Core Viewpoint - Constellation Brands reported its Q3 fiscal 2026 results, showing a decline in sales and earnings year over year, primarily due to weak consumer demand trends, despite surpassing analyst estimates for both metrics [2][3]. Financial Performance - Comparable earnings per share (EPS) for Q3 were $3.06, down 6% year over year, but exceeded the Zacks Consensus Estimate of $2.65. Reported EPS was $2.88 compared to $3.39 in the same quarter last year [3]. - Net sales fell 10% year over year to $2.22 billion, surpassing the Zacks Consensus Estimate of $2.18 billion. Organic net sales decreased by 2% year over year [3]. Segment Performance - The beer segment's sales decreased by 1% year over year to $2.01 billion, with shipment volumes down 2.2%. Depletions fell 3%, with declines in Modelo Especial (4%), Corona Extra (9%), and Modelo Chelada (2%), partially offset by growth in Pacifico (over 15%) and Victoria (over 13%) [4]. - The wine and spirits segment saw a significant decline of 51% year over year in sales, totaling $213.1 million, impacted by a 70.6% drop in shipment volumes due to divestitures and strategic pricing changes [5]. Margins and Income - Comparable loss for the company was $46.9 million, compared to a loss of $9.2 million in the prior-year quarter, attributed to weak operating income across beer, wine, and spirits [6]. - Operating income for the beer segment decreased by 1% year over year to $763.5 million, with an operating margin increase of 10 basis points to 38% due to favorable pricing [7]. - The wine and spirits segment reported an operating income of $33.7 million, down 65% from the previous year, with an operating margin contraction to 15.8% from 22.1% [8]. Financial Position - As of November 30, 2025, cash and cash equivalents stood at $152.4 million, long-term debt was $10.3 billion, and total shareholders' equity was $7.7 billion. The company generated an operating cash flow of $2.1 billion and an adjusted free cash flow of $1.5 billion in the first nine months of fiscal 2026 [9]. Future Expectations - Management projects an enterprise organic net sales decrease of 4-6% for fiscal 2026, with beer segment net sales expected to decline by 2-4% and wine and spirits segment net sales anticipated to drop by 17-20% [12]. - The company expects a reported operating income increase of 657-677% for fiscal 2026, while comparable operating income is projected to decline by 9-11% [13]. - Comparable EPS guidance for fiscal 2026 is set at $11.30-$11.60, with fiscal 2026 EPS expected to be $9.72-$10.02 [14]. Market Sentiment - There has been a downward trend in estimates, with the consensus estimate shifting down by 13.46% recently [16]. - Constellation Brands holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return from the stock in the coming months [18].

Financial Data and Key Metrics Changes - For Q4 2025, Plains reported Adjusted EBITDA of $738 million and full-year Adjusted EBITDA of $2.833 billion, indicating a pivotal year despite market challenges [3][4] - The crude oil segment Adjusted EBITDA was $611 million, while the NGL segment reported $122 million, reflecting seasonal impacts and market conditions [11][12] - The company expects 2026 Adjusted EBITDA guidance of $2.75 billion at the midpoint, with a 13% year-over-year growth in the crude segment [7][8] Business Line Data and Key Metrics Changes - The crude oil segment's performance was bolstered by the Cactus 3 acquisition, contributing to overall EBITDA despite challenges from recontracting [11] - The NGL segment's performance was impacted by warm weather and weak frac spreads, leading to a moderated seasonal uptick [11] - The company anticipates $100 million of EBITDA from the NGL segment post-divestiture, along with $10 million of other income [8] Market Data and Key Metrics Changes - Permian crude production is expected to remain flat year-over-year in 2026, with overall basin volumes projected to be about 6.6 million barrels by year-end [8] - The company noted a cautious optimism among larger producers in the Permian Basin, with a focus on efficiency and inventory preservation [29][30] Company Strategy and Development Direction - Plains is transitioning to a peer-play crude company, focusing on streamlining operations and enhancing cash flow durability through strategic acquisitions and divestitures [3][4] - The company is targeting $100 million in annual savings through efficiency initiatives by 2027, with half expected to be realized in 2026 [4][24] - The acquisition of the Wild Horse Terminal is expected to enhance storage capacity and generate returns above internal thresholds [7] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of executing on efficiency initiatives and closing the NGL divestiture to position the company competitively for the future [15] - The geopolitical environment and OPEC actions were noted as