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    RJF
    Earnings call· Dec 2025(Q1 FY26)

    RAYMOND JAMES FINANCIAL INC RJF

    Jan 28, 2026 Source

    Executive summary

    Raymond James Q1 FY26 — Strong Recruiting Momentum and Capital Deployment

    Raymond James delivered a strong Q1 FY26, driven by robust financial adviser recruiting and significant net new asset growth, alongside strategic capital deployment through acquisitions and share repurchases. The firm maintained a 20% adjusted pretax margin despite headwinds in Capital Markets and interest rate impacts on Private Client Group, underscoring the resilience of its diversified business model. Management remains focused on long-term organic growth and platform investments, while navigating a competitive landscape and interest rate volatility.

    Highlights

    5

    • Net new asset annualized growth of 8% this quarter, with $31 billion in net new assets.

    • Recruited financial advisers with trailing 12-month production totaling $96 million and $13 billion of client assets in Q1.

    • Record net revenues of $3.7 billion for the fiscal first quarter.

    • Adjusted pretax margin of 20% achieved despite headwinds.

    • Record bank loans of $53.4 billion, up 13% YoY and 4% sequentially.

    Concerns

    4

    • Capital Markets results declined due to lower M&A and advisory revenues, and lower debt underwriting and affordable housing investment revenues.

    • Pretax income in Private Client Group declined 5% YoY due to interest rate reductions impacting noncompensable revenues.

    • Domestic cash sweep and enhanced savings program balances declined by $2.6 billion since quarter-end due to fee billing and client reinvestment.

    • Expected aggregate NII and RJBDP fees for Q2 FY26 to be down from Q1 FY26 due to fewer interest-earning days and recent Fed rate cuts.

    Guidance & targets

    4
    CategoryTargetConfidence
    Asset management and related administrative fees
    higher by approximately 1%
    medium materiality
    High
    Non-compensation expenses (adjusted)
    approximately $2.3 billion
    medium materiality
    High
    Effective tax rate
    approximately 24% to 25%
    low materiality
    High
    Common share repurchases
    approximately $400 million
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Private Client Group
    Results driven by higher AUA from market appreciation, retention, and net new assets. Pretax income declined 5% YoY due to interest rate reductions impacting noncompensable revenues.
    PCG assets under administration: higherPCG fee-based assets: $1.04 trillionPCG fee-based assets YoY growth: 19%PCG fee-based assets QoQ growth: 3%
    		$2.77 billion——$439 million
    Capital Markets
    Revenues declined year-over-year and sequentially due to lower M&A and advisory revenues, and lower debt underwriting and affordable housing investment revenues. Robust pipeline for Q2.
    Pretax margin last quarter: 17.5%
    		$380 milliondeclineddeclined$9 million
    Asset Management
    Results largely attributable to higher financial AUM from market appreciation and strong net inflows in PCG fee-based accounts.
    Financial assets under management: higher
    		$326 million——$143 million
    Bank
    Strong loan growth fueled by securities-based loans and lower funding costs. Credit quality remains strong.
    Loans: $53.4 billionLoans YoY growth: 13%Loans QoQ growth: 4%Securities-based lending balances annual growth: 28%Securities-based lending balances QoQ growth: 10%Net interest income QoQ growth: 6%Net interest margin: 2.81%Net interest margin QoQ change: 10 bps
    		$487 million——$173 million

    Operational metrics

    38
    Net new asset annualized growth
    8%
    Q1 FY26

    Reflected in $31 billion of net new assets in the quarter.

    Net new assets
    $31 billionsecond best quarter ever
    Q1 FY26

    Strong recruiting activity and retention.

    Trailing 12-month production recruited
    $96 million
    Q1 FY26

    Strong result for a seasonally slow quarter.

    Client assets recruited
    $13 billion
    Q1 FY26

    Assets at previous firms for recruited advisers.

    Trailing 12-month production recruited (LTM)
    $460 million
    LTM

    Across all platforms.

    Total client assets recruited (LTM)
    $69 billion
    LTM

    Includes assets recruited into RIA and custody service division.

    Adjusted net income available to common shareholders
    $577 million
    Q1 FY26

    Excluding expenses related to acquisitions.

    Adjusted earnings per diluted share
    $2.86
    Q1 FY26

    Excluding expenses related to acquisitions.

    Adjusted pretax margin
    20%
    Q1 FY26

    Achieved target despite headwinds.

    Annualized return on common equity
    18%
    Q1 FY26

    Solid results given conservative capital base.

    Annualized adjusted return on tangible common equity
    21.4%
    Q1 FY26

    Solid results given conservative capital base.

    Asset management and related administrative fees
    $2 billionup 15% YoY, up 6% QoQ
    Q1 FY26

    Record revenues.

