Moelis & Company (MC) is a leading global independent investment bank that has consistently demonstrated remarkable resilience in navigating the complexities of the financial landscape. With a rich history spanning over a decade, the firm has established itself as a trusted advisor to a diverse clientele, including corporations, governments, and financial sponsors.
Company Overview and History
Founded in 2007 by veteran investment bankers, Moelis & Company has rapidly grown to become a respected player in the industry. The firm's strategic focus on providing innovative and tailored solutions to its clients has been the driving force behind its success. Through its comprehensive suite of services, including mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, and other corporate finance matters, Moelis & Company has consistently delivered exceptional value to its clients. Prior to the company's Initial Public Offering (IPO) in 2014, the business operated as a Delaware limited partnership. Following the IPO, the operations are owned by Moelis & Company Group LP, a U.S. Delaware limited partnership, and Group LP is controlled by Moelis & Company. The company's shareholders are entitled to receive a portion of Group LP's economics through their direct ownership interests in shares of Class A common stock of Moelis & Company.
Growth Strategy and Global Presence
The company has achieved rapid growth by hiring high-caliber professionals, expanding the scope of its advisory services, increasing the breadth of its geographic and sector coverage, developing new client relationships and cultivating its professionals through training and mentoring. Today, the company serves its clients globally with 917 advisory bankers based in over 20 locations around the world. Over the years, Moelis & Company has faced various challenges common to the financial services industry, including navigating regulatory changes and ensuring the protection of sensitive client information. The company has maintained a strong focus on compliance and has implemented robust policies and procedures to safeguard its clients' confidential data. Additionally, the company has weathered periods of market volatility and economic uncertainty, demonstrating its ability to adapt and continue serving its clients effectively.
Financials
The company's financial performance has been a testament to its resilience and adaptability. In 2024, Moelis & Company reported GAAP revenues of $1,194.5 million, representing a 40% increase from the previous year. The firm's adjusted revenues for the full year 2024 reached $1,201.5 million, further solidifying its position as a market leader. The annual net income for 2024 was $151.49 million, with an annual operating cash flow of $427.49 million and an annual free cash flow of $415.39 million.
In the most recent quarter (Q4 2024), the company reported revenue of $438.72 million and net income of $89.4 million. The quarterly revenue increased by 104% year-over-year, driven by an increase in the number of completed transactions compared to the prior year period. The company saw strong performance across all products and sectors.
Moelis & Company's primary source of revenue is from providing advisory services on mergers and acquisitions (M&A), recapitalizations and restructurings, capital markets transactions, private fund raisings and secondary transactions, and other corporate finance matters. The company's advisory services are diversified across industries, with no single client accounting for more than 10% of revenues in 2024, 2023, and 2022.
The company's compensation and benefits expenses, which represent the majority of its operating expenses, increased by 16% in 2024 compared to 2023, in line with the growth in revenues. Non-compensation expenses, including professional fees, travel, communication and technology costs, increased by 6% over the same period. Moelis & Company's operating margin improved to 14% in 2024, up from 5% in 2023, as the firm was able to leverage its existing infrastructure to support the higher revenue base.
Moelis & Company has demonstrated strong historical performance, achieving a total stock return of approximately 525% since its IPO in 2014 and has advised on over $5.1 trillion of transactions since inception. Industry trends show the M&A market gradually improving throughout 2024 as companies adapted their M&A strategies and the Federal Reserve began cutting interest rates in the back half of the year.
Liquidity
Moelis & Company's strong financial standing is reflected in its robust balance sheet. As of December 31, 2024, the company had $560 million in cash and no debt, providing ample liquidity and financial flexibility to navigate the dynamic market conditions. The company maintains $560 million in cash and cash equivalents, with no long-term debt.
Moelis & Company has two revolving credit facilities with aggregate base credit commitments of $50 million. The corporate facility has a base commitment of $5 million, with an option to request a temporary increase of up to $45 million. The U.S. Broker Dealer facility is a $45 million revolving credit facility pre-approved by FINRA. As of December 31, 2024, the company had no borrowings under either facility.
The company's current ratio and quick ratio are both 0.72 as of December 31, 2024, indicating a solid short-term liquidity position.
Talent Acquisition and Retention
The firm's success is not merely a result of its financial prowess but also its unwavering commitment to attracting and retaining top talent. Moelis & Company's collaborative culture and focus on professional development have enabled it to build a team of seasoned investment banking professionals who are dedicated to delivering exceptional service to their clients.
Strategic Expansion
One of the key highlights of 2024 was the firm's strategic expansion into the private funds advisory business. In early 2025, Moelis & Company announced the appointment of Matt Wesley as the Global Head of Private Funds Advisory, underscoring the company's commitment to providing comprehensive capital solutions to financial sponsors and limited partners worldwide.
The company's private funds advisory team provides global strategic advisory and distribution solutions to private fund sponsors, including secondary market advisory, tailored capital raise solutions and primary fundraising. This service is fully integrated with the firm's leading financial sponsor franchise, sector expertise and M&A capabilities.
Competitive Edge and Market Position
Despite the challenges posed by the ongoing market volatility, Moelis & Company has maintained its competitive edge. The firm's diversified revenue streams, strong balance sheet, and talented workforce have been instrumental in its ability to weather the storms and capitalize on emerging opportunities.
Moelis & Company's M&A and strategic advisory franchise is a key driver of its business, with the company advising clients on mergers, acquisitions and divestitures, spin-offs, joint ventures, fairness opinions and shareholder advisory across all sectors. The company's capital markets capabilities include structuring and executing customized financing solutions, as well as advising clients on public and private equity and debt transactions.
The company's recapitalization and restructuring advisory services are also an important part of its business, with Moelis & Company advising both companies and creditors on a wide range of capital structure matters, including liquidity, debt maturity profile, liability management, and general balance sheet issues. These engagements have been a significant source of revenue during periods of financial distress.
Future Outlook
Looking ahead, Moelis & Company remains optimistic about its growth prospects. The firm's strategic investments in key sectors, such as technology, industrials, and energy, have positioned it well to capitalize on the evolving market dynamics. Moreover, the anticipated pickup in sponsor activity and the constructive environment for the firm's restructuring business are expected to drive continued momentum.
For 2025, Moelis & Company expects non-compensation expenses to trend higher due to anticipated increases in technology, occupancy, and travel/entertainment spend. Regarding the compensation ratio, the company stated that as they get closer to a market-based low 60s compensation ratio, the progression will start to flatten out and become less linear. The company plans to be aggressive in building out their new Private Funds Advisory business, which could impact the compensation ratio.
Moelis & Company expects continued improvement in the M&A market and increased financial sponsor activity. The company also plans to continue returning excess capital to shareholders, potentially through a combination of dividend increases and share repurchases.
Conclusion
In conclusion, Moelis & Company's remarkable performance, unwavering resilience, and strategic vision have solidified its position as a leader in the global investment banking landscape. With its strong financial results in 2024, beating previous guidance, and its optimistic outlook for 2025, the company is well-positioned for continued success. As the financial markets continue to navigate uncharted waters, the firm's ability to adapt and innovate will undoubtedly be a key differentiator in its pursuit of sustainable growth and long-term success.