Piper Sandler (PIPR) Q4 2025 Earnings Transcript

Core Insights - Piper Sandler reported strong financial performance in 2025, with record adjusted net revenues of $1.9 billion and adjusted EPS of $17.74, reflecting a 22% increase in revenues compared to 2024 [1][24][25] - The company achieved a 39% increase in adjusted net income year-over-year, driven by robust advisory revenues and strong execution across all business lines [1][6][25] Financial Performance - In Q4 2025, adjusted net revenues reached $635 million, with an operating margin of 27.2% and adjusted EPS of $6.88 [1][24] - For the full year, the operating margin was 21.9%, with net income totaling $318 million [24][25] - The compensation ratio improved to 60.1% for 2025, reflecting increased net revenues and operational discipline [25][27] Advisory Business - Advisory revenues grew by 28% in 2025, totaling $1 billion, with significant contributions from financial services and industrial sectors [8][10][25] - The company completed 135 advisory transactions, a 16% increase from the previous year, and was ranked as the number two adviser for U.S. M&A deals under $1 billion [8][9][10] - Non-M&A advisory revenues exceeded 25% of total advisory revenues, driven by debt capital markets advisory and private capital advisory [11][12] Corporate Investment Banking - Corporate Investment Banking revenues reached $1.3 billion, a 28% increase from the prior year, with strong performance in M&A and debt capital markets [8][12] - The firm generated $469 million in revenues during Q4 2025, significantly driven by M&A activity [7][8] Public Finance and Brokerage - The public finance business generated $146 million in revenues for 2025, a 19% increase from the previous year, with strong performance in municipal financing [18][19] - Equity brokerage revenues reached a record $230 million for the full year, supported by strong trading volumes and client engagement [20][21] Capital Allocation - The company returned $239 million to shareholders in 2025 through stock repurchases and dividends, including a special cash dividend of $5 per share [29][30] - A four-for-one stock split was approved to enhance liquidity and accessibility for investors [31] Outlook - The company anticipates continued strong performance in 2026, with a healthy pipeline of advisory engagements and favorable market conditions [12][15][32] - Expectations for public finance and equity brokerage revenues in 2026 are optimistic, with similar performance anticipated compared to 2025 [20][21]