Perella Weinberg Partners [PWP] Filings

10-Q 1 pwp-20240630.htm 10-Q pwp-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________________________________________________________________________________________________________________________________________

FORM 10-Q

_____________________________________________________________________________________________________________________________________________________________________

(Mark One)


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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024


☐			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: 001-39558

_____________________________________________________________________________________________________________________________________________________________________

PERELLA WEINBERG PARTNERS

(Exact Name of Registrant as Specified in its Charter)

_____________________________________________________________________________________________________________________________________________________________________


Delaware			84-1770732
( State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
767 Fifth Avenue New York, NY			10153
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (212) 287-3200

_____________________________________________________________________________________________________________________________________________________________________

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

PWP

Nasdaq Global Select Market

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 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 x No o

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 x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the 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	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	x

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. o

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

As of July 30, 2024, the registrant had 52,535,701 shares of Class A common stock, par value $0.0001 per share, and 33,303,517 shares of Class B common stock, par value $0.0001 per share, outstanding.

Perella Weinberg Partners

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Financial Condition as of June 30, 2024 and December 31, 2023	4
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	6
	Condensed Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interests for the Three and Six Months Ended June 30, 2024 and 2023	7
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
Signatures		36

On June 24, 2021 (the “Closing Date” or the “Closing”), Perella Weinberg Partners consummated a business combination pursuant to that certain Business Combination Agreement, dated as of December 29, 2020 (the “Business Combination Agreement”). Unless the context otherwise requires, all references to “PWP,” the “Company,” “we,” “us” or “our” refer to Perella Weinberg Partners and its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements regarding the expectations regarding the combined business are “forward-looking statements.” In addition, words such as “estimates,” “projected,” “expects,” “estimated,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of the parties, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important factors, among others, that may affect actual results or outcomes include (but are not limited to): changing market conditions; the Company’s ability to execute on its growth initiatives, business strategies or operating plans; the Company’s ability to successfully identify, recruit, develop and retain talent; the Company's dependence on its fee-paying clients and fluctuating revenues from its non-exclusive, engagement-by-engagement business model; the high volatility of the Company’s revenue as a result of its reliance on advisory fees that are largely contingent on the completion of events which may be out of its control; the Company’s ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to the Company’s business, including actual, potential or perceived conflicts of interest and other factors that may damage its business and reputation; substantial litigation risks in the financial services industry; cybersecurity and other operational risks; extensive regulation of the corporate advisory industry and U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy and laws; and other risks and uncertainties described under the section entitled “Part I—Item 1A. Risk Factors” included in our Annual Report on Form 10-K.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Website Disclosure

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains an internet site where reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC are available. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov and on our website at https://investors.pwpartners.com/ free of charge as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. Our website is https://pwpartners.com/. Although we refer to our website in this report, the contents of our website are not included or incorporated by reference into this report. All references to our website in this report are intended to be inactive textual references only.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners
Condensed Consolidated Statements of Financial Condition
(Unaudited)
(Dollars in Thousands, Except Per Share and Per Unit Amounts)




	June 30, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	185,280	$	247,171
Restricted cash	1,231		2,931
Investments in short-term marketable debt securities	—		91,174
Accounts receivable, net of allowance	90,519		47,771
Due from related parties	3,593		3,575
Fixed assets, net of accumulated depreciation and amortization	90,913		93,652
Intangible assets, net of accumulated amortization	15,902		19,192
Goodwill	34,383		34,383
Prepaid expenses and other assets	32,166		30,871
Right-of-use lease assets	139,376		143,935
Deferred tax assets, net	52,147		46,453
Total assets	$	645,510	$	761,108
Liabilities, Redeemable Non-Controlling Interests, and Equity
Accrued compensation and benefits	$	132,777	$	233,927
Accounts payable, accrued expenses and other liabilities	74,019		52,106

Lease liabilities	181,478		175,901
Amount due pursuant to tax receivable agreement	33,845		30,928
Total liabilities	422,119		492,862
Commitments and Contingencies (Note 16)
Redeemable non-controlling interests, 32,884,770 units at redemption value of $15.40 per unit as of June 30, 2024	506,366		—
Equity
Class A common stock, par value $0.0001 per share (1,500,000,000 shares authorized, 66,115,225 issued and 52,535,701 outstanding at June 30, 2024; 1,500,000,000 shares authorized, 57,361,073 issued and 44,642,849 outstanding at December 31, 2023)	7		6
Class B common stock, par value $0.0001 per share (600,000,000 shares authorized, 33,303,517 issued and outstanding at June 30, 2024; 600,000,000 shares authorized, 41,589,339 issued and outstanding at December 31, 2023)	3		4
Preferred stock, par value $0.0001 per share (100,000,000 shares authorized, no shares issued and outstanding at June 30, 2024 and December 31, 2023)	—		—
Additional paid-in-capital	4,115		312,523
Retained earnings (accumulated deficit)	(167,852)		(54,650)
Accumulated other comprehensive income (loss)	(5,166)		(4,480)
Treasury stock, at cost (13,579,524 and 12,718,224 shares of Class A common stock at June 30, 2024 and December 31, 2023, respectively)	(114,082)		(100,747)
Total Perella Weinberg Partners equity	(282,975)		152,656
Non-controlling interests	—		115,590
Total equity	(282,975)		268,246
Total liabilities, redeemable non-controlling interests, and equity	$	645,510	$	761,108

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	$	271,998	$	165,545	$	374,125	$	296,971
Expenses
Compensation and benefits	149,973		106,216		218,563		176,179
Equity-based compensation	160,498		42,212		207,305		89,883
Total compensation and benefits	310,471		148,428		425,868		266,062
Professional fees	11,743		8,737		22,803		16,290
Technology and infrastructure	9,125		9,293		17,897		17,805
Rent and occupancy	5,860		6,678		12,137		14,092
Travel and related expenses	4,700		4,726		9,285		9,500
General, administrative and other expenses	7,223		5,796		11,742		11,190
Depreciation and amortization	5,108		3,639		10,188		6,474
Total expenses	354,230		187,297		509,920		341,413
Operating income (loss)	(82,232)		(21,752)		(135,795)		(44,442)
Non-operating income (expenses)
Related party income	—		276		—		549
Other income (expense)	745		(1,337)		3,402		(1,054)

