UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36418

Moelis & Company

(Exact name of registrant as specified in its charter)

Delaware	46-4500216
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
399 Park Avenue, 4th Floor, New York NY	10022
(Address of principal executive offices)	(Zip Code)

(212) 883-3800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title	Trading Symbol	Name of Exchange on which registered
Class A Common Stock	MC	New York Stock Exchange (NYSE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of April 14, 2022, there were 64,827,108 shares of Class A common stock, par value $0.01 per share, and 4,685,898 shares of Class B common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS

		Page
Part I. Financial Information			3
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
Part II. Other Information			32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Signatures		34

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Financial Statements (Unaudited)

	Page
Condensed Consolidated Statements of Financial Condition as of March 31, 2022 and December 31, 2021	4
Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021	5
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021	6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	7
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2022 and 2021	8
Notes to Condensed Consolidated Financial Statements	9

3

Moelis & Company

Condensed Consolidated Statements of Financial Condition

(Unaudited)

(dollars in thousands, except per share amounts)

	March 31,		December 31,
	2022		2021
Assets
Cash and cash equivalents	$	130,420	$	520,213
Restricted cash		635		801
Receivables:
Accounts receivable, net of allowance for credit losses of $2,281 and $2,823 as of March 31, 2022 and December 31, 2021, respectively		39,273		41,870
Accrued and other receivables		15,372		27,698
Total receivables		54,645		69,568
Deferred compensation		22,346		11,499
Investments		228,346		263,341
Right-of-use assets		160,137		164,083
Equipment and leasehold improvements, net		59,583		59,163
Deferred tax assets		422,636		448,123
Prepaid expenses and other assets		18,531		18,890
Total assets	$	1,097,279	$	1,555,681
Liabilities and Equity
Compensation payable	$	99,953	$	503,707
Accounts payable, accrued expenses and other liabilities		52,316		69,883
Amount due pursuant to tax receivable agreement		307,115		307,363
Deferred revenue		5,573		4,539
Lease liabilities		187,407		191,890
Total liabilities		652,364		1,077,382
Commitments and Contingencies (See Note 11)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 71,824,917 issued and 63,930,282 outstanding at March 31, 2022; 1,000,000,000 authorized, 68,518,779 issued and 62,645,599 outstanding at December 31, 2021)		718		685
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 4,685,898 issued and outstanding at March 31, 2022; 1,000,000,000 authorized, 4,686,344 issued and outstanding at December 31, 2021)		47		47
Treasury stock, at cost; 7,894,635 and 5,873,180 shares at March 31, 2022 and December 31, 2021, respectively		(354,249)		(256,320)
Additional paid-in-capital		1,306,290		1,280,498
Retained earnings (accumulated deficit)		(514,502)		(535,282)
Accumulated other comprehensive income (loss)		(1,247)		(560)
Total Moelis & Company equity		437,057		489,068
Noncontrolling interests		7,858		(10,769)
Total equity		444,915		478,299
Total liabilities and equity	$	1,097,279	$	1,555,681

See notes to the condensed consolidated financial statements (unaudited).

4

Moelis & Company

Condensed Consolidated Statements of Operations

(Unaudited)

(dollars in thousands, except per share amounts)

	Three Months Ended March 31,
	2022		2021
Revenues	$	302,088	$	263,866
Expenses
Compensation and benefits		176,637		156,499
Occupancy		5,810		7,695
Professional fees		4,315		5,999
Communication, technology and information services		8,779		8,659
Travel and related expenses		7,643		1,610
Depreciation and amortization		2,039		1,449
Other expenses		7,438		9,512
Total expenses		212,661		191,423
Operating income (loss)		89,427		72,443
Other income and (expenses)		(2,235)		3,179
Income (loss) before income taxes		87,192		75,622
Provision (benefit) for income taxes		13,598		(176)
Net income (loss)		73,594		75,798
Net income (loss) attributable to noncontrolling interests		7,879		9,269
Net income (loss) attributable to Moelis & Company	$	65,715	$	66,529
Weighted-average shares of Class A common stock outstanding
Basic		64,824,347		60,932,966
Diluted		70,000,473		66,360,217
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	1.01	$	1.09
Diluted	$	0.94	$	1.00

See notes to the condensed consolidated financial statements (unaudited).

5

Moelis & Company

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(dollars in thousands)

	Three Months Ended March 31,
	2022			2021
Net income (loss)	$	73,594		$	75,798
Foreign currency translation adjustment, net of tax		(764	)		(744	)
Other comprehensive income (loss)		(764	)		(744	)
Comprehensive income (loss)		72,830			75,054
Less: Comprehensive income (loss) attributable to noncontrolling interests		7,802			9,180
Comprehensive income (loss) attributable to Moelis & Company	$	65,028		$	65,874

See notes to the condensed consolidated financial statements (unaudited).

