Q3 2025 Piper Sandler Co Earnings Call

Water management, followed by a question and answer session.

I'll begin by turning the call over to Kate Winslow. Please go ahead.

Thank you operator, good morning, and thank you for joining the paper Sandler companies third quarter 2025 earnings conference call hosting the call today are chairman and CEO, Chad Abraham our President Deb, Schoneman and CFO Kate Clune.

Earlier. This morning, we issued a press release announcing papers <unk> third quarter 2025 financial results, which is available on our website at Piper Sandler Dot Com Slash earnings today.

Today's discussion of the results is complementary to the press release.

A replay of this call will also be available at that same website later today.

Before we begin let me remind you that remarks made on today's call may contain forward looking statements that are not historical or current facts, including statements about beliefs and expectations and involve inherent risks and uncertainties.

Speaker #2: Please stand by. Good morning and welcome to the PIPER SANDLER COMPANY's third quarter 2025 earnings conference call. Today's call is being recorded and will include remarks by PIPER SANDLER management, followed by a question and answer session.

Operator: Please stand by. Good morning and welcome to the Piper Sandler Companies Q3 2025 earnings conference call. Today's call is being recorded and will include remarks by Piper Sandler management, followed by a question and answer session. I'll begin by turning the call over to Kate Clune. Please go ahead.

Factors that could cause actual results to differ materially from those anticipated are identified in the company's reports on file with the SEC, which are available on our website at Piper Sandler Dot com and on the Sec's website at SEC Dot Gov.

Speaker #2: I'll begin by turning the call over to Kate Winslow. Please go ahead.

Speaker #3: Thank you, Operator. Good morning and thank you for joining the PIPER SANDLER COMPANY's third quarter 2025 earnings conference call. Hosting the call today are Chairman and CEO Chad Abraham, our President Debbra Schoneman, and CFO Kathy y Winslow.

Kate Clune: Thank you, Operator. Good morning and thank you for joining the Piper Sandler Companies Q3 2025 earnings conference call. Hosting the call today are Chairman and CEO Chad Abraham, our President Deb Schoneman, and CFO Kate Clune. Earlier this morning, we issued a press release announcing Piper Sandler's Q3 2025 financial results, which is available on our website at pipersandler.com/earnings. Today's discussion of the results is complimentary to the press release. A replay of this call will also be available at that same website later today. Before we begin, let me remind you that remarks made on today's call may contain forward-looking statements that are not historical or current facts, including statements about beliefs and expectations, and involve inherent risks and uncertainties.

Today's discussion also includes statements regarding certain non-GAAP financial measures that management believes are meaningful when evaluating the company's performance.

The non-GAAP measures should be considered in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP a reconciliation.

Speaker #3: Earlier this morning, we issued a press release announcing PIPER SANDLER's third quarter 2025 financial results, which is available on our website at PIPERSANDLER.COM/EARNINGS. Today's discussion of the results is complementary to the press release.

<unk> of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in our earnings release issued today I will now turn the call over to Chad.

Thank you Kate.

Good morning, everyone. Thank.

Speaker #3: A replay of this call will also be available at that same website later today. Before we begin, let me remind you that remarks made on today's call may contain forward-looking statements that are not historical or current facts, including statements about beliefs and expectations, and involve inherent risks and uncertainties.

Thank you for joining our third quarter 2025 earnings call.

The market environment improved significantly in the third quarter.

Equity markets reached record highs and with lower volatility equity underwriting meaningfully improved.

Investor sentiment was helped by a calmer outlook on trade tensions and easing of monetary policy.

Speaker #3: Factors that could cause actual results to differ materially from those anticipated are identified in the company's reports on file with the SEC, which are available on our website at PIPERSANDLER.COM and on the SEC website at sec.gov.

Kate Clune: Factors that could cause actual results to differ materially from those anticipated are identified in the company's reports on file with the SEC, which are available on our website at pipersandler.com and on the SEC website at sec.gov. Today's discussion also includes statements regarding certain non-GAAP financial measures that management believes are meaningful when evaluating the company's performance. The non-GAAP measures should be considered in addition to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in our earnings release issued today. I will now turn the call over to Chad.

Against this backdrop, we performed well with quarterly adjusted net revenues of $455 million or 21, 2% operating margin and adjusted EPS of $3 82.

All higher compared to the same period last year.

Our strategy anchored in deep sector expertise market leadership, and a comprehensive suite of products across the client lifecycle continues to resonate with clients.

Speaker #3: Today's discussion also includes statements regarding certain non-GAAP financial measures that management believes are meaningful when evaluating the company's performance. The non-GAAP measures should be considered in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP.

We have now achieved eight consecutive quarters of year over year growth.

Underscoring, our consistent execution and sustained momentum.

Speaker #3: A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in our earnings release issued today. I will now turn the call over to Chad.

This progress is supported by our investments in the business the.

The diversification of our platform.

In an improving market backdrop.

During the third quarter, we generated $292 million in corporate investment banking revenues.

Speaker #4: Thank you, Kate. Good morning, everyone. Thank you for joining our third quarter 2025 earnings call. The market environment improved significantly in the third quarter.

Chad Abraham: Thank you, Kate. Good morning, everyone. Thank you for joining our Q3 2025 earnings call. The market environment improved significantly in Q3. Equity markets reached record highs, and with lower volatility, equity underwriting meaningfully improved. Investor sentiment was helped by a calmer outlook on trade tensions and easing of monetary policy. Against this backdrop, we performed well with quarterly adjusted net revenues of $455 million, a 21.2% operating margin, and adjusted EPS of $3.82, all higher compared to the same period last year. Our strategy, anchored in deep sector expertise, market leadership, and a comprehensive suite of products across the client lifecycle, continues to resonate with clients. We have now achieved eight consecutive quarters of year-over-year growth, underscoring our consistent execution and sustained momentum. This progress is supported by our investments in the business, the diversification of our platform, and an improving market backdrop.

Reflecting significant growth over the prior year.

And delivered one of our strongest third quarter performances on record.

Speaker #4: Equity markets reached record highs, and with lower volatility, equity underwriting meaningfully improved. Investor sentiment was helped by a calmer outlook on trade tensions and easing of monetary policy.

Our leading financial services and health care franchises.

Each generated strong advisory and corporate financing revenues during the quarter.

While both franchises have been perennial market leaders, we continue to expand the answer these industry teams with additional sub sector capabilities product expertise and connectivity with private equity clients.

Speaker #4: Against this backdrop, we performed well with quarterly adjusted net revenues of $455 million, a 21.2% operating margin, and adjusted EPS of $3.82, all higher compared to the same period last year.

Our healthcare and financial services investment banking groups are among the largest teams in these sectors.

Led by senior bankers, who have long tenures of Piper Sandler.

Speaker #4: Our strategy anchored in deep sector expertise, market leadership, and a comprehensive suite of products across the client lifecycle continues to resonate with clients. We have now achieved eight consecutive quarters of year-over-year growth, underscoring our consistent execution and sustained momentum.

Testament to our commitment to internal development and continuity.

Additionally, we continue to advise on some of the most significant transactions in these sectors.

We advised on the largest U S Bank M&A deal that is closed in 2025 and served as book runner for one of the largest biopharma capital raises in the market.

Speaker #4: This progress is supported by our investments in the business, the diversification of our platform, and an improving market backdrop. During the third quarter, we generated $292 million in corporate investment banking revenues, reflecting significant growth over the prior year, and delivered one of our strongest third quarter performances on record.

As the outlook improves in both healthcare and financial services we.

We are well positioned to support our clients and deliver strong results for our shareholders.

Chad Abraham: During Q3, we generated $292 million in corporate investment banking revenues, reflecting significant growth over the prior year, and delivered one of our strongest Q3 performances on record. Our leading financial services and healthcare franchises each generated strong advisory and corporate financing revenues during the quarter. While both franchises have been perennial market leaders, we continue to expand these industry teams with additional subsector capabilities, product expertise, and connectivity with private equity clients. Our healthcare and financial services investment banking groups are among the largest teams in these sectors, led by senior bankers who have long tenures at Piper Sandler Companies, a testament to our commitment to internal development and continuity. Additionally, we continue to advise on some of the most significant transactions in these sectors. We advised on the largest U.S.

Specific to the advisory component of corporate investment banking.

Revenues for the quarter were $212 million up 13% year over year as we completed 82 transactions.

Speaker #4: Our leading financial services and healthcare franchises each generated strong advisory and corporate financing revenues during the quarter. While both franchises have been perennial market leaders, we continue to expand the industry teams with additional subsector capabilities, product expertise, and connectivity with private equity clients.

Sector performance was led by our financial services group.

With results bolstered by a resurgence in bank M&A activity.

