Q2 2024 Evercore Inc Earnings Call

Participants

Katy Haber; Managing Director, Head of Investor Relations & ESG; Evercore Inc

John Weinberg; Chairman of the Board, Chief Executive Officer; Evercore Inc

Timothy Lalonde; Chief Financial Officer; Evercore Inc

James Yaro; Analyst; Goldman Sachs Group, Inc.

Ryan Kenny; Analyst; Morgan Stanley

Brennan Hawken; Analyst; UBS Investment Bank

Devin Ryan; Analyst; JMP Securities LLC

Aidan Hall; Analyst; Keefe, Bruyette, & Woods, Inc.

James Mitchell; Analyst; Seaport Research Partners

Brendan O'Brien; Analyst; Wolfe Research, LLC

Presentation

Operator

Good morning, and welcome to the Evercore Second Quarter 2024 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question-and-answer session. (Operator Instructions)
I will now turn the call over to Katy Haber, Managing Director of Investor Relations and ESG at Evercore. Please go ahead.

Katy Haber

Thank you, operator. Good morning, and thank you for joining us today for Evercore's Second Quarter 2024 financial results conference call. This is Katy Heber Evercore's Head of Investor Relations in ESG. Joining me on the call today is John Weinberg, our Chairman and CEO; and Tim Lalonde, our CFO. After our prepared remarks, we'll open up the call for questions.
Earlier today, we issued a press release announcing Evercore's Second Quarter 2024 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at evercore.com.
This conference call is being webcast live and the for Investors section of our website and in our textile chemicals are subject to risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially than those indicated in these statements.
These factors include, but are not limited to those discussed in Evercore's filings with the SEC, the including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
I want to remind you that the company assumes no duty to update any forward-looking statements in our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the Company's performance.
For the disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website. We can continue to believe that it is important to evaluate Evercore's performance on an annual basis.
As we have noted previously, our results for any particular quarter are influenced by the timing of trends in closing. I will now turn the call over to John.

John Weinberg

Thank you, Katy, and good morning, everyone. This past quarter represents our best second quarter for firm-wide adjusted net revenues on record. We delivered $695 million in part, driven by our second quarter adjusted advisory fees of $568 million, which increased 52% year over year.
We've been involved in a number of significant transactions, including three of the six largest global announced deals year to date. Broad market indicators suggest the M&A markets are in the midst of a gradual recovery.
With year to date, global M&A announced dollar volume greater than $100 million, up 24% year over year following a very slow year for the market in 2023. We remain encouraged by the market outlook and the opportunity it presents for Evercore.
Internally, we've seen an increase in activity levels as both our corporate and sponsor clients prepare for what is expected to be a busy second half, supporting our robust backlogs. That said, we continue to monitor the economic and geo-political risks that could impact the timing and trajectory of the recovery.
Nonetheless, given current market dynamics, we expect the recovery for both the market in our results to continue through the balance of this year and into next, we believe current M&A market, which has already begun, as we now provide a broader range of products than we ever have before. We also cover a larger, more diverse set of clients.
Further today, we have approximately 25% more investment banking senior managing directors than we did at the end of 2021, which presents significant opportunity for us. Importantly, we continue to have success in attracting high-quality talent.
As I discussed at an industry conference last month so far this year, six senior individuals have started that or have committed to join the firm. As we have mentioned in past calls, France has been a focus as our next step in progressing our European business.
We're pleased to have hired three senior professionals in Paris who will join later this year. We maintain a strong pipeline of high quality candidates and remain open to recruiting talent in strategically important areas in addition to promoting talent internally.
