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    RJF
    Earnings call· Sep 2025(Q4 FY25)

    RAYMOND JAMES FINANCIAL INC RJF

    Oct 22, 2025 Source

    Executive summary

    Raymond James Q4 FY25 — Record Revenues and Earnings Driven by Broad-Based Growth

    Raymond James delivered record Q4 and FY25 results, driven by broad-based growth across its Private Client Group, Capital Markets, Asset Management, and Bank segments. The firm's consistent, long-term approach and significant investments in technology and adviser recruiting continue to differentiate it in a competitive and consolidating industry. Management remains confident in its strategic positioning and ability to sustain growth while maintaining strong capital levels.

    Highlights

    5

    • Record net revenues of $3.7 billion in Q4 FY25, up 8% YoY, and $14.1 billion for FY25, up 10% YoY.

    • Record pretax income of $731 million in Q4 FY25 and $2.71 billion for FY25, up 3% YoY.

    • Record client assets of $1.73 trillion and record financial advisers of 8,943.

    • Record recruiting results with TTM production of $407 million, a 21% increase over prior year.

    • Adjusted pretax margin reached 20.7% in Q4 FY25, meeting the full-year target of 20%.

    Concerns

    3

    • Pretax income declined 4% YoY in Q4 FY25 due to interest rate reductions totaling 125 basis points since September 2024.

    • Domestic cash sweep and enhanced savings program balances declined in October due to record quarterly fee billings of approximately $1.8 billion.

    • Potential for platform loss due to bank M&A, with one instance cited for $2.7 billion of assets.

    Guidance & targets

    5
    CategoryTargetConfidence
    Asset management and related administrative fees
    higher by approximately 6.5% over the fourth quarter level
    medium materiality
    High
    Aggregate of NII and RJBDP third-party fees
    approximately flat with the fourth quarter level
    medium materiality
    High
    Effective tax rate
    approximately 24% to 25%
    medium materiality
    High
    Share repurchase pace
    $400 million to $500 million a quarter
    high materiality
    High
    Adjusted pretax margin
    over 20%
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Private Client Group
    Pretax income declined year-over-year, primarily due to interest rate reductions totaling 125 basis points since September of 2024.
    Client assets under administration: $1.6 trillion (YoY growth of 11%)Recruiting TTM production: $407 million (21% increase YoY)Recruited client assets: $58 billionDomestic net new assets: $18 billion (5% annualized growth rate)Financial advisers: 8,943 (2% higher YoY)PCG fee-based assets: $1.01 trillion (up 15% YoY, 7% QoQ)Domestic cash sweep and enhanced savings program balances: $56.4 billion (up 2% QoQ, 3.7% of domestic PCG client assets)
    		$2.66 billion——$416 million
    Capital Markets
    Net revenues grew 6% year-over-year, driven primarily by higher debt underwriting, strong growth in affordable housing investments business revenues as well as solid improvements in both equity and fixed income brokerage revenues. Sequential results grew a robust 35%, largely due to higher M&A revenues, debt underwriting and affordable housing investments revenues.
    Investment Banking revenues: $316 million (nearly flat YoY, up 49% sequentially)Affordable housing investment revenues: up $25 million sequentially (19% increase FY)
    		$513 million6%35%$90 million
    Asset Management
    Results were largely attributable to higher financial assets under management compared to the prior year quarter due to market appreciation over the 12-month period and strong net inflows into PCG fee-based accounts.
    Net inflows into managed programs: $3.6 billion (7.3% annualized growth rate)
    		$314 million——$132 million
    Bank
    Loans ended the quarter at a record $51.6 billion, primarily reflecting robust 22% annual growth in securities-based lending balances. Credit quality of the loan portfolio remains strong.
    Loans: $51.6 billion (record)Securities-based lending balances growth: 22% annuallyResidential mortgage loans growth: 9% over the yearCriticized loans as % of total loans: 1.28%Nonperforming assets as % of Bank segment assets: 0.29% (29 bps)Bank loan allowance for credit losses as % of total loans: 0.88% (88 bps)Bank loan allowance for credit losses on corporate loans as % of corporate loans: 1.88%
    		$459 million——$133 million

    Operational metrics

    24
    Adjusted net income available to common shareholders
    $635 million
    Q4 FY25

    Excluding expenses related to acquisitions.

