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, 2021

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, 5th 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 15, 2021, there were 61,325,544 shares of Class A common stock, par value $0.01 per share, and 4,899,457 shares of Class B common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
Part II. Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35

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, 2021 and December 31, 2020	4
Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	5
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020	6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	7
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2021 and 2020	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,
	2021			2020
Assets
Cash and cash equivalents	$	155,402		$	202,477
Restricted cash		1,081			807
Receivables:
Accounts receivable, net of allowance for credit losses of $6,183 and $3,775 as of March 31, 2021 and December 31, 2020, respectively		71,824			89,297
Accrued and other receivables		45,427			11,916
Total receivables		117,251			101,213
Deferred compensation		15,676			12,004
Investments		118,427			211,826
Right-of-use assets		171,857			177,069
Equipment and leasehold improvements, net		52,067			49,977
Deferred tax assets		423,281			424,345
Prepaid expenses and other assets		16,055			16,726
Total assets	$	1,071,097		$	1,196,444
Liabilities and Equity
Compensation payable	$	59,889		$	220,058
Accounts payable, accrued expenses and other liabilities		24,583			25,026
Amount due pursuant to tax receivable agreement		324,064			307,581
Deferred revenue		8,105			2,692
Lease liabilities		193,876			196,614
Total liabilities		610,517			751,971
Commitments and Contingencies (See Note 11)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 66,648,561 issued and 61,325,544 outstanding at March 31, 2021; 1,000,000,000 authorized, 61,986,927 issued and 58,027,844 outstanding at December 31, 2020)		666			620
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 4,899,457 issued and outstanding at March 31, 2021; 1,000,000,000 authorized, 5,948,750 issued and outstanding at December 31, 2020)		49			59
Treasury stock, at cost; 5,323,017 and 3,959,083 shares as of March 31, 2021 and December 31, 2020, respectively		(226,381	)		(152,170	)
Additional paid-in-capital		1,101,205			1,052,322
Retained earnings (accumulated deficit)		(393,166	)		(420,682	)
Accumulated other comprehensive income (loss)		(856	)		(201	)
Total Moelis & Company equity		481,517			479,948
Noncontrolling interests		(20,937	)		(35,475	)
Total equity		460,580			444,473
Total liabilities and equity	$	1,071,097		$	1,196,444

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,
	2021			2020
Revenues	$	263,866		$	153,706
Expenses
Compensation and benefits		156,499			95,120
Occupancy		7,695			7,231
Professional fees		5,999			4,236
Communication, technology and information services		8,659			8,392
Travel and related expenses		1,610			7,944
Depreciation and amortization		1,449			1,199
Other expenses		9,512			5,142
Total expenses		191,423			129,264
Operating income (loss)		72,443			24,442
Other income and (expenses)		3,179			(1,660	)
Income (loss) before income taxes		75,622			22,782
Provision (benefit) for income taxes		(176	)		(7,344	)
Net income (loss)		75,798			30,126
Net income (loss) attributable to noncontrolling interests		9,269			4,996
Net income (loss) attributable to Moelis & Company	$	66,529		$	25,130
Weighted-average shares of Class A common stock outstanding
Basic		60,932,966			52,666,457
Diluted		66,360,217			57,092,982
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	1.09		$	0.48
Diluted	$	1.00		$	0.44

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,
	2021			2020
Net income (loss)	$	75,798		$	30,126
Foreign currency translation adjustment, net of tax		(744	)		(1,630	)
Other comprehensive income (loss)		(744	)		(1,630	)
Comprehensive income (loss)		75,054			28,496
Less: Comprehensive income (loss) attributable to noncontrolling interests		9,180			4,670
Comprehensive income (loss) attributable to Moelis & Company	$	65,874		$	23,826

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,
	2021			2020
Cash flows from operating activities
Net income (loss)	$	75,798		$	30,126
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad debt expense		3,149			518
Depreciation and amortization		1,449			1,199
Equity-based compensation		50,963			38,255
Deferred tax provision		21,245			(6,723	)
Other		(2,615	)		2,099
Changes in assets and liabilities:
Accounts receivable		14,401			5,565
Accrued and other receivables		(32,589	)		(1,899	)
Prepaid expenses and other assets		(587	)		117
Deferred compensation		(3,660	)		(4,925	)
Compensation payable		(160,178	)		(150,260	)
Accounts payable, accrued expenses and other liabilities		1,969			9,454
Deferred revenue		5,409			1,439
Dividends received		2,279			1,942
Net cash provided by (used in) operating activities		(22,967	)		(73,093	)
Cash flows from investing activities
Purchase of investments		(78,723	)		(28,152	)
Proceeds from sales of investments		173,046			181,249
Note payments received from employees		70			—
Purchase of equipment and leasehold improvements		(3,539	)		(13,139	)
Net cash provided by (used in) investing activities		90,854			139,958
Cash flows from financing activities
Dividends and distributions		(39,685	)		(88,689	)
Proceeds from exercise of stock options		—			11,819
Treasury stock purchases		(74,211	)		(31,636	)
Net cash provided by (used in) financing activities		(113,896	)		(108,506	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		(792	)		(2,176	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(46,801	)		(43,817	)
Cash, cash equivalents, and restricted cash, beginning of period		203,284			168,572
Cash, cash equivalents, and restricted cash, end of period	$	156,483		$	124,755
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes	$	1,913		$	1,560
Other non-cash activity
Cumulative effect adjustment upon adoption of ASU 2016-13	$	—		$	364
Dividend equivalents issued	$	5,131		$	12,125
Class A Partnership Units or other equity converted into Class A Common Stock	$	3,903		$	786
Forfeiture of fully-vested Group LP units or other equity units	$	25		$	96

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, 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	)		—			—			—			—			(74,211	)
Equity-based payments to non-employees		—		—			—			—		—			—			108			—			—			—			108
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		1,049,293		(1,049,293	)		—			10		(10	)		—			2,161			—			—			1,742			3,903
Other		—		—			—			—		—			—			(25	)		—			—			—			(25	)
Balance as of March 31, 2021		66,648,561		4,899,457			(5,323,017	)	$	666	$	49		$	(226,381	)	$	1,101,205		$	(393,166	)	$	(856	)	$	(20,937	)	$	460,580

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, 2020

52,773,617

10,397,915

(2,757,558

)