Separately, we continue to invest in our Evercore ISI business by recruiting top tier research analysts, including three senior analysts so far this year. Our Chief Strategist of international, it Political Affairs and Public Policy, our new head of sales, and a senior analyst covering semiconductors.
Now let me briefly discuss the quarter. There were several highlights in our investment banking business. As I mentioned at the start of this call, we advised on some of the largest announced transactions year to date, including GE on its spinoff of GE Vernova for nearly $36 billion, synopsis on its approximately $35 billion acquisition and Conoco Phillips on as $22.5 billion acquisition of Marathon Oil.
Our financial sponsors practice has recently seen an uptick in activity in parts stemming from improved market conditions, including leveraged finance and pressure from LPs to return capital.
We have advised on several significant sell-side sponsored transactions, including Prometheus a gen star portfolio company on a strategic investment from Advent International and Leonard Green, and take a portfolio company of Providence Equity Partners on its equity investment from Goldman Sachs alternatives Private Equity business.
We remain highly focused on the opportunity within this client group and expect more robust sponsor activity will reinforce the broader recovery. The European advisory team saw some improvement in March market and our results compared to the first quarter.
The backlog in the region continues to build, and we expect a stronger second half of the year. Our strategic defense business continues to be active as there is a heightened focus among Actavis on breakups management changes and cross border listings.
Momentum on our liability management and restructuring practice has continued in line with the first quarter. Liability management, particularly with sponsor remains a primary jury driver of activity. The business continues to be active across both debtor and creditor assignments.
Our market leading private capital advisory business had a strong second quarter in large part driven by robust activity in the GP part of the business.
Overall the pipeline for PCA's, they're very strong and we expect the remainder of the year to be active. Our private funds group continues to strengthen as the broader fundraising market improves. We've invested in this business over the years, positioning ourselves as a leader in this space with a top tier client base.
Following a strong first quarter, underwriting activity moderated as the much anticipated IPO reopening has yet to fully materialize. Although our second quarter results were lower relative to a very strong first quarter, we were actively engaged in follow-ons, demonstrating strong diversification across sectors and a focus on increasing our role in underwriting deals.
Notably, Evercore was less lead book runner on two follow-ons in the quarter, including AZZ's $322 million offering and Lithium Americas, $275 million offering. Our equities business had a solid quarter despite continued low level of volatility which had persisted for several quarters.
As macroeconomic and geopolitical factors are of heightened focus among investors, we continue to provide our clients with preeminent contents, differentiated corporate access and exceptional execution. Lastly, in wealth management, we set another new quarterly record for assets under management, which is now over $13 billion.
Before I turn it over to Tim to discuss the financial results, I want to reiterate a few points. We remain steadfast in the execution of our long-term strategic plan, which includes first, continuing to build out certain industry coverage groups, including TMT, healthcare sponsors, financials and other fast-growing segments of the economy.
Second, remaining focused on our geographically expansion, as most recently seen with our investment in Paris. And lastly, continuing to deepen and broaden our product capabilities in adjacent areas.
Over the past several years, we've greatly expanded our client coverage, diversified our client services and strengthened our position across key businesses. We are seeing results from the execution of our strategy. Looking forward, we will continue to invest in our firm and execute on our strategic plan while also remaining focused on improving our expense margins over time.
As the deal environment continues to improve. We're excited for what is the head for both us and the market. Evercore is stronger today than we've ever been before.
With that, let me turn it over to Tim.

