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    RJF
    Earnings call· Jun 2026(Q3 FY26)

    RAYMOND JAMES FINANCIAL INC RJF

    Jul 22, 2026 Source

    Executive summary

    Raymond James Q3 FY26 — Record Revenues and EPS Driven by Diversified Model and Strong Recruiting

    Raymond James delivered strong Q3 FY26 results, achieving record revenues and EPS, underpinned by its diversified business model and robust financial adviser recruiting momentum. The firm continues to invest heavily in technology and AI, including the enterprise rollout of its proprietary AI assistant, Raimond, to enhance adviser productivity and client experience. While Capital Markets activity remains below normalized levels, the firm maintains a positive outlook on its pipeline and capital deployment priorities, including strategic acquisitions and shareholder returns.

    Highlights

    6

    • Generated record quarterly revenues of $3.93 billion, representing 16% growth over the prior year quarter.

    • Achieved pre-tax income of $750 million, an increase of 33% compared to the year-ago quarter.

    • Reported record adjusted earnings per diluted share of $3.14.

    • Ended the quarter with record client assets under administration of $1.86 trillion, up 18% year-over-year.

    • Domestic net new assets were $21.7 billion, representing a 5.5% annualized growth rate.

    • Recruited financial advisers with trailing 12-month production totaling $156 million and nearly $23 billion of client assets in Q3.

    Concerns

    3

    • Capital Markets activity levels remain below a normalized environment, especially in the middle market and sponsor-driven client segments.

    • Non-compensation expenses increased due to elevated legal expenses associated with a putative class action lawsuit related to cash sweep programs.

    • Asset Management segment margin was impacted by the partial quarter contribution and acquisition-related expenses from the Clark Capital acquisition.

    Guidance & targets

    4
    CategoryTargetConfidence
    Asset management and related administrative fees
    increase approximately 11% from the third quarter level
    medium materiality
    High
    Aggregate NII and RJBDP fees from third-party banks
    approximately flat with the third quarter level
    medium materiality
    Medium
    Effective tax rate
    approximate 24%
    medium materiality
    High
    Non-compensation expenses
    approximately $2.3 billion
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Private Client Group
    Revenues grew primarily due to higher PCG assets under administration, resulting from market appreciation, strong retention, and continued net new asset additions. Pre-tax income grew 3% YoY, partially offset by lower interest rates and investments in growth.
    Client assets under administration: $1.86 trillion (up 9% QoQ, 18% YoY)Domestic net new assets: $21.7 billion (5.5% annualized growth rate)Recruited TTM production (Q3): $156 millionRecruited client assets (Q3): $23 billionRecruited TTM production (YTD): $393 millionRecruited client assets (YTD): $56 billionAdviser satisfaction rate: 97%
    		$2.84 billion14%—$423 million
    Capital Markets
    Segment net revenues increased year-over-year and sequentially, largely due to higher M&A and advisory revenues and higher debt underwriting revenues. Activity levels remain below normalized, but the pipeline is encouraging.
    		$477 million——$48 million
    Asset Management
    Results were largely driven by higher financial assets under management compared with the prior year quarter, reflecting market appreciation and strong net inflows into PCG fee-based accounts. Results also included a partial quarter contribution from the Clark Capital acquisition.
    		$362 million——$143 million
    Bank
    Segment net revenues increased due to net loan growth. Results benefited from a loan loss reserve release driven by strengthening credit quality and a shift toward lower-risk securities-based and residential mortgage loans.
    Loans: $56.2 billion (up 13% YoY, 3% QoQ)Securities-based lending balances: up $6 billion (34% YoY, 8% QoQ)Securities-based loans & residential mortgages as % of total loans: 64% (44% SBL, 20% residential mortgage)
    		$488 million7%—$206 million

    Operational metrics

    31
    Adjusted net income available to common shareholders
    $620 million
    Q3 FY26

    Excludes acquisition-related expenses.

    Adjusted earnings per diluted share
    $3.14
    Q3 FY26

    Excludes acquisition-related expenses.

    Pre-tax margin
    19.1%
    Q3 FY26

    Firm-wide pre-tax margin.

    Adjusted pre-tax margin
    19.9%
    Q3 FY26

    Firm-wide adjusted pre-tax margin, in line with guidance of approximately 20%.

    Annualized return on common equity
    18.8%
    Q3 FY26

    Annualized return on common equity.

    Annualized adjusted return on tangible common equity
    23.5%
    Q3 FY26

    Annualized adjusted return on tangible common equity.