We advised on six of the 10 largest bank mergers that closed during the third quarter and we ranked as the top adviser to banks based on the number of announced U S. M&A transactions this year.

Speaker #4: Our healthcare and financial services investment banking groups are among the largest teams in these sectors, led by senior bankers who have long tenures at Piper Sandler. This is a testament to our commitment to internal development and continuity.

We also had strong contributions from our healthcare consumer and energy power and infrastructure teams during the quarter.

In addition, our non M&A advisory teams continue to drive revenue growth.

Speaker #4: Additionally, we continue to advise on some of the most significant transactions in these sectors. We advised on the largest U.S. bank M&A deal that has closed in 2025 and served as bookrunner for one of the largest biopharma capital raises in the market.

In recent years, we have made substantial investments in the advisory capabilities.

Which include debt capital markets Advisory.

Chad Abraham: bank M&A deal that has closed in 2025 and served as bookrunner for one of the largest biopharma capital raises in the market. As the outlook improves in both healthcare and financial services, we are well positioned to support our clients and deliver strong results for our shareholders. Specific to the advisory component of corporate investment banking, revenues for the quarter were $212 million, up 13% year-over-year as we completed 82 transactions. Sector performance was led by our financial services group, with results bolstered by a resurgence in bank M&A activity. We advised on six of the ten largest bank mergers that closed during Q3, and we rank as the top advisor to banks based on the number of announced U.S. M&A transactions this year. We also had strong contributions from our healthcare, consumer, and energy, power, and infrastructure teams during the quarter.

Private capital advisory and restructuring.

To expand client offerings and increased market share, especially with private equity.

Speaker #4: As the outlook improves in both healthcare and financial services, we are well positioned to support our clients and deliver strong results for our shareholders.

Our debt capital markets Advisory business is on pace to deliver a third consecutive record year, reflecting higher average fees as well as a broader and more diversified client base.

Speaker #4: Specific to the advisory component of corporate investment banking, revenues for the quarter were $212 million, up 13% year-over-year, as we completed 82 transactions. Sector performance was led by our financial services group.

The combination of our industry expertise and deep relationships with a broad range of capital providers enables us to deliver best in class outcomes for our clients.

Looking ahead, our advisory pipeline is robust and building.

Speaker #4: With results bolstered by a resurgence in bank M&A activity. We advised on six of the 10 largest bank mergers that closed during the third quarter, and we rank as the top advisor to banks based on the number of announced U.S.

The fourth quarter is typically our strongest quarter and this year is shaping up to be no different.

We expect advisory revenues for the fourth quarter of 2025 to be similar to last year's fourth quarter.

Speaker #4: M&A transactions this year. We also had strong contributions from our healthcare, consumer, and energy, power, and infrastructure teams during the quarter. In addition, our non-M&A advisory teams continue to drive revenue growth.

Turning to corporate financing.

Markets were strong throughout the quarter, and we generated $80 million of revenues our.

Our strongest quarterly results since 2021.

Chad Abraham: In addition, our non-M&A advisory teams continue to drive revenue growth. In recent years, we have made substantial investments in the advisory capabilities, which include debt capital markets advisory, private capital advisory, and restructuring to expand client offerings and increase market share, especially with private equity. Our debt capital markets advisory business is on pace to deliver a third consecutive record year, reflecting higher average fees as well as a broader and more diversified client base. The combination of our industry expertise and deep relationships with a broad range of capital providers enables us to deliver best-in-class outcomes for our clients. Looking ahead, our advisory pipeline is robust and building. Q4 is typically our strongest quarter, and this year is shaping up to be no different. We expect advisory revenues for Q4 of 2025 to be similar to last year's Q4.

We completed 38 financings raising 14 billion for corporate clients.

Speaker #4: In recent years, we have made substantial investments in the advisory capabilities which include debt capital markets advisory, private capital advisory, and restructuring, to expand client offerings and increase market share.

Increased transaction activity and significantly higher average fees contributed to our strong relative performance.

Revenues for the quarter were driven by healthcare and financial services.

Speaker #4: Especially with private equity. Our debt capital markets advisory business is on pace to deliver a third consecutive record year, reflecting higher average fees as well as a broader and more diversified client base.

Piper Sandler served as book runner on all 13 of the equity deals completed for health care companies.

Driven by an improved capital raising environment for biotech clients fueled by M&A activity, promising drug therapies and lower interest rates.

Speaker #4: The combination of our industry expertise and deep relationships with a broad range of capital providers enables us to deliver best-in-class outcomes for our clients.

We were also active during the quarter, raising both equity and debt capital for financial services companies.

Our performance underscores the strength of our execution capabilities and the earnings potential in a favorable market environment for our core sectors.

Speaker #4: Looking ahead, our advisory pipeline is robust and building. The fourth quarter is typically our strongest quarter, and this year is shaping up to be no different.

As we look ahead, our pipeline remains strong and diverse.

Speaker #4: We expect advisory revenues for the fourth quarter of 2025 to be similar to last year's fourth quarter. Turning to corporate financing, markets were strong throughout the quarter, and we generated $80 million of revenues.

However, we expect fourth quarter corporate financing revenues to moderate from the particularly strong third quarter.

Chad Abraham: Turning to corporate financing, markets were strong throughout the quarter, and we generated $80 million of revenues, our strongest quarterly results since 2021. We completed 38 financings, raising $14 billion for corporate clients. Increased transaction activity and significantly higher average fees contributed to our strong relative performance. Revenues for the quarter were driven by healthcare and financial services. Piper Sandler served as bookrunner on all 13 of the equity deals completed for healthcare companies, driven by an improved capital raising environment for biotech clients, fueled by M&A activity, promising drug therapies, and lower interest rates. We were also active during the quarter, raising both equity and debt capital for financial services companies. Our performance underscores the strengths of our execution capabilities and the earnings potential in a favorable market environment for our core sectors. As we look ahead, our pipeline remains strong and diverse.

Shifting to talent.

We finished the quarter with 183 investment banking managing directors.

Speaker #4: Our strongest quarterly results since 2021. We completed 38 financings, raising $14 billion for corporate clients. Increased transaction activity and significantly higher average fees contributed to our strong relative performance.

<unk> joined our technology group as we closed the Chi squared acquisition, which adds expertise in government services and defense technology.

Early in the fourth quarter, we announced the hiring of <unk> focused on enterprise risk and resiliency and artificial intelligence.

Speaker #4: Revenues for the quarter were driven by healthcare and financial services. Piper Sandler served as bookrunner on all 13 of the equity deals completed for healthcare companies, driven by an improved capital raising environment for biotech clients, fueled by M&A activity, promising drug therapies, and lower interest rates.

In total we have added eight new Mds to our technology group this year.

Building out this franchise remains a strategic priority given the sector's fee pool.

Overall, our third quarter results were strong and we are pleased with our performance year to date.

The combination of improved activity levels strong execution across business lines, and a constructive market environment positions us well as we head into year end.

Speaker #4: We were also active during the quarter raising both equity and debt capital for financial services companies. Our performance underscores the strength of our execution capabilities and the earnings potential in a favorable market environment for our core sectors.

We are entering the fourth quarter with good momentum strong client engagement and meaningful opportunities to gain share.

With that I will turn the call over to Deb to discuss our public finance and brokerage businesses.

Speaker #4: As we look ahead, our pipeline remains strong and diverse, however, we expect fourth quarter corporate financing revenues to moderate from the particularly strong third quarter.

Thanks, Chad I'll begin with an update on our public finance business.

Chad Abraham: However, we expect Q4 corporate financing revenues to moderate from the particularly strong Q3. Shifting to talent, we finished the quarter with 183 investment banking managing directors. Three MDs joined our technology group as we closed the G2 acquisition, which adds expertise in government services and defense technology. Early in the Q4, we announced the hiring of two MDs focused on enterprise risk and resiliency and artificial intelligence. In total, we have added eight new MDs to our technology group this year. Building out this franchise remains a strategic priority given the sector's fee pool. Overall, our Q3 results were strong, and we are pleased with our performance year to date. The combination of improved activity levels, strong execution across business lines, and a constructive market environment positions us well as we head into year-end.

Market conditions remained favorable with elevated issuance levels, which are on track to surpass last year's record.

Speaker #4: Shifting to talent, we finished the quarter with 183 investment banking managing directors. Three MDs joined our technology group as we closed the G-Squared acquisition.

For the third quarter of 2025, we generated $39 million of municipal financing revenues down from the exceptionally strong second quarter, but up 8% year over year.

Speaker #4: Which adds expertise in government services and defense technology. Early in the fourth quarter, we announced the hiring of two MDs focused on enterprise risk and resiliency and artificial intelligence.

