Lazard Profit Falls 59% in Third Quarter Despite Revenue and Advisory Growth
Key Facts
Lazard reported a 59% decline in GAAP net income attributable to the firm in the third quarter of 2026, despite higher revenue and growth in financial advisory, according to its earnings disclosure. Net income totaled $29 million, compared with $71 million in the third quarter of 2025, as profit fell alongside expanding revenue. GAAP net revenue rose to $814 million from $748 million in the same period a year earlier, an increase of 9%. Adjusted diluted earnings per share fell to $0.36 from $0.56 a year earlier, a decline of 36%, according to the earnings statement. In financial advisory, adjusted net revenue totaled $465 million for the quarter, compared with $422 million in the corresponding period of 2025. The business posted annual growth of 10%, outpacing the increase in the firm's overall GAAP net revenue over the same period. The quarterly results thus combined higher revenue across the firm and financial advisory with declines in both GAAP net income and adjusted earnings per share from a year earlier.
On costs, adjusted compensation and benefits accounted for 69.9% of revenue in the third quarter, according to the financial tables accompanying Lazard's earnings announcement. The ratio rose from 65.5% in the third quarter of 2025 and was unchanged from the second quarter of 2026. The adjusted operating margin was 10.8% in the third quarter, compared with 14.0% in the corresponding period a year earlier. On a quarterly basis, the margin improved from 8.3% in the second quarter, while the ratio of adjusted compensation and benefits to revenue remained stable between the periods. The company reported an adjusted effective tax rate of 38.1% in the third quarter, according to the same disclosure. That was above 21.4% in the third quarter of 2025 but down from 69.7% in the second quarter of 2026. The operating margin thus improved and the tax rate declined from the previous quarter, while the annual comparison continued to show a lower margin and higher tax and compensation ratios.
The results follow a second quarter in which Lazard reported GAAP net income of $5 million, according to its earnings announcement for that period of 2026. Diluted earnings per share were $0.03 at the time, according to the company's statement for the second quarter and first half of the year. As background to the financial advisory business, Reuters reported in its coverage of the July results that Lazard had cut more than 80 managing director positions as part of a restructuring of the business. Those cuts appeared in the agency's report dated July 23, 2026, before the third-quarter results showed growth in advisory revenue. During morning trading following the July results, Lazard shares fell about 3.5%, according to Reuters, in a move that followed the second-quarter earnings announcement.
On the company's upcoming agenda, Orszag said Lazard would launch its new private capital advisory business, "Lazard CL," in "early November." The launch is scheduled after the third-quarter results, which included an increase in adjusted financial advisory net revenue from a year earlier. Lazard declared a quarterly cash dividend of $0.50 per share on October 21, 2026, according to its dividend announcement. The dividend is payable to shareholders of record on November 2, 2026, under the terms set out in the announcement. Orszag is also scheduled to participate in a discussion at the BMO financial conference on November 10, 2026. The company set the discussion for 10:15 a.m. U.S. Eastern time, according to its conference participation announcement. Lazard set November 13, 2026, as the payment date for the quarterly cash dividend to eligible shareholders.