# Moelis & Co (MC) Informational only - not investment advice. CIK: 0001596967 SIC: 6282 Investment Advice SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Security And Commodity Brokers, Dealers, Exchanges, And Services](/major-group/62/) > [SIC 6282 Investment Advice](/industry/6282/) Latest 10-K filed: 2026-02-26 SEC page: https://www.sec.gov/edgar/browse/?CIK=1596967 Filing source: https://www.sec.gov/Archives/edgar/data/1596967/000119312526076747/mc-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Net income | 259617000 | USD | 2025 | 2026-02-26 | | Assets | 1740685000 | USD | 2025 | 2026-02-26 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001596967.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net income | 141,865,000 | 126,524,000 | 208,004,000 | 135,692,000 | 218,438,000 | 422,978,000 | 168,682,000 | -27,516,000 | 151,491,000 | 259,617,000 | | Operating income | 161,089,000 | 164,282,000 | 226,781,000 | 114,543,000 | 265,709,000 | 495,917,000 | 216,100,000 | -40,352,000 | 172,945,000 | 273,863,000 | | Assets | 598,800,000 | 699,068,000 | 914,375,000 | 1,071,699,000 | 1,196,444,000 | 1,555,681,000 | 1,216,869,000 | 1,179,759,000 | 1,378,936,000 | 1,740,685,000 | | Liabilities | 347,359,000 | 354,812,000 | 542,622,000 | 677,872,000 | 751,971,000 | 1,077,382,000 | 757,931,000 | 817,297,000 | 899,553,000 | 1,060,308,000 | | Stockholders' equity | 211,845,000 | 324,950,000 | 404,361,000 | 442,827,000 | 479,948,000 | 489,068,000 | 444,495,000 | 352,141,000 | 441,606,000 | 568,439,000 | | Cash and cash equivalents | 318,926,000 | 213,191,000 | 261,100,000 | 167,812,000 | 202,477,000 | 520,213,000 | 206,794,000 | 186,417,000 | 412,467,000 | 508,595,000 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001596967.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2018-Q1 | 2018-03-31 | | | 0.75 | reported discrete quarter | | 2019-Q1 | 2019-03-31 | 275,000 | | | reported discrete quarter | | 2019-Q2 | 2019-06-30 | 245,000 | | | reported discrete quarter | | 2019-Q3 | 2019-09-30 | 241,000 | | | reported discrete quarter | | 2019-Q4 | 2019-12-31 | 229,000 | | | derived Q4 = FY annual - nine-month YTD | | 2020-Q1 | 2020-03-31 | 188,000 | | | reported discrete quarter | | 2020-Q2 | 2020-06-30 | 198,000 | | | reported discrete quarter | | 2020-Q3 | 2020-09-30 | 182,000 | | | reported discrete quarter | | 2020-Q4 | 2020-12-31 | 180,000 | | | derived Q4 = FY annual - nine-month YTD | | 2023-Q2 | 2023-03-31 | | 3,563,000 | | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | -13,246,000 | | reported discrete quarter | | 2023-Q4 | 2023-12-31 | | -6,464,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | | 17,485,000 | | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 17,485,000 | | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 14,921,000 | | reported discrete quarter | | 2024-Q4 | 2024-12-31 | | 99,845,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | | 53,775,000 | | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 53,775,000 | | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 46,755,000 | | reported discrete quarter | | 2025-Q4 | 2025-12-31 | | 99,016,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | | 42,295,000 | | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1596967/000119312526192462/mc-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-30 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. Forward-Looking Statements and Certain Factors that May Affect Our Business The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes that appear elsewhere in this Form 10-Q. We have made statements in this discussion that are forward-looking statements. You can identify these forward looking statements by the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. You should consider the numerous risks outlined under “Risk Factors” in our Annual Report on Form 10-K and in this Form 10-Q. Although we believe the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward looking statements. You should not rely upon forward looking statements as a prediction of future events. We are under no duty to and we do not undertake any obligation to update or review any of these forward looking statements after the date of this filing to conform our prior statements to actual results or revised expectations whether as a result of new information, future developments or otherwise. Executive Overview Moelis & Company is a leading global independent investment bank that provides innovative strategic advice and solutions to a diverse client base, including corporations, governments, and financial sponsors. We assist our clients in achieving their strategic goals by offering comprehensive integrated financial advisory services across all major industry sectors. With over 20 locations in North and South America, Europe, the Middle East, Asia and Australia, we advise clients on their most critical decisions, including mergers and acquisitions, recapitalizations and restructurings, capital markets transactions and other corporate finance matters. Our ability to provide confidential, independent advisory services to our clients across sectors and regions and through all phases of the business cycle has led to long-term client relationships and a diversified revenue base. As of March 31, 2026, we served our clients globally with 1,027 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. Business Environment and Outlook 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 months ended March 31, 2026 and 2025, referenced throughout this Form 10-Q was obtained from LSEG - Financial Technology & Data (formerly known as Refinitiv) as of April 8, 2026 and April 7, 2025, respectively. 