We underwrote 133 municipal negotiated transactions raising 6 billion of par value for our clients activity was broad based across geographies with strong performance from our governmental business in Texas, California, and Iowa, as well as our special districts and health care sectors.

Speaker #4: In total, we have added eight new MDs to our technology group this year. Building out this franchise remains a strategic priority given the sector's fee pool.

For the first nine months of 2025, our revenues increased 31% over last year outpacing the market issuance growth in par value of 12%.

Speaker #4: Overall, our third quarter results were strong and we are pleased with our performance year to date. The combination of improved activity levels, strong execution across business lines, and a constructive market environment positions us well as we head into year-end.

With record levels of issuance in the first half of this year, we saw some pull forward of activity, which has impacted the typical seasonality of this business.

Our pipeline remains strong, particularly in the specialty sectors, and we expect our fourth quarter revenues to be similar to the third quarter.

Speaker #4: We are entering the fourth quarter with good momentum. Strong client engagement and meaningful opportunities to gain share. With that, I will turn the call over to Deb to discuss our public finance and brokerage businesses.

Chad Abraham: We are entering the Q4 with good momentum, strong client engagement, and meaningful opportunities to gain share. With that, I will turn the call over to Deb to discuss our public finance and brokerage businesses.

Turning to our equity brokerage business, we generated $54 million of revenues for the third quarter of 2025 down 7% from the second quarter as volatility moderated from elevated levels in April.

Speaker #2: Thanks, Chad. I'll begin with an update on our public finance business. Market conditions remain favorable, with elevated issuance levels that are on track to surpass last year's record.

Deb Schoneman: Thanks, Chad. I'll begin with an update on our public finance business. Market conditions remained favorable, with elevated issuance levels, which are on track to surpass last year's record. For Q3 of 2025, we generated $39 million of municipal financing revenues, down from the exceptionally strong Q2, but up 8% year-over-year. We underwrote 133 municipal negotiated transactions, raising $6 billion of par value for our clients. Activity was broad-based across geographies, with strong performance from our governmental business in Texas, California, and Iowa, as well as our special districts and healthcare sectors. For the first nine months of 2025, our revenues increased 31% over last year, outpacing the market issuance growth in par value of 12%. With record levels of issuance in the first half of this year, we saw some pull forward of activity, which has impacted the typical seasonality of this business.

Throughout the year, we've seen strength in our derivatives and electronic trading businesses.

<unk> product capabilities combined with the scale, we have built over the last few years have provided resiliency and upside to our performance and our year to date revenues are up 8% compared to 2024.

Speaker #2: For the third quarter of 2025, we generated $39 million in municipal financing revenues, down from the exceptionally strong second quarter but up 8% year-over-year.

Lastly, turning to fixed income, we generated $56 million of revenues for the third quarter of 2025, consistent with our strong second quarter and up 15% from the year ago period.

Speaker #2: We underwrote $133 municipal negotiated transactions, raising $6 billion of par value for our clients. Activity was broad-based across geographies, with strong performance from our governmental business in Texas, California, and Iowa, as well as our special districts and healthcare sectors.

Activity was solid across most products and client verticals in anticipation of further rate cuts.

We also continued to advise on balance sheet repositioning, resulting from bank M&A activity and as depositary clients adjust to the changing rate environment.

Speaker #2: For the first nine months of 2025, our revenues increased 31% over last year, outpacing the market issuance growth in par value of 12%. With record levels of issuance in the first half of this year, we saw some pull forward of activity, which has impacted the typical seasonality of this business.

Rod product capabilities, the breadth of our client base and robust distribution allows us to provide both differentiated advice and liquidity across all aspects of the balance sheet, including loans securities and derivatives.

Speaker #2: Our pipeline remains strong, particularly in the specialty sectors, and we expect our fourth quarter revenues to be similar to the third quarter. Turning to our equity brokerage business, we generated $54 million of revenues for the third quarter of 2025, down 7% from the second quarter, as volatility moderated from elevated levels in April.

Now I will turn the call over to Keith to review, our financial results and provide an update on capital use.

Deb Schoneman: Our pipeline remains strong, particularly in the specialty sectors, and we expect our Q4 revenues to be similar to Q3. Turning to our equity brokerage business, we generated $54 million of revenues for Q3 of 2025, down 7% from Q2, as volatility moderated from elevated levels in April. Throughout the year, we've seen strength in our derivatives and electronic trading businesses. Our broad product capabilities, combined with the scale we have built over the last few years, have provided resiliency and upside to our performance, and our year-to-date revenues are up 8% compared to 2024. Lastly, turning to fixed income, we generated $56 million of revenues for Q3 of 2025, consistent with a strong Q2 and up 15% from the year-ago period. Activity was solid across most products and client verticals in anticipation of further rate cuts.

Thanks, Tim My comments will address our adjusted non-GAAP financial results, which should be considered in addition to and not a substitute for the corresponding GAAP financial measures.

For the third quarter of 2025, we generated net revenues of 455 million operating income of $96 million and an operating margin of 21, 2%.

Speaker #2: Throughout the year, we've seen strength in our derivatives and electronic trading businesses. Our broad product capabilities, combined with the scale we have built over the last few years, have provided resiliency and upside to our performance in our year-to-date revenues are up 8% compared to 2024.

Net income totaled 69 million and diluted EPS was $3 82.

For the first nine months of 2025 net revenues totaled $1 2 billion operating income was $238 million and our operating margin was 19, 2%.

Speaker #2: Lastly, turning to fixed income, we generated $56 million of revenues for the third quarter of 2025, consistent with a strong second quarter and up 15% from the year-ago period.

We generated $195 million of net income and $10 86 of diluted EPS.

Speaker #2: Activity was solid across most products and client verticals in anticipation of further rate cuts. We also continued to advise on balance sheet repositioning, resulting from bank M&A activity and as depository clients adjust to the changing rate environment.

Net revenues for the third quarter of 2025 increased 12% from the sequential quarter driven by robust equity capital markets activity net.

Deb Schoneman: We also continued to advise on balance sheet repositioning resulting from bank M&A activity and as depository clients adjust to the changing rate environment. Our broad product capabilities, the breadth of our client base, and robust distribution allow us to provide both differentiated advice and liquidity across all aspects of the balance sheet, including loans, securities, and derivatives. Now, I will turn the call over to Kate to review our financial results and provide an update on capital use. Thanks, Deb. My comments will address our adjusted non-GAAP financial results, which should be considered in addition to, and not a substitute for, the corresponding GAAP financial measures. For the Q3 of 2025, we generated net revenues of $455 million, operating income of $96 million, and an operating margin of 21.2%. Net income totaled $69 million, and diluted EPS was $3.82.

Net revenue for the quarter grew 29% over the third quarter of last year, driven by strong execution across all of our businesses and more accommodative markets for the year to date period of 2025, net revenues increased 19% compared to the prior year, reflecting broad based strength across the firm.

Speaker #2: Our broad product capabilities, the breadth of our client base, and robust distribution allows us to provide both differentiated advice and liquidity across all aspects of the balance sheet, including loans, securities, and derivatives.

Speaker #2: Now, I will turn the call over to Kate to review our financial results and provide an update on capital use.

Turning to expenses.

We reported a compensation ratio of 61, 7% for the third quarter of 2025 and 62% for the first nine months of the year both.

Speaker #3: Thanks, Deb. My comments will address our adjusted non-GAAP financial results, which should be considered in addition to and not as a substitute for the corresponding GAAP financial measures.

Both ratios improved from the comparable periods of 2024, driven by increased net revenues.

Speaker #3: For the third quarter of 2025, we generated net revenues of $455 million, operating income of $96 million, and an operating margin of 21.2%. Net income totaled $69 million, and diluted EPS was $3.82.

We continue to exercise strong operating discipline, while balancing employee retention and strategic investment opportunities.

For the third quarter of 2025, non compensation expenses, excluding reimburse steel costs were $65 million and in line with our guided range.

Speaker #3: For the first nine months of 2025, net revenues totaled $1.2 billion, operating income was $238 million, and our operating margin was 19.2%. We generated $195 million of net income and $10.86 of diluted EPS.

Deb Schoneman: For the first nine months of 2025, net revenues totaled $1.2 billion, operating income was $238 million, and our operating margin was 19.2%. We generated $195 million of net income and $10.86 of diluted EPS. Net revenues for the Q3 of 2025 increased 12% from the sequential quarter, driven by robust equity capital markets activity. Net revenue for the quarter grew 29% over the Q3 of last year, driven by strong execution across all of our businesses in more accommodative markets. For the year-to-date period of 2025, net revenues increased 19% compared to the prior year, reflecting broad-based strength across the firm. Turning to expenses, we reported a compensation ratio of 61.7% for the Q3 of 2025 and 62% for the first nine months of the year. Both ratios improved from the comparable periods of 2024, driven by increased net revenues.