Timothy Lalonde

Thank you, John. Our second quarter financial results reflects an improving market environment as John just discussed, our pipelines remain robust. We are monitoring the velocity at which new deals are added and existing deals in process reach fruition.
We are committed to improving our expense margins, recognizing that this improvement is positively influenced by the increase in revenue. We also require serious cost discipline and we are active actively engaged in that yet.
It is important to note that we are building the firm making strategic investments, and we are balancing these two objectives. Accordingly, we will drive improvement gradually over the near to medium term. With that, I will now discuss our second quarter financial results.
For the second quarter of 2024, net revenues, operating income and EPS on a GAAP basis were $689 million, $108 million and $1.81 per share, respectively. My comments from here, we'll focus on non-GAAP metrics, which we believe are useful in evaluating our results.
Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website.
Our second quarter adjusted net revenues of $695 million increased 38% versus the second quarter of 2023. Adjusted net revenues represent a record second quarter for Evercore. Second quarter adjusted operating income of $114 million increased 80% versus the second quarter of 2023. Adjusted loss per share of $1.81 increased 89% versus the second quarter of last year.
Our adjusted operating margin was 16.4% for the second quarter, up from 12.6% in the second quarter of last year. Turning to the business, second quarter, adjusted advisory fees of $568 million increased 52% year over year, reflecting a strengthening market environment and improved market share compared to a year ago.
Our second quarter underwriting fees were $31 million, down 19% from a year ago. in any quarter. Results in this business depends on the size and number of transactions in which we are involved and that fluctuates from quarter to quarter. For the first half of 2024 underwriting fees were up nearly 42% year over year.
Commissions and related revenue of $53 billion in the second quarter was up 6% year over year, despite continued low volatility and flat conventional single stock market volumes. Second quarter adjusted asset management and administration fees of $21 million increased 16% year over year, primarily driven by higher fees as AUM increased due to market appreciation.
Second quarter adjusted other revenue net was approximately $22 million, which compares to $24 million a year ago.
Turning to expenses, the adjusted compensation ratio for the second quarter is 66% compared to 67% a year ago. This ratio represents our best judgment as of the accrual for this quarter, taking into consideration in our view of full year revenue and compensation expense when factoring in SMD hiring head count levels, market levels of compensation at year end and the other relevant factors.
As I discussed on our first quarter call, we are striving to make improvements in our compensation ratio, while we concurrently continue to build the firm strategically.
Next, non-compensation expenses in the quarter were $122 million, up 18% from a year ago and the Adjusted noncomp expense ratio for the quarter 17.6% compared to 20.5% a year ago, a 290 basis points improvement.
Together to comp expense ratio and the non-comp expense ratio represents a nearly 400 basis points improvement versus a year ago. For non-compensation expense increase from the year prior is primarily driven by three items.
First professional fees reflect higher client related expenses, which are potentially recoverable and generally are correlated with higher levels of revenue, in addition to higher consulting and search and placement costs.
Second, travel and related fees reflect a combination of continued post COVID normalization of traveling expenses and higher client related activity levels.
Third, an increase in other operating expenses reflect education and training costs for our summer analysts and associate classes, increased regulatory filing, an annual fees of which may be seasonal or in some cases episodic.
We continue to closely monitor our non-comp expenses, which on a per employee basis for the first half of the year are only about 7% higher than 2019. The pre COVID year, reflecting a less than 2% compound annual increase, which is less than the rate of inflation.
We believe we can to make progress on our non-comp ratio in the near to medium term. So we face some pressures from increased information services, cost, investment in technology and headcount related to implementation of our strategic growth plan.
In line with my comments from our first quarter earnings call, we anticipate that our full year non-comp expense ratio should be consistent with or compare favorably to our pre-COVID non-comp expense ratio.
Our adjusted tax rate for the quarter was 26.9% compared to 29.6% in the second quarter of last year. We anticipate that our tax rate in the third and fourth quarters will continue to be similar to our recent historical tax rates in those quarters.
Turning to our balance sheet. As of June 30, our cash and investment securities totaled nearly $1.7 billion, which is approximately $200 million higher than last year's levels at this time. In the first six months of this year, we returned a total of $396 million to shareholders through dividends and repurchases of 1.8 million shares at an average price of $178.61.
Our second quarter diluted share count was 43.4 million, up slightly from the prior year. The increase in our share count primarily was due to the impact of our higher share price on unvested RSUs. We are encouraged by what we see and proud of what we have accomplished in the first half of the year.
We believe the broader market recovery will progress throughout 2024 and into 2025 based on what we see internally and the continued improvement in market conditions. We remain focused on the build-out of our firm while managing our expenses responsibly.
We are appreciative of our shareholders and are focused on increasing Evercore's value over the medium and longer term. With that, we will now open the line for questions.

Question and Answer Session

Operator

Thank you. We will now conduct the question and answer portion of the conference. (Operator Instructions)
James Yaro, Goldman Sachs.

James Yaro

Good morning and thanks for taking my question. As part of the marker that is lagged so far the cycle, maybe, John, could you speak to the sponsor dialogues that you are having on the M&A side, whether these have improved and also perhaps some perspective on sponsor engagement around IPOs and whether those could increase from here?

John Weinberg

Sure. So activity levels for sponsors are definitely picking up and as you've seen, statistically, it's up about 17% to 20% year on year to date, half year. Having said that, I think our experience would be that there is a constant is there is a continual ramp up right now. We're seeing a significant number of bake-offs significantly larger than we have seen in the past.
We also are seeing real activities in the sponsors looking at portfolios and trying to figure out real, how do they get moving with their portfolios. Some portfolios, companies that have been really been invested in over a period of time. I think sponsors are really trying to think about bringing them out.
And there's a dynamic here that I think is at play, which is really positive toward ramping. And that is that I think LPs are looking for a return and of capital. And they're at they're pretty vocal about the fact that they want that to happen.
In addition, I think that the sponsors have a significant amount of dry powder, some of the aging. And I think if it doesn't get used, it may go away. And so I think that you have is very positive dynamic of real pressure to get moving, which were portfolios.
In addition, the markets are our positive, both the leveraged finance side and private credit. There's really a an appetite for real activity. And so all of those things together, I think, are really building the ramp. And from our perspective, it's coming, it's going to ramp overrun. It's not going to happen all at once, but we're feeling very positive tone to the market.
And in terms of the IPO, I think IPOs are being considered as well as the M&A side for these portfolios. And so I think what we're seeing is just a very, very high activity level in our and our leverage on our sponsor coverage group is really seeing tremendous activity right now. So from our so our perspective, I think the momentum and is growing.

