PJT Partners Inc. Income Taxes Disclosure
The Company’s pretax income is associated with activities in domestic and international jurisdictions, as follows:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Income (Loss) Before Provision for Taxes |
|
|
|
|
|
|
|
|
|
|||
Domestic |
|
$ |
412,454 |
|
|
$ |
309,432 |
|
|
$ |
181,815 |
|
International |
|
|
(69,535 |
) |
|
|
(38,863 |
) |
|
|
(4,206 |
) |
Total |
|
$ |
342,919 |
|
|
$ |
270,569 |
|
|
$ |
177,609 |
|
The Provision for Income Taxes consists of the following:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Federal Income Tax |
|
$ |
23,905 |
|
|
$ |
27,367 |
|
|
$ |
22,907 |
|
State and Local Income Tax |
|
|
11,390 |
|
|
|
10,969 |
|
|
|
7,478 |
|
Foreign Income Tax |
|
|
1,040 |
|
|
|
2,284 |
|
|
|
3,471 |
|
|
|
|
36,335 |
|
|
|
40,620 |
|
|
|
33,856 |
|
Deferred |
|
|
|
|
|
|
|
|
|
|||
Federal Income Tax |
|
|
(2,816 |
) |
|
|
(3,196 |
) |
|
|
(3,550 |
) |
State and Local Income Tax |
|
|
(294 |
) |
|
|
(5,328 |
) |
|
|
1,599 |
|
Foreign Income Tax |
|
|
(44 |
) |
|
|
— |
|
|
|
22 |
|
|
|
|
(3,154 |
) |
|
|
(8,524 |
) |
|
|
(1,929 |
) |
Provision for Taxes |
|
$ |
33,181 |
|
|
$ |
32,096 |
|
|
$ |
31,927 |
|
The following table summarizes the Company’s tax position:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Income Before Provision for Taxes |
|
$ |
342,919 |
|
|
$ |
270,569 |
|
|
$ |
177,609 |
|
Provision for Taxes |
|
$ |
33,181 |
|
|
$ |
32,096 |
|
|
$ |
31,927 |
|
Effective Income Tax Rate |
|
|
9.7 |
% |
|
|
11.9 |
% |
|
|
18.0 |
% |
The following table reconciles the U.S. federal statutory tax rate to the effective income tax rate after the adoption of ASU 2023-09:
