Jefferies Financial Group Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 24 June 2026: press release. Guidance figures: 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net revenues and earnings rose year on year: Net revenues were $2,206,451 thousand against $1,634,447 thousand a year earlier. Net earnings attributable to common shareholders were $226,234 thousand, against $88,017 thousand. Source
• Advisory and underwriting combined up 53%: Combined Advisory and Underwriting net revenues were $1.20 billion, 53% above the prior year quarter. Management described these as its best quarterly results ever. Source
• Equities revenue at a record: Equities net revenues were $600,751 thousand, up 14% from $526,244 thousand a year earlier, a record quarter for the segment. Source
• Asset management fees and returns fell: Fees and investment return were $46 million, down 35% from the prior year quarter. Total asset management net revenues were $187,718 thousand, against $154,621 thousand. Source
• Compensation ratio rose to 53.9%: Compensation and benefits were $1,188,245 thousand, a ratio of 53.9% against 52.3% a year earlier and 53.8% in the February quarter. Source
• Buybacks of $197 million in quarter: The company repurchased 4.0 million shares, including 2.5 million in the open market for $121 million and 1.5 million for net-share settlements of equity plans. Source

“The continued acceleration in our core businesses during the second quarter drove record first half net revenues in Advisory, total Investment Banking, Equities, total Capital Markets and combined Investment Banking and Capital Markets.”

Richard Handler, CEO, and Brian Friedman, President

Guidance

What changed from last quarter

• New: Management disclosed an intent to acquire 50% of Hildene, announced last fall. Closing is targeted for the third quarter, and management expects the deal to be immediately accretive. Source

Headline results and drivers

• Net revenues and earnings rose year on year: Net revenues were $2,206,451 thousand against $1,634,447 thousand a year earlier. Net earnings attributable to common shareholders were $226,234 thousand, against $88,017 thousand. Source
• Diluted EPS and returns both higher: Diluted earnings per voting common share were $1.02, against $0.40. Return on adjusted tangible shareholders' equity was 12.8%, against 5.5% a year earlier. Source
• Pre-tax earnings rose from a year earlier: Earnings before income taxes were $315,549 thousand, against $134,901 thousand a year earlier and $212,216 thousand in the February quarter. Source
• Investment banking revenue up 57%: Investment banking net revenues were $1,206,820 thousand, against $766,307 thousand a year earlier, and $1,017,293 thousand in the February quarter. Source

Investment banking segments

• Advisory and underwriting combined up 53%: Combined Advisory and Underwriting net revenues were $1.20 billion, 53% above the prior year quarter. Management described these as its best quarterly results ever. Source
• Advisory revenue up 47% on share gains: Advisory net revenues were $674,118 thousand, 47% above the prior year quarter, driven by market share gains and increased deal volumes. Source
• Underwriting up 62% on equity deals: Underwriting net revenues were $531 million, 62% higher. Equity underwriting rose to $370,691 thousand from $122,366 thousand a year earlier. Source
• Debt underwriting down on deal values: Debt underwriting net revenues were $160,186 thousand, against $205,363 thousand a year earlier. Management cited lower deal values and lower asset-backed securities origination. Source
• Corporate M&A build-out continues: Management said it continues building corporate M&A alongside its sponsor-led business. Management also said no single outsized fee drove the quarter's results. Source

“We continue to be optimistic about the second half of 2026, given the strength of our current backlog and new business bookings.”

Richard Handler, CEO, and Brian Friedman, President

Equities and fixed income

• Equities revenue at a record: Equities net revenues were $600,751 thousand, up 14% from $526,244 thousand a year earlier, a record quarter for the segment. Source
• Cash and electronic trading gained share: Management attributed Equities growth to market share gains in cash and electronic trading across EMEA, Asia and the Americas. Source
• Prime services as a strategic partner: Management said Jefferies has become an increasingly important strategic partner to large hedge funds. Equity derivatives expanded alongside investment banking. Source
• Fixed income up 12%: Fixed Income net revenues were $198,541 thousand, up 12%, reflecting distressed, municipal and emerging markets businesses. Source