Total non-operating income (expenses)	745		(1,061)		3,402		(505)
Income (loss) before income taxes	(81,487)		(22,813)		(132,393)		(44,947)
Income tax expense (benefit)	(642)		(4,543)		18,452		743
Net income (loss)	(80,845)		(18,270)		(150,845)		(45,690)
Less: Net income (loss) attributable to non-controlling interests	(14,817)		(18,629)		(48,973)		(40,926)
Net income (loss) attributable to Perella Weinberg Partners	$	(66,028)	$	359	$	(101,872)	$	(4,764)
Net income (loss) per share attributable to Class A common shareholders
Basic	$	(1.21)	$	0.01	$	(1.96)	$	(0.11)
Diluted	$	(1.21)	$	(0.19)	$	(1.96)	$	(0.56)
Weighted-average shares of Class A common stock outstanding
Basic	54,589,542		42,743,611		51,894,913		42,531,895
Diluted	54,589,542		86,521,626		51,894,913		86,566,075

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollars in Thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income (loss)	$	(80,845)	$	(18,270)	$	(150,845)	$	(45,690)
Foreign currency translation gain (loss), net of tax	(16)		1,898		(1,206)		3,483
Comprehensive income (loss)	(80,861)		(16,372)		(152,051)		(42,207)
Less: Comprehensive income (loss) attributable to non-controlling interests	(14,781)		(17,661)		(49,493)		(39,159)
Comprehensive income (loss) attributable to Perella Weinberg Partners	$	(66,080)	$	1,289	$	(102,558)	$	(3,048)

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners

Condensed Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interests

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts)


	Shares
	Class A Common Stock	Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Non- Controlling Interests		Total Equity		Redeemable Non-Controlling Interests
Balance at December 31, 2023	57,361,073	41,589,339	(12,718,224)	$	6	$	4	$	(100,747)	$	312,523	$	(54,650)	$	(4,480)	$	115,590	$	268,246	$	—
Net income (loss)	—	—	—	—		—		—		—		(35,844)		—		(34,156)		(70,000)		—
Equity-based awards	—	—	—	—		—		—		33,371		—		—		13,942		47,313		—
Distributions to partners	—	—	—	—		—		—		—		—		—		(2,867)		(2,867)		—
Issuance of Class A common stock for vested PWP Incentive Plan Awards	2,086,273	—	113,673	—		—		1,364		(1,143)		(221)		—		—		—		—
Withholding tax payments on vested PWP Incentive Plan Awards	—	—	—	—		—		—		(24,568)		—		—		—		(24,568)		—
Dividends declared ($0.07 per share of Class A common stock)	—	—	—	—		—		—		150		(5,265)		—		—		(5,115)		—
Foreign currency translation gain (loss)	—	—	—	—		—		—		—		—		(634)		(556)		(1,190)		—
Other	—	—	—	—		—		—		656		—		—		(11)		645		—
Issuance of Class A common stock in public offering (Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests)	5,750,000	—	—	1		—		—		65,986		—		—		—		65,987		—
Exchange of PWP OpCo Units and corresponding Class B common stock for Class A common stock (Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests)	794,146	(793,354)	—	—		—		—		570		—		—		—		570		—

Change in ownership interests	—	—	—	—		—		—		(25,168)		—		—		25,168		—		—
Balance at March 31, 2024	65,991,492	40,795,985	(12,604,551)	$	7	$	4	$	(99,383)	$	362,377	$	(95,980)	$	(5,114)	$	117,110	$	279,021	$	—
Effect of the Merger and related transactions	—	(6,149,211)	—	—		(1)		—		64		—		—		(109,737)		(109,674)		97,496
Net income (loss)	—	—	—	—		—		—		—		(66,028)		—		—		(66,028)		(14,817)
Equity-based awards	—	—	—	—		—		—		30,967		—		—		—		30,967		60,794
Distributions to partners	—	—	—	—		—		—		—		—		—		—		—		(2,331)
Issuance of Class A common stock for vested PWP Incentive Plan Awards	123,733	—	25,027	—		—		301		(206)		(95)		—		—		—		—
Withholding tax payments on vested PWP Incentive Plan Awards and equity-classified ACUs	—	—	—	—		—		—		(1,264)		—		—		—		(1,264)		(12,534)
Dividends declared ($0.07 per share of Class A common stock)	—	—	—	—		—		—		132		(5,749)		—		—		(5,617)		—
Foreign currency translation gain (loss)	—	—	—	—		—		—		—		—		(52)		—		(52)		36
Other	—	—	—	—		—		—		634		—		—		—		634		14
Exchange of PWP OpCo Units and corresponding Class B common stock for cash (Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests)	—	(1,343,257)	—	—		—		—		(19)		—		—		(7,373)		(7,392)		(10,862)
Treasury stock purchase	—	—	(1,000,000)	—		—		(15,000)		—		—		—		—		(15,000)		—
Change in ownership interests	—	—	—	—		—		—		37,735		—		—		—		37,735		(37,735)
Changes in redemption value of redeemable non-controlling interests	—	—	—	—		—		—		(426,305)		—		—		—		(426,305)		426,305
Balance at June 30, 2024	66,115,225	33,303,517	(13,579,524)	$	7	$	3	$	(114,082)	$	4,115	$	(167,852)	$	(5,166)	$	—	$	(282,975)	$	506,366

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners

Condensed Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interests

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts)


	Shares
	Class A Common Stock	Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Non- Controlling Interests		Total Equity
Balance at December 31, 2022	52,237,247	44,563,877	(10,492,286)	$	5	$	4	$	(80,067)	$	242,129	$	(18,071)	$	(6,538)	$	122,678	$	260,140
Net income (loss)	—	—	—	—		—		—		—		(5,123)		—		(22,297)		(27,420)
Equity-based awards	—	—	—	—		—		—		27,932		—		—		20,334		48,266
Distributions to partners	—	—	—	—		—		—		—		—		—		(3,119)		(3,119)
Issuance of Class A common stock for vested PWP Incentive Plan Awards	1,250,162	—	99,057	—		—		1,189		(1,189)		—		—		—		—
Withholding tax payments on vested PWP Incentive Plan Awards	—	—	—	—		—		—		(11,356)		—		—		—		(11,356)
Dividends declared ($0.07 per share of Class A common stock)	—	—	—	—		—		—		169		(4,925)		—		—		(4,756)
Foreign currency translation gain (loss)	—	—	—	—		—		—		—		—		786		799		1,585
Other	—	—	—	—		—		—		(14)		—		—		(17)		(31)

