Summary of Lincoln International (LCLN) Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $226 million, a 51% increase year-over-year and a 43% increase from Q1 2026.

Adjusted Operating Margin: 20%.

Adjusted Net Income: Grew 48% from the prior year.

Adjusted Diluted EPS: $0.26 (no prior year comparison due to previous partnership structure).

Investment Banking Revenue: $178 million, up 56% from the prior year; 140 transactions closed year-to-date, a 46% increase.

Valuations and Opinions Revenue: $48 million, up 35% year-over-year; 19% increase in Portfolio Valuations.

Adjusted Compensation Ratio: 61% for Q2, expected to remain the same for the full year.

Cash Position: $251 million in cash and cash equivalents, with long-term debt of $102 million, resulting in a net cash position of $149 million.

2Strategic Updates and Business Highlights

Successful IPO on May 20, 2026, providing capital for growth and enhancing flexibility.

Strong performance across both business segments, with notable growth in M&A, Capital Advisory, and Valuations.

Continued investment in talent, with 7 new managing directors hired in H1 2026, enhancing sector expertise.

Positive trends in M&A activity, particularly in Industrials and Business Services, with a growing backlog and increased conviction among buyers and sellers.

Focus on integrating technology and AI to enhance operational efficiency and service offerings.

3Forward Guidance and Outlook

Optimistic about the second half of 2026, expecting normal seasonal trends in M&A activity.

Anticipation of continued growth in both Investment Banking and Valuations segments, driven by a healthy macroeconomic environment and strong corporate fundamentals.

Expectation of high single-digit growth in non-compensation expenses for the full year.

4Bad News, Challenges, or Points of Concern

Some sectors, particularly software, continue to face headwinds, although improvements are noted.

Ongoing macroeconomic and geopolitical uncertainties could impact future performance.

The potential for increased competition and pricing pressures in the Valuations business due to the retailization of private capital markets.

5Notable Q&A Insights

MarshBerry Business Outlook: The MarshBerry segment is on track with its forecasts and has the largest backlog relative to its targets for the year.

M&A Activity: Broader market participation is noted, with both high-quality and underperforming assets being explored for sale.

Valuations Growth Drivers: Increased frequency of valuations due to retailization and more stringent reporting requirements are driving demand.

Recruiting Strategy: The company is strategically hiring talent during market slowdowns, with a focus on sectors that align with growth opportunities.

Cultural Integration: Emphasis on maintaining a strong company culture as the firm scales, with a detailed culture document guiding employee engagement. Overall, Lincoln International reported strong financial performance in Q2 2026, driven by robust growth in both Investment Banking and Valuations, while maintaining a cautious but optimistic outlook for the remainder of the year amidst ongoing market challenges.