Jefferies Financial temporarily tightened employment contracts for its private capital advisory teams to discourage competitors from poaching talent https://t.co/kTteAkEP79 ...

Core Viewpoint - Jefferies Financial Group Inc. reported mixed results in its recent earnings, with strong equity trading performance but weaknesses in investment banking and asset management, leading to a decline in net income and revenues compared to the previous year [2][3][4]. Financial Performance - Adjusted earnings for Q2 fiscal 2025 were 43 cents per share, matching estimates but down from 67 cents per share in the prior year [2]. - Net income attributable to common shareholders was $88 million, a decrease from $145.7 million year-over-year [3]. - Quarterly net revenues were $1.63 billion, down 1.3% year-over-year, but exceeded the Zacks Consensus Estimate of $1.56 billion [4]. Expense Analysis - Total non-interest expenses rose to $1.50 billion, an increase of 5% from the prior-year quarter, driven by higher costs across most components except for compensation and benefits and underwriting costs [4]. Segment Performance - Investment Banking and Capital Markets reported net revenues of $1.47 billion, down 1.6% from the previous year, attributed to weak equity and debt underwriting and fixed-income trading, although equities trading performed robustly [6]. - Asset Management's net revenues were $154.6 million, a decline of 1.2% from the year-ago quarter [6]. Valuation Metrics - As of May 31, 2025, the book value per common share increased to $49.96 from $46.57 a year earlier, while adjusted tangible book value per fully diluted share rose to $32.84 from $31.27 [5]. Market Sentiment - The consensus estimate for Jefferies has shifted down by 11.36% over the past month, indicating a flat trend in estimates review [7]. - Jefferies holds a poor Growth Score of F and a similar score for momentum, with an overall aggregate VGM Score of F, placing it in the bottom 40% for investment strategies [8]. Outlook - Jefferies has a Zacks Rank of 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [9].

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[Financial Information](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of the company's financial performance and position, including detailed statements, management's analysis, and risk disclosures [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarterly period ended May 31, 2025, including statements of financial condition, earnings, comprehensive income, changes in equity, and cash flows, along with detailed notes Consolidated Financial Condition Highlights (Unaudited) | Indicator | May 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | $67,285.3 million | $64,360.3 million | | **Total Liabilities** | $56,902.8 million | $54,134.9 million | | **Total Equity** | $10,382.2 million | $10,225.0 million | Consolidated Earnings Highlights (Unaudited) | Metric ($ in thousands, except per share) | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | Six Months Ended May 31, 2025 | Six Months Ended May 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $1,634,447 | $1,656,445 | $3,227,466 | $3,394,648 | | **Net Earnings** | $91,395 | $154,687 | $228,244 | $311,079 | | **Net Earnings Attributable to Common Shareholders** | $88,017 | $145,736 | $215,955 | $295,377 | | **Diluted EPS** | $0.40 | $0.64 | $0.97 | $1.31 | Consolidated Cash Flow Highlights (Unaudited, Six Months Ended May 31) | Cash Flow Activity ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | $(3,643,497) | $(1,180,047) | | **Net Cash Used in Investing Activities** | $(157,144) | $(110,455) | | **Net Cash Provided by Financing Activities** | $2,885,268 | $3,499,293 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on significant accounting policies, business activities, and specific financial statement items, including segments, fair value, derivatives, and joint ventures - The company operates in two reportable business segments: **Investment Banking and Capital Markets** and **Asset Management**[25](index=25&type=chunk) - In February 2024, OpNet, a consolidated subsidiary, agreed to sell substantially all of its wholesale operating assets, with the sale closing in August 2024; the sale of Foursight Capital LLC closed in the second quarter of 2024[26](index=26&type=chunk)[42](index=42&type=chunk)[45](index=45&type=chunk) Level 3 Financial Instruments Roll-forward (Six Months Ended May 31, 2025, $ in thousands) | Category | Balance at Nov 30, 2024 | Net Gains/Losses | Purchases/Issuances | Sales/Settlements | Net Transfers | Balance at May 31, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Level 3 Assets** | $734,225 | $2,503 | $218,344 | $(142,559) | $(57,200) | $763,039 | | **Total Level 3 Liabilities** | $866,006 | $(36,343) | $240,243 | $(164,225) | $(36,512) | $1,049,169 | - The company has significant equity method investments in Jefferies Finance (50/50 joint venture with MassMutual) and Berkadia (joint venture with Berkshire Hathaway), with investment balances of **$663.5 million** and **$437.7 million** respectively as of May 31, 2025[151](index=151&type=chunk)[154](index=154&type=chunk)[157](index=157&type=chunk) Segment Performance (Six Months Ended May 31, $ in millions) | Segment | Net Revenues 2025 | Net Revenues 2024 | Pre-Tax Earnings 2025 | Pre-Tax Earnings 2024 | | :--- | :--- | :--- | :--- | :--- | | **Investment Banking & Capital Markets** | $2,869.4 | $2,945.7 | $355.1 | $406.3 | | **Asset Management** | $346.3 | $429.9 | $(80.9) | $22.6 | - The company maintains a strategic alliance with Sumitomo Mitsui Banking Corporation (SMBC), which owns approximately **15.7%** of the company's common stock on an as-converted basis as of May 31, 2025[220](index=220&type=chunk)[262](index=262&type=chunk) [Management's Discussion and Analysis (MD&A)](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an analysis of the company's financial performance for the second quarter and first half of 2025, covering consolidated results, revenue and expense analysis, liquidity, capital resources, and risk management practices [Consolidated Results of Operations](index=41&type=section&id=2.1%20Consolidated%20Results%20of%20Operations) For the six months ended May 31, 2025, net revenues decreased by 4.9% to $3.23 billion, and earnings from continuing operations before taxes fell 36.2% to $286.0 million, primarily due to lower Fixed Income and Asset Management results and higher non-compensation expenses Financial Performance vs. Prior Year | Metric ($ in thousands) | Six Months Ended May 31, 2025 | Six Months Ended May 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $3,227,466 | $3,394,648 | (4.9)% | | **Earnings from Continuing Operations Before Income Taxes** | $285,966 | $447,996 | (36.2)% | | **Net Earnings Attributable to Common Shareholders** | $215,955 | $295,377 | (26.9)% | - The decrease in profitability was attributed to market uncertainty from U.S. policy and geopolitical events, a decline in investment returns from the Asset Management business, reduced performance in the Fixed Income business, and higher non-compensation expenses[280](index=280&type=chunk) [Revenues by Source](index=43&type=section&id=2.2%20Revenues%20by%20Source) For the six months ended May 31, 2025, Investment Banking advisory revenues grew 37.5% and Equities revenues increased 17.7%, but these gains were offset by declines in Fixed Income and Asset Management revenues Net Revenues by Business Line (Six Months Ended May 31, $ in millions) | Business Line | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Investment Banking** | $1,467.0 | $1,514.4 | (3.1)% | | *Advisory* | *$855.6* | *$622.5* | *37.5%* | | *Underwriting (Equity & Debt)* | *$655.6* | *$793.2* | *(17.3)%* | | **Equities** | $935.3 | $794.7 | 17.7% | | **Fixed Income** | $467.1 | $636.7 | (26.6)% | | **Asset Management** | $346.3 | $429.9 | (19.4)% | - The investment banking backlog remains strong, but the timing of its realization is uncertain due to ongoing U.S. policy and geopolitical events[295](index=295&type=chunk) - Aggregate net assets under management (AUM) increased to **$31.4 billion** as of May 31, 2025, from **$28.0 billion** at November 30, 2024[317](index=317&type=chunk) [Non-interest Expenses](index=50&type=section&id=2.3%20Non-interest%20Expenses) For the six months ended May 31, 2025, total non-interest expenses were flat at $2.94 billion, with compensation and benefits decreasing 5.2% while non-compensation expenses rose due to higher business development, brokerage fees, and technology costs Non-interest Expenses (Six Months Ended May 31, $ in thousands) | Expense Category | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Compensation and benefits** | $1,695,966 | $1,788,864 | (5.2)% | | **Brokerage and clearing fees** | $239,181 | $220,206 | 8.6% | | **Business development** | $152,361 | $126,281 | 20.7% | | **Technology and communications** | $285,673 | $272,750 | 4.7% | | **Other** | $157,034 | $125,417 | 25.2% | | **Total non-interest expenses** | $2,941,500 | $2,946,652 | (0.2)% | - The compensation and benefits expense as a percentage of net revenues was **52.5%** for the first half of 2025, compared to **52.7%** for the same period in 2024[323](index=323&type=chunk) [Liquidity, Financial Condition and Capital Resources](index=53&type=section&id=2.4%20Liquidity,%20Financial%20Condition%20and%20Capital%20Resources) The company maintains a robust liquidity and capital position, with total long-term capital of $21.8 billion and a leverage ratio of 6.5x as of May 31, 2025, returning $244.7 million to shareholders while increasing long-term debt Key Financial Ratios and Balances | Metric | May 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | **Total Assets** | $67,285 million | $64,360 million | | **Total Equity** | $10,382 million | $10,225 million | | **Tangible Shareholders' Equity** | $8,245 million | $8,103 million | | **Leverage Ratio** | 6.5x | 6.3x | | **Tangible Gross Leverage Ratio** | 7.9x | 7.7x | - Total long-term capital stood at **$21.76 billion** at May 31, 2025, with a long-term debt to equity capital ratio of **1.10:1**[389](index=389&type=chunk)[390](index=390&type=chunk) - The company's liquidity management framework includes a Cash Capital Policy, a Modeled Liquidity Outflow (MLO) assessment, and a Contingency Funding Plan (CFP) to ensure sufficient liquidity in stressed conditions[371](index=371&type=chunk) - During the six months ended May 31, 2025, the company returned **$244.7 million** to shareholders, consisting of **$187.1 million** in dividends and **$57.6 million** in share repurchases for tax withholding[358](index=358&type=chunk) [Risk Management](index=60&type=section&id=2.5%20Risk%20Management) The