27 For the first three months of 2026, we earned GAAP revenues of $319.8 million compared with $306.6 million earned during the same period in 2025. This represents an increase of 4% compared to a 7% increase in the number of global completed M&A transactions greater than $100 million in the same period. We continue to observe strong levels of deal activity and client engagement across our businesses. Rapid technological change, particularly related to AI, is driving companies to reevaluate their positioning and long-term competitiveness in an evolving market, supporting the need for strategic transactions and the demand for scale. Financial sponsor engagement continues to increase, reflecting ongoing efforts to monetize a substantial backlog of investments. In addition, recent market dislocation and evolving credit conditions are contributing to increased demand for liability management transactions and are expected to support more traditional restructuring activity over time. As capital markets adjust to recent market disruption, demand for customized financing solutions has also increased. Following substantial investment in 2025, our private capital advisory business has become a core pillar of our client offering and the team is actively executing and winning new business. Our transaction activity levels and the timing of our revenues may be impacted by the volatility driven by recent geopolitical events, evolving conditions in the private credit market and AI-driven disruption. AI-driven disruption is weighing particularly on M&A sentiment within the software sector. However, we believe we are well-positioned to navigate these dynamic markets given our diversified capabilities, strong balance sheet, substantial liquidity and zero debt. Results of Operations The following is a discussion of our results of operations for the three months ended March 31, 2026 and 2025. Three Months Ended March 31, ($ in thousands) 2026 2025 Variance Revenues $ 319,780 $ 306,593 4 % Expenses: Compensation and benefits 210,415 211,549 -1 % Non-compensation expenses 68,869 58,132 18 % Total operating expenses 279,284 269,681 4 % Operating income (loss) 40,496 36,912 10 % Other income and (expenses) 5,665 6,141 -8 % Income (loss) before income taxes 46,161 43,053 7 % Provision (benefit) for income taxes 3,866 (10,722) N/M Net income (loss) $ 42,295 $ 53,775 -21 % N/M = not meaningful Revenues We operate in a highly competitive environment. Each revenue-generating engagement is separately solicited, awarded and negotiated, and there are usually no long-term contracted sources of revenue. As a consequence, our fee-paying client engagements are not predictable, and high levels of revenues in one period are not necessarily predictive of continued high levels of revenues in future periods. To develop new business, our professionals maintain an active dialogue with a large number of existing and potential clients. We add new clients each year as our bankers continue to expand their relationships, as we hire senior bankers who bring their client relationships and as we receive introductions from our relationship network of senior executives, board members, attorneys and other third parties. We also lose clients each year as a result of the sale or merger of clients, changes in clients’ senior management, competition from other financial services firms and other causes. We earn substantially all of our revenues from advisory engagements, and, in many cases, we are not paid until the completion of an underlying transaction. The vast majority of our advisory revenues are recognized over time, although the recognition of our transaction fees are constrained until the engagement is substantially complete. 28 Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, or the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out-of-pocket expenses. We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments. Three Months Ended March 31, 2026 versus 2025 Revenues were $319.8 million for the three months ended March 31, 2026 as compared with $306.6 million for the same period in 2025, representing an increase of 4%. 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 March 31, 2026 and 2025, we earned revenues from 136 clients and 151 clients, respectively, and the number of clients that paid fees equal to or greater than $1 million was 61 clients and 60 clients, respectively. Operating Expenses The following table sets forth information relating to our operating expenses: Three Months Ended March 31, ($ in thousands) 2026 2025 Variance Expenses: Compensation and benefits $ 210,415 $ 211,549 -1 % % of revenues 66 % 69 % Non-compensation expenses $ 68,869 $ 58,132 18 % % of revenues 22 % 19 % Total operating expenses $ 279,284 $ 269,681 4 % % of revenues 87 % 88 % Our operating expenses are classified as compensation and benefits expenses and non-compensation expenses. Compensation and benefits expenses account for the majority of our operating expenses. Non-compensation expenses, which include the costs of professional fees, travel and related expenses, communication, technology and information services, occupancy, depreciation and other expenses, generally have been less significant in comparison with compensation and benefits expenses. Three Months Ended March 31, 2026 versus 2025 Operating expenses were $279.3 million for the three months ended March 31, 2026 and represented 87% of revenues, compared with $269.7 million for the same period in 2025 which represented 