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JF

Jefferies Financial Group Inc. (JEF)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was mixed: total net revenues of $1.59B and diluted EPS of $0.57 from continuing operations; both declined year over year amid weaker Fixed Income trading and significantly lower Asset Management investment returns .
  • Investment Banking remained resilient: Advisory rose to $398M (+17% YoY) and Debt underwriting to $199M (+54% YoY), while Equity underwriting fell 39% YoY; Capital Markets posted Equities +10% YoY but Fixed Income −18% YoY .
  • Results missed Wall Street consensus: revenue $1.59B vs $1.86B consensus*, EPS $0.57 vs $0.94 consensus*; softness in Asset Management investment returns and lower Fixed Income volumes drove the miss. Estimates marked with * are from S&P Global.
  • Operating discipline remained intact: compensation ratio 52.8% and non-compensation ratio 37.7% including ~$17M charitable donations ($10M Los Angeles wildfire relief), with book value per share at $49.48 and adjusted tangible book value per fully diluted share at $32.57 .

What Went Well and What Went Wrong

What Went Well

  • Advisory strength and market share gains: “Advisory … up 17%, largely from market share gains” with net revenues of $398M .
  • Debt underwriting momentum: Debt underwriting net revenues rose 54% YoY to $199M, reflecting improved activity and product positioning .
  • Equities franchise continued to perform: Equities net revenues grew 10% YoY to $409M with strong prime services and global electronic trading .

What Went Wrong

  • Equity underwriting weakness: Equity underwriting net revenues fell 39% YoY to $129M as sector opportunity slowed in areas where JEF has higher market share .
  • Fixed Income normalization: Fixed Income net revenues decreased 18% YoY to $289M, driven by lower volatility and volumes vs. an exceptionally strong prior-year quarter .
  • Asset Management headwinds: Fees and investment return revenues dropped 53% YoY to $83M due to a difficult investment environment, particularly long equity-biased strategies, versus strong performance last year .

Financial Results

Quarterly topline and earnings

Metric (USD, scale)Q3 2024Q4 2024Q1 2025
Total Net Revenues ($ Thousands)$1,683,552 $1,956,602 $1,593,019
Diluted EPS - Continuing Ops ($)$0.72 $0.91 $0.57
Net Earnings Attributable to Common Shareholders ($ Thousands)$167,128 $205,746 $127,793
Book Value per Common Share ($)$48.89 $49.42 $49.48
Adjusted Tangible Book Value per Fully Diluted Share ($)$31.87 $32.36 $32.57

Segment breakdown

Segment Net Revenues ($ Thousands)Q3 2024Q4 2024Q1 2025
Advisory$592,462 $596,707 $397,780
Equity Underwriting$150,096 $191,218 $128,520
Debt Underwriting$183,078 $171,456 $199,362
Other Investment Banking$23,846 $27,443 $(24,970)
Total Investment Banking$949,482 $986,824 $700,692
Equities$381,426 $410,768 $409,058
Fixed Income$289,183 $240,922 $289,226
Total Capital Markets$670,609 $651,690 $698,284
Total IB + Capital Markets$1,620,091 $1,638,514 $1,398,976
Asset Management Fees & Revenues$13,261 $13,752 $88,630
Investment Return$32,942 $101,762 $(5,634)
Allocated Net Interest$(16,016) $(15,104) $(17,221)
Other Investments (incl. net interest)$101,902 $214,340 $125,940
Total Asset Management$59,012 $314,750 $191,715

KPIs and risk metrics

KPIQ3 2024Q4 2024Q1 2025
Avg VaR (95%, $ Millions)$11.35 $12.75 $13.13
Trading Loss Days7 8 4
Leverage Ratio6.3 6.3 6.8
Employees at Period End7,624 7,822 7,701

Actuals vs Wall Street consensus (S&P Global)

MetricQ1 2025 ActualQ1 2025 Consensus*Delta
Revenue ($)$1,593,019,000 $1,863,016,500*Miss
Primary EPS ($)$0.57 $0.94*Miss

Estimates marked with * are Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per Common ShareQ4 2024 → Q1 2025$0.40 (declared for Feb 27, 2025) $0.40 (declared for May 29, 2025) Maintained
Formal Revenue/Margin/Tax GuidanceQ1 2025Not provided Not provided N/A

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in Jefferies’ filings or IR press releases; analysis reflects management commentary from press releases .