challenges, but management remains focused on long-term growth and stability [3][15] - The company expressed confidence in the ability to grow beyond 2026, supported by self-help initiatives and market fundamentals [58] Other Important Information - A 10% increase in quarterly distribution was announced, bringing the annual distribution to $1.67 per unit, representing an 8.5% yield [8][9] - The company plans to reduce its distribution coverage ratio threshold from 160% to 150%, reflecting improved visibility and alignment with peers [9][10] Q&A Session Summary Question: Synergies from Cactus Pipeline - Management confirmed achieving $50 million in synergies, with half from G&A and OPEX reductions and the rest from optimizing pipeline capacity [20][21] Question: Cost Savings Initiatives - The NGL business sale allows for a comprehensive review of company structure, targeting $100 million in savings by 2027 [24][25] Question: Permian Basin Outlook - Management noted cautious optimism among producers, with a focus on efficiency and inventory preservation, expecting growth to resume in 2027 [29][30] Question: Distribution Coverage Ratio - The reduction to 150% is seen as conservative, allowing for routine investments and distribution growth [37][73] Question: Growth Capital Expenditures - The 2026 growth CAPEX is guided at $350 million, aligning with typical investment levels, focusing on ongoing projects and potential expansions [41][42]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported Adjusted EBITDA attributable to Plains of $738 million and $2.833 billion for the full year, indicating a pivotal year despite market challenges [4][5] - The crude oil segment adjusted EBITDA was $611 million, which included contributions from the Cactus III acquisition, while the NGL segment reported adjusted EBITDA of $122 million [11][12] - The company expects adjusted EBITDA guidance for 2026 at $2.75 billion, with a midpoint for the oil segment EBITDA of $2.64 billion, reflecting a 13% year-over-year growth in the crude segment [7][8] Business Line Data and Key Metrics Changes - The crude oil segment is expected to drive significant growth, while the NGL segment is projected to contribute $100 million of EBITDA, assuming the divestiture closes as planned [8][12] - The company is focusing on streamlining operations and has targeted $100 million in annual savings through 2027, with approximately 50% expected to be realized in 2026 [5][6] Market Data and Key Metrics Changes - Permian crude production is expected to remain flat year-over-year in 2026, with overall basin volumes projected to be about 6.6 million barrels at the end of the year [8] - The company anticipates growth to resume in 2027, driven by global energy demand growth and diminishing OPEC spare capacity [8] Company Strategy and Development Direction - The company is transitioning to a pure-play crude company, which is expected to streamline operations and enhance cash flow durability [4][5] - Key initiatives for 2026 include closing the NGL divestiture, integrating the Cactus III Pipeline, and improving cost structures [5][6] - The company remains committed to generating significant free cash flow, optimizing its asset base, and maintaining a flexible balance sheet [10][17] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges faced in 2025, including geopolitical unrest and OPEC actions, but emphasized a focus on operational efficiency and strategic transactions [4][16] - The outlook for 2026 is characterized as a year of execution and self-help, with confidence in the ability to grow beyond 2026 due to expected synergies and market improvements [16][61] Other Important Information - The company announced a 10% increase in quarterly distributions, bringing the annual distribution to $1.67 per unit, representing an 8.5% yield based on recent equity prices [8][9] - The company is also focused on maintaining a distribution coverage ratio of 150%, which reflects improved visibility and aligns with peers [9][42] Q&A Session Summary Question: Synergies from Cactus Pipeline - Management confirmed that they are on track to achieve $50 million in synergies from the Cactus III acquisition, with half already realized through G&A and OPEX reductions [21][22] Question: Cost Savings Initiatives - The company is rethinking its structure post-NGL sale, aiming for $100 million in cost savings by the end of 2027, with $50 million expected in 2026 [26][27] Question: Permian Basin Outlook - Management expressed cautious optimism regarding producer sentiment in the Permian Basin, noting that efficiencies are improving despite a flat production outlook for 2026 [31][33] Question: Capital Allocation Priorities - The company reiterated its focus on distribution growth and maintaining a conservative coverage ratio, with plans for opportunistic investments in bolt-ons and repurchases [36][42] Question: Long-Haul Permian Volume Guidance - Management explained that the guidance includes contributions from Cactus III and increased contracted capacity, with expectations for stable margins [66][68] Question: Impact of Geopolitical Developments - Management discussed the potential impacts of developments in Venezuela, noting that while immediate effects may create opportunities, substantial long-term changes would require significant investment [52][54]