Exchange of PWP OpCo Units and corresponding Class B common stock for Class A common stock (Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests)	786,644	(785,862)	—	—		—		—		457		—		—		—		457
Treasury stock purchase	—	—	(1,457,304)	—		—		(14,754)		—		—		—		—		(14,754)
Change in ownership interests	—	—	—	—		—		—		2,678		—		—		(2,678)		—
Balance at March 31, 2023	54,274,053	43,778,015	(11,850,533)	$	5	$	4	$	(93,632)	$	260,806	$	(28,119)	$	(5,752)	$	115,700	$	249,012
Net income (loss)	—	—	—	—		—		—		—		359		—		(18,629)		(18,270)
Equity-based awards	—	—	—	—		—		—		24,173		—		—		18,407		42,580
Distributions to partners	—	—	—	—		—		—		—		—		—		(5,692)		(5,692)
Issuance of Class A common stock for vested PWP Incentive Plan Awards	97,163	—	24,386	—		—		293		(189)		(98)		—		—		6
Withholding tax payments on vested PWP Incentive Plan Awards	—	—	—	—		—		—		(453)		—		—		—		(453)
Dividends declared ($0.07 per share of Class A common stock)	—	—	—	—		—		—		156		(4,758)		—		—		(4,602)
Foreign currency translation gain (loss)	—	—	—	—		—		—		—		—		930		968		1,898
Other	—	—	—	—		—		—		747		—		—		777		1,524

Treasury stock purchase	—	—	(919,379)	—		—		(7,735)		—		—		—		—		(7,735)
Change in ownership interests	—	—	—	—		—		—		(5,923)		—		—		5,923		—
Balance at June 30, 2023	54,371,216	43,778,015	(12,745,526)	$	5	$	4	$	(101,074)	$	279,317	$	(32,616)	$	(4,822)	$	117,454	$	258,268

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in Thousands)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities
Net income (loss)	$	(150,845)	$	(45,690)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity-based awards vesting expense	137,392		90,846
Depreciation and amortization	10,188		6,474
Bad debt expense	3,544		1,065
Foreign currency revaluation	(513)		1,401
Non-cash operating lease expense	5,250		7,006
Deferred taxes	(992)		343
Other	607		79
Decrease (increase) in operating assets:
Accounts receivable, net of allowance	(46,903)		16,431
Due from related parties	(18)		(138)
Prepaid expenses and other assets	(1,486)		1,364
Increase (decrease) in operating liabilities:
Accrued compensation and benefits	(106,841)		(126,207)
Accounts payable, accrued expenses and other liabilities	29,361		(8,033)
Lease liabilities	4,920		4,692
Net cash provided by (used in) operating activities	(116,336)		(50,367)
Cash flows from investing activities
Purchases of fixed assets	(14,724)		(34,829)
Purchases of investments in short-term marketable debt securities	—		(49,733)
Maturities of investments in short-term marketable debt securities	91,188		140,551
Other	—		488
Net cash provided by (used in) investing activities	76,464		56,477
Cash flows from financing activities
Proceeds from issuance of Class A common stock in public offering, net of underwriting discount and offering costs	65,986		—
Exchange of PWP OpCo Units and corresponding Class B common stock for cash	(19,382)		—
Withholding tax payments for vested PWP Incentive Plan Awards and equity-classified ACUs	(38,366)		(11,809)
Distributions to partners	(5,198)		(8,811)
Dividends paid on Class A and Class B common stock	(8,628)		(6,502)
Treasury stock purchases	(15,000)		(22,489)
Payments pursuant to tax receivable agreement	—		(472)
Other	(2,369)		—
Net cash provided by (used in) financing activities	(22,957)		(50,083)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(762)		2,217
Net increase (decrease) in cash, cash equivalents and restricted cash	(63,591)		(41,756)
Cash, cash equivalents and restricted cash, beginning of period	250,102		174,166
Cash, cash equivalents and restricted cash, end of period	$	186,511	$	132,410
Supplemental disclosure of non-cash activities
Lease liabilities arising from obtaining right-of-use lease assets	$	1,060	$	178
Accrued capital expenditures	$	793	$	6,906
Accrued dividends and dividend equivalent units on unvested PWP Incentive Plan Awards	$	4,142	$	3,781
Non-cash paydown of Partner promissory notes	$	896	$	1,547
Deferred tax effect resulting from changes in ownership and exchanges of PWP OpCo Units, net of amounts payable under tax receivable agreement	$	1,848	$	457



Supplemental disclosures of cash flow information
Cash paid for income taxes	$	1,039	$	4,185

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited)

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Note 1—Organization and Nature of Business

Perella Weinberg Partners and its consolidated subsidiaries, including PWP Holdings LP (“PWP OpCo”) (collectively, “PWP” and the “Company”), is a global independent advisory firm that provides strategic and financial advice to a wide range of clients. The Company’s activities as an investment banking advisory firm constitute a single business segment that provides a range of advisory services, including advice related to strategic and financial decisions, mergers and acquisitions (“M&A”) execution, shareholder and defense advisory, financing and capital solutions advice with resources focused on restructuring and liability management, capital markets advisory, private capital placement, as well as specialized underwriting and research services primarily for the energy and related industries.

On June 24, 2021, the Company consummated a business combination pursuant to a Business Combination Agreement that resulted in PWP OpCo becoming jointly-owned by Perella Weinberg Partners, PWP Professional Partners LP (together with its successors (including pursuant to the Division and Merger (each as defined below)) and assigns, as applicable, “Professional Partners”) and certain existing partners of PWP OpCo as part of an umbrella limited partnership C-corporation (Up-C) structure (the “Business Combination”).

