stockrowLatest quarter
Evercore reported Q2 FY2026 revenue of $998.5 million, up 19.1% from $838.0 million a year earlier. Diluted earnings per share fell to $2.32 from $2.36, while operating margin declined to 17.6% from 18.6%.
The filing shows that advisory fees rose 11% from a year earlier, as the company earned more revenue from large transactions and collected more advisory fees. Underwriting fees increased 201%, reflecting participation in more transactions, while commissions rose 9%, primarily on higher trading volume.
Evercore’s filing attributed higher compensation expense principally to deferred-award amortization, higher base salaries and a higher incentive-compensation accrual. Non-compensation expenses also rose, driven primarily by travel, professional fees, technology and information services, and other operating expenses. The company reported free cash flow of $514.8 million, compared with $411.7 million a year earlier.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $998.5 million | $838.0 million | 19.1% |
| Diluted EPS | $2.32 | $2.36 | −1.69% |
| Gross margin | 99.7% | 99.6% | 0.1 percentage points |
| Operating margin | 17.6% | 18.6% | −1.0 percentage point |
| Free cash flow | $514.8 million | $411.7 million | 25.0% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Revenue | $1.2 billion | $916.5 million | Beat by 28.6% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On the Q2 call, CEO John Weinberg said client engagement remained high and the backlog was near record levels. He cautioned that the timing of converting that backlog into revenue could vary by quarter. Weinberg said large-company strategic mergers were driving industry activity, while middle-market and sponsor-related deals remained below historical levels.
Asked about the second half, Weinberg pointed to client engagement, engagement letters and conflict checks. CFO Timothy LaLonde said Evercore stopped short of revenue guidance, citing uncertainties in the environment. Weinberg also said software-related M&A discussions had picked up after a pause and that artificial intelligence was prompting companies to consider acquisitions and scale.
On hiring, Weinberg said 4 senior managing directors had joined investment banking since the prior call and 7 more had committed to join. He put the global investment banking total at 188, with more than 50 still ramping. In Europe, he said Evercore had added restructuring and liability-management capabilities and expected to compete more effectively.
Analysts pressed LaLonde on non-compensation spending after the quarter’s adjusted ratio reached 17.5%. He said the majority of the increase reflected investments, including client events, deal execution, hiring and technology. He also cited seasonal or episodic items, including conferences and interns, that could be smaller in coming quarters. LaLonde put the combined effect of certain items in the double-digit millions but said some details were not appropriate for broad discussion.
Asked about cost growth, LaLonde said data and information costs had risen faster than inflation, while travel costs also reflected higher flight and hotel prices. He said Evercore wanted to grow revenue faster than headcount and non-compensation costs over time.
Guidance
On the Q2 call, LaLonde said Evercore expected full-year non-compensation expenses to grow modestly faster than they had over the previous couple of years. On the Q1 call, he had expected a similar growth rate to that period.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Tax rate, non-GAAP | Q3 FY2026 | Evercore expects its Q3 FY2026 effective tax rate to be similar to its rates in comparable quarters over the last few years. | Q2 FY2026: Evercore expects its adjusted effective tax rate in Q2 2026 to be similar to the rate in comparable prior-year quarters. | — |
| Operating expenses, Non Gaap Non Compensation Ratio | FY2026 | Evercore expects its FY2026 non-compensation expense ratio to be approximately in line with last year’s. | — | — |
| Operating expenses, Non Gaap Non Compensation | FY2026 | Evercore expects non-compensation expenses to grow modestly faster in FY2026 than in the last couple of years. | — | — |
| Headcount, Senior Managing Director Hires | FY2026 | 3 | — | — |
| Operating expenses, Non Gaap Compensation Ratio | FY2026 | Evercore expects its adjusted compensation ratio to improve in 2026, but by meaningfully less than in each of the prior two years. | — | — |