James Yaro

Thank you very much.

Operator

Ryan Kenny, Morgan Stanley.

Ryan Kenny

Hi, good morning. On you mentioned that European M&A, it's picking up. Can you just dig into what's driving that and how the pipeline in Europe compared to US? Are they growing at roughly the same pace? Or is this one stronger than the other?

Timothy Lalonde

Our experiences that the that the US market is out ahead that the European market is actually finding a positive tone, but the US market is ahead. There's just true of, I think, at a real activity builder in US, which is really ahead. I think that you US is slightly ahead. I think the activity on both markets, though, is positive, and we think there's a real build.

Ryan Kenny

Thank you.

Operator

Brennan Hawken, UBS.

Brennan Hawken

Good morning. Thank you for taking my questions. Tim, I was a little unclear on the comp ratio commentary. So hoping you could maybe clarify, were you saying that 66% is in line with the full year expectation? Or were you suggesting that there's a chance for lower a downward pressure?
You know, based on, of course, you guys have a decent handle on the revenue outlook, usually about six months out. So I would think by this point you had travel, it would there's always uncertainty, but maybe a little less uncertainty at this stage. Thanks.

Timothy Lalonde

Sure, Brennan. 66% is what I would say is generally similar to what we would expect for the full year. And we do know foresee a strengthening environment and along with that strengthening right revenue, if -- it's impossible for us to know exactly the steepness of the ramp or the timing of transaction closings.
But there is a possibility of and we're certainly striving to achieve shave some improvement. But is it just the lack of clarity at this point with respect to ramp and timing could be more precise than that.

Brennan Hawken

That's fair. Would you categorize the 66% as maybe a bit on the conservative side? And so therefore, if you know, sort of a worst case scenario or is it more on? Is it possible to give us an indication about where it's where it sits on that skew?

Timothy Lalonde

I wouldn't characterize it as one way or another other than to say it reflects our best judgment of the appropriate accrual for this quarter.

Brennan Hawken

Okay. Thanks for taking my questions.

Operator

Devin Ryan, Citizens GMP.

Devin Ryan

For a great morning, John. Morning, Tim. Just a question on some of the non M&A advisory business. It sounds like on a really healthy activity, both in restructuring and ensure our advisory. Do you want to think about kind of look out maybe not even the next couple of quarters, but just over the next couple of years and how you expect those businesses to grow and the contribution of the overall from one level to evolve.
Meaning, if we get into an M&A recovery scenario, do businesses should become smaller pieces, but larger than the absolute or just based on what you're seeing in the environment and obviously restructuring fills, it could be a month your cycle year, they can actually become larger proportional to the overall firm-wide revenues? Thanks.

John Weinberg

Sure. The restructuring business continues apace. And I think our view of the restructuring business is that it will continue really at this level and it will be at this healthy levels for quite some time. We do have as you said several businesses, which are not M&A related. Obviously about over a third of our businesses are non M&A related. Our cap private capital advisory businesses are a very healthy. We see real growth in this business.
They're actually performing extremely well right now and we anticipate that there will be real growth in those businesses. Our equity capital markets business is also performing well. We anticipate that it will continue and there will be a ramp in that business also. But, the one thing I would really say though, is that merger business is really our biggest business.
And I don't know whether the businesses that are non-mergers are going to grow in terms of their proportion of our business, just because I think that the demerger business is going to continue to ramp. The merger business will take some time to ramp all the way up.
As we said, it's and take the balance of this year and into next to really get to what we would see call full recovery of that is very powerful engine for us. And so what I'd say is I feel like we have good balance. We will continue to have the balance. I feel like our businesses generally are all quite healthy. And so I don't really see any weakening in any of those businesses. But I do think that the merger business is going to continue to strengthen. I hope that helps.

Devin Ryan

It does. Thank you.

Operator

Aidan Hall, KBW.

Aidan Hall

Great. Thanks for taking my question. Just a follow up on the comp ratio commentary. Seems like, given the elevated level of hiring and just a way that the years playing out, non-comp ratio would be coming in maybe a little higher than initially expected for the year.
So I know it's still early, but is there any way to frame how to think about leverage in 2025 as it relates to kind of compensation expense, especially as a rebound in activity remains pretty sustainable or at least that's the base case expectation here on the road revenue side? Thank you.

