Jefferies Announces Third Quarter 2025 Financial Results

$ in thousands, except per share amounts

Quarter End

Year-to-Date

3Q25

3Q24

2025

2024

Net earnings attributable to common shareholders

$

223,986

$

167,128

$

439,912

$

462,719

Diluted earnings per common share from continuing operations

$

1.01

$

0.72

$

1.98

$

2.06

Return on adjusted tangible shareholders' equity from continuing operations ¹

13.6

%

10.3

%

9.3

%

10.0

%

Total net revenues

$

2,047,432

$

1,683,552

$

5,274,898

$

5,078,200

Investment banking net revenues ¹⁴

$

1,135,325

$

943,566

$

2,602,324

$

2,457,963

Capital markets net revenues ¹⁴

$

723,382

$

676,525

$

2,125,821

$

2,107,863

Asset management net revenues

$

176,882

$

59,012

$

523,218

$

488,919

Pre-tax earnings from continuing operations

$

331,815

$

252,687

$

617,781

$

700,683

Book value per common share

$

50.60

$

48.89

$

50.60

$

48.89

Adjusted tangible book value per fully diluted share ³

$

33.38

$

31.87

$

33.38

$

31.87

$ in thousands

Three Months Ended

Nine Months Ended

August 31,
2025

May 31,
2025

August 31,
2024

August 31,
2025

August 31,
2024

Net revenues by source:

Advisory

$

655,578

$

457,860

$

592,462

$

1,511,218

$

1,214,927

Equity underwriting

181,205

122,366

150,096

432,091

608,586

Debt underwriting

249,525

205,363

183,078

654,250

517,771

Other investment banking ¹⁴

49,017

(19,282

)

17,930

4,765

116,679

Total Investment Banking

1,135,325

766,307

943,566

2,602,324

2,457,963

Equities ¹⁴

486,695

526,244

387,342

1,421,997

1,182,025

Fixed income

236,687

177,911

289,183

703,824

925,838

Total Capital Markets

723,382

704,155

676,525

2,125,821

2,107,863

Total Investment Banking and Capital Markets Net revenues ⁵

1,858,707

1,470,462

1,620,091

4,728,145

4,565,826

Asset management fees and revenues ⁶

15,916

20,766

13,261

125,312

89,736

Investment return

68,026

50,404

(40,135

)

112,796

110,447

Allocated net interest ⁴

(18,550

)

(19,144

)

(16,016

)

(54,915

)

(47,031

)

Other investments, inclusive of net interest ¹³

111,490

102,595

101,902

340,025

335,767

Total Asset Management Net revenues

176,882

154,621

59,012

523,218

488,919

Other

11,843

9,364

4,449

23,535

23,455

Total Net revenues by source

$

2,047,432

$

1,634,447

$

1,683,552

$

5,274,898

$

5,078,200

Non-interest expenses:

Compensation and benefits

$

1,083,510

$

854,839

$

889,098

$

2,779,476

$

2,677,962

Compensation ratio ¹⁵

52.9

%

52.3

%

52.8

%

52.7

%

52.7

%

Non-compensation expenses

$

632,107

$

644,707

$

541,767

$

1,877,641

$

1,699,555

Non-compensation ratio ¹⁵

30.9

%

39.4

%

32.2

%

35.6

%

33.5

%

Total Non-interest expenses

$

1,715,617

$

1,499,546

$

1,430,865

$

4,657,117

$

4,377,517

Net earnings from continuing operations before income taxes

$

331,815

$

134,901

$

252,687

$

617,781

$

700,683

Income tax expense

$

89,311

$

43,506

$

78,011

$

147,033

$

207,077

Income tax rate

26.9

%

32.3

%

30.9

%

23.8

%

29.6

%

Net earnings from continuing operations

$

242,504

$

91,395

$

174,676

$

470,748

$

493,606

Net earnings (losses) from discontinued operations, net of income taxes

—

—

6,363

—

(1,488

)

Net losses attributable to noncontrolling interests

(10,041

)

(7,668

)

(6,874

)

(24,692

)

(19,102

)

Preferred stock dividends

28,559

11,046

20,785

55,528

48,501

Net earnings attributable to common shareholders

$

223,986

$

88,017

$

167,128

$

439,912

$

462,719

Nine Months Ended August 31, 2025 Versus August 31, 2024

• Net earnings attributable to common shareholders of $224 million, or $1.01 per diluted common share from continuing operations.

