For Immediate Release Jefferies Financial Group Inc. (NYSE: JEF) March 26, 2025 Q1 Financial Highlights | $ in thousands, except per share amounts | | Quarter End | | | --- | --- | --- | --- | | | | 1Q25 | 1Q24 | | Net earnings attributable to common shareholders | $ | 127,793 $ | 149,641 | | Diluted earnings per common share from continuing operations | $ | 0.57 $ | 0.69 | | Return on adjusted tangible shareholders' equity from continuing operations 1 | | 8.0 % | 9.8 % | | Total net revenues | $ | 1,593,01 ...

Jefferies Financial Group Inc. (JEF) is slated to report first-quarter fiscal 2025 (ended Feb. 28) results tomorrow, after market close. The company’s quarterly revenues and earnings are anticipated to have modestly improved on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from solid improvement in the investment banking (IB) business and higher cap ...

Company Overview - Jefferies Financial Group has transitioned from Leucadia National into a comprehensive financial services firm, providing advisory services, underwriting, and institutional trading [1] Industry Position - Jefferies Financial Group has established itself as one of the largest independent firms within the financial services industry [1]

Core Viewpoint - Jefferies has shown a significant rebound in its investment banking business and overall revenues, but rising expenses may pose challenges moving forward [2][3][5]. Financial Performance - Adjusted earnings from continuing operations for Q4 fiscal 2024 were $1.05 per share, exceeding the Zacks Consensus Estimate of 98 cents and up from 30 cents in the prior-year quarter [2][3]. - Net income attributable to common shareholders (GAAP basis) was $205.7 million, a substantial increase from $65.6 million in the prior-year quarter [3]. - For fiscal 2024, adjusted earnings from continuing operations were $3.39 per share, surpassing the consensus estimate of $3.20 and significantly up from $1.30 in fiscal 2023 [4]. - Net income attributable to common shareholders (GAAP basis) for fiscal 2024 was $669.3 million, rising from $260.9 million in the prior year [4]. Revenue and Expenses - Quarterly net revenues reached $1.96 billion, a 63.4% year-over-year increase, and exceeded the Zacks Consensus Estimate of $1.84 billion [5]. - For fiscal 2024, net revenues increased by 49.7% to $7.03 billion, also beating the consensus estimate of $6.93 billion [5]. - Total non-interest expenses were $1.65 billion, up 48.8% from the prior-year quarter, attributed to increases in nearly all cost components [5]. Segment Performance - Investment Banking and Capital Markets generated net revenues of $1.64 billion, a 54.9% increase from the prior-year quarter, driven by strong advisory and underwriting performance [7]. - Asset Management saw net revenues of $314.5 million, significantly up from $140.6 million in the year-ago quarter [7]. Valuation Metrics - As of November 30, 2024, book value per common share was $49.42, up from $46.10 a year earlier, while adjusted tangible book value per fully diluted share increased to $32.36 from $30.82 [6]. Market Sentiment - Recent estimates for Jefferies have trended downward, with a consensus estimate shift of -8.09% [8]. - The stock currently holds an average Growth Score of C, a Momentum Score of F, and a Value Score of C, resulting in an aggregate VGM Score of D [10]. - Jefferies has a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [11].