Timothy Lalonde

Yes, sure. I can talk a little bit about first, let me start in order to create the contacts with what our comp ratio reminding people at our comp ratio as last year was 67.6% for the full year. As you'll recall, last year, we started a little bit lower, but as conditions did not improve in the latter part of the year. And we also had a full plate of high quality candidates we had hired there was an upward drift. So comparing quarter over last year quarters probably not quite appropriate. I would think about looking into this quarter in relation to last full year again, which was 67.6%and of course higher than that in the latter part of the year.
So we have made some progress already a year to date, and we're focused on this and we think said, number one, we will get some leverage from increased revenues over time, we expect that. And so we don't look at this current comp ratio for this quarter as being our steady state in terms of go forward in the near to medium term. We're looking to improve on it, but that improvement will be a gradual improvement. This is not something that happens overnight. We return to normalcy.

Aidan Hall

Understood. Thank you.

Operator

Jim Mitchell, Seaport Global.

James Mitchell

Hey, good morning. Tim, maybe you could you mentioned on velocity, Tim. So could you talk to we haven't talked about elongation of the of the process. So are we starting to see timing from announcement to closings better?
How are you thinking about all this activity and the speed at which it could turn into revenue? So any thoughts on that and your comments on second half being better? Is that our activity level comment to our revenue comment? Thanks.

Timothy Lalonde

Sure. First, let me start by just repeating to create a base for this a comment you heard in our prepared remarks, which is that we've characterized the backlogs as being a robust and that's certainly the case. But the -- in order for revenues to materialize, we look at a combination of both the size of the backlog and the rate at which transactions are moving through.
We're at of point in the ramp where that is not going to show up as we look at it from a of backward looking standpoint, that's not going to show up yet. Anecdotal feedback from our bankers. What we do have is analogy processes are more active.
They're moving a little more quickly. You heard John's comments about the leverage finance markets, which for which issuances up about, you know, if you if you look at the aggregate of high yield issuance and leverage loans is up about 100% year over year.
So the pieces of the puzzle are in place and we're anticipating improvement in velocity as we move forward. And then with regard to the second part of your question about activity levels, is it just activity levels or is it had revenues of which we started noticing improved activity levels months ago and we in fact commented on that in our first quarter earnings call and then there's of course a lag time.
But we would expect of some of this increased activity to be reflected in revenues as we approach the end of the year and into next year.

James Mitchell

Got it. Thanks.

Operator

(Operator Instructions)
Brandon O'Brien, Wolfe Research.

Brendan O'Brien

Good morning. So I just want to touch on a private capital advisory business. Secondary activity was very strong in the first half and as expected and accelerate meaningfully over the next couple of years as sponsors look to return capital to our peers. Just wanted to get a sense as to how meaningful of a growth engine that could be fair for ongoing forward.
And as we think about the potential recovery at sponsor M&A activity, do you expect the strength of this franchise in your improved sponsor coverage model to enable you to capture greater share?

John Weinberg

We would hope so. We have really made great efforts to make sure that we bring together all of the fee businesses. A debt are touching sponsors so that we really can holistically service sponsors and bring a much more diverse and broad set of a skill sets to bear on what they're trying to accomplish. And I think that clearly the private capital advisory businesses are strengthening.
There is the market is growing for those businesses, especially for continuity type vehicles and, frankly as sponsors make decisions about portfolio companies, they really look in a much more to a diverse set of options. I have options, whether it's an IPO, whether it's a sale, whether it's more investment, whether there's some continuity vehicle, all of those things are our options.
And so we think that really bringing it all the getting a real leverage upward with respect to those businesses, I think that the sponsor business for us is going to continue to grow and improve. I think that it will have it will it will have an increasingly high percentage of the things that we do.
Having said that, obviously, we're developing all of our businesses broadly throughout the whole portfolio of advisory services. So hoping we're hoping the strategy of investing broadly is going to bring real opportunity for our revenue growth.
Having said that, I think your question about sponsors and the concentration of private capital advisory services is that those businesses will continue to improve and grow. And we feel really good about the investments we're making there.

Brendan O'Brien

Great. And if I could just squeeze in a follow-up on the comp ratio. When do you think about normalized comp ratio? You've heard from some of your peers that given the structural cost increase in the cost of retaining the talent wage inflation and the like, that their comp ratio is going to be structurally higher going forward. I guess when you speak to a normalized comp ratio, how are you thinking about that relative to the sub 60% level that you've run at historically?