Non compensation costs for the quarter, excluding reimbursed deal expenses increased 6% year over year, driven by higher occupancy costs associated with relocating our Minneapolis headquarters office <unk>.

Non compensation costs for the first nine months of 2025, excluding reimbursable expenses totaled $204 million, an increase of 9% compared to the prior year period.

Speaker #3: Net revenues for the third quarter of 2025 increased 12% from the sequential quarter driven by robust equity capital markets activity. Net revenue for the quarter grew 29% over the third quarter of last year, driven by strong execution across all of our businesses in Moore Accommodative Markets.

Moving to income tax expense, our income tax rate for the quarter was 28, 8% for.

For the year to date period income tax expense was reduced by $27 million of tax benefits related to the vesting of restricted stock awards, which resulted in an income tax rate of 18, 2%.

Speaker #3: For the year-to-date period of 2025, net revenues increased 19% compared to the prior year, reflecting broad-based strength across the firm. Turning to expenses, we reported a compensation ratio of 61.7% for the third quarter of 2025 and 62% for the first nine months of the year.

Excluding the $27 million of benefits our effective tax rate was 29, 6%.

Now, finishing with capital during.

During the quarter, we returned an aggregate of $16 million to our shareholders of which the majority related to our quarterly dividend payment for.

Speaker #3: Both ratios improved from the comparable periods of 2024, driven by increased net revenues. We continue to exercise strong operating discipline while balancing employee retention and strategic investment opportunities.

For the first nine months of this year, we returned an aggregate of $204 million to shareholders. This includes repurchases of approximately 362000 shares were $105 million of our common stock primarily related to employee tax withholding on the vesting of restricted stock awards.

Deb Schoneman: We continue to exercise strong operating discipline while balancing employee retention and strategic investment opportunities. For the Q3 of 2025, non-compensation expenses, excluding reimbursed deal costs, were $65 million and in line with our guided range. Non-compensation costs for the quarter, excluding reimbursed deal expenses, increased 6% year-over-year, driven by higher occupancy costs associated with relocating our Minneapolis headquarters office. Non-compensation costs for the first nine months of 2025, excluding reimbursed deal expenses, totaled $204 million, an increase of 9% compared to the prior year period. Moving to income tax expense, our income tax rate for the quarter was 28.8%. For the year-to-date period, income tax expense was reduced by $27 million of tax benefits related to the vesting of restricted stock awards, which resulted in an income tax rate of 18.2%. Excluding the $27 million of benefits, our effective tax rate was 29.6%.

Speaker #3: For the third quarter of 2025, non-compensation expenses excluding reimbursed field costs were $65 million and in line with our guided range. Non-compensation costs for the quarter, excluding reimbursed deal expenses, increased 6% year-over-year, driven by higher occupancy costs associated with relocating our Minneapolis headquarters office.

It also includes an aggregate of $99 million or $5 per share paid to shareholders through our quarterly and special cash dividends.

Lastly, I am pleased to announce that today the board approved a quarterly cash dividend of <unk> 70 per share the.

Speaker #3: Non-compensation costs for the first nine months of 2025, excluding reimbursed deal expenses, totaled $204 million, an increase of 9% compared to the prior year period.

The dividend will be paid on December 12 to shareholders of record as of the close of business on November 25th.

Speaker #3: Moving to income tax expense, our income tax rate for the quarter was 28.8%. For the year-to-date period, income tax expense was reduced by $27 million of tax benefits related to the vesting of restricted stock awards, which resulted in an income tax rate of 18.2%.

Thank you Kate with that we can now open the call for questions. If you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to leverage signal to reach our equipment.

Again press Star one to ask a question, we'll pause for a moment to allow everyone the opportunity to signal for questions.

Speaker #3: Excluding the 27 million of benefits, our effective tax rate was 29.6%. Now finishing with capital. During the quarter, we returned an aggregate of $16 million, to our shareholders.

Deb Schoneman: Now, finishing with capital, during the quarter, we returned an aggregate of $16 million to our shareholders, of which the majority related to our quarterly dividend payments. For the first nine months of this year, we returned an aggregate of $204 million to shareholders. This includes repurchases of approximately 362,000 shares, or $105 million, of our common stock primarily related to employee tax withholding on the vesting of restricted stock awards. It also includes an aggregate of $99 million, or $5 per share, paid to shareholders through our quarterly and special cash dividends. Lastly, I am pleased to announce that today, the board approved a quarterly cash dividend of $0.70 per share. The dividend will be paid on December 12 to shareholders of record as of the close of business on November 25.

We will take our first question from Brendan O'brien with Wolfe Research.

Speaker #3: Of which the majority related to our quarterly dividend payment. For the first nine months of this year, we returned an aggregate of $204 million to shareholders.

Good morning, and thanks for taking my questions.

To start I, just wanted to touch on the bank M&A environment, clearly seeing the benefits of the pickup in activity and I believe that last quarter was the most active in terms of the number of bank deals announced in the U S. In some time.

Speaker #3: This includes repurchases of approximately $362,000 shares or $105 million, of our common stock primarily related to employee tax withholding on the vesting of restricted stock awards.

Do you sense as to how you would frame the size of the opportunity that you see over the next few years within this space and maybe what are some of the key risks that you are mindful of that could derail this momentum.

Speaker #3: It also includes an aggregate of $99 million, or $5 per share, paid to shareholders through our quarterly and special cash dividends. Lastly, I am pleased to announce that today the Board approved a quarterly cash dividend of $0.70 per share.

Over the next couple of years.

Yes, yes. Thank you.

Yes no.

Obviously, we talked last quarter started to see the pick up over the summer June July August.

Speaker #3: The dividend will be paid on December 12th to shareholders of record as of the close of business on November 25th.

Clearly when you just look at the announced transactions in September and October that pace has accelerated.

Speaker #1: Thank you, Kate. With that, we can now open the call for questions. If you would like to ask a question, please signal by pressing *1 on your telephone keypad.

Kate Clune: Thank you, Kate. With that, we can now open the call for questions. If you would like to ask a question, please signal by pressing Star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. Again, press Star 1 to ask a question. We'll pause for a moment to allow everyone the opportunity to signal for questions. We will take our first question from Brendan O'Brien with Wolfe Research.

We do expect that accelerated pace.

Yeah.

Speaker #1: If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. Again, press star one to ask a question.

To continue.

Relative to what the size of the opportunity as you know obviously depository is only.

Half, our U S <unk> business and that.

Speaker #1: We'll pause for a moment to allow everyone the opportunity to signal for questions. We will take our first question from Brendan O'Brien with Wolf Research.

Obviously SSG is a.

Our percentage of the total so it.

We do expect a good increase depository business and it's not just impacting sort of the M&A, but.

Speaker #4: Good morning, and thanks for taking my questions. To start, I just wanted to touch on the bank M&A environment. Clearly, we are seeing the benefits of the pickup in activity, and I believe that last quarter was the most active in terms of the number of bank deals announced in the U.S. in some time.

Chad Abraham: Good morning, and thanks for taking my questions. To start, I just wanted to touch on the bank M&A environment. Clearly seeing the benefits of the pickup in activity, and I believe that last quarter was the most active in terms of the number of bank deals announced in the U.S. in some time. I just want to get a sense as to how you'd frame the size of the opportunity that you see over the next few years within this space, and maybe what are some of the key risks that you're mindful of that could derail this momentum over the next couple of years.

It helps with the balance sheet restructurings.

And so expect that pace to continue what could.

What could derail that.

I would say the biggest thing is just what happens with stock prices and I would say, even though we're seeing an increased pace on a lot of the base sort of stock prices.

Speaker #4: I just want to get a sense as to how you'd frame the size of the opportunity that you see over the next few years within this space, and maybe what are some of the key risks that you're mindful of that could derail this momentum.

A lot of the depository stocks have moved which isn't a perfect starting point to do a transaction, obviously matters less if you're using equity, but I think just kind of what that based valuation is.

Speaker #4: Over the next couple of years.

Speaker #5: Yeah, yeah, thank you. Yeah, no, it's obviously we talked last quarter, you know, started to see the pickup over the summer, June, July, August.

Chad Abraham: Yeah, thank you. It's obviously, we talked last quarter, started to see the pickup over the summer, June, July, August. Clearly, when you just look at the announced transactions in September and October, that pace has accelerated. We do expect that accelerated pace to continue. Relative to what the size of the opportunity is, obviously depositories is only half our FSG business, and obviously FSG is a percentage of the total. We do expect a good increased depository business, and it's not just impacting sort of the M&A, but helps with the balance sheet restructurings. Expect that pace to continue. What could derail that? I would say the biggest thing is just what happens with stock prices.

