Short answer
Lazard Inc (LAZ) filed its fiscal 2018 10-K annual report with the SEC on Feb 26, 2019. It reported revenue of $2.9B (+6.9% year over year) and net income of $527M.
- Top risk flagged: MiFID II reduced European affiliates’ ability to use commissions for broker research, increasing Asset Management research costs
FY2018 key financial metrics · XBRL
- Revenue
- $2.9B
- +6.9% YoY
- Net income
- $527M
- +107.9% YoY
- Operating margin
- 23.6%
- −7.0 pp YoY
- EPS (diluted)
- $4.06
- +112.6% YoY
- ROE
- 57.5%
- +36.4 pp YoY
- Operating cash flow
- $699M
- −32.1% YoY
Source: XBRL data from the Lazard Inc (LAZ) FY2018 10-K on SEC EDGAR. USD.
Lazard Inc FY2018 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core model: Independent financial advisory and global asset management across diversified clients, geographies and investment strategies
- Asset Management expansion: Long/short equity, quantitative equity, real assets, commodities and international value equity strategies
- Competitive positioning: Greater technology, data science and senior-professional investment, with broader global distribution and local presence
- Global footprint: 43 cities across 27 countries, with 2,996 employees as of December 31, 2018
- Client concentration improvement: Ten largest Financial Advisory clients fell to 19% of segment revenue from 22% in 2017 and 23% in 2016
Management Discussion & Analysis
- Net revenue $2.826B, up $182M or 7% YoY, driven by advisory fees up $169M and asset-management fees up $73M
- Operating margin 24.1% vs 31.2%, while earnings-from-operations margin 27.4% vs 26.8%
- Best segment: Financial Advisory revenue $1.556B, up 12%, margin 22.9% vs 17.6%; Asset Management margin 31.5% vs 35.4%
- Operating cash flow $1.029B; share repurchases $553M, dividends $360M, investing outflows $46M
- Outlook: M&A fundamentals remain supportive; key risks include market volatility, lower M&A activity, AUM declines and geopolitical factors
Risk Factors
- MiFID II reduced European affiliates’ ability to use commissions for broker research, increasing Asset Management research costs
- Brexit uncertainty threatened Lazard’s significant U.K. and European operations, with potential regulatory changes and market volatility
- Third-party clearing, settlement and trading providers exposed Asset Management to operational failures and transaction disruptions
- Passive investment strategies pressured Lazard’s actively managed products through lower demand and fee competition
- Lazard Group carried approximately $1.5 billion of debt, potentially constraining liquidity and refinancing access
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