88% of revenues. The increase in operating expenses was primarily driven by higher deal-related costs, communications and technology expenses, and occupancy costs due to increased headcount as compared with the prior year period. Compensation and Benefits Expenses 29 Our compensation and benefits expenses are determined by management based on revenues earned, the results from investments where our emplo [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Form 10‑K. Actual results and the timing of events may differ significantly from those expressed or implied in such forward‑looking statements due to a number of factors, including those set forth in the sections entitled “Risk Factors” and “Special Note Regarding Forward‑Looking Statements” and elsewhere in this Form 10‑K. Executive Overview Moelis & Company is a leading global independent investment bank that provides innovative strategic advice and solutions to a diverse client base, including corporations, governments, and financial sponsors. We assist our clients in achieving their strategic goals by offering comprehensive integrated financial advisory services across all major industry sectors. With over 20 locations in North and South America, Europe, the Middle East, Asia and Australia, we advise clients on their most critical decisions, including mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, and other corporate finance matters. Our ability to provide confidential, independent advisory services to our clients across sectors and regions and through all phases of the business cycle has led to long-term client relationships and a diversified revenue base. As of December 31, 2025, we served our clients globally with 1,012 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. Business Environment and Outlook Economic and global financial conditions can materially affect our operational and financial performance. See “Risk Factors” elsewhere in this 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 in 2025 and 2024 referenced throughout this Form 10-K was obtained from LSEG - Financial Technology & Data (formerly known as Refinitiv), as of January 5, 2026 and January 6, 2025, respectively. For the year ended December 31, 2025, we earned GAAP revenues of $1,516.8 million compared with $1,194.5 million earned during the same period in 2024. This represents an increase of 27% compared to a 7% increase in the number of global completed M&A transactions greater than $100 million in the same period. Our new business origination and deal activity are strong. The breadth and depth of M&A activity that emerged in late 2025 is expanding. Strategic acquirers are becoming more active as corporate boards demonstrate increased willingness to pursue larger, transformational transactions to enhance scale and address ongoing technological change. Financial sponsor activity is also increasing, supported by improved valuation alignment and the need to deploy and return capital to investors. Activity in our capital structure advisory business continues to be driven by liability management assignments and we anticipate more traditional restructurings as prior liability management solutions run their course. Our capital markets business has experienced significant growth, benefiting from increased investor risk appetite across growth-oriented sectors with strong capabilities in both the public and private markets. Following substantial investment in 2025, our private capital advisory business is gaining meaningful traction as the GP-led secondaries market continues to hit record levels. Recent geopolitical events and market volatility may impact transaction activity levels and the timing of our revenues. However, we believe we are well-positioned to navigate these dynamic markets given our diversified capabilities, strong balance sheet, substantial liquidity and zero debt. 34 Results of Operations The following is a discussion of our results of operations for the years ended December 31, 2025 and 2024. For a discussion of our results of operations for the year ended December 31, 2023, refer to “Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2024. Year Ended December 31, Variance ($ in thousands) 2025 2024 2023 2025 vs 2024 2024 vs 2023 Revenues $ 1,516,796 $ 1,194,545 $ 854,748 27 % 40 % Expenses: Compensation and benefits 1,017,076 830,151 714,749 23 % 16 % Non-compensation expenses 225,857 191,449 180,351 18 % 6 % Total operating expenses 1,242,933 1,021,600 895,100 22 % 14 % Operating income (loss) 273,863 172,945 (40,352) 58 % N/M Other income and (expenses) 53,608 23,067 11,205 132 % 106 % Income (loss) before income taxes 327,471 196,012 (29,147) 67 % N/M Provision (benefit) for income taxes 67,854 44,521 (1,631) 52 % N/M Net income (loss) $ 259,617 $ 151,491 $ (27,516) 71 % N/M N/M = not meaningful Revenues We operate in a highly competitive environment. Each revenue‑generating engagement is separately solicited, awarded and negotiated, and there are usually no long‑term contracted sources of revenue. As a consequence, our fee‑paying client engagements are not predictable, and high levels of revenues in one period are not necessarily predictive of continued high levels of revenues in future periods. To develop new business, our professionals maintain an active dialogue with a large number of existing and potential clients. We add new clients each year as our bankers continue to expand their relationships, as we hire senior bankers who bring their client relationships and as we receive introductions from our relationship network of senior executives, board members, attorneys and other third parties. We also lose clients each year as a result of the sale or merger of clients, changes in clients’ senior management, competition from other financial services firms and other causes. We earn substantially all of our revenues from advisory engagements, and, in many cases, we are not paid until the completion of an underlying transaction. The vast majority of our advisory revenues are recognized over time, although the recognition of our transaction fees are constrained until the engagement is substantially complete. Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, or the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out‑of‑pocket expenses. We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments. 35 Year Ended December 31, 2025 versus 2024 Revenues were $1,516.8 million for the year ended December 31, 2025 compared with $1,194.5 million for the same period in 2024, representing an increase of 27%. The increase in revenues was driven by an increase in the average fees per completed transaction as compared to the prior year period. For the years ended December 31, 2025 and 2024, we earned revenues from 363 clients and 406 clients, respectively, but more importantly, the number of clients that paid fees equal to or greater than $1 million was 254 clients and 241 clients, respectively. Operating Expenses The following table sets forth information relating to our operating expenses: Year Ended December 31, Variance ($ in thousands) 2025 2024 2023 2025 vs 2024 2024 vs 2023 Expenses: Compensation and benefits $ 1,017,076 $ 830,151 $ 714,749 23 % 16 % % of revenues 67 % 69 % 84 % Non-compensation expenses $ 225,857 $ 191,449 $ 180,351 18 % 6 % % of revenues 15 % 16 % 21 % Total operating expenses $ 1,242,933 $ 1,021,600 $ 895,100 22 % 14 % % of revenues 82 % 86 % 105 % Our operating expenses are classified as compensation and benefits expenses and non-compensation expenses. Compensation and benefits expenses account for the majority of our operating expenses. Non-compensation expenses, which include the costs of professional fees, travel and related expenses, communication, technology and information services, occupancy, depreciation and other expenses, generally have been less significant in comparison with compensation and benefits expenses. Year Ended December 31, 2025 versus 2024 Operating expenses were $1,242.9 million for the year ended December 31, 2025 and represented 82% of revenues, compared with $1,021.6 million for the same period in 2024 which represented 86% of revenues. The increase in operating expenses was primarily driven by increased compensation and benefits expense associated with higher revenues compared to the prior period. Compensation and Benefits Expenses Our compensation and benefits expenses are determined by management based on revenues earned, the results from 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. Our compensation expenses consist of base salary and benefits, annual incentive compensation payable as cash bonus awards, including certain amounts subject to clawback and contingent upon a required period of service (“contingent cash awards”) and amortization of equity-based compensation awards. Base salary and benefits are paid ratably throughout the year. Equity awards are amortized into compensation expenses on a graded basis (based upon the fair value of the award at the time of grant) during the service period (adjusted for retirement eligibility) over which the award vests, which is typically four or five years. The awards are recorded within equity as they are expensed. Contingent cash awards are amortized into compensation expenses over the required service period. Incentive compensation, which is accrued throughout the year, is discretionary and dependent upon a number of factors including the performance of the Company and is generally awarded and paid during the first two months subsequent to the performance year. The number of equity units granted as a component of the annual incentive award is determined with reference to the Company’s grant date fair value. 36 Year Ended December 31, 2025 versus 2024 For the year ended December 31, 2025, compensation-related expenses of $1,017.1 million represented 67% of revenues, compared with $830.2 million which represented 69% of revenues in the prior year. The increase in compensation and benefits is primarily attributable to a higher discretionary bonus expense accrual, as a result of higher revenues earned, and increased headcount as compared to the prior year period. As a percentage of revenues, compensation related expenses decreased as compared to the prior year period due to greater revenues. Non‑Compensation Expenses Our non-compensation expenses include the costs of occupancy, professional fees, communication, technology and information services, travel and related expenses, depreciation and other expenses. Historically, our non-compensation expenses have increased as we have increased headcount which results from growing our business. This trend of growth in non-compensation expense may continue as we expand into new sectors, geographies and products to serve our clients’ growing needs. Year Ended December 31, 2025 versus 2024 For the year ended December 31, 2025, non-compensation expenses of $225.9 million represented 15% of revenues, compared with $191.4 million, which represented 16% of revenues in the prior year period. The increase in non-compensation expenses is primarily related to increased deal-related travel and entertainment expenses, communication and technology