Financial Data and Key Metrics Changes - The company reported Q4 operating EPS of $7.75 per share, marking the second consecutive record quarter in earnings [6] - Adjusted operating return on equity (ROE) for the trailing 12 months was 15.7%, exceeding the intermediate-term target range of 13%-15% [6][18] - For the full year 2025, the company achieved record operating EPS and increased the value of in-force business margins by 18% [6][13] Business Line Data and Key Metrics Changes - In the U.S., favorable results were driven by management actions and variable investment income, with individual life mortality in line with expectations [7] - EMEA results showed strong volume growth and favorable experience, with full-year pre-tax earnings up 35% [11] - APAC region reported an 18% increase in pre-tax operating income, reflecting strong underlying growth and favorable underwriting experience [10] Market Data and Key Metrics Changes - Premium growth was 7.4% year-to-date on a constant currency basis, benefiting from strong growth across North America, EMEA, and APAC [19] - The U.S. healthcare business has approximately $400 million of annual premium, generating about $25 million of pre-tax run rate earnings in a typical year [43] Company Strategy and Development Direction - The company plans to exit the group healthcare lines of business after 2026, focusing on strategically aligned businesses [12][43] - The strategy includes optimizing the balance sheet, enhancing risk-adjusted investment returns, and maintaining a focus on capital stewardship [15][16] - The company aims for a balanced approach to capital deployment, targeting a total payout ratio of 20%-30% for buybacks and dividends [37][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to meet or exceed intermediate-term financial targets, citing strong momentum and a clear focus on strategy [16][33] - The company anticipates a more limited financial impact from in-force management actions in 2026 compared to recent years [24][91] - Management noted that higher interest rates are beneficial for overall earnings, given positive reinvestment cash flows [95] Other Important Information - The company deployed $2.5 billion of capital into in-force transactions for the full year, with $98 million in Q4 [19][20] - The effective tax rate for Q4 was 23.8%, with an expectation of 22%-23% for 2026 [20] - The company reported an estimated excess capital of $2.7 billion at the end of the quarter [30] Q&A Session Summary Question: Capital allocation and payout ratio - Management confirmed the target of a 20%-30% total payout ratio while maintaining flexibility for capital deployment [37] Question: Group health rate actions and business exit - Significant rate actions were taken, including a 40% average increase, and the decision to exit the group healthcare business was driven by strategic alignment [42][43] Question: Equitable block performance - The Equitable transaction is expected to generate $160 million-$170 million of earnings in 2026, with various factors contributing to economic upside [49] Question: Long-term care risk transfer deal performance - Management expressed satisfaction with the long-term care business performance, aligning with risk appetite and return expectations [62] Question: Investment portfolio exposure to software-related companies - The company has modest exposure to software lending, and AI impacts are actively monitored across the portfolio [67][68] Question: Regulatory changes in Europe and competition - Management noted no significant competitive threats arising from regulatory changes in Europe, focusing on opportunities with both asset and biometric risks [76][78] Question: Attractive regions or product lines for 2026 - The company highlighted a strong pipeline in Asia and the U.K. longevity market, with optimism about delivering attractive returns [81]