Credit and Market Risks - The company is exposed to significant credit risk due to the execution, settlement, and financing of various customer and principal securities and derivative transactions[73]. - A considerable portion of the company's revenues is derived from trading, which may incur losses related to fixed income, high yield, international, convertible, and equity securities[77]. - The company's investment banking revenue is directly related to general economic conditions, with reduced expectations of U.S. economic growth potentially leading to decreased financial market activity and investment banking revenues[90]. - Revenues from the company's asset management businesses have been negatively impacted by declining and fluctuating securities prices, which may materially affect revenues[92]. - Climate change concerns may adversely affect the profitability of certain investments and client activity levels, increasing credit risk associated with loans[86]. - Economic downturns, high inflation, and declines in consumer confidence could lead to a decrease in transaction volumes, adversely affecting commission and spread revenues[99]. - Investment banking revenues are directly related to the number and size of transactions, which may decline due to unfavorable political and economic conditions[99]. - Limitations on credit availability could negatively impact liquidity and operational results, particularly in volatile market conditions[100]. Operational and Compliance Risks - The company faces operational risks if its risk management processes are not effective, potentially leading to losses despite established risk controls[96]. - The company may incur losses due to unforeseen catastrophic events, including pandemics and geopolitical conflicts, which could disrupt operations and financial markets[84]. - A downgrade in the company's credit ratings could adversely affect its liquidity, competitive position, and borrowing costs, impacting overall financial health[79]. - The company is dependent on dividends and distributions from subsidiaries for liquidity, which may be restricted by regulatory requirements[81]. - The Dodd-Frank Act has led to significant compliance and operational costs for the company, with expectations of ongoing expenditures due to the complex regulatory framework[122]. - The EU GDPR imposes fines of up to 4% of annual worldwide turnover or €20 million for serious non-compliance, which could significantly impact the company's financial condition[142]. - The company is subject to extensive laws and regulations that could impose additional costs and limit business opportunities, potentially affecting revenue and profitability[133]. - Changes in tax laws in key jurisdictions could materially increase the company's tax expense, adversely affecting cash flow and financial condition[149]. - Regulatory focus on operational resilience requires the company to assess its resilience on critical business services, impacting risk management strategies[132]. - The company is continuously monitoring the impact of new U.S. and international regulations on its business operations[146]. Competition and Employee Management - The company faces intense competition in the financial services industry, which may pressure it to lower fees and impact profitability[104]. - The ability to attract and retain highly skilled employees is critical for the company's success, with competitive pressures potentially affecting business performance[97]. - Employee retention is critical, as losing key professionals could harm client relationships and overall business performance[102]. - The company may incur substantial costs related to defending against claims of unfair hiring practices as it seeks to attract qualified personnel[103]. Financial Performance and Metrics - Net revenues for 2024 were $7.03 billion, a 49.7% increase from $4.70 billion in 2023, driven by market share gains and a stronger overall market[179]. - Investment banking net revenues reached $3.44 billion in 2024, up 51.6% from $2.27 billion in 2023, primarily due to market share gains and increased market opportunities[181]. - Advisory net revenues were $1.81 billion, a 51.1% increase compared to $1.20 billion in 2023[181]. - Total underwriting net revenues were $1.49 billion for 2024, up 53.4% from $970.5 million in 2023, attributed to increased equity and debt underwriting activity[182]. - Earnings from continuing operations before income taxes were $1.01 billion for 2024, a 183.8% increase from $354.3 million in 2023[179]. - Net earnings from continuing operations were $712.4 million for 