MC 10-K & 10-Q changes, risk factors and insider trading

We depend on the efforts and reputations of Mr. MoelisMahmoodzadegan, Mr. Moelis, and our other executive officers. Our senior leadership team’s reputations and relationships with clients and potential clients are critical elements in the success of our business. The loss of the services of our senior leadership team, in particular Mr. Mahmoodzadegan and/or Mr. Moelis, could have a material adverse effect on our business, including our ability to attract clients.

Atlas Crest Investment Corp. entities (each an "Atlas Crest Entity" and collectively referred to as "Atlas Crest Entities") were SPACs affiliated with Moelis. Mr. Moelis was the non-Executive Chairman of the Atlas Crest Entities. Mr. Moelis, other executive officers and Managing Directors of Moelis owned a majority of each respective sponsor of Atlas Crest Entities. If Atlas Crest Entities engaged in poor business practices, Moelis could suffer reputational harm that could adversely affect our revenue and our business prospects. DuringIn 2022, the remaining Atlas Crest Entities were wound up and the remainder of the Company's investments were liquidated.

As part of our business, we manage, utilize and store sensitive or confidential client or employee data, including personal data and material non-public information. As a result, we are subject to various risks and costs associated with the collection, handling, storage and transmission of sensitive information, including those related to compliance with increasingly stringent U.S. and foreign data collection and privacy laws and other contractual obligations, as well as those associated with the compromise of our information systems collecting such information. An increasing number of laws and regulations, such as the European Union’s General Data Protection Regulation (“GDPR”), impose stringent requirements upon the processing of personal data. Several other jurisdictions, including states within the United States, have also adopted or are considering similar legislation. Any failure to comply with applicable rules could expose us to liability and/or reputational damage.

We may incur losses as a result of unforeseen or catastrophic events, including thewidespread emergencehealth of a pandemic,emergencies, cybersecurity incidents and events, terrorist attacks, war, trade policies, military conflict, climate-related incidents, or other natural disasters.

For the year ended December 31, 2024,2025, we earned GAAP revenues of $1,194.5$1,516.8 million compared with $854.7$1,194.5 million earned during the same period in 2023.2024. This represents an increase of 40%27% compared to a de minimis7% increase in the number of global completed M&A transactions greater than $100 million in the same period.

Revenues were $1,194.5$1,516.8 million for the year ended December 31, 20242025 compared with $854.7$1,194.5 million for the same period in 2023,2024, representing an increase of 40%.27%. The increase in revenues was driven by an increase in the numberaverage offees per completed transactionstransaction as compared to the prior year period.

For the years ended December 31, 20242025 and 2023,2024, we earned revenues from 406363 clients and 304406 clients, respectively, andbut more importantly, the number of clients that paid fees equal to or greater than $1 million was 241254 clients and 175241 clients, respectively.

Our compensation and benefits expenses are determined by management based on revenues earned, the mark-to-marketresults impact onfrom investments where our employees and the Moelis advisory platform contributed meaningfully to the acquisition of the asset, the competitiveness of the prevailing labor market and anticipated compensation requirements for our employees, the level of recruitment of new Managing Directors and other bankers, the amount of compensation expenses amortized related to equity awards and other relevant factors. As a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods.

For the year ended December 31, 2024,2025, compensation-related expenses of $830.2$1,017.1 million represented 69%67% of revenues, compared with $714.7$830.2 million which represented 84%69% of revenues in the prior year. The increase in compensation expensesand benefits is primarily dueattributable to a higher discretionary bonus expense accrual, as a result of higher revenues earned, and increased headcount as compared withto the prior year period. As a percentage of revenues, compensation related expenses decreased as compared to the prior year period due to greater revenues.

For the year ended December 31, 2024,2025, non-compensation expenses of $191.4$225.9 million represented 16%15% of revenues, compared with $180.4$191.4 million, which represented 21%16% of revenues in the prior year period. The increase in non-compensation expenses is broad-based andprimarily related to increased headcountdeal-related travel and theentertainment expansionexpenses, ofcommunication ourand business.technology expenses, and occupancy expenses driven by increased headcount.