On December 31, 2023, as part of an internal reorganization, Professional Partners was divided into three partnerships pursuant to a plan of division (the “Division”), which, among other things, provided that (i) all of its limited partnership interests in PWP OpCo were allocated to one of the divided partnerships, PWP AdCo Professionals LP (“AdCo Professionals”), (ii) all of its shares of Class B-1 common stock of the Company were allocated to another divided partnership, PWP VoteCo Professionals LP (“VoteCo Professionals”) and (iii) PWP Professional Partners LP changed its name to PWP AmCo Professionals LP. On April 1, 2024, as part of this internal reorganization, AdCo Professionals merged with and into PWP OpCo (the “Merger”). At the time of the Merger, (i) the original capital units (“OCUs”), value capital units (“VCUs”), and alignment capital units (“ACUs”) of AdCo Professionals were converted into an equivalent number of newly created OCUs, VCUs and ACUs of PWP OpCo, (ii) the net assets of AdCo Professionals became the net assets of PWP OpCo and (iii) PWP OpCo adopted an amended and restated limited partnership agreement (the “PWP OpCo LPA”) that permits the Company to settle quarterly exchanges in cash or shares at the Company’s discretion. The principal purpose of the internal reorganization was to simplify the structure for the partners in Professional Partners with respect to their indirect interests in PWP OpCo. There was no consideration exchanged in connection with the Division or the Merger, and neither the Division nor the Merger affected the respective rights or economic interests of the Company, PWP GP LLC (“PWP GP”), or any limited partner with respect to PWP OpCo. Refer to Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests and Note 11—Equity-Based Compensation for additional information on the Merger and related transactions.

The operations of PWP OpCo are conducted through a wholly-owned subsidiary, Perella Weinberg Partners Group LP, and its subsidiaries which are consolidated in these financial statements. PWP GP is the general partner that controls PWP OpCo. The limited partner interests of PWP OpCo are held by the Company, an Investor Limited Partner (the “ILP”), and certain current and former working partners. The Company shareholders are entitled to receive a portion of PWP OpCo’s economics through their direct ownership interests in shares of Class A common stock of PWP. The non-controlling interest owners of PWP OpCo receive economics through ownership of PWP OpCo Class A partnership units (“PWP OpCo Units”).

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and all intercompany balances and transactions have been eliminated.

These condensed consolidated financial statements and notes thereto are unaudited, and as permitted by the interim reporting rules and regulations set forth by the SEC, exclude certain financial information and note disclosures normally included in annual audited financial statements prepared in accordance with U.S. GAAP. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K. The condensed consolidated financial statements reflect all material adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Consolidation

The Company’s policy is to consolidate entities in which the Company has a controlling financial interest and variable interest entities where the Company is deemed to be the primary beneficiary. The Company is deemed to be the primary beneficiary of a variable interest entity (“VIE”) when it has both (i) the power to make the decisions that most significantly affect the economic performance of the VIE and (ii) the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. PWP is the primary beneficiary of and consolidates PWP OpCo, a VIE. As of June 30, 2024 and December 31, 2023, the net assets of PWP OpCo were $217.2 million and $249.6 million, respectively. As of June 30, 2024 and December 31, 2023, the Company did not consolidate any VIEs other than PWP OpCo.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and the assumptions underlying these estimates are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

In preparing the condensed consolidated financial statements, management makes certain estimates regarding the measurement of amounts due pursuant to the tax receivable agreement, measurement and timing of revenue recognition, assumptions used in the provision for income taxes, measurement of equity-based compensation, expected insurance reimbursements related to litigation costs, evaluation of goodwill and intangible assets, fair value measurement of financial instruments, and other matters that affect the reported amounts and disclosures of contingencies in the condensed consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash held at banks, including interest-bearing money market accounts, and any highly liquid investments with original maturities of three months or less from the date of purchase. Cash account balances often exceed federally insured limits. Restricted cash represents cash that is not readily available for general purpose cash needs. As of June 30, 2024 and December 31, 2023, the Company had no cash equivalents and had restricted cash of $1.2 million and $2.9 million, respectively, maintained as collateral for letters of credit related to certain office leases. The sum of Cash and cash equivalents and Restricted cash on the Condensed Consolidated Statements of Financial Condition corresponds to the total cash, cash equivalents, and restricted cash presented on the Condensed Consolidated Statements of Cash Flows.

Foreign Currencies

In the normal course of business, the Company and its subsidiaries may enter into transactions denominated in a non-functional currency. The Company recognized net foreign exchange gains (losses) arising from such transactions of $(0.2) million and $0.3 million during the three and six months ended June 30, 2024, respectively, and $(1.1) million and $(2.2) million for the three and six months ended June 30, 2023, respectively, which are included in Other income (expense) in the Condensed Consolidated Statements of Operations. In addition, the Company consolidates its foreign subsidiaries that have non-U.S. dollar functional currencies. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and profit and loss activity is generally translated using the average exchange rate throughout the period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated operations are included as a component of Accumulated other comprehensive income (loss) on the Condensed Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interests.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Equity-Based Compensation

Equity-based compensation relates to equity-based awards granted to employees and partners of the Company. Equity-based compensation expense is recognized over the requisite vesting period or requisite service period in an amount equal to the grant date fair value (for equity-classified awards) or the settlement fair value (for liability-classified awards). Equity-based compensation expense for employees and partners is included in Equity-based compensation on the Condensed Consolidated Statements of Operations and equity-based compensation expense for non-employees is included in Professional fees on the Condensed Consolidated Statements of Operations. The Company accounts for forfeitures of awards as they occur rather than applying an estimated forfeiture rate. For an award with service-only conditions that has a graded vesting schedule, the Company recognizes the compensation cost for the entire award on a straight-line basis over the requisite service period, ensuring that the amount recognized is at least equal to the vested portion of the award at each reporting date.

Redeemable Non-Controlling Interests

For entities that are consolidated but not 100% owned, a portion of the income or loss and equity is allocated to holders of the non-controlling interest. Profits and losses of PWP OpCo are allocated to the non-controlling interests in proportion to their ownership interest regardless of their basis, with an exception for certain equity-based compensation expense which was fully attributed to non-controlling interests prior to the Merger. Refer to Note 11—Equity-Based Compensation for further information.

As a result of the Merger, Non-controlling interests presented within equity on the Condensed Consolidated Statements of Financial Condition were reclassified to Redeemable non-controlling interests within temporary equity. Redeemable non-controlling interests are recorded at their current redemption value, which corresponds to the price of the Company’s Class A common stock. Changes in the current redemption value are recorded to Additional paid-in capital, or Retained earnings (deficit) to the extent there is insufficient Additional paid-in capital, immediately as they occur. When the Company has an unconditional obligation to purchase the Redeemable non-controlling interests for cash, the mandatorily redeemable interests are reclassified from temporary equity to a liability with changes in fair value recorded to Other income (loss) in the Condensed Consolidated Statements of Operations. As of June 30, 2024, there were no non-controlling interests considered mandatorily redeemable.