    Clients' domestic cash sweep and enhanced savings program balances
    $58.1 billionup 3% QoQ
    Q1 FY26

    Balances at quarter end.

    Combined net interest income and RJBDP fees
    $667 millionup 2% QoQ
    Q1 FY26

    From third-party bank.

    Average yield on RJBDP balances with third-party banks
    2.76%decreased 15 bps
    Q1 FY26

    Primarily due to Fed interest rate cuts since mid-September 2025.

    Compensation ratio
    65.6%
    Q1 FY26

    Total compensation ratio.

    Adjusted compensation ratio
    65.4%
    Q1 FY26

    Excluding acquisition-related compensation expenses.

    Non-compensation expenses
    $557 millionup 8% YoY, down 7% QoQ
    Q1 FY26

    Excluding bank loan loss provision, unexpected legal/regulatory items, and non-GAAP adjustments.

    Total assets
    $88.8 billionup 1% QoQ
    Q1 FY26

    Resulting primarily from loan growth, partially offset by lower corporate cash balances.

    Securities-based loans as % of total loan book
    40%
    Q1 FY26

    Part of 60% combined with residential mortgages.

    Residential mortgages as % of total loan book
    20%
    Q1 FY26

    Part of 60% combined with securities-based loans.

    Corporate cash at parent
    $3.3 billion
    Q1 FY26

    At quarter end.

    Excess liquidity
    $2.1 billionwell above target
    Q1 FY26

    Providing significant flexibility.

    Tier 1 leverage ratio
    12.7%
    Q1 FY26

    Well above regulatory requirements.

    Total capital ratio
    24.3%
    Q1 FY26

    Well above regulatory requirements.

    Excess capital capacity
    $2.4 billion
    Q1 FY26

    Before reaching targeted Tier 1 capital ratio of 10%.

    Effective tax rate
    22.7%
    Q1 FY26

    Reflecting a seasonal tax benefit from share-based compensation.

    Capital returned to shareholders
    $511 million
    Q1 FY26

    Returned during the quarter.

    Series B preferred stock redemption
    $81 million
    January

    Redeemed all outstanding shares, reduces Tier 1 capital in Q2 FY26.

    Common share repurchases (LTM)
    $1.45 billion
    LTM

    Over the past 12 months.

    Total capital returned to common shareholders (LTM)
    $1.87 billion
    LTM

    Reflecting a combined return of 89% of earnings.

    Associates using AI
    Over 10,000
    current

    Using AI on a regular basis in one way, shape or form.

    Lines of code written using AI
    Over 3 million
    per month

    With oversight from technologists.

    Domestic cash sweep and enhanced savings program balances decline (post quarter-end)
    $2.6 billion
    post Q1 FY26

    As of January activity to date, includes $1.8 billion fee billing.

    Prior common share repurchase range
    closer to like $350 to $400 million range
    past couple of quarters

    Compared to original guidance of $400 million to $500 million.

    Capital actions deployed this quarter
    $480 million
    Q1 FY26

    Including $80 million preferred equity redemption and $400 million share repurchases.

    Technology investment
    $1.1 billion
    FY26

    Investment in technology and platform for the current fiscal year.

    Transition assistance payout
    100%
    current

    Percentage of transition assistance going to retention versus the seller when recruiting one by one.

    Product announcements

    1
    ProductTypeDetails
    Rai (digital AI operations agent)launch

    Deals & partnerships

    2
    GreensLedgeBoutique Investment Bank

    Enhances Capital Markets capabilities by broadening and deepening its capabilities.

    Clark Capital ManagementLeading asset management firm specializing in wealth-focused solutions

    Focuses on model portfolios and SMA and UMA wrappers. Will maintain its independence and brands. Strong cultural and strategic fit.

    Risks & headwinds

    9
    Lower M&A and advisory revenuesQ1 FY26

    Capital Markets results declined

    Mitigation: Robust pipeline for Q2 FY26, strategic investments in the segment, confidence in well-positioned firm with motivated buyers and sellers.

    Lower debt underwriting and affordable housing investment revenuesQ1 FY26

    Capital Markets results declined

    Mitigation: Robust pipeline for Q2 FY26.

    Interest rate reductionsQ1 FY26

    PCG pretax income declined 5% YoY; reduced noncompensable revenues

    Mitigation: Strong balance sheet, diversified funding sources, loan growth, deposit beta provides resiliency on NIM and BDP yield.

    Seasonal slowdown in recruitingQ1 FY26

    Typically experiences a seasonal slowdown

    Mitigation: Achieved strong recruiting momentum despite seasonality.

    Competitive pressures from private equity backed roll-upscurrent

    Increased over the last couple of years

    Mitigation: Focus on long-term value proposition, strong balance sheet, $1.1 billion annual technology investment, unique culture, and personal relationships as differentiators.