2024, up 171.5% from $262.4 million in 2023[179]. - Preferred stock dividends increased to $74.1 million in 2024, a 407.0% rise from $14.6 million in 2023[179]. - The effective tax rate from continuing operations was 29.2% in 2024, compared to 25.9% in 2023[179]. - Net earnings from discontinued operations, including gain on disposal, were $3.7 million in 2024[184]. Investments and Asset Management - The company purchased 1.1 million common shares for $44.3 million in 2024, averaging $40.72 per share[168]. - Equities net revenues were $1.59 billion for 2024, up 39.8% compared to $1.14 billion for 2023, driven by market share gains and increased trading volumes[185]. - Fixed income net revenues were $1.17 billion for 2024, an increase of 6.8% from $1.09 billion in 2023, supported by stronger results in distressed trading and securitized markets[201]. - Asset management net revenues surged to $803.7 million for 2024, compared to $188.3 million for 2023, largely due to improved performance and the consolidation of Stratos and Tessellis[185]. - Total investment banking net revenues reached $3.44 billion for 2024, up 51.6% from $2.27 billion in 2023, reflecting extensive investments and market share gains[196]. - Total asset management fees for 2024 were $103.5 million, a 10.5% increase from $93.7 million in 2023, driven by higher management and performance fees[208]. - Investment return increased to $212.2 million in 2024, up 37.4% from $154.5 million in 2023, attributed to improved returns across various fund strategies[208]. - Other investments net revenues surged to $550.1 million in 2024, compared to a loss of $(10.3) million in 2023, primarily due to the consolidation of Stratos and Tessellis[209]. - Total assets under management decreased to $25.0 billion in 2024 from $28.0 billion in 2023, reflecting a decline in affiliated asset managers' net asset values[210]. Expenses and Financial Management - Non-interest expenses rose to $6.03 billion in 2024, an increase of 38.7% from $4.35 billion in 2023, mainly due to higher business activity and compensation expenses[220]. - Compensation and benefits expenses increased by 44.3% to $3.66 billion in 2024, compared to $2.54 billion in 2023[224]. - Business development expenses saw a significant rise of 59.7%, reaching $283.5 million in 2024, up from $177.5 million in 2023[224]. - The ratio of non-interest expenses to net revenues improved from 38.5% in 2023 to 33.7% in 2024, indicating revenue growth outpacing expense growth[225]. - Brokerage and clearing fees increased by $66.0 million due to higher trading volumes[226]. - Technology and communication expenses rose by $69.6 million related to the development of trading and management systems and increased market data costs[226]. - Cost of sales and depreciation and amortization expenses increased by $255.0 million, primarily due to the consolidation of Stratos and Tessellis[226]. - The effective tax rate for 2024 was 29.2%, up from 25.9% in 2023, largely due to a smaller tax benefit from share-based awards[231]. Company Structure and Changes - The company had a global headcount of 7,822 employees as of November 30, 2024, an increase of 258 from 7,564 employees a year earlier[186]. - The investment banking backlog remains robust, indicating strong potential for underwriting and mergers and acquisitions activity in the upcoming year[199]. - The company completed several divestitures, including the spin-off of Vitesse Energy and sales of other investments, to streamline operations[258]. - Total Level 3 assets increased to $734.2 million, with significant contributions from asset management and investment banking segments[265]. - The liquidity management framework aims to ensure sufficient liquidity during business cycles and periods of financial distress[271].

Core Insights - Jefferies Financial Group reported adjusted earnings of $1.05 per share for Q4 fiscal 2024, exceeding the Zacks Consensus Estimate of 98 cents and significantly up from 30 cents in the prior-year quarter [1][2] - The company's net income attributable to common shareholders on a GAAP basis was $205.7 million, a substantial increase from $65.6 million in the same quarter last year [2] - For the full fiscal year 2024, adjusted earnings were $3.39 per share, surpassing the consensus estimate of $3.20 and growing from $1.30 in fiscal 2023 [3] Revenue and Expenses - Quarterly net revenues reached $1.96 billion, a 63.4% year-over-year increase, and also exceeded the Zacks Consensus Estimate of $1.84 billion [4] - For fiscal 2024, net revenues increased by 49.7% to $7.03 billion, surpassing