expenses, and occupancy expenses driven by increased headcount. Other Income and Expenses Other income and expenses consists of earnings from equity method investments, gains and losses on investments, interest income and expense, and other infrequent gains or losses. Year Ended December 31, 2025 versus 2024 Other income and expenses was income of $53.6 million and $23.1 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, the income was primarily related to $20.6 million in income and net gains on financial assets, a gain of $19.1 million from the sale of 5,000,000 shares of our investment in MA Financial, $6.5 million in income associated with the forfeiture or return of compensation by former employees, and $5.2 million in income from the Company's investment in MA Financial. In the prior year, the income was primarily related to $12.4 million in income and net gains on financial assets, a $7.0 million gain on the sale of 5,000,000 shares of our investment in MA Financial, and $3.3 million from the Company's share of earnings in MA Financial. Provision for Income Taxes The Company’s operations are comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities represent obligations of their interest holders, except for certain foreign, state and local income taxes (for example, the New York City unincorporated business tax ("UBT")). The Company is subject to U.S. corporate, federal, state, and local income tax on its allocable share of results of operations from Group LP. Year Ended December 31, 2025 versus 2024 The Company’s provision for income taxes and effective tax rates were $67.9 million and 21% and $44.5 million and 23% for the years ended December 31, 2025 and 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, 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. 37 Liquidity and Capital Resources Our current assets have historically been comprised of cash, short-term liquid investments and receivables related to fees earned from providing advisory services. Our current liabilities are primarily comprised of accrued expenses, including accrued employee compensation. We pay a significant portion of incentive compensation during the first two months of each calendar year with respect to the prior year’s results. We also distribute estimated partner tax payments primarily in the first quarter of each year with respect to the prior year’s operating results. Therefore, levels of cash generally decline during the first quarter of each year after incentive compensation has been paid to our employees and estimated tax payments have been distributed to partners. Cash before dividends and share buybacks then typically builds over the remainder of the year. 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 December 31, 2025 and 2024, the Company had cash equivalents of $427.8 million and $350.9 million, respectively, invested primarily in U.S. and U.K. sovereign debt securities, money market funds, and certificates of deposit. Additionally, as of December 31, 2025 and 2024, the Company had cash of $80.8 million and $61.5 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 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, 2025, and 2024, the Company held $340.2 million and $147.9 million of investments, respectively, primarily composed of sovereign debt securities. 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 December 31, 2025, and 2024, accounts receivable were $82.2 million and $51.4 million, respectively, net of allowances of $2.1 million and $1.7 million, respectively. 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. Upon lender approval, this facility can be extended past the maturity date of May 24, 2026 to June 30, 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, 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, 2026, the end of the credit period, and must repay aggregate principal balances by the maturity date of May 24, 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 borrowings under the credit facility and the available committed credit under this facility was $45.0 million as of December 31, 2025. During February 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 March 26, 2026 to Class A common stockholders of record on February 17, 2026. During the year ended December 31, 2025, the Company paid aggregate dividends of $2.60 per share. 38 During the years ended December 31, 2025 and 2024, the Company repurchased 1,133,371 shares and 196,416 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 $1.5 million as of December 31, 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. Regulatory Capital We actively monitor our regulatory capital base. Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, record‑keeping, reporting procedures, experience and training requirements for employees and certain other requirements and procedures. These regulatory requirements may restrict the flow of funds to and from affiliates. See Note 11 of the consolidated financial statements for further information. These regulations differ in the United States, United Kingdom, Hong Kong and other countries in which we operate a registered broker‑dealer. The license under which we operate in each such country is meant to be appropriate to conduct an advisory business. We believe that we provide each of our subsidiaries with sufficient capital and liquidity, consistent with their business and regulatory requirements. Tax Receivable Agreement In connection with the IPO in April 2014, we entered into a tax receivable agreement with our eligible Managing Directors that provides for the payment to eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we realize as a result of (a) the increases in tax basis attributable to exchanges by our eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by us as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of income tax cash savings, if any, that we realize. For purposes of the tax receivable agreement, income tax cash savings will be computed by comparing our actual income tax liability to the amount of such taxes that we would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had we not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. Payments made under the tax receivable agreement are required to be made within 225 days of the filing of our tax returns. Because we generally expect to receive the tax savings prior to making the cash payments to the eligible selling holders of Group LP partnership units, we do not expect the cash payments to have a material impact on our liquidity. In addition, the tax receivable agreement provides that, upon a merger, asset sale, or other form of business combination or certain other changes of control or if, at any time, we elect an early termination of the tax receivable agreement, our (or our successor’s) obligations with respect to exchanged or acquired units (whether exchanged or acquired before or after such change of control or early termination) will be based on certain assumptions, including that we would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement, and, in the case of an early termination election, that any units that have not been exchanged are deemed exchanged for the market value of the Class A common stock at the time of termination. Consequently, it is possible, in these circumstances, that the actual cash tax savings realized by us may be significantly less than the corresponding tax receivable agreement payments. 39 Cash Flows Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees, which are generally collected within 60 days of billing, and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of incentive compensation during the first two months of each calendar year with respect to the prior year’s results. Our investing and financing cash flows are primarily influenced by activities to fund investments and payments of dividends and estimated partner taxes. A summary of our operating, investing and financing cash flows is as follows: Year Ended December 31, ($ in thousands) 2025 2024 2023 Cash provided by (used in) Operating activities: Net income (loss) $ 259,617 $ 151,491 $ (27,516) Non-cash charges 260,559 195,156 151,942 Other operating activities 56,121 80,838 34,046 Total operating activities 576,297 427,485 158,472 Investing activities (195,972) 17,112 48,574 Financing activities (283,896) (215,105) (229,173) Effect of exchange rate changes (243) (3,528) 1,803 Net increase (decrease) in cash 96,186 225,964 (20,324) Cash, cash equivalents, and restricted cash, beginning of period 413,179 187,215 207,539 Cash, cash equivalents, and restricted cash, end of period $ 509,365 $ 413,179 $ 187,215 Year Ended December 31, 2025 Cash, cash equivalents and restricted cash were $509.4 million as of December 31, 2025, an increase of $96.2 million from $413.2 million as of December 31, 2024. Operating activities resulted in a net inflow of $576.3 million primarily attributable to cash collected from clients, net of cash operating outflows, including discretionary bonuses paid during the period. Investing activities resulted in a net outflow of $196.0 million primarily attributable to net purchases of investments. Financing activities resulted in a net outflow of $283.9 million primarily related to the payment of dividends and tax distributions and treasury stock purchases. Year Ended December 31, 2024 Cash, cash equivalents and restricted cash were $413.2 million as of December 31, 2024, an increase of $226.0 million from $187.2 million as of December 31, 2023. Operating activities resulted in a net inflow of $427.5 million primarily attributable to cash collected from clients, net of cash operating outflows, including discretionary bonuses paid during the period. Investing activities resulted in a net inflow of $17.1 million primarily attributable to net proceeds from the sale of investments. Financing activities resulted in a net outflow of $215.1 million primarily related to the payment of dividends and tax distributions and treasury stock purchases. Contractual Obligations As of December 31, 2025, the Company has a total payable of $301.1 million due pursuant to the tax receivable agreement in the consolidated financial statements and of this amount, 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 $0.3 million pursuant to the tax receivable agreement during 2025. 