Asset management results

• Asset management fees and returns fell: Fees and investment return were $46 million, down 35% from the prior year quarter. Total asset management net revenues were $187,718 thousand, against $154,621 thousand. Source
• Fees lower from funds and affiliates: Fees fell on lower management fees from funds managed by Jefferies, mainly Point Bonita, and from funds managed by strategic affiliates. Source
• Investment return lower on weaker strategies: Investment return was $31,037 thousand, against $50,404 thousand. Long equity-bias strategies improved but were offset by lower performance in other fund strategies. Source
• First-half fees and returns higher: For the first half, fees and investment return totalled $205 million, meaningfully higher than the prior year period, with investment return rising on improved fund performance. Source

“The shape and scale of growth in our Equities business is translating to higher overall equities operating margins”

Richard Handler, CEO, and Brian Friedman, President

Costs, compensation and tax

• Compensation ratio rose to 53.9%: Compensation and benefits were $1,188,245 thousand, a ratio of 53.9% against 52.3% a year earlier and 53.8% in the February quarter. Source
• Non-compensation ratio fell to 31.8%: Non-compensation expenses were $702,657 thousand, against $644,707 thousand. The ratio was 31.8%, against 39.4% a year earlier. Source
• Brokerage fees rose with equity volumes: Brokerage and clearing fees were $147,446 thousand, against $129,745 thousand a year earlier. Technology and communications expenses also rose. Source
• Tax rate lower on tax credits: The effective tax rate was 20.8%, against 32.3% a year earlier. The first-half rate was 22.4%, against 20.2%. Source
• Tessellis goodwill write-down in expenses: Other expenses rose on a goodwill write-down tied to the expected Tessellis sale. The after-tax write-down for the first half was $35.5 million. Source

Capital, balance sheet and returns

• Buybacks of $197 million in quarter: The company repurchased 4.0 million shares, including 2.5 million in the open market for $121 million and 1.5 million for net-share settlements of equity plans. Source
• First-half buybacks of $372 million: Year to date, 7.0 million shares were repurchased for $372 million at an average of $53.42, including 5.0 million in the open market for $265 million. Source
• Share count at quarter end: At May 31, 2026 there were 194.1 million voting common shares and 252.0 million shares on a fully diluted basis. Non-voting common shares were 9,247 thousand. Source
• Book value per share higher: Book value per common share was $51.95, against $49.96. Adjusted tangible book value per fully diluted share was $34.55, against $32.84. Source
• Leverage ratios higher than a year ago: The leverage ratio was 7.5, against 6.5 a year earlier. The tangible gross leverage ratio was 9.0, against 7.9. Total assets were $79,540 million, against $67,285 million. Source

Demand and trading activity

• Addressable market grew for advisory and equities: Management attributed investment banking growth to market share gains and a growing addressable market in Advisory and Equity Underwriting. Source
• Trading volumes drove equities results: Management said equities results were primarily driven by higher global trading volumes, particularly within cash and electronic trading. Source
• First-half advisory up on market growth: First-half Advisory net revenues were $1.20 billion, 40% higher, driven by market share gains and increased overall market activity. Source

Headcount and trading risk

• Employee count fell from February: Employees at period end were 7,371, down from 7,596 in February and 7,671 a year earlier. Source
• Core headcount up year on year: Employees excluding Tessellis and Stratos were 6,236, against 5,949 a year earlier and 6,221 in February. Source
• Average VaR lower than a year ago: Average one-day VaR was $10.31 million for the quarter, against $11.89 million a year earlier and $9.78 million in February. Source

Coming up, as management said on 24 June 2026

• Quarterly report on or about July 9: The company expects to file its Form 10-Q on or about July 9, 2026. Amounts for May 31, 2026 are preliminary and may be revised at filing. Source
• Momentum expected to continue: Management said it expects to build further on the current momentum in coming periods. Source

Risks management discussed

• Financial: Management said growth in client prime brokerage balances has added to overall balance sheet size, though it adds consistent revenues. Source
• Financial: First-half fixed income results include a mark-to-market loss associated with Market Financial Solutions. Source
• Demand: Management cited weaker performance across several fund strategies and the repositioning of the business as reasons for lower asset management revenue. Source

Earlier plans management reported on

• Not stated: Management referred to the fall announcement and said the repositioning reduces capital allocated to certain funds. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.