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    PIPR
    Earnings call· Jun 2026(Q2 FY26)

    PIPER SANDLER COMPANIES Q2 FY26 earnings call PIPR

    Jul 30, 2026 Source

    Executive summary

    Piper Sandler Q2 FY26 — Record Advisory and Equity Brokerage Performance

    Piper Sandler delivered a strong second quarter, marked by record advisory and equity brokerage revenues, contributing to its 11th consecutive quarter of year-over-year revenue growth. The firm's diversified model, particularly its strength in Financial Services and Healthcare, enabled it to navigate varied market conditions, though fixed income faced headwinds. Management remains focused on strategic investments and disciplined cost management to drive continued long-term growth.

    Highlights

    5

    • Adjusted net revenues reached $491 million, up 21% year-over-year, marking the 11th consecutive quarter of YoY growth.

    • Advisory Services achieved record Q2 revenues of $274 million, a 34% increase year-over-year, driven by 83 transactions.

    • Corporate Investment Banking revenues grew 31% year-over-year to $312 million, contributing to a record first half performance of $636 million.

    • Equity brokerage generated record Q2 revenues of $63 million, up 8% year-over-year, and traded 6.6 billion shares in H1.

    • Municipal financing revenues were $50 million, up 18% year-over-year, representing the strongest second quarter on record.

    Concerns

    5

    • Fixed income revenues were down sequentially and year-over-year due to challenging market conditions, including geopolitical events and interest rate uncertainty.

    • Corporate financing revenues, while up 10% year-over-year, were down from a very strong first quarter.

    • The governmental business within Public Finance experienced a year-over-year decline in Q2.

    • Middle market M&A close rates have been lower than in the past, despite good pitch calendars and new mandates.

    • The Q2 ECM business showed underperformance relative to the market, though H1 performance was strong overall.

    Guidance & targets

    4
    CategoryTargetConfidence
    Public Finance revenues
    will decline from the robust second quarter
    medium materiality
    Medium
    Equity Brokerage revenues
    will follow historical trends, which typically reflect a seasonal decline
    medium materiality
    Medium
    Fixed Income revenues
    similar to the second quarter
    medium materiality
    Medium
    Firm-wide net revenues
    in line with the third quarter of 2025
    high materiality
    Medium

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Corporate Investment Banking
    Driven by robust advisory activity, with broad-based growth across nearly all sectors and products.
    First half 2026 revenues: $636 millionFirst half 2026 YoY growth: 30%Strongest first half performance on record
    		$312 million31%——
    Advisory Services
    Performance led by Financial Services and Healthcare, with meaningful contributions from Services and Industrials. Strong momentum in Private Capital Advisory group.
    83 advisory transactions completed17% increase in volumeFinancial Services led performanceHealthcare contributed strong resultsMed-Tech team advised on several largest dealsRanked #1 adviser in U.S. bank M&A by announced transaction count and deal value in H1Advisory revenues from Private Equity clients grew 10% YoYFirst half 2026 revenues: $525 millionFirst half 2026 YoY growth: 25%Sixth consecutive quarter of year-over-year growth
    		$274 million34%——
    Corporate Financing
    Activity fluctuates based on client and sector-specific dynamics, primarily in the Healthcare space.
    28 financings completed$13 billion raised for corporate clientsFirst half 2026 revenues: $111 millionFirst half 2026 YoY growth: 65%33% increase in book-run transactions (H1)Higher average fees (H1)
    		$38 million10%down sequentially—
    Public Finance
    Attributable to the strength of the specialty business, particularly special district and hospitality groups. Governmental business remained resilient despite YoY decline.
    141 municipal negotiated transactions underwritten$5 billion of par value raisedStrongest second quarter on recordFirst half 2026 YoY growth: 7%Outpacing 4% par value growth of municipal negotiated market (H1)
    		$50 million18%double Q1 revenues—
    Equity Brokerage
    Driven by successful execution of strategy and aided by benchmark rebalancing events in June.
    Record second quarter revenuesFirst half 2026 revenues: $123 millionFirst half 2026 YoY growth: 10%6.6 billion shares traded (H1)14% increase in shares traded (H1)3 largest days in firm history by notional volume (Q2)
    		$63 million8%——
    Fixed Income
    Market environment remained challenging due to geopolitical events, interest rate uncertainty, and a flattening yield curve. Bank restructuring activity provided a partial offset.
    		$49 milliondowndown—

    Operational metrics

    14
    Adjusted net revenues
    $491 million21% year-over-year
    Q2 FY26

    Fueled by activity across advisory services, municipal financing and equity brokerage.

    Adjusted operating margin
    21.8%up significantly compared to the prior year
    Q2 FY26

    Operating income for the first half grew 42% over 2025, outpacing our 22% revenue growth and illustrating the inherent scalability of our model.

    Adjusted diluted EPS
    $1.04up significantly compared to the prior year
    Q2 FY26
    Compensation ratio
    61.5%improved year-over-year
    Q2 FY26

    Reflects commitment to balancing employee retention with strategic investment opportunities.

    Non-compensation expenses
    $82 million
    Q2 FY26

    H1 increase primarily due to a litigation-related expense taken during the first quarter.

    Effective tax rate
    30.5%
    Q2 FY26

    Year-to-date tax expense was reduced by benefits related to the vesting of restricted stock awards.

    Share repurchases
    391,000 shares
    Q2 FY26

    These buybacks have more than offset the share count dilution from the 2026 annual grants.

    Cash dividends
    $14 million
    Q2 FY26

    Aggregate amount paid to shareholders.