• Return on adjusted tangible shareholders' equity from continuing operations ¹ of 13.6%.

• We had 206.3 million common shares outstanding and 254.7 million common shares outstanding on a fully diluted basis ² at August 31, 2025. Our book value per common share was $50.60 and adjusted tangible book value per fully diluted share ³ was $33.38.

• Effective tax rate from continuing operations of 26.9% compared to 30.9% for the prior year quarter. The lower rate was primarily driven by the resolution of certain state and local tax matters.

• Net earnings attributable to common shareholders of $440 million, or $1.98 per diluted common share from continuing operations.

• Return on adjusted tangible shareholders' equity from continuing operations ¹ of 9.3%.

• Repurchased 0.7 million shares of common stock for $58 million, at an average price of $79.58 per share in connection with net-share settlements related to our equity compensation plans.

• Effective tax rate from continuing operations of 23.8% compared to 29.6% for the prior year period. The lower rate was primarily driven by the resolution of certain state and local tax matters.

Investment Banking and Capital Markets

Investment Banking and Capital Markets

• Investment Banking net revenues from Advisory, Equity underwriting and Debt underwriting totaling $1.09 billion were 17% higher than the prior year quarter.

• Advisory net revenues of $656 million reflects our best quarter ever and were higher than the prior year quarter, driven by increased deal values in mergers and acquisitions across most sectors as market conditions improved.

• Underwriting net revenues of $431 million were higher than the prior year quarter, as market conditions for Equity and Debt underwriting improved, leading to increased activity levels.

• Capital Markets net revenues of $723 million were higher compared to the prior year quarter. Equities net revenues increased from the prior year quarter, as higher global volumes drove stronger results, particularly within our U.S. and Europe equity cash business. Additionally, our equity options, corporate derivatives and global electronic trading businesses also produced strong results. Fixed Income net revenues decreased from the prior year quarter as strong results from our global structured products were offset by lower results in our client flow trading businesses as tight credit conditions continued to slow activity levels.

• Investment Banking net revenues from Advisory, Equity underwriting and Debt underwriting totaling $2.60 billion were 11% higher than the prior year period. Other investment banking net revenues were $5 million, compared to net revenues of $117 million for the prior year period in part due to the prior year period including Foursight operating revenues as well as the impact of the gain on sale as Foursight was sold in April 2024, and lower performance from Jefferies Finance.

• Advisory net revenues of $1.51 billion were higher than the prior year period, driven by market share gains and increased mergers and acquisition activity levels across most sectors.

• Underwriting net revenues of $1.09 billion were lower than the prior year period, as stronger net revenues in Debt underwriting attributable to the increase in transaction activity across most sectors were offset by lower net revenues in Equity underwriting, consistent with the overall industry slowdown in the first-half of 2025.

• Capital Markets net revenues of $2.13 billion were modestly higher compared to the prior year period. Equities net revenues were strong for the current year attributable to market share gains and overall increased levels of activity during the period. Fixed Income net revenues decreased from the prior year period due to lower global activity levels and volatility in credit spreads for the first-half of 2025 meaningfully impacting the overall trading environment.

Asset Management

Asset Management

• Asset Management fees and revenues and investment return of $84 million were higher than the prior year quarter.

• Asset management fees and revenues modestly increased, driven by higher management and performance fees realized during the current quarter.

• Investment return meaningfully increased due to improved performance across several fund strategies, particularly those with a long equity bias.

• Asset Management fees and revenues and investment return of $238 million were higher than the prior year period.

• Asset management fees and revenues were higher compared to the prior year period, primarily reflecting higher performance fees on funds managed by us and through our strategic affiliates.

• Investment return was modestly higher compared to the prior year period.

Non-interest Expenses

Non-interest Expenses

• Compensation and benefits expense as a percentage of Net revenues was 52.9%, compared to 52.8% for the prior year quarter.

• Non-compensation expenses were higher primarily due to increased brokerage and clearing fees associated with increased equities trading volumes, and increased technology and communication and business development expenses. Non-compensation expenses as a percentage of Net revenues declined to 30.9%, compared to 32.2% for the prior year quarter.

• Compensation and benefits expense as a percentage of Net revenues was 52.7%, flat with the prior year period.

• Non-compensation expenses were higher primarily due to increased brokerage and clearing fees associated with increased equities trading volumes, increased higher technology and communication and business development expenses. The current year also includes approximately $17 million in charitable donations, including $10 million to support Los Angeles wildfire relief efforts, while the prior year period includes the impact of $27 million in bad debt expenses associated with the shutdown of Weiss Multi-Strategy Advisers. In addition, non-compensation expenses for the prior year period include Foursight activity up through the sale in April 2024.