Recently Adopted Accounting Pronouncements

There were no recently adopted accounting pronouncements that had a material effect on the Company’s condensed consolidated financial statements.

Future Adoption of Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends the guidance in Accounting Standards Codification (“ASC” or the “Codification”) Topic 280, Segment Reporting, to require enhanced disclosures about reportable segments on an annual and interim basis. The amendments will require disclosure of significant segment expenses, identification of the chief operating decision maker (“CODM”), and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 clarifies that an entity that has a single reportable segment is subject to all the disclosures required by the amendments and all existing segment disclosures in Topic 280. The amendments in ASU 2023-07 are effective for the Company beginning with the annual period ended December 31, 2024 and interim periods within the year ended December 31, 2025. The amendments are required to be applied retrospectively to all period presented and early adoption is permitted. The Company does not expect the adoption of ASU 2023-07 to have a material impact on the consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which amends the guidance in ASC Topic 740, Income Taxes (“ASC 740”), to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments in ASU 2023-09 are effective for the Company beginning with the annual period ended December 31, 2025. The amendments are to be applied prospectively with both retrospective application and early adoption permitted. The Company does not expect the adoption of ASU 2023-09 to have a material impact on the consolidated financial statements.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Note 3—Revenue and Receivables from Contracts with Customers

The following table disaggregates the Company’s revenue between over time and point in time recognition:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Over time	$	261,860	$	157,469	$	362,865	$	281,798
Point in time	10,138		8,076		11,260		15,173
Total revenues	$	271,998	$	165,545	$	374,125	$	296,971

Reimbursable expenses billed to clients were $1.5 million and $3.4 million for the three and six months ended June 30, 2024, respectively, and $1.3 million and $2.5 million for the three and six months ended June 30, 2023, respectively.

Performance Obligations and Contract Balances

As of June 30, 2024, the aggregate amount of the transaction price, as defined in the Codification, allocated to performance obligations yet to be satisfied was $0.3 million, and the Company generally expects to recognize this revenue within the next twelve months. Such amounts primarily relate to the Company’s performance obligations of providing transaction-related advisory services. The Company recognized revenue of $207.2 million and $265.4 million during the three and six months ended June 30, 2024, respectively, and $86.8 million and $181.0 million during the three and six months ended June 30, 2023, respectively, related to performance obligations that were satisfied or partially satisfied in prior periods. These amounts were recognized upon the resolution of revenue constraints and uncertainties in the respective periods and were generally related to transaction-related advisory services.

As of June 30, 2024 and December 31, 2023, the Company recorded $6.8 million and $0.9 million, respectively, for contract liabilities which are presented within Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition. The Company recognized previously deferred revenue of $1.6 million and $0.7 million for the three and six months ended June 30, 2024, respectively, and $1.2 million and $3.4 million for the three and six months ended June 30, 2023, respectively, which was primarily related to transaction-related advisory services that are recognized over time.

Accounts Receivable and Allowance for Credit Losses

As of June 30, 2024 and December 31, 2023, $16.2 million and $7.1 million, respectively, of accrued revenue was included in Accounts receivable, net of allowance on the Condensed Consolidated Statements of Financial Condition. These amounts have been recognized as revenue in accordance with the Company’s revenue recognition policies but remain unbilled at the end of the period. As of June 30, 2024, certain accounts receivable in the aggregate amount of $38.0 million were individually greater than 10% of the Company’s gross accounts receivable and were concentrated with one client. Of that amount, all was subsequently received after June 30, 2024. As of December 31, 2023, certain accounts receivable in the aggregate amount of $17.3 million, were individually greater than 10% of the Company’s gross accounts receivable and were concentrated with two clients. Of that amount, all was subsequently received after year end.

The allowance for credit losses activity for the three and six months ended June 30, 2024 and 2023 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	2,685	$	1,227	$	2,198	$	1,143
Bad debt expense	2,957		903		3,544		1,065
Write-offs	(4,465)		(198)		(4,536)		(281)
Recoveries	—		82		—		82
Foreign currency translation and other adjustments	23		7		(6)		12
Ending balance	$	1,200	$	2,021	$	1,200	$	2,021

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Note 4—Leases

The Company leases office space and equipment under operating lease agreements. The following is information related to such operating leases:


	June 30, 2024	December 31, 2023
Weighted-average discount rate – operating leases	4.8%	4.7%
Weighted-average remaining lease term – operating leases	13.9 years	14.3 years


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	4,691	$	5,388	$	9,429	$	10,772
Variable lease cost	604		594		1,504		1,944
Sublease income – operating leases	—		(160)		—		(319)
Total net lease cost	$	5,295	$	5,822	$	10,933	$	12,397

Net cash outflows on operating leases(1)	$	(2,653)	$	(2,857)	$	(749)	$	(466)

__________________

(1)Presented net of lease incentives received, including landlord contributions to tenant improvements.

As of June 30, 2024, the maturities of undiscounted operating lease liabilities of the Company are as follows:


Years Ending:	Operating Leases
Remainder of 2024	$	3,501
2025	18,822
2026	20,189
2027	19,357
2028	17,565
Thereafter	173,464
Total lease payments(1)	252,898
Less: Imputed Interest	(71,420)
Total lease liabilities	$	181,478

__________________

(1)Total future lease payments are presented net of expected lease incentives, including landlord contributions to tenant improvements.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Note 5—Intangible Assets

The following table provides the detail of the Company’s intangible assets:


	June 30, 2024
	Gross Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	47,400	$	(35,945)	$	11,455
Trade names and trademarks	18,400		(13,953)		4,447
Total	$	65,800	$	(49,898)	$	15,902


	December 31, 2023
	Gross Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	47,400	$	(33,575)	$	13,825
Trade names and trademarks	18,400		(13,033)		5,367
Total	$	65,800	$	(46,608)	$	19,192

The intangible assets are being amortized over an average useful life of ten years and resulted in amortization expense of $1.6 million and $3.3 million for the three and six months ended, respectively, for both June 30, 2024 and 2023, all of which is included in Depreciation and amortization in the Condensed Consolidated Statements of Operations. Amortization of intangible assets held at June 30, 2024 is expected to be $6.6 million for each of the years ending December 31, 2024 and 2025 and $6.0 million for the year ending December 31, 2026. These intangible assets will be fully amortized by November 30, 2026.