    Total capital returned to shareholders
    $215 million
    H1 FY26

    Includes cash dividends and share repurchases.

    Investment Banking Managing Directors
    1936% increase year-over-year
    Q2 FY26

    Focus on productivity by selectively adding top producers.

    Corporate Financing Book-Run Transactions
    33%increase year-over-year
    H1 FY26

    Contributed to H1 corporate financing revenue growth.

    Municipal Negotiated Transactions
    141
    Q2 FY26

    Underwritten by the Public Finance business.

    Equity Brokerage Shares Traded
    6.6 billionup 14%
    H1 FY26

    Underscores the strength of the platform and value provided to clients.

    Quarterly cash dividend
    $0.20
    Q3 FY26

    Board approved quarterly cash dividend.

    Risks & headwinds

    4
    Challenging Fixed Income MarketQ2 FY26

    Fixed income revenues down sequentially and year-over-year.

    Mitigation: Focused on providing tailored advice-driven solutions and partnering with banking colleagues for balance sheet restructuring advice.

    Middle Market M&A Close RatesRecent past, impacting H2 outlook

    Close rates have been a little lower than in the past.

    Mitigation: Focus on larger fee transactions in the pipeline.

    ECM VolatilityQ2 FY26

    Q2 ECM business showed underperformance relative to the market.

    Mitigation: Strong backlog in healthy biotech/healthcare sector, which is the majority of their ECM business.

    Increased Competition in Middle MarketOngoing

    Directional, 'could increase competition' on select transactions from money center banks.

    Mitigation: Firm's long-standing expertise and established deal flow in the middle market make it difficult for new entrants to quickly gain share.

    What to watch in Q3 FY26

    5

    Middle Market M&A Close Rates

    H2 FY26 / next quarter
    Currenta little lower than in the past
    TargetImprovement in close rates for new mandates

    Why it matters

    To indicate overall health and conversion of the middle market deal pipeline, impacting advisory revenue.

    But the pitch calendars, new mandates, things look pretty good for the back half. It will just depend on close rates. I do think across the industry, I've seen some data from various auctions where the close rates have been a little lower than in the past.

    Q&A highlights

    6

    Is there a meaningful shift from dialogue to actual deals in the middle market, especially for sponsor activity, and what are expectations for H2?

    Chad Abraham noted that middle market performance varies by sector, with Financial Services and Healthcare being strong. While overall sponsor business was up slightly for Piper Sandler, some sectors are tougher. Pitch calendars and new mandates look good for H2, but close rates have been lower.

    “But the pitch calendars, new mandates, things look pretty good for the back half. It will just depend on close rates. I do think across the industry, I've seen some data from various auctions where the close rates have been a little lower than in the past.”

    asked by Unknown Analyst · answered by Chad Abraham

    2 min read6 chapters

    Detailed Narrative

    01

    Strong First Half Performance and Diversified Model

    Piper Sandler achieved its strongest first half performance on record, with Corporate Investment Banking revenues totaling $636 million, a 30% increase year-over-year. This broad-based growth across nearly all sectors and products validates the firm's strategy of combining deep sector expertise with a wide range of solutions, enabling it to perform well across various market conditions. The firm noted its 11th consecutive quarter of year-over-year revenue growth, highlighting the durability of its model.

    02

    Advisory Services Momentum

    Advisory Services recorded $274 million in Q2 revenues, up 34% year-over-year, marking the sixth consecutive quarter of YoY growth. This was driven by 83 advisory transactions, a 17% increase in volume, and larger fees. Financial Services, particularly the #1 ranked U.S. bank M&A practice, and Healthcare, led by Med-Tech, were key contributors. The firm's Insurance and Asset Management franchises also contributed to this success.

    03

    Strategic Focus on Private Equity

    Despite a challenging environment for sponsor activity, advisory revenues from Private Equity clients grew 10% year-over-year, outperforming the broader market. The firm is scaling this practice by transitioning senior leaders to focus on Private Equity advisory efforts, aiming to capture more M&A, debt capital markets advisory, continuation vehicles, and IPO activity as market conditions improve. The Private Capital Advisory group also recorded its best quarter, driven by secondary business.

    04

    Public Finance and Equity Brokerage Records

    The Public Finance business generated $50 million in municipal financing revenues, an 18% year-over-year increase and its strongest second quarter on record, driven by specialty business strength and several large transactions. Equity brokerage also achieved record Q2 revenues of $63 million, up 8% year-over-year, aided by successful execution and unique benchmark rebalancing events in June, which produced its three largest days in firm history by notional volume.

    05

    Disciplined Cost Management

    The firm maintained strong cost discipline, with a compensation ratio of 61.5% for both Q2 and H1, an improvement year-over-year. Non-compensation expenses were $82 million or 16.7% of net revenue in Q2. The H1 non-comp ratio improved by 230 basis points to 17.5%, demonstrating operating leverage as revenue expands, despite some litigation-related expenses in Q1 and anticipated upward pressure from new occupancy costs in New York.

    06

    Capital Allocation and Shareholder Returns

    Piper Sandler repurchased 391,000 shares for $31 million in Q2 and paid $14 million in cash dividends. For the first half of 2026, $215 million was returned to shareholders, including $115 million in cash dividends ($1.625 per share) and $101 million in share repurchases (approximately 1.3 million shares). These buybacks have more than offset the share count dilution from 2026 annual grants, reinforcing the firm's commitment to disciplined capital management.

    AI-generated summary of the company’s earnings call. Not investment advice.