Third quarter 2026
Filed Oct 22, 2026Lazard reported third-quarter U.S. GAAP net revenue of $814 million and adjusted net revenue of $805 million, while U.S. GAAP diluted EPS was $0.26 and adjusted diluted EPS was $0.36.
Third-quarter adjusted net revenue increased 11% year-over-year, led by Financial Advisory and Asset Management, but adjusted operating income declined 14% and adjusted diluted EPS declined 36% year-over-year as the adjusted compensation ratio rose to 69.9%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total revenueGAAP | $836.4M | 1% | 9% |
| Q3 2026 net revenueGAAP | $814.2M | 1% | 9% |
| Q3 2026 adjusted net revenuenon-GAAP | $804.6M | 2% | 11% |
| Q3 2026 operating incomeGAAP | $54.75M | 46% | (42%) |
| Q3 2026 adjusted operating incomenon-GAAP | $86.67M | 33% | (14%) |
| Q3 2026 adjusted operating marginnon-GAAP | 10.8% | – | – |
| Q3 2026 net incomeGAAP | $29.67M | 116% | (60%) |
| Q3 2026 net income attributable to Lazard, Inc.GAAP | $29.16M | NM | (59%) |
| Q3 2026 adjusted net incomenon-GAAP | $39.97M | NM | (35%) |
| Q3 2026 diluted net income per shareGAAP | $0.26 | NM | (60%) |
| Q3 2026 adjusted diluted net income per sharenon-GAAP | $0.36 | NM | (36%) |
| Q3 2026 compensation and benefits expenseGAAP | $569.0M | 1% | 14% |
| Q3 2026 adjusted compensation and benefits expensenon-GAAP | $562.4M | 2% | 18% |
| Q3 2026 adjusted compensation rationon-GAAP | 69.9% | – | – |
| Q3 2026 non-compensation expensesGAAP | $190.4M | (8%) | 9% |
| Q3 2026 adjusted non-compensation expensesnon-GAAP | $155.5M | (9%) | 5% |
| Q3 2026 adjusted non-compensation rationon-GAAP | 19.3% | – | – |
| Q3 2026 provision for income taxesGAAP | $25.08M | 5% | 17% |
| Q3 2026 effective tax rateGAAP | 45.8% | – | – |
| Q3 2026 adjusted effective tax ratenon-GAAP | 38.1% | – | – |
| Q3 2026 ending AUMother | $284.0B | (0.2%) | 7.4% |
| Q3 2026 average AUMother | $286.6B | 2.7% | 11.4% |
| First nine months of 2026 net revenueGAAP | $2.38B | – | 8% |
| First nine months of 2026 adjusted net revenuenon-GAAP | $2.26B | – | 6% |
| First nine months of 2026 operating incomeGAAP | $181,929 | – | (25%) |
| First nine months of 2026 adjusted operating incomenon-GAAP | $205,567 | – | (28%) |
| First nine months of 2026 adjusted operating marginnon-GAAP | 9.1% | – | – |
| First nine months of 2026 net income attributable to Lazard, Inc.GAAP | $134.9M | – | (28%) |
| First nine months of 2026 adjusted net incomenon-GAAP | $99.54M | – | (44%) |
| First nine months of 2026 diluted net income per shareGAAP | $1.20 | – | (30%) |
| First nine months of 2026 adjusted diluted net income per sharenon-GAAP | $0.90 | – | (45%) |
| First nine months of 2026 adjusted compensation rationon-GAAP | 69.9% | – | – |
| First nine months of 2026 adjusted non-compensation rationon-GAAP | 21.0% | – | – |
| First nine months of 2026 adjusted effective tax ratenon-GAAP | 28.0% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Q3 2026 Financial AdvisoryRevenue included an amount pulled forward for transactions that closed just after September 30 that was in line with Lazard's two-year average. | $470 million on a U.S. GAAP basis; $465 million adjusted | 4% adjusted | 10% on a U.S. GAAP basis; 10% adjusted |
| Q3 2026 Asset ManagementAdjusted management fees were $321 million, 18% higher than the third quarter of 2025 and 4% higher than the second quarter of 2026; average AUM was $287 billion. | $357 million on a U.S. GAAP basis; $330 million adjusted | –% adjusted | 9% on a U.S. GAAP basis; 12% adjusted |
| First nine months of 2026 Financial AdvisoryFinancial Advisory adjusted net revenue was $1,266,178 versus $1,283,181 for the first nine months of 2025. | $1,279 million on a U.S. GAAP basis; $1,266 million adjusted | – | (1%) on a U.S. GAAP basis; (1%) adjusted |
| First nine months of 2026 Asset ManagementU.S. GAAP revenue included a non-cash gain on the sale and deconsolidation of the Edgewater management vehicles; adjusted management fees were $927 million, 22% higher year-over-year. | $1,118 million on a U.S. GAAP basis; $970 million adjusted | – | 23% on a U.S. GAAP basis; 17% adjusted |
Long-term outlook
- NoteThe Company aims to deliver an adjusted compensation ratio of 60% or below, with timing dependent on market conditions.
- NoteThe Company aims to deliver an adjusted non-compensation ratio between 16% and 20%, with timing dependent on market conditions.
Capital returns
- In the third quarter of 2026, Lazard returned $88 million to shareholders: $49 million in dividends, $33 million in repurchases of common stock, and $6 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
- In the first nine months of 2026, Lazard returned $366 million to shareholders: $145 million in dividends, $85 million in repurchases of common stock, and $136 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
- During the first nine months of 2026, Lazard repurchased 1.9 million shares at an average price of $43.68.
- As of September 30, 2026, total outstanding share repurchase authorization was approximately $224 million.