the consensus estimate of $6.93 billion [4] - Total non-interest expenses rose to $1.65 billion, up 48.8% from the prior-year quarter, attributed to increases across nearly all cost components [4] Segment Performance - Investment Banking and Capital Markets generated net revenues of $1.64 billion, a 54.9% increase from the prior-year quarter, driven by strong advisory and underwriting performance [6] - Asset Management saw net revenues of $314.5 million, significantly up from $140.6 million in the year-ago quarter [6] Dividend Announcement - Jefferies declared a quarterly cash dividend of 40 cents per share, reflecting a 14.3% increase from the previous dividend payout, scheduled for payment on February 27, 2025 [7] Outlook - The company is expected to benefit from a solid trading business and a resurgence in investment banking, although elevated expenses may impact the bottom line in the near term [8]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers a wide range of sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in cities such as London, New York, Toronto, Vancouver, Sydney, and Perth [2] Group 2 - The company emphasizes the use of technology to enhance workflows and improve content delivery [4] - Proactive employs automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Core Insights - Jefferies (JEF) reported a revenue of $1.96 billion for the quarter ended November 2024, marking a year-over-year increase of 63.4% and exceeding the Zacks Consensus Estimate by 6.55% [1] - The earnings per share (EPS) for the same period was $1.05, compared to $0.30 a year ago, representing a surprise of 7.14% over the consensus estimate of $0.98 [1] Financial Performance Metrics - Total Asset Management net revenues reached $314.75 million, significantly surpassing the average estimate of $148.25 million, with a year-over-year change of 123.8% [4] - Total Investment Banking and Capital Markets net revenues were $1.64 billion, slightly below the average estimate of $1.69 billion, but still reflecting a year-over-year increase of 54.9% [4] - Total Capital Markets revenues amounted to $651.69 million, exceeding the average estimate of $580.35 million, with a year-over-year change of 35.4% [4] - Total Investment Banking revenues were reported at $986.82 million, compared to the average estimate of $1.11 billion, showing a year-over-year increase of 71.1% [4] Segment Performance - In the Capital Markets segment, Equities revenues were $410.77 million, surpassing the average estimate of $355.08 million, with a year-over-year increase of 51.3% [4] - Fixed Income revenues reached $240.92 million, exceeding the average estimate of $225.27 million, reflecting a year-over-year change of 14.9% [4] - In the Investment Banking segment, Advisory revenues were $596.71 million, compared to the average estimate of $623.64 million, showing a year-over-year increase of 91.1% [4] - Other Investment Banking revenues skyrocketed to $27.44 million, compared to the average estimate of $49.61 million, with a remarkable year-over-year increase of 865.6% [4]

分组1 - Jefferies reported quarterly earnings of $1.05 per share, exceeding the Zacks Consensus Estimate of $0.98 per share, and showing a significant increase from $0.30 per share a year ago, representing an earnings surprise of 7.14% [1] - The company achieved revenues of $1.96 billion for the quarter ended November 2024, surpassing the Zacks Consensus Estimate by 6.55%, compared to $1.2 billion in revenues from the previous year [2] - Jefferies has outperformed the S&P 500, with shares increasing about 1.5% since the beginning of the year, while the S&P 500 gained 0.5% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $1.18 on revenues of $2.07 billion, and for the current fiscal year, it is $4.81 on revenues of $8.22 billion [7] - The Financial - Miscellaneous Services industry, to which Jefferies belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Jefferies reported strong financial performance in Q4 and full-year 2024, marked by significant revenue and earnings growth and improved profitability metrics [Q4 & Full-Year 2024 Performance](index=1&type=section&id=Q4%20%26%20Full-Year%202024%20Performance) Jefferies reported significant year-over-year growth in its fourth quarter and full-year 2024 results, with net revenues and earnings surging across both periods Key Financial Metrics (Q4 & Full-Year 2024 vs 2023) | Metric | Q4 2024 | Q4 2023 | YoY Change | FY 2024 | FY 2023 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Net Revenues ($)** | $1.96B | $1.20B | +63% | $7.03B | $4.70B | +50% | | **Net Earnings