Financial Data and Key Metrics Changes - 2025 Same Store NOI results matched initial guidance, but the path to those results was not straightforward, with stronger rental growth in the first half followed by a deceleration in the latter half of the year [4][5] - The company purchased approximately $206 million of its stock during Q4 2025, totaling $300 million in stock purchases for the year [10] - The normalized FFO per share for 2025 was $3.99, with a guidance midpoint for 2026 at $4.08, reflecting a 2.25% improvement [27] Business Line Data and Key Metrics Changes - The blended rate for Q4 was 0.5%, driven by a strong renewal rate of 4.5%, while new lease rates were negative across most markets except San Francisco [14] - Other income growth was slightly below expectations due to less income from the bulk internet rollout and bad debt net improvement [14] Market Data and Key Metrics Changes - Coastal markets, particularly New York and San Francisco, showed strong performance, while Southern California markets and expansion markets experienced muted growth [14][21] - The company expects a significant decline in competitive new supply, with deliveries projected to decrease by 35% or about 40,000 units in 2026 compared to 2025 [11][12] Company Strategy and Development Direction - The company remains committed to a diversified portfolio strategy, investing in renovations, acquisitions, and development activities selectively [9] - The focus is on maximizing shareholder returns through a well-earning renter portfolio across various metropolitan areas [7] - The company plans to sell properties with lower forward return profiles and use proceeds for stock buybacks, enhancing forward growth rates [10] Management's Comments on Operating Environment and Future Outlook - Management noted heightened policy and geopolitical uncertainty impacted consumer and employer confidence, leading to a slowdown in job and rent growth [5] - The outlook for 2026 includes a broad range of possible outcomes for the U.S. economy, with expectations for steady demand and improved supply conditions [6][12] - The company anticipates a return to a more normalized peak leasing season due to reduced competitive supply and stable job growth [17] Other Important Information - The company returned over $1.3 billion to shareholders in 2025 through dividends and stock repurchases [11] - The company expects Same Store expense growth in 2026 to range between 3%-4%, with controllable expenses remaining stable [25] Q&A Session Questions and Answers Question: Can you talk about the assets you're selling and the fund that repurchases? - The assets being sold are typically older, non-core properties with higher CapEx loads, which are expected to improve the growth rate of the existing portfolio [35] Question: Can you provide more color on your comment around the renewals at 4.5%? - The renewal quotes are around 6%, with confidence in landing at 4.5% due to a strong centralized process and low economic hardship among residents [42][44] Question: On the 2026 supply outlook, can you give us some background on how you come up with your competitive supply set? - The company uses both data from providers and a boots-on-the-ground approach to evaluate competitive supply, confirming a meaningful decline in 2026 [46][47] Question: Are you factoring in regulatory costs when assessing different markets? - Yes, the company considers litigation costs and regulatory conditions in its underwriting and portfolio allocation decisions [51][53] Question: What is the expected cadence of Same Store revenue growth through the year? - The second half of the year is expected to be stronger than the first, primarily due to reduced competitive supply [83]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported Adjusted EBITDA of $738 million and $2.833 billion for the full year, indicating a pivotal year despite market challenges [3][4] - The crude oil segment Adjusted EBITDA was $611 million, which included contributions from the Cactus 3 acquisition [10] - The NGL segment reported Adjusted EBITDA of $122 million, reflecting seasonal impacts and warm weather [10] Business Line Data and Key Metrics Changes - The company is transitioning to a peer-play crude company, enhancing cash flow quality through the sale of the NGL business and acquisition of the Cactus 3 Pipeline [3][4] - The NGL segment is expected to contribute $100 million of EBITDA post-divestiture, while the oil segment is projected to grow by 13% year-over-year [6][7] Market Data and Key Metrics Changes - Permian crude production is expected to remain flat year-over-year in 2026, with overall basin volumes around 6.6 million barrels by year-end [7] - The company anticipates a more constructive oil market environment in 2027, driven by global energy demand growth [7][30] Company Strategy and Development Direction - The company is focused on three key initiatives for 2026: closing the NGL divestiture, integrating the Cactus 3 Pipeline, and streamlining operations for efficiency [4][5] - A targeted $100 million in annual savings is expected through 2027, with half of that realized in 2026 [5][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding producer sentiment in the Permian Basin, noting improved efficiencies and a focus on preserving inventory [29][30] - The company remains committed to generating significant free cash flow and maintaining a flexible