The Company’s provision for income taxes wasand aneffective expensetax ofrates were $67.9 million and 21% and $44.5 million against a pre-tax income of $196.0 million and a benefit of $1.6 million against pre-tax loss of $29.1 million23% for the years ended December 31, 20242025 and 2023,2024, respectively. The income tax provision for the aforementioned periods primarily reflects the Company's allocable share of operating results from Group LP at the prevailing U.S. federal, state, and local corporate income tax rate, and the effect of certain non-tax-deductible items, offset by the impacteffect of the excess tax benefit recognized fromin equityconnection with the delivery of equity-based compensation delivered at thean time of vesting at aappreciated price above the grant date price for such equity.

In addition to cash and cash equivalents, we hold sovereign debt securities and certificates of deposit, which are both highly-liquid instruments in active markets, that are classified as investments on our consolidated statements of financial condition as they have original maturities of three months or more from the date of purchase. As of December 31, 2024,2025, and 2023,2024, the Company held $147.9$340.2 million and $162.9$147.9 million of investments, respectively, primarily composed of sovereign debt securities classified as investments, respectively.securities.

To provide for additional working capital and other general corporate purposes, we maintain two revolving credit facilities with aggregate base credit commitments of $50.0 million. The facility for corporate purposes has a base credit commitment of $5.0 million, and we can request a temporary increase of the credit amount by up to $45.0 million, not to exceed the capacity available under the FINRA credit line discussed below. This option may be exercised up to two times per year during the twelve-month term of the credit line. Unless theUpon lender issuesapproval, athis noticefacility ofcan terminationbe priorextended topast the maturity date of May 24, 2025, this facility will automatically extend2026 to June 30, 2026.2027. The Company incurs a 0.25% per annum fee on the amount of the unused commitment. Advances on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the Company’s option of (i) SOFR plus 1.3% or (ii) Prime minus 1.50%.

As of December 31, 2024,2025, the Company had no borrowings under the $5.0 million credit facility and the Company’s available committed credit, net of the FINRA credit line capacity, was $4.4 million as a result of the issuance of an aggregate amount of $0.6 million of various standby letters of credit, which were required in connection with certain office leases and other agreements.

In addition, Moelis & Company LLC ("U.S. Broker Dealer") maintains a $45.0 million revolving credit facility agreement pre-approved by FINRA to provide additional regulatory capital as necessary. Under the facility, U.S. Broker Dealer may borrow capital until May 23, 2025,2026, the end of the credit period, and must repay aggregate principal balances by the maturity date of May 24, 2026.2027. The Company incurs a 0.25% per annum fee on the amount of the unused commitment. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears on the last day of March, June, September, and December of each calendar year. U.S. Broker Dealer had no borrowingborrowings under the credit facility and the available committed credit under this facility was $45.0 million as of December 31, 2024.2025.

During the years ended December 31, 20242025 and 2023,2024, the Company repurchased 196,4161,133,371 shares and 1,107,683196,416 shares, respectively, pursuant to the Company's share repurchase program and from its employees for the purpose of settling tax liabilities incurred upon delivery of equity-based compensation awards. In July 2021, the Board of Directors authorized the repurchase of up to $100 million of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. The dollar value of shares that may yet be purchased under the program was $62.5$1.5 million as of December 31, 2024.2025. On February 4, 2026, the Board of Directors authorized the repurchase of an additional $300 million of Class A common stock and/or Class A partnership units of Group LP with no expiration date, bringing total repurchase authorization to $301.5 million.

As of December 31, 2024,2025, the Company has a total payable of $290.8$301.1 million due pursuant to the tax receivable agreement in the consolidated financial statements.statements Thereand isof nothis paymentamount, an estimated $32.2 million will be due in less than one year. These amounts represent management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement. Payments made under the tax receivable agreement are required to be made within 225 days of the filing of our tax returns. We generally expect to receive the tax savings prior to making the cash payments to the eligible selling holders of Group LP partnership units. The Company made a payment of $20.3$0.3 million pursuant to the tax receivable agreement during 2024.2025.

The Company is exposed to the risk that the exchange rate of the U.S. dollar relative to other currencies may have an adverse effect on the reported value of the Company’s non‑U.S. dollar denominated assets and liabilities. Non‑functional currency‑related transaction gains and losses are recorded in the consolidated statements of operations. In addition, the reported amounts of our revenues and other income from investments may be affected by movements in the rate of exchange between the pound sterling, euro, Brazilian real, Hong Kong dollar, Israeli shekel, rupee, Australian dollar, Saudi riyal and the U.S. dollar, in which our financial statements are denominated. For the years ended December 31, 20242025 and 2023,2024, the net impact of the fluctuation of foreign currencies in other comprehensive income (loss) in the consolidated statements of comprehensive income were losses of $3.1$0.4 million and gains$3.1 million, respectively, primarily from the fluctuations of $0.7foreign million, respectively.currencies. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations through the use of derivative instruments or other methods.