Note 6—Regulatory Requirements

The Company has a number of consolidated subsidiaries registered as broker-dealers with regulatory agencies in their respective countries. None of the SEC-regulated subsidiaries hold funds or securities for, or owe money or securities to, clients or carry accounts of or for clients, and as such are all exempt from the SEC Customer Protection Rule (Rule 15c3-3). As of June 30, 2024 and December 31, 2023, all regulated subsidiaries had capital in excess of their applicable minimum capital requirements. As a result of the minimum capital requirements and various regulations on these broker dealers, a portion of the capital of each subsidiary of the Company is restricted and may be unavailable to pay its creditors.

Note 7—Fixed Assets

Fixed assets are recorded at cost less accumulated depreciation and amortization and consist of the following as of June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
Leasehold improvements	$	81,820	$	79,719
Furniture and fixtures	12,735		12,442
Equipment	23,603		22,522
Software	6,017		5,756
Total	124,175		120,439
Less: Accumulated depreciation and amortization	(33,262)		(26,787)
Fixed assets, net	$	90,913	$	93,652

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Depreciation expense related to fixed assets was $3.4 million and $6.8 million for the three and six months ended June 30, 2024, respectively, and $1.9 million and $3.0 million for the three and six months ended June 30, 2023, respectively. Amortization expense related to software costs was immaterial for the three and six months ended June 30, 2024 and 2023.

Note 8—Income Taxes

The following table summarizes the Company’s tax position for the periods presented:


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Income (loss) before income taxes	$	(81,487)		$	(22,813)		$	(132,393)		$	(44,947)
Income tax expense (benefit)	$	(642)		$	(4,543)		$	18,452		$	743
Effective income tax rate	0.8		%	19.9		%	(13.9)		%	(1.7)		%

The Company’s overall effective tax rate in each of the periods presented above varies from the U.S. federal statutory rate primarily because (i) a portion of the Company’s income is allocated to non-controlling interests held in PWP OpCo in which the majority of any tax liability on such income is borne by the holders of such non-controlling interests and reported outside of the condensed consolidated financial statements and (ii) permanent differences related to compensation expenses.

Neither the Company nor its subsidiaries recognized any gain or loss for income tax purposes as a result of the Division or the Merger.

The Company recorded a liability for unrecognized tax benefits of $3.7 million as of June 30, 2024 and December 31, 2023, primarily related to potential double taxation at certain of its foreign subsidiaries. The Company does not expect there to be any material changes to uncertain tax positions within 12 months of the reporting date.

Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests

Class A Common Stock Offering

On March 1, 2024, the Company issued and sold 5,750,000 shares of Class A common stock at a price of $12.00 per share for net proceeds of $66.0 million after deducting underwriting discounts and offering costs.

Share Repurchases

On February 16, 2022, the Company’s Board of Directors initially approved a stock repurchase program and the authorized amount under such program was increased on February 8, 2023 such that the Company is authorized to repurchase up to $200.0 million of the Company’s Class A common stock. On June 3, 2024, the Company repurchased 1,000,000 founder shares at a purchase price of $15.00 per share for a total purchase price of $15.0 million. Since inception of the share repurchase program, 12,920,699 shares have been purchased at an average price per share of $8.22 through June 30, 2024. Prior to the implementation of the stock repurchase program, on August 9, 2021, the Company repurchased 1,000,000 founder shares at a purchase price of $12.00 per share for a total purchase price of $12.0 million.

Redeemable Non-Controlling Interests

As a result of the Merger, the Non-controlling interests on the Condensed Consolidated Statements of Financial Condition were reclassified to Redeemable non-controlling interests within temporary equity. Redeemable non-controlling interests are presented at the current redemption value and represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners. As of June 30, 2024, the current and former working partners and the ILP collectively own 32,884,770 PWP OpCo Units, which represent a 38.5% non-controlling ownership interest in PWP OpCo.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Exchange Rights

Holders of PWP OpCo Units (the “PWP OpCo Unitholders”) other than the Company may exchange their units for (i) shares of Class A common stock on a one-for-one basis or (ii) cash from an offering of shares of Class A common stock and (iii) subsequent to the Merger, cash from any other source. Concurrently with an exchange, such PWP OpCo Unitholder is required to surrender shares of Class B common stock for additional shares of Class A common stock or cash at a conversion rate of 0.001. Whether the exchanging PWP OpCo Unitholder receives cash or Class A common stock in exchange for their PWP OpCo Units and Class B common stock is at the Company’s option. Working partners are restricted in their ability to exchange PWP OpCo Units for a period between three to five years after the Closing. PWP GP may waive, and in certain cases has waived, the foregoing restrictions for any holder with respect to all or a portion of such holder’s units, with no obligation to do so for any other holder. During the three months ended June 30, 2024, the Company elected to settle exchanges of certain PWP OpCo Units and corresponding shares of Class B common stock for $19.5 million in cash, of which $0.1 million of related tax withholding remained unpaid as of June 30, 2024. During the six months ended June 30, 2024, in addition to the cash-settled exchange, the Company settled exchanges in the first quarter of 2024 for 794,146 shares of Class A common stock. During the six months ended June 30, 2023, the Company settled exchanges of certain PWP OpCo Units and corresponding shares of Class B common stock for 786,644 shares of Class A common stock. There were no exchanges during the three months ended June 30, 2023. To the extent an exchange creates a step-up in tax basis, the Company records an increase in Deferred tax assets, net, Amounts due pursuant to tax receivable agreement, and Additional paid-in-capital.

Note 10—Debt

As of June 30, 2024, and December 31, 2023, the Company had no outstanding debt. The Company has a revolving credit facility (the “Revolving Credit Facility”) through a credit agreement with Cadence Bank, N.A. (“Cadence Bank”), dated November 30, 2016 (as amended, the “Credit Agreement”), with an available line of credit of $50.0 million with up to $20.0 million of available incremental revolving commitments, and a maturity date of July 1, 2025. Issuance costs incurred related to the Credit Agreement are amortized as interest expense using the effective interest method over the life of the Revolving Credit Facility. The Company is also charged a quarterly commitment fee of 0.25% on any unused portion of the line of credit, which is recorded as interest expense. Interest expense related to the Revolving Credit Facility was immaterial during the three and six months ended June 30, 2024 and June 30, 2023 and is included within Other income (expense) in the Condensed Consolidated Statements of Operations.