balance sheet while returning capital to unit holders [9][16] Other Important Information - A 10% increase in quarterly distribution was announced, raising the annual distribution to $1.67 per unit, representing an 8.5% yield [7][8] - The company plans to reduce its distribution coverage ratio threshold from 160% to 150%, reflecting improved cash flow visibility [8][39] Q&A Session Summary Question: Synergies from Cactus Pipeline - Management confirmed that $50 million in synergies are already on track, with half achieved through G&A and OPEX reductions [20] Question: Cost savings initiatives - The NGL business sale allows for a comprehensive review of company structure, targeting $100 million in savings by 2027 [24][25] Question: Permian Basin outlook - Producer sentiment is cautiously optimistic, with a focus on efficiency and improved recoveries [29][30] Question: Distribution coverage rationale - The 150% coverage level is seen as conservative, allowing for multi-year distribution growth [38][39] Question: Growth CAPEX details - The 2026 growth CAPEX is guided at $350 million, reflecting a return to typical investment levels [41][42] Question: Impact of geopolitical developments - Management discussed potential impacts from Venezuela, emphasizing the need for stability and investment for long-term changes [49][51] Question: Trends in other business segments - The company sees stable performance in Canadian operations, with growth expected in the Uinta Basin [83]

Financial Data and Key Metrics Changes - AutoNation reported a solid fourth quarter with a 3% revenue growth and an 8% adjusted net income growth, leading to a 16% increase in adjusted earnings per share [3][11] - Adjusted free cash flow exceeded $1 billion, up approximately 39% from 2024 [3][9] - Adjusted net income for the full year increased by 8% to $757 million, while adjusted EPS was $20.22, a 16% increase from 2024 [16][17] Business Line Data and Key Metrics Changes - Same-store unit sales of new vehicles decreased by 10% in Q4, with a 60% decline in battery electric vehicles and a 10% decline in hybrid powertrain vehicles [5][17] - Used vehicle gross profit increased by 5% for the full year, with retail profitability per unit in line with 2024 [6][19] - Customer Financial Services (CFS) unit profitability grew by 8% year-over-year, with record gross profit per unit [7][21] Market Data and Key Metrics Changes - The fourth quarter faced tougher sales comparisons due to a surge in sales in Q4 2024, resulting in a light vehicle SAR of 16.7 million [4] - New vehicle inventory amounted to 45 days of supply, up 6 days from the previous year [18] - The used vehicle market remains tight, with a focus on acquiring vehicles through internal channels [20] Company Strategy and Development Direction - AutoNation expanded its presence in key markets by acquiring several dealerships, including Ford and Mazda in Denver and Audi and Mercedes in Chicago [10][29] - The company aims to maintain a balanced capital allocation strategy, with significant investments in both CapEx and share repurchases [29][30] - The focus remains on improving after-sales performance and customer retention through enhanced service offerings [8][79] Management's Comments on Operating Environment and Future Outlook - Management expects the market to be slightly down in 2026 compared to 2025, with potential benefits from tax changes and depreciation [32] - The used vehicle market is anticipated to show year-over-year improvements, while new unit profitability is expected to remain stable [32][33] - Affordability pressures are a key concern, with expectations of OEMs providing more affordable models to address consumer sensitivity to monthly payments [77][78] Other Important Information - The company deployed over $1.5 billion in capital, with half reinvested in the business and half returned to shareholders through share repurchases [29][30] - The balance sheet remains healthy, with leverage largely unchanged from the prior year at 2.44x EBITDA [30] Q&A Session Summary Question: Regarding the new car business and weaker unit numbers - Management noted a reduction in OEM dealer-facing incentives and a significant drop in EV volume, which contributed to the decline in unit sales [38][40] Question: On AutoNation Finance's profitability cadence - Management expressed confidence in continued profitability growth, with a strong starting point for 2026 [42][43] Question: Capital spending and M&A market outlook - Management indicated that 2026 capital spending levels would be similar to 2025, with ongoing opportunities in the M&A market [52][54] Question: Impact of lease returns on dealership business - Management believes OEMs have prepared for increased lease returns and expects this to benefit the dealership business [71][73] Question: Consumer credit availability and after-sales behavior - Management acknowledged affordability pressures and noted that consumer behavior in after-sales has become more price-sensitive [77][79] Question: Used market strategy and mix shifts - Management highlighted strong performance in higher-priced used vehicles and the need to balance inventory across price segments [82][83]