company employs a comprehensive risk management framework to address market, credit, operational, and other principal risks, with average daily firmwide VaR decreasing to $11.89 million in Q2 2025 - Principal risks are identified as market, credit, liquidity and capital, operational, model, strategic, legal, compliance, new business, and reputational risk[418](index=418&type=chunk) Daily Firmwide VaR (95%, 1-day, for Q2 2025) | Metric ($ in millions) | Value | | :--- | :--- | | **VaR at May 31, 2025** | $11.68 | | **Average** | $11.89 | | **High** | $15.39 | | **Low** | $8.96 | - Total counterparty credit exposure (excluding cash) was **$2.70 billion** at May 31, 2025, with the largest exposures to A-rated and BBB-rated counterparties[460](index=460&type=chunk) - The top non-U.S. country risk exposures (net issuer and counterparty risk, excluding cash) as of May 31, 2025, were to the **United Kingdom ($627.5M)**, **Canada ($471.0M)**, and **France ($142.9M)**[465](index=465&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section cross-references the market risk disclosures provided within the "Risk Management" section of Management's Discussion and Analysis (Item 2) - Quantitative and qualitative disclosures about market risk are set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations —Risk Management" in Part I, Item 2 of this Form 10-Q[470](index=470&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of May 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, evaluated and concluded that the company's disclosure controls and procedures were effective as of May 31, 2025[471](index=471&type=chunk)[476](index=476&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[477](index=477&type=chunk) [Other Information](index=69&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, and equity security transactions [Legal Proceedings, Risk Factors, and Share Repurchases](index=69&type=section&id=Item%201.%20Legal%20Proceedings%20%26%20Item%201A.%20Risk%20Factors%20%26%20Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section covers legal matters, risk factors, and equity security transactions, noting routine legal proceedings, a specific litigation loss, consistent risk factors, and share repurchases for tax liabilities - The company is involved in various legal and regulatory matters in the normal course of business, which are not expected to have a material adverse effect on its financial statements[479](index=479&type=chunk) - A specific litigation against the former portfolio manager of 3|5|2 Capital ABS Master Fund LP resulted in a recognized loss of **$17.2 million** to date, with the outcome and potential recovery uncertain[480](index=480&type=chunk)[484](index=484&type=chunk) - There are no new risk factors reported; the company refers to the disclosures in its Annual Report on Form 10-K for the year ended November 30, 2024[485](index=485&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Publicly Announced Program Purchases | Remaining Authorization | | :--- | :--- | :--- | :--- | :--- | | **Mar 2025** | 20,846 | $56.45 | — | $250.0M | | **Apr 2025** | — | — | — | $250.0M | | **May 2025** | 1,549 | $46.59 | — | $250.0M | | **Total** | **22,395** | **$55.77** | **—** | **$250.0M** |

Core Insights - Jefferies Financial Group (NYSE: JEF) is a full-service investment bank with a fiscal quarter Q2 that includes March, April, and May, making its earnings release significant for anticipating results from larger investment banks like Goldman Sachs [1] Group 1: Company Overview - Jefferies Financial Group operates as a full-service investment bank [1] Group 2: Earnings Significance - The earnings release of Jefferies is particularly valuable as it serves as a precursor to the earnings reports of larger investment banks [1]

Core Viewpoint - Jefferies Financial Group's second-quarter fiscal 2025 adjusted earnings of 43 cents per share matched estimates but declined from 67 cents per share in the prior-year quarter, indicating a challenging financial environment [1][9]. Financial Performance - Net income attributable to common shareholders was $88 million, down from $145.7 million in the prior-year quarter, reflecting a significant decrease in profitability [2]. - Quarterly net revenues were $1.63 billion, a decrease of 1.3% year over year, although it surpassed the Zacks Consensus Estimate of $1.56 billion [3]. - Total non-interest expenses rose to $1.50 billion, up 5% from the prior-year quarter, driven by increases in almost all cost components except for compensation and benefits and underwriting costs [3]. Segment Performance - In the Investment Banking and Capital Markets segment, net revenues were $1.47 billion, falling 1.6% from the prior-year quarter due to lower equity and debt underwriting and fixed-income performance, partially offset by strong performance in Equities [5]. - The Asset Management segment reported net revenues of $154.6 million, down 1.2% from the year-ago quarter [5]. Shareholder Returns - Jefferies announced a quarterly cash dividend of 40 cents per share, to be paid on August 29, 2025, to shareholders as of August 18 [6]. Book Value - As of May 31, 2025, the book value per common share was $49.96, an increase from $46.57 as of May 31, 2024, while the adjusted tangible book value per fully diluted share rose to $32.84 from $31.27 [4].