    Asset management and related administrative fees
    $2.08 billionup 20% YoY, 3% QoQ
    Q3 FY26

    Record fees.

    PCG fee-based assets
    $1.15 trillionup 22% YoY, 11% QoQ
    Q3 FY26

    Record quarter-end PCG fee-based assets.

    Clients' domestic cash sweep and Enhanced Savings Program balances
    $58.8 billionup 2% QoQ, 7% YoY
    Q3 FY26

    Represents 3.4% of domestic PCG client assets at quarter end.

    Enhanced Savings Program balances
    $2.4 billionup 19% QoQ
    Q3 FY26

    On-balance sheet increase in bank deposits, enabling shift of cash sweep balances to third-party banks.

    Combined net interest income and RJBDP fees from third-party banks
    $658 millionup $8 million (1%) QoQ
    Q3 FY26

    Fee revenues from RJBDP balances with third-party banks increased due to higher yield and average balances.

    Yield on RJBDP balances with third-party banks
    2.75%up 5 bps
    Q3 FY26

    Increased yield on balances swept to third-party banks.

    Compensation expense
    $2.58 billion
    Q3 FY26

    Total compensation expense.

    Total compensation ratio
    65.7%
    Q3 FY26

    Firm-wide compensation ratio.

    Adjusted compensation ratio
    65.5%down 20 bps QoQ
    Q3 FY26

    Excludes acquisition-related compensation expenses. In line with target of approximately 65%.

    Non-compensation expenses
    $599 milliondown 5% YoY, up 3% QoQ
    Q3 FY26

    Prior year quarter included a reserve increase for a legal settlement. Sequentially increased due to higher professional fees (elevated legal expenses) and business development expenses.

    Total assets
    $94.2 billionup 3% QoQ
    Q3 FY26

    Primarily due to growth of the loan portfolio.

    RJF corporate cash at parent
    $2.5 billion
    Q3 FY26

    Provides excess liquidity of $1.3 billion above the $1.2 billion target. Declined due to Clark Capital acquisition.

    Tier 1 leverage ratio
    11.7%down 140 bps over 12 months
    Q3 FY26

    Well above regulatory requirements, with a conservative target of 10%.

    Total capital ratio
    22.5%
    Q3 FY26

    Well above regulatory requirements.

    Excess capital capacity
    $1.5 billion
    Q3 FY26

    Capacity to deploy before reaching the conservative Tier 1 leverage ratio target of 10%.

    Effective tax rate
    20.7%
    Q3 FY26

    Includes favorable impact of nontaxable gains on corporate-owned life insurance portfolio.

    Capital returned to shareholders (Q3)
    $506 million
    Q3 FY26

    Combination of common dividends paid and share repurchases.

    Common shares repurchased (Q3)
    $400 million
    Q3 FY26

    Part of the share repurchase program.

    Common shares repurchased (LTM)
    $1.6 billion
    LTM Q3 FY26

    Over the past 12 months.

    Total capital returned to common shareholders (LTM)
    nearly $2 billion
    LTM Q3 FY26

    Includes dividends and share repurchases over the past 12 months.

    AI annual technology spend
    more than $1.1 billion
    Annual

    Annual technology spend, including investments in automation, process improvement, and AI.

    Raimond AI unique users
    6,500
    Q3 FY26

    Unique users since the full rollout on June 15.

    Raimond AI satisfaction rate
    99.5%
    Q3 FY26

    Satisfaction rate for the proprietary AI assistant.

    AI academy completions
    close to 20,000
    Q3 FY26

    Number of individuals who completed the four-course module since rollout.

    Net new assets
    $75 billionup 119% YoY
    YTD FY26

    Net new assets for the fiscal year to date, a record.

    Product announcements

    1
    ProductTypeDetails
    Raimondlaunch

    Deals & partnerships

    1
    Clark CapitalAcquisition of wealth-focused solutions and approximately $47 billion in combined assets under management and nondiscretionary assets.

    The acquisition of Clark Capital was completed during the quarter (April 30), adding its wealth-focused solutions and assets to the Raymond James platform. The integration is focused on stabilizing the client base and team, with future opportunities for cross-pollination.

    Risks & headwinds

    2
    Capital Markets activity levels

    Activity levels remain below what we would have considered a normalized environment, especially in the middle market and sponsor-driven client segments.

    Mitigation: The firm entered the fourth quarter with an encouraging pipeline, reflecting strategic investments. Management is optimistic about positioning as motivated buyers and sellers engage.

