Lazard Q3 2026: Rising Pay Costs Sink a Third Straight Quarter
As seen on the 24/7 Wall St. homepage on October 22, 2026.
Pay is eating the upside: the adjusted compensation ratio hit 69.9% versus 65.5% a year ago, turning 11% adjusted net revenue growth into a third straight quarter of missing expectations. Financial Advisory still posted record third quarter revenue, with the Lazard CL private capital business launching in early November.
Continue ReadingShow less
Lazard missed on both earnings and revenue for the third consecutive quarter, with adjusted earnings per share of $0.36 for Q3 2026 missing expectations.
Compensation is the core problem: the adjusted compensation ratio climbed to 69.9%, far from Lazard's long-term target of 60% or below. Adjusted net revenue rose 11% year-over-year, but widening comp expense eroded the benefit before it could reach the bottom line.
A heavier tax burden compounded the pressure, with the effective tax rate jumping to 38.1% from 21.4% in Q3 2025. Stronger underlying revenue was not enough to keep reported net income from thinning out.
Sponsored
There were genuine bright spots: Financial Advisory set a third-quarter record with adjusted net revenue of $464.69 million, and Asset Management revenue rose 12% on higher average assets under management. Year-to-date gross inflows in Asset Management were described as a record, though the segment did see net outflows in Q3 alone.
Lazard plans a November launch of Lazard CL, a new private capital advisory business, alongside a pending acquisition of Campbell Lutyens and AI adoption under its Lazard 2030 strategy. CEO Peter Orszag stated that client activity and forward indicators in Financial Advisory remain strong, and the board declared a quarterly dividend of $0.50 per share payable November 13, 2026.
Mentioned: LAZ