Note 11—Equity-Based Compensation

Further information regarding the Company’s equity-based compensation awards is described in Note 12—Equity-Based Compensation in the Notes to Consolidated Financial Statements in “Part II. Item 8. Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

PWP Omnibus Incentive Plan Awards

Concurrent with the Business Combination, the Company adopted the Perella Weinberg Partners 2021 Omnibus Incentive Plan (the “PWP Incentive Plan”), which establishes a plan for the granting of various forms of incentive compensation awards, including restricted stock units (“RSUs”) and performance restricted stock units (“PSUs”), measured by reference to PWP Class A common stock (“PWP Incentive Plan Awards”). The PWP Incentive Plan established a reserve for a one-time grant of awards in connection with the Business Combination as well as a reserve for general purpose grants (the “General Share Reserve”). Grantees have rights to dividends declared during the vesting period and receive such dividends only upon vesting in the form of cash or dividend equivalent units. The Company uses newly issued shares of Class A common stock to satisfy vested awards, with the exception of shares issued out of treasury stock for vested awards (and related dividend equivalent units) held by French employees. Pursuant to the PWP Incentive Plan, the number of shares of Class A common stock reserved for issuance from the General Share Reserve increases each year.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

During the third quarter of 2021, in connection with the Business Combination, the Company granted awards (the “Business Combination Awards”) in the form of (a) RSUs that vest upon the achievement of service conditions (“Transaction RSUs”) and (b) PSUs that only vest upon the achievement of both service and market conditions, including certain long-term incentive awards granted to management (“Transaction PSUs”). As of June 30, 2024, the $12.00, $13.50, and $15.00 price targets were met for the Transaction PSUs.

The Company grants units from the General Share Reserve from time to time in the ordinary course of business in the form of (a) RSUs that vest upon the achievement of service conditions (“General RSUs”) and (b) PSUs that only vest upon the achievement of both service and market conditions (“General PSUs”). During the six months ended June 30, 2024 and 2023, the Company granted 6,773,129 and 6,857,726 General RSUs, respectively, at a weighted average grant date fair value of $13.47 and $10.13 per award, respectively. During the six months ended June 30, 2024 and 2023, 4,009,592 and 2,564,468 General RSUs vested with a total fair value of $53.2 million and $25.8 million, respectively. During the six months ended June 30, 2023, the Company granted 1,000,000 General PSUs at a weighted average grant date fair value of $6.02 per award. No General PSUs were granted during the six months ended June 30, 2024. As of June 30, 2024, the $15.00 price target was met for General PSUs.

Legacy Awards and Professional Partners Awards

Prior to the Business Combination, Professional Partners granted certain equity-based awards to partners providing services to PWP OpCo (the “Legacy Awards”). In connection with the Business Combination and a related internal reorganization of Professional Partners, existing Legacy Awards were canceled and replaced by converting each limited partner’s capital interests in Professional Partners attributable to PWP OpCo into OCUs, VCUs, and/or ACUs. The OCUs were fully vested upon recapitalization. The VCUs and ACUs (collectively, “Professional Partners Awards”) were held by current working partners and required services to be performed on behalf of PWP OpCo. The Professional Partners Awards were generally subject to a service-based graded vesting schedule over a three to five-year requisite service period. Once vested, the Professional Partners Awards became OCUs, other than the cash-settled ACUs referenced below, and are eligible for the same exchange rights as other PWP OpCo Units, subject to certain lock-up periods. Refer to Note 9—Stockholders’ Equity and Redeemable Non-Controlling Interests for more information on exchange rights.

At the time of the Merger, the Company entered into vesting acceleration agreements with certain holders of Professional Partners Awards (the “Accelerated Units”) to accelerate vesting during the second quarter of 2024 (the “Vesting Acceleration”). The Accelerated Units are generally subject to a lock-up period that is identical to the lockup period applicable to such units prior to the Vesting Acceleration. The Company also provided each holder of Accelerated Units that are ACUs the ability to convert a portion of such holder’s ACUs into cash upon vesting in an aggregate amount up to such holder’s estimated tax liability. The principal purpose of the Vesting Acceleration was to facilitate the payment of taxes associated with ACU vesting to align with the treatment of vested restricted stock units of the Company.

As a result of the Merger and Vesting Acceleration, certain Professional Partners Awards were modified from equity-classified to liability-classified awards with changes in fair value generally recorded as incremental equity-based compensation expense through the date of vesting. During the three months ended June 30, 2024, the Company recorded $130.0 million of equity-based compensation expense related to the acceleration of the Professional Partners Awards. Of that amount, $69.2 million was related to liability-classified awards.

In connection with the Vesting Acceleration, the Company paid or accrued a combined $86.6 million in settlement of 6,149,211 ACUs and corresponding shares of Class B common stock. Of that amount, the Company paid $60.6 million in settlement of liability-classified ACUs and $15.7 million for withholding tax payments on equity-classified ACUs and the settlement of other liabilities. These amounts are included within cash flows from operating activities and financing activities, respectively, on the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2024. As of June 30, 2024, $10.3 million of withholding taxes payable is included in Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statement of Financial Condition.

Prior to the Merger, all of the compensation expense and corresponding capital contribution associated with the Legacy Awards and Professional Partners Awards were allocated to Non-controlling interests in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Financial Condition as the granting of the Professional Partners Awards did not change Professional Partners’ interest in PWP OpCo and did not economically dilute Perella Weinberg Partners shareholders relative to Professional Partners. As a result of the Merger, the Professional Partners Awards are held directly at PWP OpCo and PWP OpCo as a whole bears the cost of the cash settlement feature of the awards. As a result, subsequent to the Merger, the Company allocates the costs associated with the Professional Partners Awards between Perella Weinberg Partners and non-controlling interests in proportion to their ownership interests, which is consistent with the allocation of the other profit and loss activity of PWP OpCo.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

The following table presents the expense related to equity-based awards that were recorded in Professional fees and components of Equity-based compensation included in the Condensed Consolidated Statements of Operations:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Professional fees
PWP Incentive Plan Awards	$	508	$	368	$	1,014	$	963


Equity-based compensation
PWP Incentive Plan Awards	$	30,459	$	23,805	$	63,324	$	51,142
Legacy Awards	—		3,224		—		6,449
Professional Partners Awards (equity-classified)	60,794		15,183		74,736		32,292
Professional Partners Awards (liability-classified)	69,245		—		69,245		—
Total Equity-based compensation	$	160,498	$	42,212	$	207,305	$	89,883

Income tax benefit of equity-based awards	$	4,727	$	3,065	$	9,436	$	6,624

As of June 30, 2024, total unrecognized compensation expense related to all unvested equity-based awards was $166.9 million, which is expected to be recognized over a weighted average period of 2.1 years.

