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PIPER SANDLER COMPANIES (PIPR)·Q3 2025 Earnings Summary

Executive Summary

  • Record third-quarter performance: net revenues $479.3M (+21% QoQ, +33% YoY), adjusted net revenues $455.3M (+12% QoQ, +29% YoY), adjusted EPS $3.82; both revenue and EPS significantly beat Wall Street consensus. Consensus: revenue $423.5M, EPS $3.27; actuals: revenue $479.3M (+13.2% surprise), EPS $3.82 (+16.7% surprise). The beat was driven by a sharp rebound in equity financings, strong advisory, and improved fixed income activity . Estimates from S&P Global*.
  • Mix improved: corporate financing revenue surged to $79.7M (+128% QoQ, +345% YoY), advisory reached $212.4M (+3% QoQ, +13% YoY), and fixed income services rose to $55.7M (+3% QoQ, +15% YoY). Pre-tax margin expanded to 22.4% (vs. 12.3% in Q2), aided by lower comp ratio (60.3%) and higher investment income .
  • Guidance/Outlook: management expects Q4 advisory revenue similar to last year’s Q4, corporate financing to moderate from Q3’s strength, municipal financing Q4 similar to Q3; fixed income trends positive with bank M&A-linked restructurings. Dividend maintained at $0.70/share, payable Dec 12, 2025 .
  • Strategic: completed acquisition of G Squared Capital Partners (government services/defense tech), and announced Middle East expansion via MENA Growth Partners—supporting technology franchise build-out and global reach .

What Went Well and What Went Wrong

What Went Well

  • Corporate financing inflection: $79.7M, best quarter since 2021, with 38 financings raising $14B; healthcare led with bookrunner roles on all 13 healthcare equity deals; financial services also strong .
  • Advisory resilience: $212.4M revenue on 82 total advisory transactions; leading share in bank M&A (advisor on six of the ten largest U.S. bank M&A closings in the quarter) and robust non‑M&A advisory growth (debt advisory, private capital advisory, restructuring) .
  • Margin expansion and disciplined OpEx: pre-tax margin 22.4% (vs. 12.3% in Q2); adjusted operating margin 21.2% (vs. 18.1% in Q2); non‑comp ex reimbursed deals ~$65M in line with guided range; comp ratio fell to 60.3% .

What Went Wrong

  • Equity brokerage moderated: $53.8M (‑7% QoQ), reflecting lower volatility, though roughly flat YoY .
  • Municipal financing cooled sequentially: $38.5M (‑8% QoQ) after a strong Q2; though still +8% YoY with issuance strength in governmental business .
  • Government shutdown risk: management noted potential near-term impact to corporate financings and M&A if shutdown persists, creating timing uncertainty around approvals/reviews .

Financial Results

Headline Results vs Prior Periods

MetricQ3 2024Q2 2025Q3 2025
Net Revenues ($USD Millions)$359.6 $396.8 $479.3
Diluted EPS ($USD)$1.96 $2.38 $3.38
Adjusted Net Revenues ($USD Millions)$351.8 $405.4 $455.3
Adjusted EPS ($USD)$2.57 $2.95 $3.82
Pre-tax Margin (%)15.5% 12.3% 22.4%
Adjusted Operating Margin (%)18.4% 18.1% 21.2%

Q3 2025 Results vs Wall Street Consensus

MetricActual Q3 2025Consensus Q3 2025Surprise ($)Surprise (%)
Revenue ($USD Millions)$479.3 $423.5*$55.8+13.2%
Primary EPS ($USD)$3.82 $3.27*$0.55+16.7%
Values retrieved from S&P Global*.

Segment Revenue Breakdown

Segment ($USD Millions)Q3 2024Q2 2025Q3 2025
Advisory Services$188.0 $206.2 $212.4
Corporate Financing$17.9 $35.0 $79.7
Municipal Financing$35.5 $41.9 $38.5
Equity Brokerage$52.5 $58.1 $53.8
Fixed Income Services$48.5 $54.3 $55.7
Interest Income$7.8 $7.9 $9.4
Investment Income/(Loss)$10.7 $(4.8) $30.6
Net Revenues$359.6 $396.8 $479.3

KPIs

KPIQ3 2024Q2 2025Q3 2025
Completed M&A & Restructuring Transactions57 49 60
Completed Capital Advisory Transactions14 22 22
Total Completed Advisory Transactions71 71 82
Total Equity Transactions Priced11 16 23
Book-run Equity Transactions Priced8 12 21
Total Debt & Preferred Transactions Priced6 10 15
Book-run Debt & Preferred Transactions4 8 8
Municipal Negotiated Issues – Par ($B)$5.5 $5.7 $5.8
Total Municipal Issues Priced157 175 133
Equity Brokerage – Shares Traded (B)2.7 2.9 2.7
Compensation Ratio (%)64.2% 65.1% 60.3%
Non-comp Ratio (%)20.3% 22.6% 17.3%
Effective Tax Rate (%)27.4% 35.1% 23.2%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Advisory RevenuesQ4 2025No prior quantitative guidanceExpect similar to last year’s Q4 Maintained/clarified
Corporate Financing RevenuesQ4 2025No prior quantitative guidanceExpected to moderate from strong Q3 Lowered vs Q3 run-rate
Municipal Financing RevenuesQ4 2025No prior quantitative guidanceExpect Q4 similar to Q3 Maintained
Fixed Income Services2H25–2026No prior quantitative guidancePositive trends; larger restructuring revenues correlated with bank M&A; timing uncertain Improving
Non-comp Expenses (ex reimbursed deals)Q3 2025In-line with guided range~$65M in Q3; in-line with guided range Maintained
Effective Tax Rate (Adjusted)FY 2025N/AQ3 adj. ETR 28.8%; YTD adj. ETR 18.2% due to vesting benefits; ~29.6% excl. benefits Informational
DividendQ4 2025$0.70 declared on Aug 1$0.70 declared; payable Dec 12, 2025; record Nov 25, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Equity FinancingImpacted by high volatility; lower activity Still muted; Q2 corporate financing down YoY Strong rebound; $80M, best since 2021; 38 deals; healthcare led Up
Advisory (M&A & Non‑M&A)Record Q1 advisory revenue; sector breadth Solid advisory; services & industrials, healthcare, debt advisory $212M; top share in bank M&A; robust non‑M&A (debt, PCA, restructuring) Up
Fixed Income ServicesMore accommodative markets; reduced depository activity vs Q4 Strong activity; balance sheet restructurings Continued strength (+15% YoY); positive outlook with rate cuts and bank M&A Up
Municipal FinancingIncreased issuance vs YoY Best since 2021; broad issuance Slight sequential moderation; YoY growth; expect Q4 similar to Q3 Stable
Macro/Volatility/TradeHigher volatility impacted financings More constructive environment Lower volatility, easing policy; calmer trade outlook supported sentiment Improving
Regulatory/Shutdown RiskN/AN/APotential impact from government shutdown on deal timing Risk rising
Technology/AI Build-outAdded tech/sector hires Pending G Squared acquisition G Squared closed; added MDs incl. AI focus; tech franchise priority Expanding
International ExpansionN/AN/AAnnounced MENA Growth Partners acquisition to expand GCC hub Expanding