We earn substantially all of our revenues by providing advisory services on mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, private fund raisingsfundraisings and secondary transactions, and other corporate finance matters. The Company also acts as an underwriter of certain securities offerings. We provide our advisory services on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. In many cases, we are not paid until the completion of an underlying transaction.

The Company maintains an allowance for credit losses that, in management’s opinion, provides for an adequate reserve to cover its current expectation of future losses as of the reporting date. For purposes of determining appropriate allowances, the Company stratifies its population of accounts receivable into two categories, one for short-term receivables and a second for private fundscapital advisory receivables. Each population is separately evaluated using an aging method that results in a percentage reserve based on the age of the receivable, in addition to considerations of historical charge-offswrite-offs and current economic conditions.

After concluding that a reserved accounts receivable is no longer collectible, the Company will charge-offwrite-off the receivable. This has the effect of reducing both the gross receivable and the allowance for credit losses. If a reserved accounts receivable is subsequently collected, such reversals reduce the gross receivable and the allowance for credit losses and is a reduction of bad debt expense, which is recorded within other expenses on the consolidated statement of operations. The combination of reversals and the provision for credit losses of a reported period comprise the Company’s bad debt expense.

As of MarchJune 31,30, 2026, we served our clients globally with 1,0271,016 advisory bankers. We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters which set forth our fees. We generally generate fees at key transaction milestones, such as closing, the timing of which is outside of our control. As a result, revenues and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter. The performance of our business depends on the ability of our professionals to build relationships with clients over many years by providing trusted advice and exceptional transaction execution.

Economic and global financial conditions can materially affect our operational and financial performance. See “Risk Factors” in Part II. Other Information of this Form 10-Q and in our Form 10-K for a discussion of some of the factors that can affect our performance. The M&A market data for announced and completed transactions during the three and six months ended MarchJune 31,30, 2026 and 2025, referenced throughout this Form 10-Q was obtained from LSEG - Financial Technology & Data (formerly known as Refinitiv) as of AprilJuly 8,7, 2026 and AprilJuly 7, 2025, respectively.

For the first threesix months of 2026, we earned GAAP revenues of $319.8$729.2 million compared with $306.6$672.0 million earned during the same period in 2025. This represents an increase of 4%9% compared to a 7%13% increase in the number of global completed M&A transactions greater than $100 million in the same period.

We continue to observe strong levels of deal activity and client engagement across our businesses. RapidThe pursuit of scale, supported by a more accommodative U.S. regulatory environment, is a primary driver of M&A activity, and rapid technological change, particularly related to AI,artificial isintelligence drivingtechnologies ("AI"), continues to drive companies to reevaluaterevalue their positioning and long-term competitiveness in an evolving market,competitiveness, supporting the need for strategic transactions and the demand for scale.transactions. Financial sponsor engagement continues to increase, reflecting ongoing efforts to monetize a substantial backlog of investments. In addition, recent market dislocation and evolvingEvolving credit conditions and increased lender selectivity are contributing to increased demand for liability management transactions and are expected to support more traditional restructuring activity over time. AsThe expansion of our capital markets adjustplatform spanning both the public and private capital markets has positioned us to recentdeliver market disruption, demand for customizedcomprehensive financing solutions hasamid alsoconstructive increased.capital Followingmarkets substantialconditions. investmentThrough inour 2025,continued investment, our private capital advisory business has become a core pillar of our client offering and the team is actively executing and winning new business.mandates.

Our transaction activity levels and the timing of our revenues may be impacted by the volatility driven by recent geopolitical events, evolving conditions in the private credit market and AI-driven disruption. AI-driven disruption is weighing particularly on M&A sentiment within the software sector. However, we believe we are well-positioned to navigate these dynamic markets given our diversified capabilities, strong balance sheet, substantial liquidity and zero debt.

The following is a discussion of our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025.

Revenues were $319.8$409.4 million for the three months ended MarchJune 31,30, 2026 as compared with $306.6$365.4 million for the same period in 2025, representing an increase of 4%.12%. The increase in first quarter revenues is primarily attributable to an increase in average fees earned per completed transaction, as compared with the prior year period.