What the market.

<unk> is probably one of the bigger risks to that.

Speaker #5: Clearly, when you just look at the announced transactions in September and October, that pace has accelerated. We do expect that, you know, accelerated pace to continue.

That's helpful color and I guess for my follow up I wanted to touch on margins you guys have done a really good job managing expenses over the past couple of years and what it has been a challenging backdrop I know you've talked about getting to 20% plus over time, but given you're already running at a 19% margin year to date and you.

Speaker #5: You know, relative to what the, you know, size of the opportunity is, you know, obviously depositories is only half our, you know, FSG business, and that, you know, obviously FSG is a percentage of the total.

Have all views tailwind that you're back as we enter into 2026 I just wanted to get a sense as to how youre thinking about the margin potential for the business as things start to normalize or in some cases.

Speaker #5: So we do expect a good increase in depository business, and it's not just impacting M&A, but it also helps with balance sheet restructurings. We expect that pace to continue.

Really really accelerates from here.

Good morning for the question.

Go ahead.

Speaker #5: What could derail that? You know, I would say the biggest thing is just what happens with stock prices, and I would say even though we're seeing an increased pace, you know, on a lot of the base sort of stock prices, you know, a lot of the depository stocks haven't moved, which, you know, isn't a perfect starting point to do a transaction.

I was going to I'll start here.

You know Brendan we typically guide to things that we are.

Quite confident in and very focused on and similar to the discussion we have around the comp ratio range, we're certainly looking for opportunities for.

Chad Abraham: I would say even though we're seeing an increased pace on a lot of the base sort of stock prices, a lot of the depository stocks haven't moved, which isn't a perfect starting point to do a transaction. Obviously, it matters less if you're using equity. I think just kind of what that base valuation is and what the market has is probably one of the bigger risks to that.

Discipline and leverage as the top line continues to improve so is that 20% of maximum it certainly isn't where we look for opportunities to accelerate that where they present themselves of course, we will and that was sort of our kind of first target's starting point, there and and to your point, we're quite pleased with where we've been performing to date.

Speaker #5: Obviously, matters less if you're using equity, but I think just kind of what that base valuation is, and you know, what the market has is probably one of, you know, the bigger risks to that.

And we'll continue to look for opportunities to enhance that as we move forward.

Speaker #4: That's a helpful color, and I guess for my follow-up, I wanted to touch on margins. You know, you guys have done a really good job managing expenses over the past couple of years, and what has been a challenging backdrop.

Chad Abraham: That's helpful, Kate. I guess for my follow-up, I wanted to touch on margins. You guys have done a really good job managing expenses over the past couple of years, in what has been a challenging backdrop. I know you've talked about getting to 20%+ over time, but given you're already running at a 19% margin year-to-date and you have all of these tailwinds at your back as we enter into 2026, I just wanted to get a sense as to how you're thinking about the margin potential for the business as things start to normalize or in some cases really, really accelerate from here.

Great. Thank you for taking my questions.

We will take our next question from James <unk> with Goldman Sachs.

Speaker #4: I know you've talked about getting to 20% plus over time, but given you're already running at a 19% margin year to date, and you have all of these tailwinds at your back as we enter into 2026, I just want to get a sense as to how you're thinking about the margin potential for the business as things start to normalize or in some cases really accelerate from here.

Good morning, and thanks for taking the questions. Chad you saw really good corporate having print this quarter you talked about a little bit about the fourth quarter already but maybe you could just help us.

Think about the risks to the business from the government shut down whether thats temporary and and if you see any more permanent impacts if this persists.

Speaker #6: Good morning. Thank you for the question.

Deb Schoneman: Good morning. Thank you for the question.

Yes definitely.

Speaker #5: Go ahead, Kate.

Chad Abraham: Go ahead, Kate.

Definitely been getting that question a lot and it's a difficult one honestly, what I think about sort of the <unk>.

Speaker #6: I was going to, I'll start here. You know, Brendan, we typically guide to things that we are quite confident in and very focused on, and similar to the discussion we have around the comp ratio range, we're certainly looking for opportunities for, you know, discipline and leverage as, you know, the top line continues to improve.

Deb Schoneman: I was going to start here. Brendan, we typically guide to things that we are quite confident in and very focused on. Similar to the discussion we have around the comp ratio range, we're certainly looking for opportunities for discipline and leverage as the top line continues to improve. Is that 20% a maximum? It certainly isn't. Will we look for opportunities to accelerate that where they present themselves? Of course, we will. That was sort of our kind of first target starting point there. To your point, we're quite pleased with where we've been performing to date, and we'll continue to look for opportunities to enhance that as we move forward.

September and October and what happened, we haven't seen a lot of material results to revenues, but I do think the next.

Three or four weeks youre going to get more.

More painful on that front in it it's a complicated questions relative to corporate finance because it sort of depends on what what type of transactions you know there are.

Speaker #6: So is that 20% a maximum? It certainly isn't. Will we look for opportunities to accelerate that where they present themselves, of course we will.

Speaker #6: That was sort of our, you know, kind of first target starting point there, and to your point, we're quite pleased with where we've been performing to date.

There are time periods that laps when youre trying to get reviewed that that if you don't you are fine there are other situations, where if you had done an IPO in the prior year and Youre trying to do.

Speaker #6: And we'll continue to look for opportunities to enhance that as we move forward.

Speaker #4: Great. Thank you for taking my questions.

Chad Abraham: Great. Thank you for taking my questions.

I'll follow on and Youre not auto registered than you do need to do a review so I.

Speaker #1: We will take our next question from James Yarrow with Goldman Sachs.

Kate Clune: We will take our next question from James Yaro with Goldman Sachs.

I really do believe it's going to start both with Pheno.

Speaker #7: Good Good morning, and thanks for taking the questions. Chad, you saw a really good corporate financing print this quarter. You talked about a little bit about the fourth quarter already, but maybe you could just help us think about the risks to this business from the government shutdown, whether that's temporary and if you see any more permanent impacts if this persists.

[Analyst 1]: Good morning, and thanks for taking the questions. Chad, you saw a really good corporate financing print this quarter. You talked a little bit about the fourth quarter already, but maybe you could just help us think about the risks to this business from the government shutdown, whether that's temporary and if you see any more permanent impacts if this persists.

Financing and M&A starting to impact revenues, if we're still talking about this a few weeks from now.

Okay.

Interesting.

Just wanted to touch on the <unk>.

Tech sector Buildout within investment banking has seen strong market share gains you just closed the <unk> acquisition in the space that help us think through where you are in the build out of that sector and what are your aspirations.

Speaker #5: Yeah, I've definitely been getting that question a lot, and it's a difficult one. Honestly, what I think about sort of September and October and what happened, we haven't seen a lot of material results to revenues.

Chad Abraham: Yeah, I've definitely been getting that question a lot, and it's a difficult one. Honestly, when I think about September and October and what happened, we haven't seen a lot of material results to revenues. I do think the next three or four weeks are going to get more painful on that front. It's a complicated question relative to corporate finance because it sort of depends on what type of transactions there are. There are time periods that lapse when you're trying to get reviewed that if you don't, you're fine. There are other situations where if you had done an IPO in the prior year and you're trying to do a follow-on and you're not auto-registered, then you do need to do a review.

Yeah, I mean, I would say I would say obviously, it's been something we've been talking about for three or four years and we've had we've.

We've made progress along the way we've also sort of made some changes to the <unk>.

Speaker #5: But I do think the next three or four weeks are going to get more painful on that front, and it, you know, it's a complicated question relative to corporate finance because it sort of depends on what type of transactions, you know, there are.

<unk> group, we've added some new hires we've done some acquisitions so.

I would kind of say, we're halfway to where we want to be kind of on the team but our.

Our long term goal is this fee pool, and just the backdrop and the sort of evolution.

Speaker #5: There are time periods that lapse when you're trying to get reviewed that if you don't, you're fine. There are other situations where, you know, if you had done an IPO in the prior year and you're trying to do a follow-on and you're not auto-registered, you know, then you do need to do a review.

Should provide an opportunity for us to have as big a business.

As we have in financials and healthcare and so I imagine it'll stay are.

Our number one priority of the next couple of years, so I sort of view it as kind of halfway there made good progress starting to see the results in revenue, but still a lot of opportunity for growth.

Speaker #5: So, I really do believe it's going to start, you know, both with financing and M&A starting to impact revenues, you know, if we're still talking about this a few weeks from now.

Chad Abraham: I really do believe it's going to start both with financing and M&A starting to impact revenues if we're still talking about this a few weeks from now.

Super helpful. Thanks, a lot.