Management Commentary

  • “We delivered record third quarter revenues powered by an increase in equity financings as well as strong activity across the rest of our businesses.” — Chad Abraham, CEO .
  • “Equity markets reached record highs… we performed well with quarterly adjusted net revenues of $455 million, a 21.2% operating margin, and adjusted EPS of $3.82… we have now achieved eight consecutive quarters of year-over-year growth.” — CEO prepared remarks .
  • “We generated $80 million of [corporate financing] revenues, our strongest quarterly results since 2021… served as bookrunner on all 13 of the equity deals completed for healthcare companies.” — CEO .
  • “Non-compensation expenses, excluding reimbursed deal costs, were $65 million and in line with our guided range.” — CFO Kate Clune .
  • “We underwrote 133 municipal negotiated transactions, raising $6 billion of par value… we expect our fourth quarter revenues to be similar to the third quarter.” — President Deb Schoneman .

Q&A Highlights

  • Bank M&A momentum: management expects accelerated pace to continue; risks include depository stock valuations affecting transaction feasibility .
  • Margin trajectory: 20%+ operating margin is not a ceiling; management will look for opportunities to accelerate margins as topline improves .
  • Government shutdown: limited immediate impact, but could soon affect corporate financing and M&A timing depending on transaction types and review requirements .
  • Tech franchise: about “halfway” to target scale; aim for tech to rival financials and healthcare in fee pool over time; recent hires include AI-focused MDs .
  • Non‑M&A advisory: growing faster than M&A; agented debt raises now scaling to $400–$600M; ongoing success in private capital advisory and restructuring .

Estimates Context

  • Q3 2025 beat on both revenue and EPS: revenue $479.3M vs $423.5M consensus (+13.2%); EPS $3.82 vs $3.27 consensus (+16.7%). Strength came from a sharp improvement in equity financings, continued fixed income momentum, and robust advisory pipeline execution . Estimates from S&P Global*.
  • Potential estimate revisions: upward adjustments likely for near-term margins and corporate financing contributions given Q3 operating leverage and sequential improvement; management’s Q4 commentary implies normalizing corporate financing and stable advisory/municipal, which may temper Q4 topline expectations while supporting sustained margin discipline .

Key Takeaways for Investors

  • Broad-based beat: significant revenue and EPS upside vs consensus driven by equity financing rebound, advisory strength, and fixed income momentum; operating leverage evident via margin expansion .
  • Pipeline-supported outlook: advisory expected similar to last year’s Q4; corporate financing to moderate from Q3 highs but backdrop supports continued activity; municipal stable; fixed income aided by bank M&A‑linked restructurings .
  • Strategic positioning: acquisitions (G Squared; MENA Growth Partners) deepen government services/defense tech coverage and expand GCC footprint; tech franchise remains a top priority with AI focus .
  • Capital return consistency: dividend maintained at $0.70; steady buybacks (Q3: 11k shares, $3.7M) with substantial year-to-date capital return of $204M through repurchases and dividends .
  • Risk watch: government shutdown timing risk; depository stock valuations influencing bank M&A cadence; municipal refundings more likely a 2026 event as rates trend lower .
  • Trading implications (short term): positive reaction bias on sustained margin improvement and corporate financing strength; monitor headlines on shutdown and deal approvals. Medium term: estimate normalization to a more balanced mix with continued advisory and fixed income support, while tech build-out and GCC expansion open incremental fee pools .

Additional Reference Data and Press Releases

  • Dividend declared: $0.70/share payable Dec 12, 2025 (record Nov 25, 2025) .
  • G Squared Capital Partners acquisition completed (gov’t services/defense tech), integrating into technology IB .
  • Announced acquisition of MENA Growth Partners to establish GCC hub (closing 1Q26 expected) .

Prior Quarters Snapshot (for Trend Context)

  • Q2 2025: net revenues $396.8M; adjusted net revenues $405.4M; diluted EPS $2.38; adjusted EPS $2.95; institutional brokerage and municipal financing strength; corporate financing subdued .
  • Q1 2025: net revenues $357.3M; adjusted net revenues $383.3M; diluted EPS $3.65 (tax benefit), adjusted EPS $4.09; record advisory revenue; equity financings impacted by volatility .