6

Moelis & Company

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(dollars in thousands)

	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	73,594	$	75,798
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad debt expense (benefit)		(288)		3,149
Depreciation and amortization		2,039		1,449
Equity-based compensation		37,067		50,963
Deferred tax provision		25,973		21,245
Other		3,192		(2,615)
Changes in assets and liabilities:
Accounts receivable		2,643		14,401
Accrued and other receivables		11,957		(32,589)
Prepaid expenses and other assets		463		(587)
Deferred compensation		(10,957)		(3,660)
Compensation payable		(403,408)		(160,178)
Accounts payable, accrued expenses and other liabilities		(17,798)		1,969
Deferred revenue		1,040		5,409
Dividends received		2,029		2,279
Net cash provided by (used in) operating activities		(272,454)		(22,967)
Cash flows from investing activities
Purchases of investments		(117,432)		(78,723)
Proceeds from sales of investments		147,250		173,046
Note payments received from (issued to) employees		—		70
Purchases of equipment and leasehold improvements		(2,458)		(3,539)
Net cash provided by (used in) investing activities		27,360		90,854
Cash flows from financing activities
Payments for dividends and tax distributions		(45,647)		(39,685)
Payments for treasury stock purchases		(97,929)		(74,211)
Payments under tax receivable agreement		(248)		—
Other proceeds		100		—
Net cash provided by (used in) financing activities		(143,724)		(113,896)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		(1,141)		(792)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(389,959)		(46,801)
Cash, cash equivalents, and restricted cash, beginning of period		521,014		203,284
Cash, cash equivalents, and restricted cash, end of period	$	131,055	$	156,483
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes, net	$	7,165	$	1,913
Other non-cash activity
Class A Partnership Units or other equity converted into Class A Common Stock	$	150	$	3,903
Dividends in kind	$	5,572	$	5,131
Forfeiture of fully-vested Group LP units or other equity units	$	—	$	25

See notes to the condensed consolidated financial statements (unaudited).

7

Moelis & Company

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(dollars in thousands, except share amounts)

	Shares																		Retained			Accumulated
	Class A		Class B						Class A		Class B					Additional			Earnings			Other
	Common		Common			Treasury			Common		Common		Treasury			Paid-In			(Accumulated			Comprehensive			Noncontrolling			Total
	Stock		Stock			Stock			Stock		Stock		Stock			Capital			Deficit)			Income (Loss)			Interests			Equity
Balance as of January 1, 2022		68,518,779		4,686,344			(5,873,180	)	$	685	$	47	$	(256,320	)	$	1,280,498		$	(535,282	)	$	(560	)	$	(10,769	)	$	478,299
Net income (loss)		—		—			—			—		—		—			—			65,715			—			7,879			73,594
Equity-based compensation		3,305,692		—			—			33		—		—			20,949			—			—			16,085			37,067
Other comprehensive income (loss)		—		—			—			—		—		—			—			—			(687	)		(77	)		(764	)
Dividends declared ($0.60 per share of Class A common stock) and tax distributions		—		—			—			—		—		—			5,572			(44,935	)		—			(6,284	)		(45,647	)
Treasury Stock Purchases		—		—			(2,021,455	)		—		—		(97,929	)		—			—			—			—			(97,929	)
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		446		(446	)		—			—		—		—			(774	)		—			—			924			150
Equity-based payments to non-employees		—		—			—			—		—		—			45			—			—			—			45
Other		—		—			—			—		—		—			—			—			—			100			100
Balance as of March 31, 2022		71,824,917		4,685,898			(7,894,635	)	$	718	$	47	$	(354,249	)	$	1,306,290		$	(514,502	)	$	(1,247	)	$	7,858		$	444,915

	Shares																Retained			Accumulated
	Class A		Class B					Class A		Class B					Additional		Earnings			Other
	Common		Common		Treasury			Common		Common		Treasury			Paid-In		(Accumulated			Comprehensive			Noncontrolling			Total
	Stock		Stock		Stock			Stock		Stock		Stock			Capital		Deficit)			Income (Loss)			Interests			Equity
Balance as of January 1, 2021		61,986,927		5,948,750		(3,959,083	)	$	620	$	59	$	(152,170	)	$	1,052,322	$	(420,682	)	$	(201	)	$	(35,475	)	$	444,473
Net income (loss)		—		—		—			—		—		—			—		66,529			—			9,269			75,798
Equity-based compensation		3,612,341		—		—			36		—		—			41,508		—			—			9,419			50,963
Other comprehensive income (loss)		—		—		—			—		—		—			—		—			(655	)		(89	)		(744	)
Dividends declared ($0.55 per share of Class A Common Stock) and tax distributions		—		—		—			—		—		—			5,131		(39,013	)		—			(5,803	)		(39,685	)
Treasury Stock Purchases		—		—		(1,363,934	)		—		—		(74,211