Financial Data and Key Metrics Changes - AerCap reported record GAAP net income of $3.8 billion, or $21.30 per share, and adjusted net income of $2.7 billion, or $15.37 per share for 2025 [5][19] - Full-year revenues reached an all-time high of $8.5 billion, with sales volumes totaling a record $3.9 billion [5][19] - Operating cash flow for the full year was $5.4 billion, and the company returned $2.6 billion to shareholders through share repurchases and dividends [5][26] - The net debt-to-equity ratio was 2.1x at year-end, and the company received $1.5 billion in recoveries related to the Ukraine conflict [6][20] Business Line Data and Key Metrics Changes - AerCap executed 705 transactions in 2025, including the sale of 189 assets with a gain-on-sale margin of 27% [9][10] - The company extended 87% of its leased aircraft in 2025, up from 79% in 2024, indicating strong customer demand [9] - The engine leasing business expanded through a partnership with GE Aerospace, enhancing AerCap's value proposition [11] - The cargo business received certification for the 777-300ERSF passenger-to-freighter conversion program, delivering eight converted aircraft [12] Market Data and Key Metrics Changes - Demand for aviation assets remains robust, with industry-wide load factors at record highs, while supply is constrained due to delivery delays and maintenance backlogs [8] - Airlines and lessors accounted for over 80% of aircraft sales revenues in 2025 [10] - The cargo market showed resilience despite global trade tariffs and geopolitical challenges, with a strong pipeline for future deliveries [12] Company Strategy and Development Direction - AerCap's strategy focuses on capitalizing on favorable market conditions, with a strong outlook for 2026 projected adjusted EPS of $12-$13 per share [7][25] - The company plans to continue executing strategic transactions, leveraging its scale and market intelligence [10][15] - AerCap aims to maintain a disciplined approach to capital allocation, balancing share repurchases, asset acquisitions, and dividends [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the structural shortage of aircraft persisting through the end of the decade, despite potential demand fluctuations [8][9] - The company highlighted the importance of operational efficiency and asset management in driving long-term value [43] - Management acknowledged the need for ongoing focus on internal operations to mitigate risks associated with high-value assets [43][44] Other Important Information - AerCap's book value per share increased by over 68% since the end of 2022, reflecting strong capital generation capabilities [21][22] - The company has over $3 billion of excess capital to deploy, with 95% of its order book placed for the next two years [15] Q&A Session Summary Question: On the order book and potential future orders - Management indicated that while they prefer to order at the bottom of the cycle, they added 103 aircraft to their order book last year without direct orders from OEMs [30][31] Question: Concerns about the size of lessors - Management noted that as long as they can maintain price discipline and not be price takers, they believe they can grow significantly [34] Question: Thoughts on the A220-500 aircraft - Management expressed skepticism about the need for the A220-500, suggesting it could cannibalize Airbus's own market share [38] Question: Transition from selling aircraft to traditional leasing - Management emphasized that the majority of earnings come from the operating business, and they have consistently sold assets at a gain [39][40] Question: Systemic risks to aircraft lessors - Management acknowledged the importance of operational efficiency and asset management to mitigate risks associated with high maintenance costs [85]

Financial Data and Key Metrics Changes - Piper Sandler reported record adjusted net revenues of $635 million in Q4 2025, with a 27.2% operating margin and adjusted EPS of $6.88. For the full year, adjusted net revenues reached $1.9 billion, achieving a 21.9% operating margin and adjusted EPS of $17.74, reflecting a 22% growth in adjusted net revenues compared to 2024 [4][20][21] - The company returned $239 million to shareholders through share repurchases and dividends in 2025, marking a payout ratio of 43% of adjusted net income [5][24] Business Line Data and Key Metrics Changes - Corporate investment banking generated $469 million in revenues during Q4 2025, a significant increase driven by robust M&A activity, with full-year revenues totaling $1.3 billion, up 