|
|
Year Ended December 31, 2025 |
|
|||||
|
|
$ |
|
|
% |
|
||
U.S. Federal Statutory Tax Rate |
|
$ |
72,013 |
|
|
|
21.0 |
% |
State and Local Income Taxes, Net of |
|
|
9,379 |
|
|
|
2.7 |
% |
Foreign Tax Effects |
|
|
|
|
|
|
||
United Kingdom |
|
|
|
|
|
|
||
Current Year Operating Loss |
|
|
(11,863 |
) |
|
|
-3.5 |
% |
Excess Tax Benefits on |
|
|
(10,308 |
) |
|
|
-3.0 |
% |
Changes in Valuation Allowance |
|
|
21,901 |
|
|
|
6.4 |
% |
Other |
|
|
(1,379 |
) |
|
|
-0.4 |
% |
Other Foreign |
|
|
2,972 |
|
|
|
0.9 |
% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
||
Net Income Attributable to |
|
|
(27,523 |
) |
|
|
-8.0 |
% |
Permanent Differences on |
|
|
3,032 |
|
|
|
0.9 |
% |
Other |
|
|
1,428 |
|
|
|
0.4 |
% |
Other Reconciling Items |
|
|
|
|
|
|
||
Excess Tax Benefits on |
|
|
(26,973 |
) |
|
|
-7.9 |
% |
Other |
|
|
502 |
|
|
|
0.2 |
% |
|
|
$ |
33,181 |
|
|
|
9.7 |
% |
1 State and local taxes in New York State and New York City comprise the majority (greater than 50%) of the tax effect.
The following table reconciles the U.S. federal statutory tax rate to the effective income tax rate prior to the adoption of ASU 2023-09:
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Expected Income Tax Expense at the |
|
|
21.0 |
% |
|
|
21.0 |
% |
Permanent Differences for Compensation |
|
|
-3.4 |
% |
|
|
-0.4 |
% |
Income Not Subject to |
|
|
-8.8 |
% |
|
|
-8.4 |
% |
Foreign Income Taxes |
|
|
0.8 |
% |
|
|
1.1 |
% |
State and Local Income Taxes, Net of |
|
|
2.8 |
% |
|
|
3.5 |
% |
Return to Provision |
|
|
0.3 |
% |
|
|
0.0 |
% |
Rate Change Impact |
|
|
-1.1 |
% |
|
|
0.8 |
% |
Other |
|
|
0.3 |
% |
|
|
0.4 |
% |
Effective Income Tax Rate |
|
|
11.9 |
% |
|
|
18.0 |
% |
The following table provides a disaggregation of income taxes paid, net of refunds received for the year ended December 31, 2025:
|
|
Year Ended December 31, |
|
|
|
|
2025 |
|
|
Federal |
|
$ |
26,900 |
|
State and Local |
|
|
|
|
Illinois |
|
|
2,246 |
|
New York City |
|
|
6,146 |
|
Other - State and Local |
|
|
5,090 |
|
|
|
|
13,482 |
|
Foreign |
|
|
|
|
Spain |
|
|
2,470 |
|
Other - Foreign |
|
|
1,565 |
|
|
|
|
4,035 |
|
Payments for Income Taxes, Net of Refunds Received |
|
$ |
44,417 |
|
Deferred income taxes reflect the net tax effects of temporary differences that may exist between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. A summary of the tax effects of the temporary differences is as follows:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred Tax Assets |
|
|
|
|
|
|
||
Operating Lease Liabilities |
|
$ |
57,555 |
|
|
$ |
49,256 |
|
Tax Basis Step-Up from former Parent |
|
|
2,181 |
|
|
|
4,551 |
|
Deferred Compensation |
|
|
52,263 |
|
|
|
44,560 |
|
Partner Exchange Basis Step-Up |
|
|
42,818 |
|
|
|
39,047 |
|
Fixed Assets |
|
|
77 |
|
|
|
462 |
|
Other |
|
|
3,822 |
|
|
|
5,926 |
|
|
|
|
158,716 |
|
|
|
143,802 |
|
Deferred Tax Liabilities |
|
|
|
|
|
|
||
Operating Lease Right-of-Use Assets |
|
|
49,525 |
|
|
|
45,827 |
|
Intangible Assets |
|
|
4,407 |
|
|
|
3,238 |
|
Other |
|
|
9,827 |
|
|
|
9,554 |
|
|
|
|
63,759 |
|
|
|
58,619 |
|
Deferred Tax Asset, Net |
|
$ |
94,957 |
|
|
$ |
85,183 |
|
The realization of deferred tax assets arising from timing differences and net operating losses requires taxable income in future years in order to deduct the reversing timing differences and absorb the net operating losses. The Company assesses positive and negative evidence in determining whether to record a valuation allowance with respect to deferred tax assets. This assessment is performed separately for each taxing jurisdiction. The Company has concluded that it is more likely than not that the deferred tax assets presented above will be realized.
As of December 31, 2025, Deferred Tax Assets of $53.2 million related to foreign net operating loss carryforwards are not presented in the table above and are fully reserved with a corresponding valuation allowance, accordingly, there is no impact on the Company's Deferred Tax Asset, Net presented above. The foreign net operating losses generally have an indefinite carryforward period.
The Company does not believe that it meets the indefinite reversal criteria that would allow the Company to refrain from recognizing any deferred tax liability with respect to its foreign subsidiaries. Accordingly, the Company records a deferred tax liability with respect to an outside basis difference in its investment in a foreign subsidiary, where applicable.
The Company is subject to taxation in the U.S. and various state, local and foreign jurisdictions. As of December 31, 2025, the Company is not generally subject to examination by the tax authorities for years before 2022.
The Company had no unrecognized tax benefits as of December 31, 2025 and 2024.
For the years ended December 31, 2025, 2024 and 2023, no interest or penalties were accrued with respect to unrecognized tax positions and there were no settlements with taxing authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.