Core Insights - Jefferies reported $1.63 billion in revenue for the quarter ended May 2025, a year-over-year decline of 1.3% and an EPS of $0.43 compared to $0.67 a year ago, with a revenue surprise of +5.13% over the Zacks Consensus Estimate of $1.55 billion [1] Revenue Performance - Total Asset Management Net revenues were $154.62 million, exceeding the two-analyst average estimate of $128.63 million, representing a year-over-year change of -1.2% [4] - Total Investment Banking and Capital Markets Net revenues were $1.47 billion, compared to the $1.42 billion average estimate, reflecting a year-over-year change of -1.6% [4] - Total Capital Markets revenues were $704.16 million, slightly below the $720.30 million estimate, with a year-over-year change of +1.9% [4] - Total Investment Banking revenues were $766.31 million, exceeding the $704.64 million average estimate, showing a year-over-year decline of -4.6% [4] Key Metrics - Jefferies' shares returned +11.2% over the past month, outperforming the Zacks S&P 500 composite's +5.1% change, with a Zacks Rank 3 (Hold) indicating potential performance in line with the broader market [3] - Total Capital Markets - Equities revenues were $526.24 million, surpassing the $446.78 million estimate, with a year-over-year increase of +29.3% [4] - Total Investment Banking - Advisory revenues were $457.86 million, exceeding the $389.88 million estimate, reflecting a year-over-year increase of +61.3% [4]

Core Viewpoint - Jefferies reported quarterly earnings of $0.43 per share, matching the Zacks Consensus Estimate, but down from $0.67 per share a year ago [1]. Financial Performance - Revenues for the quarter ended May 2025 were $1.63 billion, exceeding the Zacks Consensus Estimate by 5.13%, but down from $1.66 billion year-over-year [2]. - Over the last four quarters, Jefferies has surpassed consensus EPS estimates only once and topped revenue estimates twice [2]. Stock Performance - Jefferies shares have declined approximately 29.4% year-to-date, contrasting with the S&P 500's gain of 3.6% [3]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.66 on revenues of $1.74 billion, and for the current fiscal year, it is $2.42 on revenues of $6.8 billion [7]. - The trend of earnings estimate revisions is mixed ahead of the earnings release, which may influence future stock movements [6]. Industry Context - The Financial - Miscellaneous Services industry, to which Jefferies belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8].

