Moelis & Company NYSE: MC reported record first-quarter 2026 revenue and pointed to elevated deal activity and a strong pipeline, while executives cautioned that geopolitical uncertainty, disruptions in private credit, and AI-driven sector dislocation are creating near-term headwinds in parts of the transaction environment.
Record first-quarter revenue as M&A and private capital advisory rose
Chief Executive Officer and co-founder Navid Mahmoodzadegan said the firm delivered “record first quarter revenues of $320 million” and “record first quarter levels of announced transaction activity,” alongside “strong momentum in senior hiring” and continued execution of strategic growth priorities.
Chief Financial Officer Christopher Callesano said first-quarter revenue of $320 million increased 4% from the prior-year period. He attributed the year-over-year increase to higher M&A and private capital advisory (PCA) revenue, “partially offset by declines in capital structure advisory and capital markets.” Callesano said the quarterly business mix was “approximately 2/3 M&A and 1/3 non-M&A.”
Advisory highlights and market backdrop
Mahmoodzadegan cited a number of notable mandates since the prior earnings call, including advising on Clear Channel Outdoor’s $6.2 billion sale to Mubadala Capital and TWG Global, Tri Pointe Homes’ $4.5 billion sale to Sumitomo Forestry, and Kennedy Wilson’s $9.5 billion take-private. He also said Moelis advised TowerBrook on a $1.2 billion continuation vehicle for EisnerAmper and acted as an active bookrunner on X-energy’s $1.2 billion IPO.
Looking at the broader environment, Mahmoodzadegan said the firm entered 2026 with “high levels of new business origination and a constructive outlook,” but flagged several factors weighing on parts of the market: “the war in the Middle East, disruptions in private credit, and the impact of AI on certain sectors.” He added that these forces “create new opportunities” as well, and said the firm’s pipeline was “near all-time highs.”
Business trends across product areas
M&A: Mahmoodzadegan said corporates are seeking scale to strengthen strategic positioning amid technology disruption, a dynamic he described as “most pronounced in large cap transactions,” supported by “a more accommodative U.S. regulatory backdrop.” He also pointed to dislocation in public equities driving take-private activity, noting the firm’s strength in board and special committee advisory.
He said Moelis continues to benefit from sponsors’ need to monetize a large backlog of investments, even though the market has not yet seen a broad-based rebound in sponsor exits. Still, Mahmoodzadegan said the firm’s “M&A revenues from sponsors grew double digits during the quarter,” clarifying later that this was a year-over-year comparison.
Private capital advisory: Mahmoodzadegan said the GP-led secondaries market continues to hit record levels, driven by demand for liquidity solutions, increased adoption of continuation vehicles, and a growing base of institutional investors seeking seasoned assets. He said Moelis’ PCA “thesis is playing out as expected,” with live mandates and a rapidly building pipeline. The CEO also noted the addition of a managing director focused on private credit secondaries and another expected to join later in the year, which would bring the firm to “seven senior bankers dedicated to GP-led secondaries.”
Asked whether PCA is accretive to pre-tax income yet, Callesano said it is “hard to tell during the quarter,” but added, “Sure, it could be accretive,” describing PCA as a growing component of the firm’s non-M&A business.
Capital markets: Mahmoodzadegan said demand for growth capital is supporting activity, particularly in late-stage growth and pre-IPO issuance in areas including AI, digital infrastructure, and aerospace and defense. He also said IPO issuance is strong, with Moelis involved in multiple transactions expected to come to market. The firm is investing further in the business, including recent hires of two managing directors—one focused on securitization and another complementing private credit and debt capital markets capabilities.
Capital structure advisory: Mahmoodzadegan said liability management remains the most active segment and that increased lender selectivity is widening the gap between companies that can refinance and those that require more complex solutions—an environment he expects to “lead to more traditional restructurings over time.” He said the CSA pipeline is “meaningfully above last year’s levels,” with technological disruption and commodity price volatility creating opportunities. He also highlighted expanding creditor coverage as a driver of diversification in the CSA business.
In response to a question about weaker year-over-year restructuring revenue, Mahmoodzadegan said the decline was “really just timing,” emphasizing that quarterly results depend on which transactions close in the period. He reiterated that the CSA team’s pipeline is up and said he expects CSA growth in 2026.
AI, software repricing, and private credit “headwinds”
In discussion of the software sector, Mahmoodzadegan described a public-market repricing driven by concerns over how AI could disrupt historically sticky software business models. He said the revaluation “bleeds over into the private markets,” affecting both M&A and lenders’ willingness to finance certain companies, making it “harder in the near term to navigate traditional software M&A at the same rate as you’ve seen over the last few years.”
He outlined a framework in which some companies may adapt and prosper, some may face significant disruption and require liability management if overlevered, and others may need time and potentially bespoke capital or hybrid solutions to adjust. He said Moelis’ product capabilities position the firm to advise across these outcomes.
On private credit, Mahmoodzadegan said he does not see systemic risk, characterizing direct lending as “a small part of the overall private credit complex.” He said current issues are largely tied to direct lending into software and concentration in certain portfolios, but added that lenders remain active across other sectors. He also said headlines can make lenders more selective as they reassess risk.
Expenses, capital return, and hiring
Callesano said the first-quarter adjusted compensation expense ratio was 65.8%, down from 69% in the first quarter of 2025 and in line with the firm’s full-year 2025 adjusted compensation ratio. He said the ratio will depend on revenue trajectory and hiring pace through the year. In the Q&A, both executives said they remain focused on continuing to improve the comp ratio over time, with Callesano noting it is “a little too early” to predict the path for 2026.
Adjusted non-compensation expenses were $67 million, representing a 21% ratio. Callesano said higher deal-related costs and increased communication and technology expenses drove the growth. He reiterated expectations that full-year 2026 non-comp expenses will grow at a similar rate to 2025, reflecting investments in technology (including AI), increased deal-related travel, and headcount growth. On quarterly fluctuations within expense line items, Callesano said components can be “lumpy,” but in aggregate they tend to balance out over time.
On capital allocation, Callesano said Moelis ended the quarter with $354 million of cash and no debt. The board declared a regular quarterly dividend of $0.65 per share. The firm repurchased 1.9 million shares at an average price of $61.40, including 1 million shares used to settle employee tax obligations and 895,000 shares repurchased in the open market. Including the dividend, Callesano said the firm returned approximately $171 million of capital to shareholders related to the first quarter.
Mahmoodzadegan said Moelis hired eight managing directors year to date—two already onboard and six expected to join later in the year—adding that the firm has invested across sectors including energy and healthcare IT and expanded European coverage with hires in chemicals and sponsor coverage. He also noted the firm relocated to a new, expanded office in London.
Mahmoodzadegan closed by reiterating that Moelis is “actively testing and deploying AI tools across our business,” calling AI “a clear productivity lever” intended to support bankers, improve client service, and drive efficiencies.
About Moelis & Company NYSE: MC
Moelis & Co operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.
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