    Fewer billing days in Q2 FY26Q2 FY26

    Headwind

    Mitigation: Focus on generating long-term sustainable growth.

    Payroll taxes resettingQ2 FY26

    Headwind

    Mitigation: Focus on generating long-term sustainable growth.

    Domestic cash sweep and enhanced savings program balances declinepost Q1 FY26

    Down $2.6 billion post quarter-end

    Mitigation: Diversified funding sources, monitoring rate trajectory, strong client reinvestment activity.

    Aggregate NII and RJBDP fees expected to declineQ2 FY26

    Down from Q1 FY26 level

    Mitigation: Higher interest-earning asset balances at beginning of quarter, strong loan growth, diversified funding.

    What to watch in Q2 FY26

    5

    Capital Markets Revenue

    Remainder of FY26
    Current$380 million (Q1 FY26)
    TargetMeaningful improvement above Q1 level

    Why it matters

    Capital Markets revenue is cyclical and management expressed optimism about a robust pipeline after a weak Q1; its recovery is key for overall firm performance and operating leverage.

    We are optimistic about the pipeline. And we would be disappointed for the rest of the year if the revenue in the Capital Markets segment doesn't improve meaningfully above the $380 million level that it's achieved this quarter.

    Q&A highlights

    6

    Inquired about specific areas of NNA strength, drivers of acceleration over the last year, and the current pipeline's robustness.

    Paul Shoukry highlighted $31 billion in NNA as the second-best quarter ever, driven by robust, broad-based recruiting across affiliation options, strong adviser retention, and the firm's unique culture, technology investments ($1.1 billion this year), and product offerings. He emphasized the "Power of Personal" value proposition as a key differentiator against competitors focused on short-term metrics.

    “The advisers we're recruiting are not looking for a 3- to 5-year destination. They're looking for a much longer -- and 3- to 5-year destination with another liquidity event that's going to cause other sorts of disruption for them and their clients. We are kind of a long-term stable play for advisers and their clients.”

    asked by Michael Cho · answered by Paul Shoukry

    2 min read6 chapters

    Detailed Narrative

    01

    Adviser Recruiting and Retention

    Raymond James continues to see strong recruiting momentum, attracting financial advisers with trailing 12-month production totaling $96 million and approximately $13 billion of client assets in Q1 FY26. Over the past 12 months, total client assets recruited across all platforms exceeded $69 billion. The firm attributes this success to its client-first culture, robust technology platform, and strong balance sheet, which differentiate it in a competitive market. Adviser satisfaction remains high, contributing to strong retention.

    02

    Strategic Investments and AI Adoption

    The company is committed to continuous investment in its platform and offerings, including a private wealth adviser program and an expanded alternative investments platform. A key highlight is the newly launched proprietary digital AI operations agent named "Rai," designed to enhance service models and streamline processes for financial advisers. Over 10,000 associates are already using AI regularly, with over 3 million lines of code written monthly using AI, indicating significant internal adoption.

    03

    Capital Markets Performance and Outlook

    Capital Markets segment revenues declined this quarter due to lower M&A, advisory, debt underwriting, and affordable housing investment revenues, facing tough comparables. However, management expressed confidence in a robust pipeline for Q2 FY26, driven by pent-up demand from motivated buyers and sellers, particularly financial sponsors. The firm expects meaningful improvement in Capital Markets revenue for the remainder of the fiscal year, noting the segment's high operating leverage.

    04

    Bank Segment Growth and Deposit Dynamics

    The Bank segment achieved record loans of $53.4 billion, reflecting 28% annual growth in securities-based lending balances and 10% growth in Q1 alone. This growth is a synergistic impact of the private client business. Net interest margin in the bank segment increased 10 basis points to 2.81%. Domestic cash sweep and enhanced savings program balances declined by $2.6 billion since quarter-end, primarily due to fee billing and client reinvestment, with a notable shift from higher-yielding savings products as rates decline.

    05

    Capital Deployment and M&A Strategy

    Raymond James continues to deploy capital through organic growth, technology investments, dividends, and share repurchases. The firm repurchased $400 million of common stock in Q1 and targets another $400 million in Q2. Acquisitions like Clark Capital Management and GreensLedge demonstrate a focus on strong cultural and strategic fits that generate attractive shareholder returns, with a preference for organic growth and selective inorganic opportunities.

    06

    Pretax Margin and Operating Leverage

    The firm achieved a 20% adjusted pretax margin for the quarter, highlighting the stability of its diversified businesses despite headwinds from lower interest-related and investment banking revenues. Management noted that the Private Client Group's independent channel, with its higher payout, impacted the compensation ratio, but expressed satisfaction with the overall result given the revenue mix. Higher revenue levels in Capital Markets are expected to drive significant operating leverage.

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