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Advisory momentumRecord advisory revenues: $592M (Q3) on market share gains ; Record quarter in Advisory $597M (Q4) $398M; “up 17% YoY” on market share gains Strong, sustained; backlog building
Equity underwritingFlat YoY in Q3; improved in Q4 to $191M Down 39% YoY to $129M; sector opportunity slowed Mixed to weaker in Q1
Debt underwritingStrong leveraged finance in Q3 ; solid Q4 $171M $199M, +54% YoY Improving
Equities performanceQ3 +42% YoY; cash/electronic strong ; Q4 +49% YoY +10% YoY, prime services/electronic trading strong Continued strength
Fixed IncomeQ3 +13% YoY; credit trading strong ; Q4 +15% YoY −18% YoY; lower volatility/volumes Volatile; softer in Q1
Asset ManagementQ3: challenging for certain strategies ; Q4: substantially higher net revenues Fees/performance fees up, investment return materially weaker; total $83M Highly variable
Macro/policy backdropQ3: improving conditions ; Q4: more normalized market conditions “Uncertainties … around U.S. policy and geopolitical events” More uncertain in Q1
Expense/margin discipline2024 non-comp ratio improved to 34% Non-comp 37.7% incl. ~$17M charitable donations Elevated near-term, disciplined over time

Management Commentary

  • “The capital markets have become increasingly more challenging due to the uncertainties that have arisen around U.S. policy and geopolitical events… our high quality backlog continues to build” — Richard Handler (CEO) and Brian Friedman (President) .
  • “We remain very confident about our strategy… maintaining record liquidity and striving to gain market share across our firm” .
  • “Advisory… up 17%… Debt underwriting… up 54%… Equity underwriting… down 39%” — drivers of segment mix .
  • “Equities… increased 10%… Fixed Income… decreased 18%… driven by lower volatility translating to lower overall volumes” — trading context .
  • “Asset Management… offset by considerably weaker investment return… particularly those with a long equity bias” — strategy performance color .
  • Charitable context: ~$17M non-compensation expenses include $10M for Los Angeles wildfire relief, linked to Doing Good Global Trading Day .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available; Jefferies issued a detailed press release without a published call transcript in the available document catalog and IR news page .
  • Management’s commentary emphasized backlog strength in Advisory, mixed underwriting activity, and macro uncertainties affecting Capital Markets and Asset Management .

Estimates Context

  • Revenue and EPS missed Wall Street consensus: revenue $1.59B vs $1.86B consensus*, EPS $0.57 vs $0.94 consensus*; Asset Management investment return weakness (−$5.6M vs $117.6M prior year) and lower Fixed Income volumes were key drivers .
  • Tax rate was unusually low at 9.4% due to partial resolution of state/local tax matters, providing an offset to operational softness .
  • Equity underwriting slowdown and Fixed Income normalization suggest consensus may need to temper near-term expectations for underwriting and FI trading, while maintaining constructive views on Advisory and Equities .

Estimates marked with * are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Advisory strength and backlog provide near-term revenue visibility despite macro uncertainty; watch for conversion timing of the pipeline into fees .
  • Expect continued Equities resilience (prime services, electronic trading) versus more variable Fixed Income given lower volatility and volumes .
  • Underwriting mix is shifting: Debt underwriting is robust; Equity underwriting softness (sector-specific) may cap near-term IB upside .
  • Asset Management variability remains a swing factor; the quarter’s investment return headwind materially impacted results versus last year .
  • Operating discipline intact: elevated non-comp from charitable donations is non-recurring; compensation ratio remains in the low-50% range .
  • Capital position healthy: book value per share $49.48 and adjusted tangible book per fully diluted share $32.57; leverage ratio at 6.8 .
  • Near-term stock catalysts: potential estimate resets after a revenue/EPS miss*, confirmation of advisory backlog conversion, stabilization in Fixed Income activity, and clarity on Asset Management performance trajectory. Estimates marked with * are Values retrieved from S&P Global.

Additional Sources Reviewed

  • Q1 2025 8-K Item 2.02 and attached press release .
  • Q4 2024 press release (8-K) for prior quarter context .
  • Q3 2024 press release (8-K) for two-quarters-ago trend analysis .
  • IR press releases and Doing Good Global Trading Day donation announcement .