For the three months ended MarchJune 31,30, 2026 and 2025, we earned revenues from 136144 clients and 151136 clients, respectively, and the number of clients that paid fees equal to or greater than $1 million was 6167 clients and 60 clients, respectively.

Operating expenses were $279.3$336.6 million for the three months ended MarchJune 31,30, 2026 and represented 87%82% of revenues, compared with $269.7$304.7 million for the same period in 2025 which represented 88%83% of revenues. The increase in operating expenses was primarilyattributable drivento byboth higherincreased deal-related costs, communicationscompensation and technology expenses,benefits and occupancynon-compensation costs due to increased headcountexpenses, as compared with the prior year period.

For the three months ended MarchJune 31,30, 2026, compensation related expenses of $210.4$269.4 million represented 66% of revenues, compared with $211.5$252.1 million which represented 69% of revenues in the prior year period. The marginal decreaseincrease in compensation and benefits is primarily attributable to ahigher lower incentive compensation accrual,headcount, as compared to the prior year period. As a percentage of revenues, compensation related expenses decreased as compared to the prior year period primarily due to greater revenues.

For the three months ended MarchJune 31,30, 2026, non‑compensation expenses of $68.9$67.2 million represented 22%16% of revenues, compared with $58.1$52.6 million which represented 19%14% of revenues in the prior year period. The increase in non-compensation expenses is primarily driven by higheroccupancy and depreciation expenses related to new office space, deal-related costs,travel communicationsexpenses, professional fees associated with the public capital markets business, and technologyother expenses,expenses and occupancy costs duerelated to increasedbusiness headcountadministration, as compared with the prior year period.

For the three months ended MarchJune 31,30, 2026, other income and expenses was income of $5.7$2.5 million, primarily related to $5.4 million in income and net gains on financial assets.assets and the Company's share of MA Financial's results. For the prior year period, other income and expenses was income of $6.1$3.5 million, primarily related to $4.4$3.9 million in incomenet gains and net gainsincome on financial assets and $1.2 million in the Company's share of earnings in MA Financial.assets.

The Company’s provisionprovisions for income taxes wasand aneffective expensetax ofrates $3.9were million against pre-tax income of $46.2$20.2 million and a27% benefitand of $10.7$17.4 million againstand pre-tax income of $43.1 million27% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The income tax provisions for the aforementioned periods primarily reflect the Company’s allocable share of operating results from Group LP at the prevailing U.S. federal, state, and local corporate income tax rates and the effect of certain non-tax deductible items, offset by the effect of the excess tax benefit recognized in connection with the delivery of equity-based compensation at an appreciated price above the grant date price for such equity.items.

We evaluate our cash needs on a regular basis in light of current market conditions. Cash and cash equivalents include all short‑term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. As of MarchJune 31,30, 2026 and December 31, 2025, the Company had cash equivalents of $75.5$159.9 million and $427.8 million, respectively, invested primarily in U.S. and U.K. sovereign debt securities, money market funds, and certificates of deposit. Additionally, as of MarchJune 31,30, 2026 and December 31, 2025, the Company had cash of $77.4$47.9 million and $80.8 million, respectively, maintained in U.S. and non‑U.S. bank accounts, of which most bank account balances exceeded the U.S. Federal Deposit Insurance Corporation (“FDIC”) and U.K. Financial Services Compensation Scheme (“FSCS”) coverage limits.

In addition to cash and cash equivalents, we hold sovereign debt securities, which are highly liquid instruments in active markets that are classified as investments on our condensed consolidated statements of financial condition as they have original maturities of three months or more from the date of purchase. As of MarchJune 31,30, 2026 and December 31, 2025, the Company held $200.7$273.4 million and $340.2 million of investments, respectively.

Our liquidity is highly dependent upon cash receipts from clients which generally requires the successful completion of transactions. The timing of receivable collections typically occurs within 60 days of billing. As of MarchJune 31,30, 2026 and December 31, 2025 accounts receivable were $97.9$66.9 million and $82.2 million, respectively, net of allowances of $3.0$3.9 million and $2.1 million, respectively.

As of MarchJune 31,30, 2026, the Company had no borrowings under the $5.0 million credit facility and the Company’s available committed credit, net of the FINRA credit line capacity, was $4.4 million as a result of the issuance of an aggregate amount of $0.6 million of various standby letters of credit, which were required in connection with certain office leases and other agreements.

