any number, or a count of signed engagement letters, would let readers test whether the fourth quarter can match last year's $1.3 billion.
How was the Robey Warshaw anniversary payment settled?
The deferred payment to the sellers fell due on the first anniversary of the October 2025 closing. Shares would add to the count the buyback is reducing; cash would come out of the $2.8 billion balance.
What is the employment-tax exposure beyond the amount accrued?
Special charges rose by $2.0 million this quarter, mixed with duplicate office costs in London. The company says it will keep revising the estimate, so readers need the jurisdiction, the years covered and the maximum reasonably possible loss.
How much did unpaid fees cost this quarter?
The allowance for bad debts nearly doubled in the first half, and the finance chief did not quantify the provision then. Other operating expenses rose 28% again, so the share from unpaid fees matters for the cost story.
What revenue do financing advice and fund placement earn?
Businesses outside mergers brought in over 40% of revenue, Weinberg said, but no line reports them. A dollar figure for debt advisory and private capital work would show how much growth survives a slower merger market.