Speaker #7: Okay. Really interesting. Just wanted to touch on the tech sector build-out with Investment Banking. You've seen strong market share gains. You just closed the G-squared acquisition in the space.

[Analyst 1]: Okay. Really interesting. Just wanted to touch on the tech sector build-out within investment banking. You've seen strong market share gains. You just closed the G2 acquisition in the space. Help us think through where you are in the build-out of that sector and what are your aspirations.

We will take our next question from Devin Ryan with citizens Bank.

Great. Good morning, everyone. How are you.

So devin thank you.

Speaker #7: Help us think through where you are in the build-out of that sector and what your aspirations are.

Good so just wanted to come back to the outlook for <unk>.

M&A advisory great to hear about some of the.

Speaker #5: Yeah, I mean, I would say, you know, obviously it's been something we've been talking about for three or four years, and we've had, we've made progress along the way.

Chad Abraham: Yeah. I mean, I would say obviously it's been something we've been talking about for three or four years, and we've made progress along the way. We've also made some changes to the existing group. We've added some new hires. We've done some acquisitions. I would kind of say we're halfway to where we want to be kind of on the team. Our long-term goal is this feed pool and just the backdrop and the sort of evolution should provide an opportunity for us to have as big a business as we have in financials and healthcare. I imagine it'll stay our number one priority the next couple of years. I sort of view it as kind of halfway there. Made good progress, starting to see the results in revenue, but still a lot of opportunity for growth.

Improving trends, there and kind of the expectation for a strong ended the year for revenues, but it'd be great to just take a step back and think about.

Speaker #5: We've also sort of, you know, made some changes to the existing group. We've added some new hires and done some acquisitions. So I would kind of say we're halfway to where we want to be, kind of on the team. But our long-term goal is this fee pool, and the backdrop and the sort of evolution should provide an opportunity for us to have as big a business as we have in financials and healthcare.

Kind of a cadence of activity of what you've been seeing kind of how things trended through the third quarter or post labor day kind of everything kicked off or just how to think about that trend and then as you think across sectors like what are outside of deposit towards what you talked about it but what are some of the big drivers that are <unk>.

Porting more activity and.

The kind of impetus for sponsors to really more aggressively re engaged in the market.

Speaker #5: And so, you know, I imagine it'll stay our number one priority the next couple of years. So I sort of view it as kind of halfway there.

Yeah. Thanks, Thanks, Kevin Yeah, I would say.

For us it's been a pretty steady build throughout the spring and summer and into the fall. There's no question. The last couple of months, especially the pitch.

Speaker #5: Made good progress, starting to see the results in revenue, but still a lot of opportunity for growth.

Speaker #7: Super Super helpful. Thanks a lot.

[Analyst 1]: Super helpful. Thanks a lot.

Pitch activity in new mandates has increased.

Speaker #1: We will take our next question from Devin Ryan with Citizens Bank.

Kate Clune: We will take our next question from Devin Ryan with Citizens JMP.

Significantly obviously, we already talked about just whats going on in bank deposits. The depository sector and just just the volume there increasing pretty rapidly I would say a couple of other things for us.

Speaker #8: Great. Good morning, everyone. How are you?

[Analyst 2]: Great. Good morning, everyone. How are you?

Speaker #5: Good, Devin. Thank you.

Chad Abraham: Good, Devin. Thank you.

Speaker #8: Good. So, I just want to come back to the outlook for M&A advisory. You know, it’s great to hear about some of the improving trends there and kind of the expectation for a strong end-of-the-year for revenues.

[Analyst 2]: I just want to come back to the outlook for M&A advisory. Great to hear about some of the improving trends there and the expectation for a strong end of the year for revenues. It'd be great to take a step back and think about the cadence of activity, what you've been seeing, how things trended through the third quarter, post-Labor Day, when everything kicked off, or just how to think about that trend. As you think across sectors, outside of depositories, which you talked about in depth, what are some of the big drivers that are supporting more activity and the impetus for sponsors to really more aggressively re-engage in the market? Thank you.

Health care is a big sector for us in and I think we've seen.

We had a pretty tough year in healthcare M&A last year, we're having a much better year. This year and frankly, just the pace of new engagements there has been really good.

Speaker #8: But it'd be great to just take a step back and think about kind of the cadence of activity, what you've been seeing, kind of how things trended through the third quarter, you know, post-labor day, kind of everything kicked off or just like how to think about that trend.

Specially in.

Med Tech.

And in some other areas within healthcare, but I would also say just our areas that touch.

Speaker #8: And then as you think across sectors, like what are, outside of depositories, which you talked about in depth, like what are some of the big drivers that are supporting more activity and, you know, just the kind of impetus for sponsors to really more aggressively re-engage in the market?

Private equity I think with some of the results private equity as seen on some of the.

Transactions the longer that goes the more and more people are going to try to get a <unk>.

Speaker #8: Thank you.

Liquidity to some of the things they've had in the pipeline and so we.

Speaker #5: Yeah, thanks, Devin. I would say, you know, for us, it's been a pretty steady build throughout the spring and summer and into the fall. There's no question the last couple of months, especially, the pitch activity and new mandates have increased significantly.

Chad Abraham: Yeah. Thanks, Devin. I would say for us, it's been a pretty steady build throughout the spring and summer and into the fall. There's no question the last couple of months, especially the pitch activity and new mandates, has increased significantly. Obviously, we already talked about just what's going on in the depository sector and just the volume there increasing pretty rapidly. I would say a couple of other things for us. Healthcare is a big sector for us, and I think we've seen we had a pretty tough year in healthcare M&A last year. We're having a much better year this year, and frankly, just the pace of new engagements there has been really good, especially in medtech and in some other areas within healthcare. I would also say just our areas that touch private equity.

We're definitely seeing that in.

And Thats pretty broad you know certain parts of services for certain parts of commercial and residential services.

Obviously places where tariffs don't matter, we're still still having a tough time in.

Parts of consumer, but for us things that touch private equity really touches all of our our industry groups and.

Speaker #5: Obviously, we already talked about just what's going on in the bank, you know, the depository sector and just the volume there increasing pretty rapidly. I would say, you know, a couple other things for us.

In those areas, we expect to pick up and not just in M&A.

We're having a another record year in debt advisory and a big chunk of that business.

Speaker #5: Healthcare is a big sector for us, and I think we've seen, you know, we had a pretty tough year in healthcare M&A last year.

Is working with sponsors as well.

Speaker #5: We're having a much better year this year. And frankly, just the pace of new engagements there has been really good. You know, especially in med tech and, you know, some other areas within healthcare.

Great I appreciate that color and then one for Deb just trying to think about.

Kind of some of the underlying drivers of the fixed income brokerage business. So.

First off on the depository side I guess, probably similar question do you guys got earlier on bank M&A, how should we think about what a normalization for that part of the business looks like as rates come down.

Speaker #5: But I would also say just our areas that touch private equity, I think with some of the results private equity has seen on some of the transactions, you know, the longer that goes, the more and more people are going to try to get liquidity to some of the things they've had in the pipeline.

Chad Abraham: I think with some of the results private equity is seeing on some of the transactions, the longer that goes, the more and more people are going to try to get liquidity to some of the things they've had in the pipeline. We're definitely seeing that, and that's pretty broad. Certain parts of services, certain parts of commercial and residential services. Obviously, places where tariffs don't matter. We're still having a tough time in parts of consumer. For us, things that touch private equity really touch all of our industry groups, and in those areas, we expect a pickup. Not just in M&A. We're having another record year in debt advisory, and a big chunk of that business is working with sponsors as well.

Just there's more engagement like how much is there a way to frame kind of the revenue upside to normalization or at least how you guys think about it and then also Deborah if you can just give a little more color for what youre seeing with municipal demand and just remind us how we should think about that trending I guess to the extent.

Speaker #5: And so we're definitely seeing that. And, you know, that's pretty broad—certain parts of services, certain parts of commercial and residential services. You know, obviously, places where tariffs don't matter.

Rates lower as well.

Okay, great. Thanks, Kevin.

On the depositary in fixed income of course as rates come down in the yield curve Steepens. We I mean overall see increased client engagement and that includes the depository clients as they then have an ability to reposition their balance sheets.

Speaker #5: We're still, you know, having a tough time in parts of consumer, but for us, things that touch private equity really touch all of our industry groups.

Speaker #5: And, you know, in those areas, we expect a pickup and not just in M&A, you know, we're having another record year in debt advisory and, you know, a big chunk of that business is working with sponsors as well.

Now normalization is going to be tricky to to figure out exactly what that looks like because the other thing, we're seeing pickup or larger revenue events that come from balance sheet restructurings that are specifically tied to an M&A transaction and that's where we've seen some of the pick up over the last couple of quarters those tend to be a little bit larger transactions.