In addition, Moelis & Company LLC ("U.S. Broker Dealer") maintains a $45.0 million revolving credit facility agreement pre-approved by FINRA to provide additional regulatory capital as necessary. Under the facility, U.S. Broker Dealer may borrow capital until May 24, 2026,2027, the end of the credit period, and must repay aggregate principal balances by the maturity date of May 24, 2027.2028. The Company incurs a 0.25% per annum fee on the amount of the unused commitment. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears on the last day of March, June, September, and December of each calendar year. U.S. Broker Dealer had no borrowings under the credit facility and the available committed credit under this facility was $45.0 million as of MarchJune 31,30, 2026.

The Board of Directors of Moelis & Company declared a regular quarterly dividend of $0.65 per share. The $0.65 per share will be paid on JuneSeptember 18,17, 2026 to Class A common stockholders of record on MayAugust 11,10, 2026. During the threesix months ended MarchJune 31,30, 2026 the Company paid aggregate dividends of $0.65$1.30 per share.

During the threesix months ended MarchJune 31,30, 2026 and 2025, the Company repurchased 1,909,9702,274,404 and 156,105186,889 shares, respectively, from its employees pursuant to the Company's share repurchase program and for the purpose of settling tax liabilities incurred upon delivery of equity-based compensation awards and pursuant to the Company's share repurchase program.awards. In February 2026, the Board of Directors authorized the repurchase of up to $300.0 million of Class A common stock and/or Class A partnership units of Group LP with no expiration date. The dollar value of shares that may yet be purchased under the program was $248.0$226.2 million as of MarchJune 31,30, 2026.

ThreeSix Months Ended MarchJune 31,30, 2026

Cash, cash equivalents and restricted cash were $153.7$208.6 million at MarchJune 31,30, 2026, a decrease of $355.7$300.8 million from $509.4 million at December 31, 2025. Operating activities resulted in a net outflow of $278.8$49.3 million primarily attributable to cash operating outflows, including discretionary bonus paid during the period, net of cash collected from clients. Investing activities resulted in a net inflow of $127.6$35.6 million primarily attributable to net sales of investments. Financing activities resulted in a net outflow of $204.4$285.7 million primarily related to treasury stock purchases and the payment of dividends and tax distributions and treasury stock purchases.distributions.

ThreeSix Months Ended MarchJune 31,30, 2025

Cash, cash equivalents and restricted cash were $185.4$222.5 million at MarchJune 31,30, 2025, a decrease of $227.8$190.7 million from $413.2 million at December 31, 2024. Operating activities resulted in a net outflowinflow of $165.5$38.7 million primarily attributable to cash collected from clients, net of cash operating outflows, including discretionary bonuses paid during the period, net of cash collected from clients.period. Investing activities resulted in a net outflow of $7.0$113.1 million primarily attributable to purchases of investments. Financing activities resulted in a net outflow of $56.7$117.8 million primarily related to the payment of dividends and tax distributions and treasury stock purchases.

As of MarchJune 31,30, 2026, the Company has a total payable of $269.3$269.6 million due pursuant to the tax receivable agreement in the condensed consolidated financial statements and of this amount an estimated $38.3$38.6 million will be due in less than one year. These amounts represent management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement. Payments made under the tax receivable agreement are required to be made within 225 days of the filing of our tax returns. We generally expect to receive the tax savings prior to making the cash payments to the eligible selling holders of Group LP partnership units. The Company made a payment of $32.2 million pursuant to the tax receivable agreement during the first threesix months of 2026.

The Company is exposed to the risk that the exchange rate of the U.S. dollar relative to other currencies may have an adverse effect on the reported value of the Company’s non‑U.S. dollar denominated assets and liabilities. Non‑functional currency‑related transaction gains and losses are recorded in the condensed consolidated statements of operations. In addition, the reported amounts of our revenues and other income from investments may be affected by movements in the rate of exchange between the pound sterling, euro, Brazilian real, Hong Kong dollar, Israeli shekel, rupee, Australian dollar, Saudi riyal and the U.S. dollar, in which our financial statements are denominated. Other comprehensive income (loss) in the condensed consolidated statements of comprehensive income werewas lossesa gain of $0.2less than $0.1 million and gainsa gain of $1.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and losses of $0.2 million and gains of $2.6 million for the six months ended June 30, 2026 and 2025, respectively, primarily from the fluctuations of foreign currencies. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations through the use of derivative instruments or other methods.

ASC 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three and six months ended MarchJune 31,30, 2026 and 2025, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three and six months ended MarchJune 31,30, 2026 and 2025, no such amounts were recorded.