Piper Sandler(PIPR) - 2025 Q3 - Quarterly Results

Financial Performance - Piper Sandler Companies reported record third quarter revenues of $479 million, a 21% increase from Q2 2025 and a 33% increase from Q3 2024[2]. - Adjusted net revenues for Q3 2025 were $455 million, reflecting a 12% increase from Q2 2025 and a 29% increase from Q3 2024[2]. - Net income attributable to Piper Sandler Companies was $60 million, up 43% from Q2 2025 and 73% from Q3 2024[2]. - Earnings per diluted common share for Q3 2025 were $3.38, a 42% increase from Q2 2025 and a 72% increase from Q3 2024[2]. - For the first nine months of 2025, net revenues totaled $1.2 billion, up 18% year-over-year, supported by strong execution across all business segments[6]. - Adjusted net revenues reached $455.3 million in Q3 2025, a 12% increase from Q2 2025 and a 29% increase from Q3 2024, driven by growth in corporate financing revenues[24]. - Total revenues for Q3 2025 reached $480.1 million, a 20.5% increase from $398.6 million in Q2 2025 and a 33.1% increase from $360.9 million in Q3 2024[42]. - Net income for Q3 2025 was $60.3 million, or $3.38 per diluted share, reflecting increases due to higher net revenues and a lower effective tax rate[18]. - Adjusted net income for Q3 2025 was $68.6 million, or $3.82 per diluted share, reflecting increases due to higher adjusted net revenues[28]. - Adjusted net revenues for the nine months ended September 30, 2025, were $1.244 billion, compared to $1.042 billion for the same period in 2024, reflecting a 19.4% year-over-year growth[44]. - The company’s adjusted net income for the nine months ended September 30, 2025, was $194.793 million, compared to $141.467 million for the same period in 2024, marking a 37.7% increase[45]. Revenue Breakdown - Advisory services revenues reached $212 million, growing 13% year-over-year, driven by significant M&A activity[6]. - Corporate financing revenues surged to $80 million, marking a 128% increase from Q2 2025 and a 345% increase from Q3 2024[12]. - Investment banking revenues were $330.6 million in Q3 2025, up 16.7% from $283.1 million in Q2 2025 and up 37.0% from $241.5 million in Q3 2024[42]. - Equity brokerage revenues were $53.8 million in Q3 2025, down 7% from Q2 2025 but flat compared to Q3 2024, while fixed income services revenues increased by 3% from Q2 2025 and 15% from Q3 2024[19]. Expenses and Margins - Non-interest expenses for Q3 2025 were $371.8 million, a 7% increase from Q2 2025 and a 22% increase from Q3 2024[15]. - Adjusted total operating expenses for Q3 2025 were $359.0 million, an increase from $332.0 million in Q2 2025[43]. - Adjusted operating income for Q3 2025 was $96.3 million, a 31% increase from Q2 2025 and a 49% increase from Q3 2024, with an adjusted operating margin of 21.2%[26]. - The adjusted operating margin for Q3 2025 was 21.2%, compared to 18.1% in Q2 2025[43]. - Compensation ratio decreased to 61.7% in Q3 2025 from 62.0% in Q2 2025 and 62.5% in Q3 2024, driven by higher adjusted net revenues[31]. Shareholder Returns - A quarterly cash dividend of $0.70 per share was declared, to be paid on December 12, 2025[7]. - The company declared a quarterly cash dividend of $0.70 per share, totaling $11.9 million for Q3 2025, and returned $99.3 million to shareholders in the first nine months of 2025[30]. - During Q3 2025, the company repurchased 11 thousand shares for $3.7 million at an average price of $328.38 per share[32]. - The company declared a dividend of $0.70 per common share for Q3 2025, up from $0.65 in Q2 2025[42]. Strategic Developments - The company completed the acquisition of G Squared Capital Partners on September 12, 2025, enhancing its technology investment banking capabilities[4]. - Piper Sandler's acquisition of G Squared Capital Partners is expected to enhance its corporate advisory capabilities, although the anticipated benefits may take longer to realize[38]. - The company is focused on expanding its corporate investment banking and fixed income businesses amid uncertain macroeconomic conditions[41]. Taxation - The effective tax rate for Q3 2025 was 28.8%, compared to 28.1% in Q2 2025 and 28.6% in Q3 2024[27]. - Piper Sandler Companies reported an adjusted income tax expense of $27.777 million for Q3 2025, compared to $20.631 million in Q2 2025 and $18.519 million in Q3 2024[44].