Speaker #8: Great. Appreciate that color. And then one for Deb, just trying to think about some of the underlying drivers of the fixed income brokerage business.

[Analyst 2]: Great. Appreciate that, Collar. One for Deb, just trying to think about some of the underlying drivers of the fixed income brokerage business. First off, on the depository side, I guess probably a similar question you guys got earlier on bank M&A, how should we think about what a normalization for that part of the business looks like as rates come down and there's more engagement? How much is there a way to frame the revenue upside to normalization, or at least how you guys think about it? Also, Deb, if you can just give a little bit more color for what you're seeing with municipal demand and just remind us how we should think about that trending, I guess, to the extent rates lower as well. Thanks.

And so we do expect that to continue if you think about the commentary that that Chad just discussed relative to the bank M&A business. Those are very correlated as most often when these bank M&A transactions happened we are seeing these restructurings happened.

Speaker #8: So you know, first off, on the depository side, I guess probably a similar question to you guys got earlier on bank M&A. How should we think about what a normalization for that part of the business looks like as rates come down and just there's more engagement?

It happened with them. So I would just say there is a correlation here to these larger restructurings in the M&A business, it's just a little difficult to determine the timing of them and when they will hit but we do expect to see positive trends in our fixed income businesses as all these dynamics continue to play out in the marketplace.

Speaker #8: Like how much is there a way to frame kind of the revenue upside to normalization or at least how you guys think about it?

Speaker #8: And then also Deb, if you can just give a little bit more color for what you're seeing with municipal demand and just remind us how we should think about that trending, I guess, to the extent rates lower as well.

Speaker #8: Thanks.

Specifically to the municipal side, we saw strong fund flows in the beginning of the year they softened a little in the second quarter and we saw them coming back.

Speaker #3: Yeah, great. Thanks, Devin. On the depository in fixed income, of course, as rates come down and the yield curve deepens, we overall see increased client engagement, and that includes with depository clients as they then have an ability to reposition their balance sheets.

Deb Schoneman: Yeah. Great. Thanks, Devin. On the depository and fixed income, of course, as rates come down and the yield curve steepens, we, I mean, overall, see increased client engagement, and that includes with depository clients as they then have an ability to reposition their balance sheets. Normalization is going to be tricky to figure out exactly what that looks like because the other thing we're seeing pick up are larger revenue events that come from balance sheet restructurings that are specifically tied to an M&A transaction. That's where we've seen some of the pickup over the last couple of quarters. Those tend to be a little bit larger transactions, and I do expect that to continue.

Again, and that's very helpful and healthy for the environment and the high yield side one of the other things. We're seeing is just investors having discipline. So even with the strong fund fund flows.

Speaker #3: Now, normalization is going to be tricky to figure out exactly what that looks like because the other thing we're seeing pick up are larger revenue events that come from balance sheet restructurings that are specifically tied to an M&A transaction.

Our discerning I would say in a good way.

Healthy market for well structured transactions to come relative to rates, which was part of your question as those rates come down refundings will pick up we have seen some of that really modestly start to happen in Q3, as we look at it.

Speaker #3: And that's where we've seen some of the pickup over the last couple of quarters, those tend to be a little bit larger transactions. And so we do expect that to continue.

Speaker #3: If you think about the commentary that Chad just discussed relative to the bank M&A business, I mean, those are very correlated as most often when these bank M&A transactions happen, we are seeing these restructurings.

Deb Schoneman: If you think about the commentary that Chad just discussed relative to the bank M&A business, those are very correlated as most often when these bank M&A transactions happen, we are seeing these restructurings happen with them. I would just say there's a correlation here to these larger restructurings in the M&A business. It's just a little difficult to determine the timing of them and when they'll hit. We do expect to see positive trends in our fixed income businesses as all these dynamics continue to play out in the marketplace. Specifically to the municipal side, we saw strong fund flows in the beginning of the year. They softened a little in the second quarter, and we saw them coming back again, and that's very helpful and healthy for the environment. On the high-yield side, one of the other things we're seeing is just investors having discipline.

Talk to our clients now I think many are also choosing to wait and see what happens into next year. So the refinancing activity picking up is likely more of a 2026 phenomenon than at 2025.

Speaker #3: Happen with them. So I would just say there's a correlation here to these larger restructurings in the M&A business. It's just a little difficult to determine the timing of them.

Excellent. Thank you just as a follow up just on the bank M&A driven kind of balance sheet restructuring, obviously chunky those can be nice fee for you is that primarily going to be tied to deals where youre directly advising or is there an opportunity to get involve.

Speaker #3: And when they'll hit. But we do, you know, expect to see positive trends in our fixed income businesses as all these dynamics continue to play out in the marketplace.

One maybe you are not working on the M&A side of the deal, but there's just need for for your expertise yeah great question.

Speaker #3: Specifically to the municipal side, you know, we saw strong fund flows in the beginning of the year. They softened a little in the second quarter.

It is really both we have seen some transactions, where we have strong relationships where.

Speaker #3: And we saw them coming back again, and that's very helpful and healthy for the environment and the high-yield side. One of the other things we're seeing is just investors having discipline.

Given the approach we take the team we have that does that work being very well recognized in the marketplace. We are seeing some of these balance sheet restructuring that we're doing that we're not associated with us on the M&A side.

Speaker #3: So even with the strong fund flows, our discerning, I would say in a good way. Healthy market for well-structured transactions to come. Relative to rates, which was part of your question, as those rates come down, refundings will pick up.

Deb Schoneman: Even with the strong fund flows, investors are discerning, I would say, in a good way. Healthy market for well-structured transactions to come. Relative to rates, which was part of your question, as those rates come down, refundings will pick up. We have seen some of that really modestly start to happen in Q3. As we look out and talk to our clients now, I think many are also choosing to wait and see what happens into next year. The refinancing activity picking up is likely more of a 2026 phenomenon than a 2025.

Yes, but for the railcar Devin.

But for the record Devin, we'd love a significant M&A fee and we wanted to do the restructuring on everything.

Speaker #3: We have seen some of that really modestly start to happen in Q3. As we look out and talk to our clients now, I think many are also choosing to wait and see what happens into next year.

Yes.

Exactly.

Yeah.

Okay.

As a reminder, if you would like to ask a question. Please press star one.

Speaker #3: So the refinancing activity picking up is likely more of a 2026 phenomenon than a 2025.

Take our next question from Mike Grondahl with Northland Securities.

Hey, guys. Thanks, Congrats on a nice quarter.

Chad anything else to call out on this good momentum youre seeing entering for Q.

Speaker #8: Excellent. Thank you. Just as a follow-up, Deb, just on the bank M&A-driven kind of balance sheet restructuring, obviously chunky those can be nice fees for you.

[Analyst 2]: Excellent. Thank you. Just as a follow-up, Deb, just on the bank M&A-driven kind of balance sheet restructuring, obviously, chunky, those can be nice fees for you. Is that primarily going to be tied to deals where you're directly advising, or is there an opportunity to get involved when maybe you're not working on the M&A side of the deal, but there's just need for your expertise?

No I would just say.

Speaker #8: Is that primarily going to be tied to deals where you're directly advising or is there an opportunity to get involved when maybe you're not working on the M&A side of the deal, but there's just need for your expertise?

Yeah.

Probably the strongest thing we had in Q3 was just our equity financing business now obviously that was off really low levels. The first couple of quarters, but that was pretty diverse.

Speaker #3: Yeah, great question. It is really both. We have seen some transactions where we have strong relationships where given the approach we take, the team we have that does that work being very well recognized in the marketplace, we are seeing some of these balance sheet restrictions that we're doing that we're not associated with us on the M&A side.

Deb Schoneman: Great question. It is really both. We have seen some transactions where we have strong relationships where, given the approach we take, the team we have that does that work, being very well recognized in the marketplace, we are seeing some of these balance sheet restructurings that we're doing that were not associated with us on the M&A side.

What we're doing.

A lot in health care and I would say we are.

We're seeing just more significant healthcare transactions, we a few large ones, where we have a significant role that's made an impact obviously that's augmented by <unk>.

Financial services and financing both on the debt and equity side. So.

Speaker #8: Yeah, but for the record, Devin, but for the record, Devin, we'd love a significant M&A fee and we want to do the restructuring on everything.

Chad Abraham: For the record, Devin, we'd love a significant M&A fee, and we want to do the restructuring on everything. Yeah.

<unk> was strong I think there were just so many big things in Q3, which is just why we made the comment that I don't I don't know if we'll get back to those levels in Q4, but still significantly better than where we've been and then we are obviously starting to see.

Speaker #3: Yeah.

Speaker #8: Exactly.

[Analyst 2]: Exactly.