Note 12—Other Compensation and Benefits

Compensation and benefits expense consists of salaries, bonuses (discretionary awards and guaranteed amounts), severance, as well as payroll and related taxes and benefits for the Company’s employees. In all instances, compensation expense is accrued over the requisite service period.

Benefit Plans

Certain employees participate in employee benefit plans, which consists of defined contribution plans including (i) profit-sharing plans qualified under Section 401(k) of the Internal Revenue Code, (ii) a U.K. pension scheme for U.K. employees and (iii) a German pension plan for employees in Germany. Expenses related to the Company’s employee benefit plans were $1.8 million and $3.6 million for the three and six months ended June 30, 2024, respectively, and $1.7 million and $3.4 million for the three and six months ended June 30, 2023, respectively, and are included in Compensation and benefits in the Condensed Consolidated Statements of Operations.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Business Realignment

During the second quarter of 2023, the Company began a review of the business, which resulted in headcount reductions in order to improve compensation alignment and to provide greater flexibility to advance strategic opportunities (the “Business Realignment”). In conjunction with the Business Realignment, the Company incurred expenses related to separation and transition benefits of $1.8 million for the six months ended June 30, 2024 and $3.8 million for both the three and six months ended June 30, 2023. Additionally, the Company incurred the acceleration of equity-based compensation amortization (net of forfeitures) of $1.5 million for the six months ended June 30, 2024 and $1.3 million for both the three and six months ended June 30, 2023. Such amounts are presented in Compensation and benefits and Equity-based compensation in the Condensed Consolidated Statements of Operations, respectively. All of the expected Business Realignment costs were incurred as of March 31, 2024.

Activity within Accrued compensation and benefits on the Condensed Consolidated Statements of Financial Condition related to the Business Realignment was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	3,138	$	—	$	12,525	$	—
Incurred expenses	—		5,106		3,249		5,106
Non-cash expenses	—		(1,257)		(1,499)		(1,257)
Payments	(2,431)		(537)		(13,568)		(537)
Ending balance	$	707	$	3,312	$	707	$	3,312

Note 13—Net Income (Loss) Per Share Attributable to Class A Common Shareholders

The calculations of basic and diluted net income (loss) per share attributable to Class A common shareholders are presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net income (loss) attributable to Perella Weinberg Partners – basic	$	(66,028)	$	359	$	(101,872)	$	(4,764)

Dilutive effect from assumed exchange of PWP OpCo Units, net of tax	—		(16,980)		—		(43,859)

Net income (loss) attributable to Perella Weinberg Partners – diluted	$	(66,028)	$	(16,621)	$	(101,872)	$	(48,623)
Denominator:
Weighted average shares of Class A common stock outstanding – basic	54,589,542		42,743,611		51,894,913		42,531,895

Weighted average number of incremental shares from assumed exchange of PWP OpCo Units	—		43,778,015		—		44,034,180

Weighted average shares of Class A common stock outstanding – diluted	54,589,542		86,521,626		51,894,913		86,566,075
Net income (loss) per share attributable to Class A common shareholders
Basic	$	(1.21)	$	0.01	$	(1.96)	$	(0.11)
Diluted	$	(1.21)	$	(0.19)	$	(1.96)	$	(0.56)

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Basic and diluted net income (loss) per share attributable to Class B common shareholders has not been presented as these shares are entitled to an insignificant amount of economic participation.

The Company uses the treasury stock method to determine the potential dilutive effect of unvested PWP Incentive Plan Awards and the if-converted method to determine the potential dilutive effect of exchanges of PWP OpCo Units into Class A common stock. The Company adjusts net income (loss) attributable to Class A common shareholders under both the treasury stock method and if-converted method for the reallocation of net income (loss) between Class A common shareholders and non-controlling interests that result upon the assumed issuance of dilutive shares of Class A common stock as if the issuance occurred as of the beginning of the applicable period.

The following table presents the weighted average potentially dilutive shares that were excluded from the calculation of diluted net income (loss) per share under the treasury stock method or if-converted method, as applicable, because the effect of including such potentially dilutive shares was antidilutive for the period presented:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
PWP OpCo Units	33,022,579	—	37,170,827	—
PWP Incentive Plan Awards	9,133,806	275,508	7,205,942	1,001,289

Note 14—Fair Value Measurements and Investments

Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs:

Level 1—Unadjusted quoted prices are available in active markets for identical financial instruments as of the reporting date.

Level 2—Pricing inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3—Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which level within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the instrument.

As of June 30, 2024 and December 31, 2023, the fair values of cash, restricted cash, accounts receivable, due from related parties, accounts payable and certain accrued liabilities approximate their carrying amounts due to the short-term nature of these items.

Perella Weinberg Partners

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in Thousands, Except Per Share Amounts and Where Otherwise Noted)

Fair Value of Financial Instruments

The following table summarizes the categorization and fair value estimate of the Company’s financial instruments that were measured on a recurring basis pursuant to the above fair value hierarchy levels as of December 31, 2023:

December 31, 2023

Level 1

Level 2

Level 3

Total

Financial asset

Perella Weinberg Partners [PWP] Filings
10-Q	[2024-08-02]
10-Q	[2024-05-03]
10-K	[2024-02-23]
10-Q	[2023-11-07]
10-Q	[2023-08-04]
10-Q	[2023-05-04]
10-K	[2023-02-28]
10-Q	[2022-11-07]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-03-11]
S-1	[2021-12-21]
10-Q	[2021-11-05]
10-Q	[2021-08-12]
S-1	[2021-07-15]
10-Q	[2021-05-24]
10-K	[2021-03-15]
10-Q	[2020-11-16]
S-1	[2020-09-08]