Core Insights - Jefferies reported a slight decline in total revenue for Q2 FY 2025 compared to Q2 FY 2024, with total revenue at $1.63 billion, down 1% [1] - Adjusted earnings per share fell significantly by 38% to $0.40, missing analysts' expectations [1][2] - Investment banking revenue decreased by 3% year-over-year, while capital markets revenue remained flat [1][3] Financial Performance - Total revenue for Q2 FY 2024 was $1.66 billion, while Q2 FY 2025 saw a decrease to $1.63 billion [1] - Adjusted earnings per share dropped from $0.64 to $0.40, falling short of expectations [1][2] - Investment banking revenue was $787.4 million in Q2 FY 2024 and decreased to $766.3 million in Q2 FY 2025 [1] - Capital markets revenue remained stable at $707.1 million in Q2 FY 2024 and $704.2 million in Q2 FY 2025 [1] Market Reaction - Following the earnings report, Jefferies shares fell nearly 2% in after-hours trading [5] - The stock had previously risen approximately 42% from its April lows but remains down about 29% year-to-date [6] Operational Insights - Jefferies experienced a significant increase in advisory revenue within its investment banking segment, driven by market share gains and higher M&A activity [3] - However, this was offset by a substantial decline in equity underwriting activity, leading to an overall decrease in investment banking sales [3] - In capital markets, equities performed well, particularly in Europe and Asia, while fixed income revenue faced challenges due to market volatility [4] Future Outlook - CEO Richard Handler expressed optimism about the company's prospects, citing resilience in the global economy and strong backlog figures [8] - Increased non-interest expenses, including higher brokerage and clearing fees, contributed to the earnings miss [7]

Financial Performance - Net earnings attributable to common shareholders for Q2 2025 were $88 million, or $0.40 per diluted common share, down from $145.7 million, or $0.64 per diluted common share in Q2 2024[2][10]. - Total net revenues for Q2 2025 were $1.63 billion, a slight decrease from $1.66 billion in Q2 2024, with year-to-date revenues at $3.23 billion compared to $3.39 billion in the previous year[2][10]. - Net earnings attributable to common shareholders for the three months ended May 31, 2025, were $88,017, compared to $145,736 in 2024, a decrease of approximately 39.5%[16]. - Net earnings from continuing operations for the three months ended May 31, 2025, were $91,395,000, a decrease of 40.8% compared to $154,647,000 for the same period in 2024[18]. - The net earnings attributable to common shareholders for basic earnings per share for the six months ended May 31, 2025, was $215,955,000, down from $301,237,000 in the same period of 2024, a decline of 28.4%[18]. Revenue Breakdown - Investment banking net revenues totaled $786 million for Q2 2025, up 6.4% year-over-year, driven by a 61% increase in Advisory revenues[6][10]. - Capital Markets net revenues were $704 million for Q2 2025, slightly down from $707 million in Q2 2024, with Equities net revenues increasing by 24% to $526 million[7][10]. - Asset Management fees and investment return revenues for Q2 2025 were $71 million, a 43% increase from the prior year quarter, attributed to improved performance across several strategies[8][10]. - Total revenues for the three months ended May 31, 2025, were $2,494,315, compared to $2,516,296 for the same period in 2024, reflecting a decrease of approximately 0.9%[16]. - Net revenues for the six months ended May 31, 2025, were $3,227,466, down from $3,394,648 in 2024, representing a decline of about 4.9%[16]. Expenses and Costs - Total non-interest expenses for the three months ended May 31, 2025, were $1,499,546, compared to $1,428,691 in 2024, an increase of approximately 4.9%[16]. - Interest expense for the six months ended May 31, 2025, was $1,739,713, compared to $1,673,590 in 2024, reflecting an increase of about 3.9%[16]. - Compensation and benefits for the three months ended May 31, 2025, were $854,839, compared to $861,993 in 2024, a slight decrease of approximately 0.2%[16]. - Brokerage and clearing fees for the six months ended May 31, 2025, were $239,181, compared to $220,206 in 2024, representing an increase of about 8.6%[16]. Shareholder Metrics - The company declared a quarterly cash dividend of $0.40 per common share, payable on August 29, 2025[3]. - Return on adjusted tangible shareholders' equity from continuing operations was 5.5% for Q2 2025, down from 9.1% in Q2 2024[2][10]. - The book value per common share increased to $49.96 in Q2 2025, up from $46.57 in Q2 2024[2][10]. - The weighted average diluted common shares outstanding for the three months ended May 31, 2025, were 221,897, a decrease from 226,146 in the same period of 2024[18]. - Common shares outstanding as of May 31, 2025, totaled 206,272 thousand, with adjusted fully diluted shares outstanding at 254,564 thousand[22]. Tax and Regulatory - The effective tax rate from continuing operations was 32.3% for Q2 2025, compared to 32.1% for the prior year quarter[10]. - The company reported an income tax expense of $43,506 for the three months ended May 31, 2025, compared to $73,107 in 2024, a decrease of approximately 40.5%[16]. Operational Insights - Management expressed optimism for the second half of 2025, citing a strong backlog and increased client discussions around capital formation and strategic opportunities[4][5]. - The company reported a leverage ratio of 6.5 for the three months ended May 31, 2025, compared to 6.8 for the same period in 2024[17]. - The number of employees at the end of the reporting period was 7,601, a slight increase from 7,577 in the previous year[17]. - Cash and cash equivalents as of May 31, 2025, totaled $1,126,000,000, compared to $1,117,000,000 as of May 31, 2024, reflecting a growth of 0.8%[17]. Discontinued Operations - The company experienced net losses attributable to noncontrolling interests of $7,668,000 for the three months ended May 31, 2025, compared to $3,785,000 in the same period of 2024[18]. - The company experienced a net earnings impact from discontinued operations of $5,861 thousand for the six months ended May 31, 2025[20].