Speaker #1: As a reminder, if you would like to ask a question, please press star one. We will take our next question from Mike Grondahl with Northland Securities.

Kate Clune: As a reminder, if you would like to ask a question, please press star one. We will take our next question from Mike Grondahl with Northland Securities.

IPO activity and deals work, which bodes well for more IPO activity again.

If we can get those approved and launch will be another question with the government shutdown, but the backdrop has been pretty good for a pickup in financing across a lot of our sectors.

Speaker #9: Hey guys, thanks. Congrats on a nice quarter. Chad, anything else to call out? On this good momentum you're seeing entering 4Q?

Chad Abraham: Hey, guys. Thanks. Congrats on a nice quarter. Chad, anything else to call out on this good momentum you're seeing entering Q4? No, I would just say probably the strongest thing we had in Q3 was just our equity financing business. Now, obviously, that was off really low levels the first couple of quarters, but that was pretty diverse. We're doing, obviously, a lot in healthcare. I would say we're seeing just more significant healthcare transactions. A few large ones where we have a significant role, that's made an impact. Obviously, that's augmented by financial services and financing both on the debt and equity side. Financing was strong. I think there were just so many big things in Q3, which is just why we made the comment that I don't know if we'll get back to those levels in Q4, but still significantly better than where we've been.

I would call that out in addition to the comments have already made about M&A.

Speaker #2: No, I would just say, you know, probably the strongest thing we had in Q3 was just our equity financing business. Now, obviously that was off really low levels the first couple of quarters, but that was pretty diverse.

Perfect perfect and Deb.

How are you feeling.

Maybe not so much for Q, but just kind of 26 in general after two fed cuts and maybe a little bit more.

Speaker #2: You know, we're doing obviously a lot in healthcare. And I would say we're seeing, you know, just more significant healthcare transactions. You know, a few large ones where we have a significant role, you know, that's made an impact.

Or are you thinking about.

Fixed income and municipal for 'twenty six.

Yes, I think as I was making the comments when we see that the.

The rates coming down more importantly, almost really the normalization of the yield curve that'll be the thing to watch.

Speaker #2: Obviously, that's augmented by financial services and financing both on the debt and equity side. So financing was strong. I think there were just so many big things in Q3, which is just why we made the comment that, you know, I don't know if we'll get back to those levels in Q4, but still significantly better than where we've been.

Most importantly, we are.

You will see increased activity one of the most important things it feels like that drives that is just more certainty when uncertainty enters the investors pause a bit. So I think it's a favorable environment from that perspective, and really again rate cuts, but more importantly, a normalization.

Speaker #2: And then we, you know, we were obviously starting to see IPO activity and deals work, which bodes well for more IPO activity. Again, you know, if we can get those approved and launch, you know, we'll be another question with the government shutdown.

Chad Abraham: We were obviously starting to see IPO activity and deals work, which bodes well for more IPO activity. Again, if we can get those approved and launched, will be another question with the government shutdown. The backdrop has been pretty good for a pickup in financing across a lot of our sectors. I'd call that out in addition to the comments I've already made about M&A. Perfect. Perfect. Deb, how are you feeling, maybe not so much Q4, but just kind of 2026 in general after two Fed cuts and maybe a little bit more? How are you thinking about fixed income and municipal for 2026?

L curve.

Got it got it well hey, <unk>.

Congrats on <unk> and good luck the rest of the way this year.

Thanks, Mike Thank you.

Speaker #2: But the backdrop has been pretty good for a pickup in financing across a lot of our sectors. So I'd call that out in addition to the comments I've already made about M&A.

They will take a follow up question from James <unk> with Goldman Sachs.

Hi, Thanks for taking follow up.

Chad maybe.

Would it be possible to just comment on the on the momentum in your non M. Non M&A advisory businesses.

Speaker #9: Perfect. Perfect. And Deb, how are you feeling, maybe not so much about Q4, but just kind of 2026 in general after two Fed cuts and maybe a little bit more?

And maybe if you could just size how much this contributed in the quarter.

Yes, we still don't disclose the percentage of sort of non M&A advisory. We are we are looking at that as it becomes more and more significant what I would say is.

Speaker #9: How are you thinking about, you know, fixed income and municipal for 26?

Speaker #3: Yeah, I think as I was making the comments when we see the rates coming down, more importantly, almost really the normalization of the yield curve, that'll be the thing to watch probably most importantly.

Deb Schoneman: Yeah. I think as I was making the comments, when we see the rates coming down, more importantly, almost really the normalization of the yield curve, that'll be the thing to watch probably most importantly. You will see increased activity. One of the most important things that feels like that drives that is just more certainty. When uncertainty enters, the investors pause a bit. I think it's a favorable environment from that perspective. Really, again, rate cuts, but more importantly, a normalization of the yield curve.

The last three years the pace of growth has been more significant than M&A and just as a <unk>.

A reminder, theirs.

There is multiple pieces to that we obviously talked about the <unk>.

Speaker #3: We're just, you know, you will see increased activity. One of the most important things it feels like that drives that is just more certainty when uncertainty enters, you know, the investor's paws a bit.

And in that business that we we do a lot with sponsors that's just growing significantly is theres just so many providers of that.

Capital and I would say, we're doing larger and larger deals there.

Speaker #3: So I think it's a favorable environment from that perspective. Really, again, rate cuts, but more importantly, a normalization of the yield curve.

A lot of our deals used to be 5100, 150 million there and now we're seeing opportunities in sort of the agent and that where we're doing four to $5 $600 million raises which makes up.

Speaker #9: Got Got it. Got it. Well, hey, congrats on 3Q and good luck the rest of the way this year.

Chad Abraham: Got it. Got it. Congrats on Q3, and good luck the rest of the way this year.

A big difference another piece for US is obviously restructuring I would say that that business is.

Speaker #3: Thanks, Mike.

Deb Schoneman: Thanks, Mike.

Speaker #2: Thank you.

Chad Abraham: Thank you.

The longer we get into it the more and more we're doing with more industry teams in general you know the market backdrop, there probably has that as a flatter market, but given that's a small fee pool for us we still feel like we can grow share and then obviously another big piece for US is is we're having success with the private cap.

Speaker #1: We will take a follow-up question from James Yarrow with Goldman Sachs.

Kate Clune: We will take a follow-up question from James Yaro with Goldman Sachs.

Speaker #10: Thanks for taking the follow-up. Chad, maybe would it be possible for you to just comment on the momentum in your non-M&A advisory business and maybe if you could just size how much this contributed in the quarter?

[Analyst 1]: Thanks for taking the follow-up. Chad, would it be possible for you to just comment on the momentum in your non-M&A advisory business, and maybe if you could just size how much this contributed in the quarter?

<unk> advisory and the avidity team we added.

Chad Abraham: Yeah. We still don't disclose the percentage of sort of non-M&A advisory. We are looking at that as it becomes more and more significant. What I would say is, the last three years, the pace of growth has been more significant than M&A. Just as a reminder, there's multiple pieces to that. We obviously talked about the agented debt business that we do a lot with sponsors, and that's just growing significantly as there's just so many providers of that capital. I would say we're doing larger and larger deals there. A lot of our deals used to be $50 million, $100 million, $150 million there, and now we're seeing opportunities in sort of agented debt where we're doing $400 million, $500 million, $600 million raises, which makes a big difference. Another piece for us is obviously restructuring.

Closed.

Ah recently, a significant <unk>.

Secondary transaction and so the more the more wins that we get there the more stories that we have with clients. So all of those make up the lion's share of that business and I would say that business continues to grow faster than M&A.

Thanks for the color.

There are no further questions at this time I will turn the conference back to Mr. Abraham for any additional or closing remarks.

Alright, thanks to everyone that joined US. This morning, we look forward to updating you on our fourth quarter and full year 2025 results early next year have a great day and happy Halloween.

This concludes today's call. Thank you for your participation you may now disconnect.

Chad Abraham: I would say that that business is, the longer we get into it, the more and more we're doing with more industry teams. In general, the market backdrop there probably has that as a flatter market, but given that's a small fee pool for us, we still feel like we can grow share. Obviously, another big piece for us is we're having success with the private capital advisory and the avidity team we added. Closed a significant secondary transaction, and the more wins we get there, the more stories we have with clients. All of those make up the lion's share of that business, and I would say that business continues to grow faster than M&A.

Okay.

[Analyst 1]: Thanks for the color.

Kate Clune: There are no further questions at this time. I will turn the conference back to Mr. Abraham for any additional or closing remarks.

Chad Abraham: All right. Thanks, everyone that joined us this morning. We look forward to updating you on our fourth quarter and full year 2024 results early next year. Have a great day and happy Halloween.

Kate Clune: This concludes today's call. Thank you for your participation. You may now disconnect.