28% from the prior year [7][11] - Advisory revenues for Q4 were $403 million, up 44% year-over-year, with total advisory services generating $1 billion in revenues for the year, reflecting a 28% increase from 2024 [7][8] - The equity brokerage business achieved record revenues of $230 million for the full year, with Q4 revenues at $64 million, a quarterly record [16][17] - Fixed income revenues for 2025 were $203 million, up 9% from the prior year, driven by strong activity with depository clients [17] Market Data and Key Metrics Changes - The company completed 335 advisory transactions in 2025, a 16% increase from the previous year, and was ranked as the number two advisor for U.S. M&A deals under $1 billion [8][9] - The public finance business generated $146 million in municipal financing revenues for 2025, a 19% increase over the previous year, with the company maintaining its position as the number two underwriter based on the number of transactions [15][16] Company Strategy and Development Direction - Piper Sandler aims to grow annual revenues to over $2 billion in the coming years, supported by ongoing investments in business diversification and sector capabilities [14] - The company is focused on expanding its technology investment banking practice through acquisitions and key hires, as evidenced by the acquisition of G2 [5][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the advisory revenue pipeline for 2026, citing a constructive market environment and strong client engagement [10][13] - The company anticipates continued growth in advisory revenues, particularly in the context of improving market conditions and increased M&A activity [10][11] Other Important Information - The board approved a 4-for-1 forward stock split to increase liquidity and accessibility for investors, effective March 24, 2026 [25] - The company expects a modest increase in non-compensation expenses in 2026, primarily due to the relocation of its New York office [22] Q&A Session Summary Question: Advisory business performance and sponsor engagement - Management noted a strong performance in the advisory business with a 28% revenue increase, highlighting improved engagement with sponsor clients and a resurgence in bank M&A activity [31][32] Question: Capital allocation and M&A opportunities - Management indicated a consistent approach to capital allocation, focusing on dividends, share buybacks, and potential acquisitions, with optimism about the M&A pipeline [34][36] Question: Expansion into new businesses - Management discussed the focus on enhancing existing products and services rather than pursuing new business lines at this time, emphasizing the growth potential within current offerings [40][41] Question: Equity capital markets outlook - Management acknowledged the volatility in equity markets but emphasized the importance of diversification across sectors to mitigate risks [42] Question: Sponsor client conversations and market conditions - Management characterized ongoing conversations with sponsor clients as steadily improving, with a focus on liquidity and M&A opportunities [46][47] Question: Debt capital advisory growth potential - Management expressed confidence in the continued growth of the debt capital advisory and private capital advisory businesses, which have outpaced M&A growth in recent years [49][50]

Core Viewpoint - Investors in defense contractors are concerned that a White House order limiting CEO pay, dividends, and stock buybacks may reduce shareholder returns and hinder the ability to attract top executives [1][3]. Group 1: Executive Order Details - President Trump issued an executive order on January 7, prohibiting defense contractors from paying dividends or buying back shares until they can produce superior products on time and on budget [2]. - The order also limits annual CEO payouts to $5 million [2]. Group 2: Investor Reactions - Investors express dismay over what they perceive as excessive federal intervention in an industry where payouts are comparable to other large U.S. corporations [3]. - David Sowerby from Ancora Advisors highlighted concerns that such restrictions could drive top executives to other industries, negatively impacting shareholder value [4]. Group 3: Capital Spending Implications - Charles Lieberman from Advisors Capital Management noted that Trump's orders may lead companies to hold back on capital spending in favor of paying shareholders and executives [6]. - He emphasized that the real issue is a lack of orders justifying increased spending on facilities, despite companies having sufficient cash flow to invest [7][8]. Group 4: Government Stance - A White House spokesperson stated that defense contractors must prioritize timely delivery of weapons to the military over stock buybacks, excessive dividends, and inflated executive salaries, warning of consequences for non-compliance [9].