James Edwin Yarrow

James Yarrow from Goldman Sachs inquired about Robinhood's international expansion plans, identifying key markets, their attractiveness, and the go-to-market strategy, differentiating between Europe and Asia.

Answer

Vlad Tenev, CEO, outlined plans to round out product suites in existing markets like the U.K. (multi-currency wallets, ISAs) and use the E.U. as a test case for crypto-powered offerings (stock tokens, DeFi, 24/7 trading). He also mentioned launching in several new Southeast Asian markets with faster feature ramp-up, aiming for millions of international customers.

James Yarrow asked for a high-level breakdown of advisory revenue mix between M&A and non-M&A businesses for 2025. He also inquired about capital return priorities beyond organic investment and the starting point for the compensation ratio in 2026, confirming if the mid-60s target still holds.

Answer

CEO Andrew Bednar respectfully declined to segment revenue by product (M&A vs. non-M&A), explaining that the firm operates by sector and solves client problems rather than selling products. He reiterated that the Financing and Capital Solutions business had a record year, particularly in Liability Management. Regarding capital return, Andrew Bednar stated the priority stack remains unchanged: investing capital in future revenue/clients is paramount, followed by managing share count, dividends, and opportunistic buybacks. For the compensation ratio, Andrew Bednar clarified that the Q4 number is irrelevant, and the full-year 2025 ratio was 68%. He stated the firm would start Q1 2026 with a 67% accrual, maintaining flexibility in Q4 to assess the final ratio.

James Yarrow inquired about Piper Sandler's strategy for expanding into new businesses, specifically through organic versus inorganic growth, and sought insights into the current equity capital markets backdrop.

Answer

Chairman and CEO Chad Abraham stated that the firm is primarily focused on leveraging existing products like restructuring and private capital advisory, where significant upside exists in banker penetration. He mentioned evaluating opportunities in areas such as private stock trading as the platform strengthens. Regarding ECM, Abraham noted that while January was strong, the recent sell-off, particularly in tech and software, impacts financings, making it difficult to predict market conditions beyond a few weeks.

James Edwin Yarrow inquired about the M&A composition of 2025, the outlook for continued large deals versus smaller deals, and when and why smaller deals might catch up. He also asked about the impact of the evolving geopolitical backdrop on boardroom dialogues and transaction activity.

Answer

CEO Navid Mahmoodzadegan stated that larger cap transactions are likely to continue due to motivations for scale, efficiency, technology positioning, and a conducive market/regulatory/financing environment. He anticipates the middle market to pick up in 2026, driven by dissipated issues, LP pressure, and sponsors monetizing older portfolio companies. Regarding geopolitics, Mr. Mahmoodzadegan acknowledged it's always a topic, but clients are often playing through short-term flare-ups to position their businesses for long-term value creation and technology disruption.