to Common Shareholders ($)** | $205.7M | $65.6M | +214% | $669.3M | $263.1M | +154% | | **Diluted EPS from Continuing Operations ($)** | $0.91 | $0.29 | +214% | $2.96 | $1.10 | +169% | | **Return on Adjusted Tangible Shareholders' Equity (%)** | 12.7% | 4.1% | +8.6pp | 10.8% | 3.9% | +6.9pp | [Dividend Announcement](index=1&type=section&id=Dividend%20Announcement) The Board of Directors announced a 14.3% increase in the quarterly cash dividend, raising it to $0.40 per common share - The quarterly cash dividend was increased by **14.3% to $0.40 per common share**, payable on February 27, 2025[2](index=2&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes strong 2024 performance to market share gains, a favorable market, and improved expense ratios, positioning the firm for continued growth [Overall Performance and Strategy](index=1&type=section&id=Overall%20Performance%20and%20Strategy) Management attributes the strong 2024 performance to market share gains and a more favorable market environment, focusing on core mission and improved expense ratios - Management highlights that Q4 2024 net revenues, pre-tax earnings, and diluted EPS from continuing operations were up **63%**, **249%**, and **214% YoY**, respectively[3](index=3&type=chunk) - The non-compensation expense ratio improved to **34% in 2024** from 39% in 2023, as revenue growth outpaced expense growth[5](index=5&type=chunk) - The firm begins 2025 in its **best-ever position**, with a strong team driving momentum and an enhanced market position across its offerings[10](index=10&type=chunk) [Business Segment Performance Review](index=1&type=section&id=Business%20Segment%20Performance%20Review) All business segments demonstrated strong year-over-year growth in 2024, with Investment Banking, Capital Markets, and Asset Management all showing significant revenue increases - **Investment Banking:** 2024 net revenues grew **52% YoY to $3.44 billion**, the second-highest on record, driven by market share gains. Q4 Advisory revenues hit a **record high**[3](index=3&type=chunk)[6](index=6&type=chunk) - **Capital Markets:** 2024 net revenues increased **24% YoY to $2.76 billion**. Equities revenues were up **40%**, and Fixed Income revenues grew **7%**, with particular strength in distressed trading and securitization[7](index=7&type=chunk)[8](index=8&type=chunk) - **Asset Management:** 2024 fee and investment return revenues rose **27% YoY to $316 million**, reflecting strong performance across multiple strategies. Other investments net revenues were **$550 million**, largely due to the consolidation of Stratos and Tessellis[9](index=9&type=chunk) [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) The detailed financial results for 2024 highlight substantial revenue growth across all segments and improved expense management, leading to increased net earnings [Financial Summary by Source](index=3&type=section&id=Financial%20Summary%20by%20Source) For the full year 2024, Total Investment Banking and Capital Markets net revenues significantly increased, alongside substantial growth in Asset Management, with improved compensation and non-compensation ratios Net Revenues by Source (Year Ended, $ in thousands) | Revenue Source | 2024 ($ in thousands) | 2023 ($ in thousands) | | :--- | :--- | :--- | | **Total Investment Banking** | $3,444,787 | $2,272,218 | | - Advisory | $1,811,634 | $1,198,916 | | - Equity Underwriting | $799,804 | $560,243 | | - Debt Underwriting | $689,227 | $410,208 | | **Total Capital Markets** | $2,759,554 | $2,232,161 | | - Equities | $1,592,793 | $1,139,425 | | - Fixed Income | $1,166,761 | $1,092,736 | | **Total Asset Management** | $803,669 | $188,345 | | **Total Net Revenues** | **$7,034,803** | **$4,700,417** | Expense Ratios (Year Ended) | Ratio | 2024 (%) | 2023 (%) | | :--- | :--- | :--- | | Compensation Ratio | 52.0% | 53.9% | | Non-compensation Ratio | 33.7% | 38.5% | [Consolidated Statement of Earnings](index=6&type=section&id=Consolidated%20Statement%20of%20Earnings) The consolidated statement for the year ended November 30, 2024, shows total net revenues of $7.03 billion, leading to significantly increased net earnings attributable to common shareholders Consolidated Earnings Summary (Year Ended, $ in thousands) | Line Item | 2024 ($ in thousands) | 2023 ($ in thousands) | | :--- | :--- | :--- | | Net Revenues | $7,034,803 | $4,700,417 | | Total Non-interest Expenses | $6,029,257 | $4,346,148 | | Earnings from Continuing Operations Before Income Taxes | $1,005,546 | $354,269 | | Net Earnings from Continuing Operations | $712,352 | $262,388 | | **Net Earnings