Lazard (NYSE:LAZ) reported fourth-quarter and full-year 2025 results that management said reflect continued progress against its “Lazard 2030” long-term growth strategy, highlighted by record financial advisory revenue and a year of rising assets under management in asset management.
2025 results and business highlights
Firm-wide revenue was $892 million in the fourth quarter, up 10% from the prior year period, and $3.0 billion for full-year 2025, up 5% from 2024, Chief Financial Officer Mary Ann Betsch said.
Betsch cited several completed transactions in the quarter and into January, including:
- Kellanova’s $35.9 billion acquisition by Mars
- Constellation Energy’s $26.6 billion acquisition of Calpine
- 3Cloud’s acquisition by Cognizant
She also referenced recently announced transactions, including AkzoNobel’s $25 billion combination with Axalta, Investindustrial’s $2.9 billion acquisition of TreeHouse Foods, and Atlas Holdings’ $1 billion acquisition of ODP Corporation. Betsch added that restructuring and liability management work included debtor roles with First Brands Group, Pine Gate Renewables, and Superior Industries, and creditor roles involving Modivcare, Saks Global, and SI Group.
Asset Management revenue was $339 million in the fourth quarter, up 18% from a year ago and up 15% sequentially. Betsch said management fees were $301 million in the quarter and $1.1 billion for the year, up 5% from 2024, while incentive fees totaled $37 million in the quarter and $59 million for the full year.
Average AUM in the fourth quarter was $261 billion, 12% higher than in 2024. As of Dec. 31, Lazard reported AUM of $254 billion, also up 12% year over year but 4% lower than September 2025. Betsch said the quarterly AUM change included $10 billion of market appreciation, $800 million of foreign exchange depreciation, and net outflows of $19.7 billion, “largely driven by the closure of one US sub-advised relationship.” Excluding that relationship, she said net inflows were $8.4 billion for full-year 2025.
Advisory mix, hiring, and productivity targets
Orszag emphasized continued investment in senior talent. He said Lazard targets 10–15 net Financial Advisory managing director additions per year (measured Q1-to-Q1), and that the firm met its 2024 goal with 11 net adds. For 2025, he said Lazard expects to exceed that goal with “more than double” 2024’s net additions.
Despite the pace of hiring, Orszag said Lazard exceeded its managing director productivity goal in 2025, delivering average revenue per managing director of $8.9 million—an increase of $2.5 million per managing director since 2023. In December, he said the firm expanded its productivity goal to target $12.5 million per managing director by 2030.
During the Q&A, Orszag said the firm’s 2025 advisory revenue mix was “just a touch under 60%” M&A and the remainder non-M&A, describing it as roughly 60/40. He said Lazard believes the non-M&A share could rise toward 50% over time, supported by continued expansion in fundraising—where he said the firm had a record year—along with ongoing opportunities in restructuring and liability management.
Asset management repositioning and 2026 net flow expectations
Orszag called 2025 an “inflection point” for asset management, saying repositioning efforts were being reinforced by investor interest in diversifying across regions and strategies. He highlighted a “won but not yet funded” mandate pipeline of $13 billion, which he said was higher than a year ago and supports an expectation for positive net flows in 2026.
Orszag also pointed to Lazard’s ETF buildout, saying the firm launched seven active ETFs in the U.S. during 2025 and surpassed $800 million in ETF AUM. Betsch said client engagement and demand were particularly strong in quantitative, emerging markets, and Japanese equity strategies, providing several examples of sizable inflows during the quarter.
Asset Management CEO Chris Hogbin, who joined in December, said the fee rate exit level was “modestly higher” than the fourth-quarter average, noting the closed sub-advised relationship carried a “significantly lower” fee rate and did not impact the full quarter. On the $13 billion of unfunded mandates, Hogbin said the mix is predominantly emerging market equities and listed infrastructure (which tend to have “quite healthy fees”), alongside some systematic services with slightly lower fees, and that overall the mix is “broadly in line” with the fourth-quarter fee rate.
Expenses, capital return, and leadership transition
On expenses, Betsch said compensation expense was $585 million in the fourth quarter and $2.0 billion for full-year 2025. The full-year compensation ratio was 65.5%, down from 65.9% in 2024. Non-compensation expense was $159 million in the quarter and $613 million for the year, resulting in a full-year non-compensation ratio of about 20%.
In response to a question on the path toward a lower comp ratio, Orszag said the firm anticipates additional operating leverage in 2026, depending on revenue growth, and tied leverage to productivity gains. He added that incoming CFO Tracy Farr will focus on operating efficiencies in corporate functions and across the firm.
On non-compensation expenses, Betsch said investors should expect a “mid- to high-single-digit” increase in dollar terms in 2026, depending on foreign exchange rates, as Lazard continues to invest in growth, client development, and technology, while aiming to return to its target range as revenues grow.
Lazard returned $98 million to shareholders in the fourth quarter, including $47 million in dividends and $50 million in share repurchases. For the full year, the firm returned $393 million, including $187 million in dividends, $91 million in share repurchases, and $115 million related to satisfaction of employee tax obligations. Betsch also noted Lazard declared a quarterly dividend of $0.50 per share.
Orszag also addressed a CFO transition, thanking Betsch and welcoming Farr. Responding to investor questions, he described the change as “very much normal course,” citing the advantage of an internal candidate and noting Betsch will serve as a senior advisor during a six-month transition.
About Lazard (NYSE:LAZ)
Lazard Ltd. (NYSE: LAZ) is a leading global financial advisory and asset management firm, offering a comprehensive suite of services to corporations, governments and individuals. Founded in 1848, Lazard has built a reputation for providing independent advice and innovative solutions in complex financial transactions. The firm is publicly traded on the New York Stock Exchange under the ticker symbol LAZ and maintains its headquarters in Hamilton, Bermuda.
In its Financial Advisory segment, Lazard assists clients with mergers and acquisitions, restructurings, capital structure optimization and strategic planning.
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