Lincoln International (NYSE:LCLN) reported record third-quarter revenue and adjusted earnings as investment banking activity strengthened and demand for valuation services increased, executives said on the company’s earnings call.
Revenue rose 57% from a year earlier to $293.7 million, while adjusted diluted earnings per share were $0.46. Chief Financial Officer Ted Heidloff said the October 2025 acquisition of MarshBerry affected year-over-year comparisons. Because Lincoln completed its initial public offering in May 2026, there was no comparable prior-year earnings-per-share figure.
Chief Executive Officer Rob Brown said the results reflected an improving transaction environment and the company’s investments in its platform. Lincoln recorded the largest transaction fee in its history for the second consecutive quarter, he said.
Investment Banking Drives Growth
Investment banking advisory revenue increased 70% year over year to $239.9 million. Lincoln closed 93 transactions during the quarter, bringing its nine-month total to 237. Heidloff said average fees rose even when excluding the quarter’s largest transaction.
Brown said the M&A business was particularly strong in industrials and business services. Capital advisory posted record third-quarter and year-to-date revenue, supported in part by refinancing demand, while private funds advisory saw strong demand for general partner-led advisory and fundraising.
Valuations and opinions revenue rose 18% to $53.8 million. The company completed 25% more portfolio valuations than a year earlier and values approximately 7,600 portfolio companies quarterly, Heidloff said. Brown said demand for more frequent independent valuations is growing as private wealth and individual investors participate more in private markets.
For the first nine months of 2026, total revenue rose 45% to $677.1 million and adjusted diluted earnings per share were $0.87. Investment banking advisory revenue increased 51% to $527.5 million, while valuations and opinions revenue grew 25% to $149.7 million.
Backlog Supports Outlook
Brown said Lincoln still expects fourth-quarter investment banking revenue to represent roughly 30% to 40% of the annual total, although it anticipates a result at the lower end of that range. A large deal originally expected in the fourth quarter closed in the third, he said.
President and Global Head of M&A Eric Malchow said the company’s backlog was near record levels and that North American pitch activity in September and October was as strong as it had ever been for two consecutive months. He also said Lincoln was seeing more activity involving businesses that had faced more challenging market conditions, although buyers remained selective.
Brown described the private equity sponsor market as improving but said it was “still not in a great sponsor market.” He pointed to pressure on sponsors to generate distributions, substantial capital available for deployment and portfolio-company performance as factors supporting a continued recovery.
Looking toward 2027, Brown said he expected Lincoln’s non-M&A investment banking businesses to deliver outsized growth, aided by senior hiring and efforts to offer more of the company’s services to existing clients. Across its services and industry groups, he said, Lincoln felt confident it could sustain the mid-teens growth rate it had achieved historically.
Expenses, Capital and Hiring
Third-quarter adjusted operating income was $71.9 million, representing a 25% margin. Adjusted compensation expense was $179 million, or 61% of revenue, while adjusted non-compensation expense was $42.7 million. Heidloff said the company continued to expect high-single-digit full-year growth in non-compensation costs on a pro forma basis including MarshBerry.
Lincoln ended September with approximately $363 million in cash and equivalents and $102 million in long-term debt, for a net cash position of $261 million. Its board declared a quarterly dividend of $0.07 per share, payable in December.
The company hired 10 managing directors through the first nine months of the year and promoted six internally at the beginning of 2026. Brown said Lincoln had its largest-ever group of directors going through the year-end managing director promotion process. He also said several external hires had committed to join in the first quarter.
Brown said MarshBerry’s backlog was at an all-time high and that its business typically was more heavily weighted toward the end of the year. He said Lincoln’s acquisition pipeline was strong, with several potential opportunities under discussion, but did not announce a transaction.
Heidloff also said a change to tax code Section 162(m) would put upward pressure on Lincoln’s tax rate beginning in 2027, though the company was still evaluating the effect. Its adjusted effective tax rate was 31% in the third quarter and for the first nine months of 2026.
About Lincoln International (NYSE:LCLN)
Lincoln International is a global investment banking and advisory firm that focuses on serving middle-market companies, private equity firms and other financial sponsors. The firm provides advice on mergers and acquisitions, divestitures, recapitalizations, restructurings and other strategic transactions.
Its services also include capital advisory, private funds advisory, valuation and fairness opinions, and other financial analysis. Lincoln International works with clients across a range of industries, including business services, consumer products, healthcare, industrials, technology and financial services.
Founded in 1996, Lincoln International is headquartered in Chicago and serves clients through offices and professionals across North America, Europe and Asia.