40 Additionally, the Company has contractual obligations related to its leases for corporate office space and an aircraft. See Note 12 to the consolidated financial statements for details regarding when these obligations are due. Market Risk and Credit Risk Our business is not capital‑intensive and we do not invest in derivative instruments or, generally, borrow through issuing debt. As a result, we are not subject to significant market risk (including interest rate risk, foreign currency exchange rate risk and commodity price risk) or credit risk. Risks Related to Cash and Short-Term Investments Our 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. We invest most of our cash in U.S. and U.K. sovereign debt securities and money market securities. Cash is maintained in U.S. and non‑U.S. bank accounts. Most U.S. and U.K. account balances exceed the FDIC and FSCS coverage limits. Nearly all of our cash balance is held at institutions or at subsidiaries of institutions labeled as global systemically important banks by the Financial Stability Board. Despite the importance of these institutions, there can be no assurance of governmental or regulatory intervention to guarantee our uninsured deposits. In addition to cash and cash equivalents, we hold sovereign debt securities that are classified as investments on our consolidated statement of financial condition as they have original maturities of three months or more (but less than twelve months) from the date of purchase. We believe our cash and short‑term investments are not subject to any material interest rate risk, equity price risk, credit risk or other market risk. Credit Risk We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable, and the current economic conditions that may affect a customer’s ability to pay such amounts owed to the Company. We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred. See “—Critical Accounting Policies and Estimates—Accounts Receivable and Allowance for Credit Losses.” Exchange Rate Risk 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, 2025 and 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 $0.4 million and $3.1 million, 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. Critical Accounting Policies and Estimates We believe that the critical accounting policies and estimates included below represent those that are most important to the presentation of our financial condition and results of operations and require management’s most difficult, subjective and complex judgment. The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary. 41 Revenue and Expense Recognition We earn substantially all of our revenues by providing advisory services on mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, private fundraisings 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 recognizes the vast majority of its advisory services revenue over time, including reimbursements for certain out-of-pocket expenses, when or as our performance obligations are fulfilled and collection is reasonably assured. The determination of whether revenues are recognized over time or at a point in time depends upon the type of service being provided and the related performance obligations. We identify the performance obligations in our engagement letters and determine which services are distinct (i.e. separately identifiable and the client could benefit from such service on its own). We allocate the transaction price to the respective performance obligations by estimating the amount of consideration we expect in exchange for providing each service. Both the identification of performance obligations and the allocation of transaction price to the respective performance obligations requires significant judgment. During such advisory engagements, our clients are continuously benefitting from our advice and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees, which are variable in nature, is constrained until substantially all services have been provided, specified conditions have been met (e.g. transaction closing) and it is probable that a significant reversal of revenue will not occur in a future period. Upfront fees and retainers specified in our engagement letters that meet the over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed. With respect to fairness opinions, fees are fixed and delivering the opinion is a separate performance obligation from other advisory services that may be promised under the same engagement letter; as such these revenues are recognized at a point in time when the engagement is formally completed and the client can obtain substantially all of the benefits from the service. Similarly, underwriting engagements are typically a single performance obligation and fees are generally recognized as revenue when the offering has been deemed to be completed by the lead manager of the underwriting group. In these instances, point in time recognition appropriately matches the transfer and consumption of our services. Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated). Accounts Receivable and Allowance for Credit Losses The accompanying consolidated statements of financial condition present accounts receivable balances net of allowance for credit losses based on the Company’s assessment of the collectability of customer accounts. 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 capital 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 write-offs and current economic conditions. After concluding that a reserved accounts receivable is no longer collectible, the Company will write-off the receivable. This has the effect of reducing both the gross receivable and the allowance for credit 42 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. Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated statements of financial condition as deferred tax assets. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more‑likely‑than‑not that some portion or all of the deferred tax assets will not be realized. 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 years ended December 31, 2025 and 2024, 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 years ended December 31, 2025 and 2024, no such amounts were recorded. Recent Accounting Developments For a discussion of recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see Note 3—Recent Accounting Pronouncements, of the consolidated financial statements included in this Form 10‑K.