    Elevated legal expensesnear-term quarters

    Increased professional fees, with the vast majority being defense costs incurred during the quarter associated with a previously disclosed putative class action lawsuit related to cash sweep programs.

    Mitigation: The firm believes it has strong defenses to the claims asserted and is vigorously defending the action. Expects to incur some additional expense in near-term quarters, but not at the Q3 level.

    What to watch in Q4 FY26

    5

    Capital Markets activity normalization

    Next quarter
    CurrentBelow normalized levels
    TargetIncreased M&A and advisory revenues

    Why it matters

    Significant upside potential for investment banking revenue and segment margin, crucial for overall firm profitability.

    We entered the fourth quarter with an encouraging pipeline, reflecting the opportunities created by the strategic investments we have made in this segment over the past few years. While the timing of📎 transaction activity remains difficult to predict📌, we are optimistic about our positioning as motivated buyers and sellers continue to engage us for the deep expertise across the industries we cover.

    Q&A highlights

    6

    Confidence in maintaining high organic growth rates given the robust recruiting backlog.

    Paul Shoukry emphasized that high adviser retention (97% satisfaction) is the foundation for growth, complemented by a broad-based, non-idiosyncratic recruiting pipeline across all affiliation options. He highlighted that net new assets are up 119% year-to-date to $75 billion, demonstrating phenomenal growth.

    “So $75 billion of net new assets for the fiscal year is up 119% from last year, which was a record. So it's truly phenomenal growth that we are driving.”

    asked by Daniel Fannon · answered by Paul Shoukry

    3 min read6 chapters

    Detailed Narrative

    01

    Adviser Recruiting and Retention

    Raymond James continues to demonstrate strong adviser recruiting momentum, attracting advisers with $156 million in TTM production and $23 billion in client assets in Q3, and $393 million in TTM production and $56 billion year-to-date. This success is attributed to its differentiated value proposition, offering diverse affiliation options and a client-first culture, supported by a 97% adviser satisfaction rate. The firm emphasizes that high retention of existing advisers is the foundation for continued growth, with net new assets up 119% year-to-date to $75 billion.

    02

    Technology and AI Investments

    The firm is investing over $1.1 billion annually in technology, including the enterprise-wide rollout of Raimond, its proprietary AI assistant, on June 15. Raimond, with 6,500 unique users and 99.5% satisfaction, aims to enhance adviser efficiency and client experience by providing secure, plain-language access to institutional knowledge. Raymond James has also launched an AI academy, with nearly 20,000 completions, to educate advisers and associates on leveraging AI to improve productivity and client service, believing AI will differentiate firms and increase the industry's competitive moat.

    03

    Capital Markets Outlook

    Capital Markets revenues grew this quarter, primarily from stronger investment banking results, though activity levels remain below normalized, particularly in the middle market and sponsor-driven segments. The firm notes an encouraging pipeline, reflecting strategic investments made over recent years. Management expresses optimism for future transaction activity, citing pent-up energy among financial sponsors and motivated buyers and sellers, despite the difficult-to-predict timing of📎 deal closures.

    04

    Bank Segment Growth and Credit Quality

    The Bank segment reported record loans of $56.2 billion, marking a 13% year-over-year and 3% sequential increase, driven primarily by 34% year-over-year and 8% sequential growth in securities-based lending balances. Credit quality across the loan portfolio remains strong, with a loan loss reserve release during the quarter. This release was driven by a strengthening in credit quality as the loan portfolio continues to shift toward lower-risk securities-based and residential mortgage loans, which now represent 64% of total loans.

    05

    Capital Deployment and Shareholder Returns

    Raymond James maintains a disciplined capital deployment strategy, prioritizing organic growth, technology investments, strategic acquisitions, and returning capital to shareholders. The firm repurchased $400 million of common stock in Q3 at an average price of $152 per share, contributing to $1.6 billion in repurchases over the past 12 months. Including dividends, nearly $2 billion (86% of earnings) was returned to common shareholders over the last year, while maintaining a strong Tier 1 leverage ratio of 11.7% and $1.5 billion in excess capital capacity.

    06

    Cash Sweep and Funding Flexibility

    Clients' domestic cash sweep and Enhanced Savings Program (ESP) balances ended the quarter at $58.8 billion, up 7% year-over-year and 2% sequentially, representing 3.4% of domestic PCG client assets. The firm diversified its funding by achieving strong growth in ESP balances, which increased by $2.4 billion or 19% sequentially. This on-balance sheet increase in bank deposits allowed Raymond James to shift a portion of its cash sweep program balances from its banks to third-party banks, demonstrating the flexibility and strength of its funding model.

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