Attributable to Common Shareholders** | **$669,273** | **$263,072** | [Financial Position & Key Metrics](index=7&type=section&id=Financial%20Position%20%26%20Key%20Metrics) As of November 30, 2024, Jefferies reported increased total assets and shareholders' equity, alongside a rise in employee count Financial Position (as of Nov 30, 2024) | Metric | Nov 30, 2024 ($) | Nov 30, 2023 ($) | | :--- | :--- | :--- | | Total Assets | $64.36B | $57.91B | | Total Shareholders' Equity | $10.16B | $9.71B | | Leverage Ratio | 6.3x | 5.9x | - The number of employees at period end was **7,822**, an increase from 7,564 at the end of 2023[24](index=24&type=chunk) [Quarterly & YTD Performance Analysis](index=4&type=section&id=Quarterly%20%26%20YTD%20Performance%20Analysis) This section provides a detailed analysis of quarterly and year-to-date performance across Investment Banking, Capital Markets, Asset Management, and expense categories [Investment Banking and Capital Markets Analysis](index=4&type=section&id=Investment%20Banking%20and%20Capital%20Markets%20Analysis) Investment Banking and Capital Markets revenues showed strong growth in Q4 and for the full year, driven by record advisory performance and increased trading volumes - **Q4 2024:** Investment Banking net revenues of **$987 million** were **73% higher YoY**, featuring the best-ever quarter for Advisory (**$597 million**). Capital Markets net revenues of **$652 million** were also higher YoY due to stronger performance in Equities[17](index=17&type=chunk) - **Full-Year 2024:** Investment Banking net revenues of **$3.44 billion** were **52% higher YoY**. Capital Markets net revenues of **$2.76 billion** were up, driven by stronger Equities performance and solid Fixed Income results[18](index=18&type=chunk) [Asset Management Analysis](index=4&type=section&id=Asset%20Management%20Analysis) Asset Management revenues were substantially higher in both Q4 and the full year, driven by strong investment returns, fee growth, and strategic consolidations - Q4 Asset Management fees, revenues, and investment return of **$116 million** were substantially higher than the prior year quarter[13](index=13&type=chunk) - Full-year 2024 Asset Management fees, revenues, and investment return of **$316 million** were substantially higher than the prior year, reflecting fee growth and strong performance despite challenges from Weiss Multi-Strategy and 352 Capital funds[16](index=16&type=chunk) [Expense Analysis](index=4&type=section&id=Expense%20Analysis) For the full year 2024, the compensation ratio improved, while non-compensation expenses increased due to higher trading volumes, technology investments, and subsidiary consolidations - The compensation and benefits expense as a percentage of Net revenues was **52.0% for FY2024**, an improvement from 53.9% in FY2023[18](index=18&type=chunk) - Non-compensation expenses rose primarily due to increased brokerage fees, technology and business development expenses, and the inclusion of consolidated subsidiaries like Stratos and Tessellis[18](index=18&type=chunk) [Shareholder Information & Non-GAAP Measures](index=8&type=section&id=Shareholder%20Information%20%26%20Non-GAAP%20Measures) This section provides detailed earnings per share calculations and reconciliations for non-GAAP financial measures, offering insights into shareholder value and adjusted performance [Earnings Per Share Details](index=8&type=section&id=Earnings%20Per%20Share%20Details) The report provides a detailed reconciliation for the calculation of earnings per share, showing diluted EPS from continuing operations for the full year 2024 Diluted EPS from Continuing Operations Calculation (FY 2024) | Component | Value (in thousands, except per share) | | :--- | :--- | | Net earnings from continuing operations attributable to common shareholders | $662,609 | | Weighted average diluted common shares | 223,650 | | **Diluted EPS from continuing operations ($)** | **$2.96** | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) Jefferies presents non-GAAP measures such as Return on Adjusted Tangible Shareholders' Equity and Adjusted Tangible Book Value per Share to provide investors with management's perspective - The return on adjusted tangible shareholders' equity from continuing operations (a non-GAAP measure) was **12.7% for Q4 2024** and **10.8% for the full year 2024**[27](index=27&type=chunk) Adjusted Tangible Book Value per Share (Nov 30, 2024) | Metric | Value ($) | | :--- | :--- | | Book value per common share (GAAP) | $49.42 | | **Adjusted tangible book value per fully diluted share (Non-GAAP)** | **$32.36** |