Timothy Lalonde

Yes, sure. Look, as I mentioned in my last comment, this is what we foresee is gradual improvement. We're focused on this. There's certainly a correlation with increasing revenue and improvement in the comp ratio, and we expect gradual improvement over the near to medium term. And we are relative to last year are running right now at 160 basis point improvement relative to last year.
And we're working hard to make sure we can deliver additional improvements. As I said, over the near to medium term, it would be premature for us or for any one at this point to speculate on whether we're going to get back down to something sub 60% of what I can tell you is we are looking to make meaningful improvements on over this year and next year and thereafter.
And as we approach that point, we'll bet we'll be able to better assess where we think the of the ultimate settling spot is.

Brendan O'Brien

Thank you for taking my questions.

Operator

James Yaro, Goldman Sachs.

James Yaro

Thanks for taking my follow-up. Tim, the non-comp expenses rose 12% quarter on quarter. You noted that much of this is some travel expenses, which is obviously a positive for the top line. But you did also talk about some inflationary factors. How should we think about non-comp expense dollars from here? Should they grow versus the 2Q level? Or is there some sort of seasonality in the quarter?

Timothy Lalonde

Yes. I think that there's at least a small amount of seasonality and that has to do with things like SEC filing fees, annual fees, our audit costs, our training costs, for the analysts and associates that arrive, et cetera. And so I think there's at least a small amount of seasonality in that figure. As you mentioned Yaro, there's also upward pressure, right?
And so travel in the most recent quarter was this as measured by number of trips is about 95% of where we were the first part of 2019, the pre COVID year by 95%. Now that has to be adjusted for the fact that our headcount is up about 23%.
And so what's out on a head count adjusted basis, our travel is at about 73% of where it was pre-COVID. And we're closely monitoring that and trying to form a view on where we think that will ultimately reach full normalization, might be -- there may be some continued normalization as we move forward.
But as you imagine, we're happy to see that kind of activity because that means we're out there servicing our clients. And so that's what one thing is. And the second thing is there's a their professional expenses that are related to increased revenues and that's another type of expense we're happy to occur, which is expenses that our round of the winning of new business and the execution of deals.
Lastly, what I would mention is and this will get to your answer to the higher, I think about it going forward. There's a very close correlation. If you look at it over a number of years with respect to our head count and non-comp costs by and so it's not perfect in the short term, but in the medium to longer term, there's a very significant correlation.
If you look at that metric for us from pre-COVID period, which is 2019 through the present, the increase is about 7%. That's non-comp costs for employee. If you look at that on an annual basis, that would be less than 2%, which is below the rate of inflation.
So, you know, we feel like we've done a solid job to date and we, of course, realize that with certain upward pressures and five by travel and professional to pause. And there will also be some investment in technology and information services cost adds as a little pressure.
So, you can rest assured that internally we've mobilized our troops and are exercising significant discipline as we think about those non-comp costs moving forward.

James Yaro

Excellent. Thanks a lot. Tim.

Operator

Brennan Hawken, UBS. Please go ahead.

Brennan Hawken

Good morning. Thanks for taking my follow-up. Tim, apologies about another question on comp here, but um, I was hoping to take a slightly different tack. So your reported adjusted comp expense year to date is up about 20% versus last year. If we drill down and think about just the fixed component of the comp expense now, in other words, salaries and benefits and deferred comp amortization on how much would that be up year to date, as compared to the reported number?

Timothy Lalonde

Apologies to Brennan, but it's not a figure, we'll disclose.

Brennan Hawken

Okay. Fine. How about this is the fixed comp growth rate less than the reported number or is it greater than the reported number?

Timothy Lalonde

Yes, it was with the fixed cost growth rate. This is a little bit of a I gave on the non-comp side of the growth and that is going to be related to growth in headcount. And then as revenues go up, certainly have probably a greater extent at the partner level. On a little lesser extent, the non-partner level there will be some increase in bonuses that correlates to the increase in revenues.
And so from that, you could probably surmise that the fixed component of it. We notice as revenues, I think, are anticipated to grow at a faster rate than headcount. You could surmise that the fixed component might grow at a little less of a rate than the bonus.

Brennan Hawken

A little less, even though the headcounts only up about 4% year over year.

Timothy Lalonde

That's a would be last. Yes, it would be less than that. Then the discretionary component.

Brennan Hawken

Thanks for the patients with my persistent.

Timothy Lalonde

Always happy to talk with you, Brennan.

Operator

Thank you. At this time, there are no further questions in queue. This concludes today's Evercore Second Quarter 2024 earnings conference call. You may now disconnect.