Lincoln International (NYSE:LCLN) reported record second-quarter and first-half revenue and adjusted earnings in its first quarterly results as a public company, citing broad-based strength across investment banking and valuations and opinions as private capital markets showed signs of improving activity.
The firm completed its initial public offering and began trading on the New York Stock Exchange on May 20. Chief Executive Officer Rob Brown said the IPO gives Lincoln greater capital and flexibility to invest in growth while broadening ownership across the organization.
Growth Across Both Business Segments
Investment banking advisory revenue rose 56% year over year to $178 million, while valuations and opinions revenue increased 35% to $48 million. Brown said M&A, capital advisory, Private Funds Advisory, portfolio valuations and transaction opinions each posted double-digit revenue growth.
Lincoln closed 140 investment banking transactions in the first half, up 46% from the prior-year period. The firm completed 73 transactions in the second quarter, compared with 67 in the first quarter. Heidloff said average fees increased meaningfully from the first quarter, including what he described as the company’s highest transaction fee to date.
For the first half, total revenue was $383 million, an increase of 36%. Investment banking revenue rose 39% and valuations and opinions revenue grew 29%.
Brown said M&A activity in the U.S. and Europe accelerated as the year progressed, particularly in industrials and business services. Lincoln’s software practice continued to face headwinds, though he said the market is beginning to improve as investors gain clarity on which companies may benefit from artificial intelligence and which could face disruption.
The company’s near-record backlog continued to build, supported by new business activity, Brown said. He added that capital advisory performed well in both healthy financings and distressed situations, while Private Funds Advisory continued to see demand for capital solutions, including secondary transactions.
Market Outlook and Seasonality
Management characterized the market recovery as early and uneven, rather than a sharp rebound. Brown said moderating geopolitical risks, a healthy economy, stable interest rates and continued financing availability supported more constructive conditions during the second quarter.
He said private equity remains a major potential driver of future M&A, given elevated dry powder, long holding periods and a large inventory of portfolio companies. Lincoln is also seeing greater willingness among sponsors to sell businesses that may not have met their original investment theses, as well as an increase in foreclosures involving private equity-owned companies.
Brown said the firm expects normal positive seasonality in the second half, with fourth-quarter activity typically accounting for 30% to 40% of annual results. Heidloff said that expectation remains consistent with the company’s current outlook.
“As long as [business performance] continues and there’s no macro shakeups, we feel optimistic about the back half of the year,” Brown said. He added that Lincoln’s valuations and opinions business, which he said values about one-third of U.S. private equity holdings, provides insight into underlying portfolio-company performance, which remained “quite good” through the second quarter.
Valuations Demand and Talent Investments
Managing Director and Global Head of Portfolio Valuations Brian Garfield said Lincoln was valuing approximately 7,400 portfolio companies, up 19% from a year earlier. He attributed demand to the increasing “retailization” of private capital markets, which is driving more frequent valuation and reporting requirements as well as greater use of third-party valuation providers.
Garfield said the firm is seeing more monthly and daily valuation requirements, particularly as funds experience increased redemption or subscription activity. He said this creates incremental valuation and fee opportunities for Lincoln.
Management also highlighted continued investment in senior talent. Lincoln promoted six managing directors at the beginning of the year and hired seven lateral managing directors in the first half across the U.S. and Europe, bringing its firmwide total to 162. The additions included professionals in asset and wealth management, pharmaceutical services, technology, restructuring, capital advisory and transaction opinions.
Brown said more managing directors are expected to join later in the year. He noted that the firm hired more than 30 managing directors across products and geographies during 2024 and 2025, and said those hires are beginning to contribute more meaningfully as they ramp up productivity.
Margins, Balance Sheet and Shareholder Return
Adjusted compensation expense was $138 million in the second quarter, representing a 61% adjusted compensation ratio. Heidloff said Lincoln expects the full-year ratio to be around 61%.
Adjusted non-compensation expense was $42 million, producing an 18.7% ratio, compared with 24% a year earlier. Heidloff attributed the improvement to operating leverage from revenue growth, while noting the company continues to invest in technology, including artificial intelligence, and real estate.
The company expects non-compensation expense growth in the high single digits for the full year. Its adjusted effective tax rate was 34% in the second quarter, and management expects approximately 31% for the full year.
Lincoln ended the quarter with approximately $251 million in cash and cash equivalents and $102 million in long-term debt, for a net cash position of $149 million. The company used IPO proceeds to repay a significant portion of debt incurred primarily to fund its October 2025 acquisition of MarshBerry.
The board declared a quarterly cash dividend of $0.07 per Class A share, payable in September. Management said returning capital to shareholders is an important component of its capital-allocation strategy.
About Lincoln International (NYSE:LCLN)
We are a global independent investment banking advisory firm focused on the private capital markets. As a leader in advising private equity and private credit investors, private company business owners and other senior executives, our globally integrated platform allows us to deliver comprehensive, sector-focused advisory services to clients across key areas of the economy. Our experienced professionals provide meaningful and differentiated private capital markets expertise across our two segments, Investment Banking Advisory and Valuations and Opinions: Investment Banking Advisory Valuations and Opinions Mergers & Acquisitions Capital Advisory Private Funds Advisory Other Services •Sell-Sides •Debt Advisory •Continuation Vehicles •Strategic Consulting •Portfolio Valuations •Buy-Sides •Special Situations & •Single Asset and •Executive Peer Networks •Transaction Opinions & •Add-ons Restructuring Co-Investment Vehicles •Agency Member Network Board Advisory •Growth Capital & •Primary Funds •Disputes Advisory Minority Equity Since our founding in 1996, we have experienced significant growth achieved through investments in our talent, our platform, the complementary capabilities we offer—including our growing, recurring, and non-cyclical valuations business—and the strategic positioning of the firm.
