Jefferies(JEF) - 2026 Q1 - Quarterly Results

Financial Performance - Net earnings attributable to common shareholders for Q1 2026 were $155.7 million, up 22% from $127.8 million in Q1 2025[2] - Total net revenues for Q1 2026 reached $2.02 billion, a 26.6% increase from $1.59 billion in Q1 2025[2] - Investment banking net revenues were $1.02 billion, reflecting a 45% growth compared to the prior year quarter[8] - Capital markets net revenues increased to $779 million, up 12% from the previous year, with equities net revenues rising 37%[9] - Asset management fees and investment return revenues surged 91% year-over-year to $159 million[10] - Total revenues for the quarter were $2.87 billion, compared to $2.47 billion in the prior year, reflecting a significant growth in various segments[19] Shareholder Returns - The company declared a quarterly cash dividend of $0.40 per share, payable on May 29, 2026[3] - Jefferies repurchased 3.0 million shares for $174 million, averaging $58.18 per share, with a total buyback authorization increased to $250 million[3] - The company repurchased 3.0 million shares of common stock for $174 million, at an average price of $58.18 per share[18] Operational Efficiency - The return on adjusted tangible shareholders' equity was 10.9%, up from 8.0% in the prior year[2] - Compensation and benefits expenses amounted to $1,085,890,000, slightly up from $1,080,779,000, indicating a compensation ratio of 53.8%[13] - Compensation and benefits expense as a percentage of net revenues was 53.8%, compared to 52.8% in the prior year quarter[18] - The compensation ratio, which measures total compensation expense as a percentage of total net revenues, is an important indicator of operational efficiency[27] Taxation - The income tax expense for the period was $52,870,000, resulting in an income tax rate of 24.9%[13] - Effective tax rate from continuing operations was 24.9%, up from 9.4% in the prior year quarter, influenced by the resolution of certain tax matters[18] Asset Management - Total asset management net revenues were $220,262,000, an increase from $186,998,000 in the previous period[13] - The company is winding down its legacy merchant banking portfolio, with the sale of Tessellis expected to close in Q1 2027[6] Financial Position - The company reported total assets of $778,756,000, compared to $914,698,000 in the previous period[13] - Total assets as of February 28, 2026, were $74.38 billion, a slight decrease from $76.01 billion in the previous quarter[20] - Book value (GAAP) increased to $10,610,845 thousand as of February 28, 2026, up from $10,204,228 thousand in 2025, representing a growth of 3.98%[24] - Adjusted tangible book value (non-GAAP) rose to $8,747,132 thousand in 2026, compared to $8,281,261 thousand in 2025, reflecting an increase of 5.64%[24] - Common shares outstanding decreased slightly to 204,423 thousand in 2026 from 206,250 thousand in 2025[24] - The total number of fully diluted shares outstanding (non-GAAP) was 255,468 thousand in 2026, a slight increase from 254,287 thousand in 2025[24] Goodwill and Leverage - The company reported a $35.5 million after-tax write-down of goodwill associated with Tessellis, which was reclassified to assets held for sale during Q1 2026[27] - The leverage ratio, defined as total assets divided by total equity, is a key metric for assessing the company's financial health[27] - The tangible gross leverage ratio, which excludes goodwill and intangible assets, is utilized by rating agencies to evaluate the company's leverage[27] - The company emphasizes the importance of tangible shareholders' equity for valuation purposes, as it is often used by investors to assess financial companies[27] Management Outlook - Management aims to build upon the momentum in core business activities throughout fiscal 2026 and beyond[12]