    Adjusted earnings per diluted share
    $3.11
    Q4 FY25

    Excluding expenses related to acquisitions.

    Annualized return on common equity
    19.6%
    Q4 FY25

    Solid results for the quarter.

    Annualized adjusted return on tangible common equity
    23.9%
    Q4 FY25

    Solid results for the quarter.

    Asset management and related administrative fees
    $1.88 billionup 13% YoY, up 8% QoQ
    Q4 FY25

    Record PCG fee-based assets equaled $1.01 trillion at quarter end.

    Brokerage revenues
    $616 millionup 8% YoY
    Q4 FY25

    Mainly due to higher PCG revenues.

    Net interest margin
    2.71%down 3 bps QoQ
    Q4 FY25

    The average yield on RJBDP balances with third-party banks decreased 5 basis points to 2.91%, in part due to the impact of the September Fed interest rate cut.

    Compensation expense
    $2.39 billion
    Q4 FY25

    Total compensation ratio for the quarter was 64.2%.

    Adjusted compensation ratio
    64.0%
    Q4 FY25

    Better than the 65% target level shared at Investor Day.

    Amortization of transition assistance and retention awards
    $355 millionup 11% vs FY24
    FY25

    Included in adjusted compensation expense.

    Non-compensation expenses
    $602 millionup 11% YoY
    Q4 FY25

    A large portion of these costs support firm-wide growth initiatives.

    Full year non-compensation expenses
    $2.1 billion
    FY25

    Achieved consistent with prior guidance, excluding certain items.

    Total assets
    $88.2 billionup 4% QoQ
    Q4 FY25

    Resulting primarily from loan growth and higher corporate cash balances.

    Corporate cash at parent
    $3.7 billionup $2.5 billion over target
    Q4 FY25

    Increased over the prior quarter level resulting from the proceeds of the senior notes offering.

    Total capital ratio
    24.1%
    Q4 FY25

    Well above regulatory requirements.

    Excess capital capacity
    $2.6 billion
    Q4 FY25

    To deploy before reaching targeted Tier 1 capital ratio of 10%.

    Effective tax rate
    17.4%
    Q4 FY25

    Reflecting the favorable impact of nontaxable corporate-owned life insurance gains and the favorable resolution of certain historical tax matters.

    Share repurchases
    $350 million
    Q4 FY25

    Part of capital deployment strategy.

    Total capital returned
    over $1.5 billion
    FY25

    Through common dividends and share repurchases.

    Subordinated notes redemption
    nearly $100 million
    August

    Utilized liquidity for this debt capital action.

    Senior notes issued
    $1.5 billion
    Q4 FY25

    Issued to take advantage of a favorable market environment, resulting in additional liquidity.

    Technology investments
    approximately $1 billion
    FY25

    Includes strategic AI initiatives designed to improve adviser efficiency and support regulatory oversight.

    AI expense
    significant increase
    FY26

    Budgeted for next year, expected to accelerate substantially.

    Loans (SBL + residential mortgage) as % of total loan book
    nearly 60%
    Q4 FY25

    Reflects the shift of the balance sheet to support the Private Client Group business.

    Industry KPIs

    3
    MetricValueDetails
    Cet1 ratio13.1%%
    Pretax margin20.7%%
    Net interest income$653 millionUSD

    Product announcements

    1
    ProductTypeDetails
    Bitcoin ETFslaunch

    Deals & partnerships

    1
    GreensLedgeAcquisition of a boutique investment bank recognized for its expertise in structured credit and securitizations, operating on a balance-sheet-light model.

    Raymond James recently announced the acquisition of GreensLedge, a boutique investment bank recognized for its expertise in structured credit and securitizations, with the transaction anticipated to close later this fiscal year.

    Risks & headwinds

    3
    Interest Rate ReductionsQ4 FY25

    Pretax income declined 4% YoY in Q4 FY25 due to 125 basis points of interest rate reductions since September 2024.

    Mitigation: Implied by NII guidance that higher asset balances are offsetting the impact of rate cuts.