- On October 21, 2026, Lazard declared a quarterly dividend of $0.50 per share, payable on November 13, 2026 to stockholders of record on November 2, 2026.
What drove it
- Financial Advisory delivered record third-quarter revenue, according to the Company.
- Adjusted Financial Advisory net revenue increased 10% year-over-year and 4% sequentially to $464,690.
- Asset Management adjusted management fees increased 18% year-over-year to $321 million, alongside 11.4% growth in average AUM.
- Ending AUM increased 7.4% year-over-year, with Emerging Markets equity AUM up 43.8% and Alternative Investments AUM up 15.2%.
- The first nine months included positive net flows of $5.1 billion.
- The first nine months of U.S. GAAP Asset Management revenue included a non-cash gain on the sale and deconsolidation of the Edgewater management vehicles.
Concerns
- Q3 adjusted operating income declined 14% year-over-year to $86,668 and adjusted operating margin declined to 10.8% from 14.0%.
- The adjusted compensation ratio increased to 69.9% from 65.5% in both the third quarter and first nine months.
- Q3 adjusted diluted net income per share declined 36% year-over-year to $0.36.
- Q3 Asset Management incentive fees declined to $1 million from $9 million, while other revenue declined to $8 million from $14 million.
- Q3 AUM had net outflows of $(2,325), and ending AUM was approximately even with June 30, 2026.
- First-nine-month adjusted Financial Advisory revenue declined 1% year-over-year to $1,266,178.
- U.S. equity AUM declined 35.9% year-over-year to $26,691.
What to watch
- Whether Financial Advisory revenue momentum continues after revenue pulled forward for transactions that closed just after September 30.
- Progress toward the long-term adjusted compensation ratio target of 60% or below.
- Whether the adjusted non-compensation ratio moves within the long-term target range of 16% to 20%.
- Asset Management net flows following third-quarter net outflows of $(2,325).
- Management fee growth, incentive fee recovery, and the early-November launch of Lazard CL.
- The impact of the pending acquisition of Campbell Lutyens, for which expenses were $4,108 in the third quarter of 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $1,263,956 as of September 30, 2026, compared with $1,469,416 as of December 31, 2025.
- Senior debt was $1,690,252 as of September 30, 2026, compared with $1,688,086 as of December 31, 2025.
- Total assets were $4,547,910 as of September 30, 2026, compared with $4,936,272 as of December 31, 2025.
- Total liabilities were $3,498,218 as of September 30, 2026, compared with $3,951,604 as of December 31, 2025.
- Total Lazard, Inc. stockholders' equity was $948,786 as of September 30, 2026, compared with $869,193 as of December 31, 2025.
- Third-quarter AUM movement comprised net flows of $(2,325), market value appreciation of $1,923, and foreign exchange depreciation of $(219).
- First-nine-month AUM movement comprised net flows of $5,066, market value appreciation of $29,388, foreign exchange depreciation of $(4,266), and acquisitions/(divestitures) of $(459).
Analysis
Lazard's third-quarter revenue trends improved across both operating businesses. U.S. GAAP net revenue increased 9% to $814,171 and adjusted net revenue increased 11% to $804,621. Financial Advisory adjusted revenue increased 10% year-over-year to $464,690 and 4% sequentially, while Asset Management adjusted revenue increased 12% to $330,242. The Financial Advisory result included revenue pulled forward for transactions that closed just after September 30, an amount the Company said was in line with its two-year average.
Asset Management was supported by management fees of $321 million, up 18% year-over-year and 4% sequentially, and average AUM of $286,590, up 11.4% year-over-year. However, incentive fees fell to $1 million from $9 million and other revenue fell to $8 million from $14 million. Ending AUM was $284,029, up 7.4% year-over-year but down 0.2% sequentially, as third-quarter net outflows of $(2,325) and foreign exchange depreciation of $(219) more than offset market value appreciation of $1,923.
Profitability did not keep pace with revenue. Q3 adjusted compensation and benefits expense rose 18% to $562,430, causing the adjusted compensation ratio to rise to 69.9% from 65.5%. Adjusted operating income decreased 14% to $86,668 and adjusted operating margin declined to 10.8% from 14.0%. U.S. GAAP operating income declined 42% to $54,752. Adjusted diluted net income per share was $0.36, down 36% from $0.56, while U.S. GAAP diluted net income per share was $0.26, down 60% from $0.65.
For the first nine months, adjusted net revenue increased 6% to $2,264,070, but adjusted operating income declined 28% to $205,567 and adjusted diluted net income per share declined 45% to $0.90. Financial Advisory adjusted revenue declined 1% over the nine-month period, whereas Asset Management adjusted revenue increased 17%. The Company reported positive net flows of $5,066 for the first nine months, but the third quarter reversed to net outflows.
Capital return totaled $88 million in the quarter and $366 million in the first nine months. Cash and cash equivalents were $1,263,956 and senior debt was $1,690,252 at September 30. Lazard declared a quarterly dividend of $0.50 per share on October 21. The release did not provide numerical near-term financial guidance, but reiterated long-term aims for an adjusted compensation ratio of 60% or below and an adjusted non-compensation ratio of between 16% and 20%.
Management, verbatim
Our Lazard 2030 strategy continues to progress as planned, with strong momentum firm-wide.
Peter R. Orszag, CEO and Chairman
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.
Tracy Farr, CFO
Not in the filing
stated, not guessed- Near-term revenue guidance
- Near-term gross margin guidance
- Near-term operating expense guidance
- Near-term tax-rate guidance
- Prior outlook section for comparison
- Operating cash flow
- Free cash flow
- Gross margin
- Q3 2026 GAAP gross margin
- Q3 2026 non-GAAP gross margin
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.