    Fee Billings Impact on Cash BalancesOctober (Q1 FY26)

    Domestic cash sweep and enhanced savings program balances declined in October due to record quarterly fee billings of approximately $1.8 billion.

    Mitigation: The decline was anticipated and is part of normal business operations following fee billings.

    Industry M&A DisruptionQ1 FY26

    Potential for platform loss due to bank M&A, with one instance cited for $2.7 billion of assets in the next quarter.

    Mitigation: The firm's stable platform and strong recruiting efforts attract advisers seeking stability during industry disruption, creating opportunities for growth.

    What to watch in Q1 FY26

    5

    Asset management and related administrative fees growth

    Q1 FY26
    Currenthigher by approximately 6.5% over the fourth quarter level
    Targethigher by approximately 6.5%

    Why it matters

    Indicates continued growth in fee-based assets and profitability from the Asset Management segment.

    As we look ahead, we expect fiscal first quarter 2026 asset management and related administrative fees to be higher by approximately 6.5% over the fourth quarter level, driven by higher PCG assets and fee-based accounts at quarter end.

    Q&A highlights

    7

    Which segments are seeing more uplift in recruiting, what resonates with advisers, and is it due to industry-wide adviser motion?

    Recruiting success is broad-based across all channels (employee, independent, RIA). The firm's "best of both worlds" value proposition (culture + resources/tech) and stable platform resonate, especially amidst industry M&A and short-term focused competitors.

    “The recruiting success that we've been having has really been broad-based across all of our affiliation options, the employee, independent contractor and the RIA, custody channels.”

    asked by Michael Cho · answered by Paul Shoukry

    2 min read6 chapters

    Detailed Narrative

    01

    Record Performance and Strategic Differentiators

    Raymond James achieved record revenues of $3.7 billion in Q4 FY25 (up 8% YoY) and $14.1 billion for FY25 (up 10% YoY), alongside record pretax income of $731 million in Q4 and $2.71 billion for FY25. The firm attributes this success to its values-based, client-focused approach, strong relationships, and long-term decision-making, which differentiate it from competitors focused on short-term exits or growth at all costs.

    02

    Adviser Recruiting and Client Asset Growth

    The firm ended the year with record client assets of $1.73 trillion and 8,943 financial advisers, reflecting 2% YoY growth. Recruiting results were outstanding, with TTM production from new advisers totaling $407 million (up 21% YoY) and recruited client assets of $58 billion. Domestic net new assets were nearly $18 billion in the quarter, representing a 5% annualized growth rate, driven by strong retention and recruiting momentum across all affiliation channels.

    03

    Strategic Investments in Technology and AI

    Raymond James invested approximately $1 billion in technology during FY25, including strategic AI initiatives. These investments aim to enhance adviser efficiency, support regulatory oversight, and improve the adviser and client experience. The firm hired a Chief AI Officer and Head of AI Strategy, budgeting for a significant increase in AI expense for FY26, viewing it as a key differentiator against smaller competitors.

    04

    Capital Markets and Bank Segment Strength

    The Capital Markets segment delivered strong Q4 results with $513 million in revenues, its third-highest on record, driven by debt underwriting, affordable housing investments, and improved brokerage revenues. The Investment Banking pipeline remains robust. The Bank segment saw record loans of $51.6 billion, primarily from 22% annual growth in securities-based lending, with strong credit quality.

    05

    Capital Deployment and Financial Strength

    The firm returned over $1.5 billion to shareholders in FY25 through common dividends and share repurchases, including $350 million in Q4. Raymond James maintains a Tier 1 leverage ratio of 13.1% and $2.6 billion in excess capital capacity, supporting its strategy of investing in organic growth, strategic acquisitions (like GreensLedge), and consistent share repurchases to manage capital levels.

    06

    Interest Rate Impact and NII Outlook

    While overall results were strong, Q4 pretax income was impacted by 125 basis points of interest rate reductions since September 2024. The Bank segment's NIM decreased 3 bps to 2.71%. For Q1 FY26, the aggregate of NII and RJBDP third-party fees is expected to be approximately flat with Q4 FY25, with higher interest-earning asset balances offsetting the full impact of the September rate cut.

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