$ in thousands, except per share amounts

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Revenues

Investment banking

$

1,088,197

$

927,094

$

2,606,976

$

2,344,743

Principal transactions

486,893

324,501

1,232,630

1,381,432

Commissions and other fees

325,178

270,643

966,711

787,968

Asset management fees and revenues

13,079

11,986

118,563

74,126

Interest

846,894

936,786

2,570,090

2,636,002

Other

147,433

124,579

379,883

439,556

Total revenues

2,907,674

2,595,589

7,874,853

7,663,827

Interest expense

860,242

912,037

2,599,955

2,585,627

Net revenues

2,047,432

1,683,552

5,274,898

5,078,200

Non-interest expenses

Compensation and benefits

1,083,510

889,098

2,779,476

2,677,962

Brokerage and clearing fees

121,164

101,119

360,345

321,325

Underwriting costs

20,332

14,017

52,703

51,053

Technology and communications

157,171

136,953

442,844

409,703

Occupancy and equipment rental

32,908

30,078

93,818

87,558

Business development

78,999

68,152

231,360

194,433

Professional services

73,329

64,630

223,563

217,967

Depreciation and amortization

53,230

45,977

136,471

139,125

Cost of sales

34,430

37,400

118,959

109,533

Other expenses

60,544

43,441

217,578

168,858

Total non-interest expenses

1,715,617

1,430,865

4,657,117

4,377,517

Earnings from continuing operations before income taxes

331,815

252,687

617,781

700,683

Income tax expense

89,311

78,011

147,033

207,077

Net earnings from continuing operations

242,504

174,676

470,748

493,606

Net earnings (losses) from discontinued operations (including gain on disposal), net of income taxes

—

6,363

—

(1,488

)

Net earnings

242,504

181,039

470,748

492,118

Net losses attributable to noncontrolling interests

(10,041

)

(6,874

)

(24,692

)

(19,102

)

Preferred stock dividends

28,559

20,785

55,528

48,501

Net earnings attributable to common shareholders

$

223,986

$

167,128

$

439,912

$

462,719

Three Months Ended

Nine Months Ended

August 31,
2025

May 31,
2025

August 31,
2024

August 31,
2025

August 31,
2024

Other Data:

Number of trading days

63

63

63

187

188

Number of trading loss days ⁷

3

13

7

20

11

Average VaR (in millions) ⁸

$

10.45

$

11.89

$

11.35

$

11.81

$

13.26

In millions, except other data

August 31,
2025

May 31,
2025

August 31,
2024

Financial position:

Total assets

$

69,320

$

67,285

$

63,275

Cash and cash equivalents

11,458

11,260

10,573

Financial instruments owned

26,117

25,570

24,039

Level 3 financial instruments owned ⁹

803

763

693

Goodwill and intangible assets, net

2,052

2,060

2,073

Total equity

10,501

10,382

10,115

Total shareholders' equity

10,439

10,305

10,046

Tangible shareholders' equity ¹⁰

8,387

8,245

7,973

Other data and financial ratios:

Leverage ratio ¹¹

6.6

6.5

6.3

Tangible gross leverage ratio ¹²

8.0

7.9

7.7

Number of employees at period end

7,866

7,671

7,624

Number of employees excluding Tessellis and Stratos at period end

6,206

5,949

5,926

$ in thousands, except per share amounts

Three Months Ended

August 31,

Nine Months Ended

August 31,

2025

2024

2025

2024

Numerator for earnings per common share from continuing operations:

Net earnings from continuing operations

$

242,504

$

174,676

$

470,748

$

493,606

Less: Net losses attributable to noncontrolling interests

(10,041

)

(6,304

)

(24,692

)

(16,541

)

Allocation of earnings to participating securities

(28,559

)

(20,785

)

(55,528

)

(48,501

)

Net earnings from continuing operations attributable to common shareholders for basic earnings per share

$

223,986

$

160,195

$

439,912

$

461,646

Net earnings from continuing operations attributable to common shareholders for diluted earnings per share

$

223,986

$

160,195

$

439,912

$

461,646

Numerator for earnings per common share from discontinued operations:

Net earnings (losses) from discontinued operations, net of taxes

$

—

$

6,363

$

—

$

(1,488

)

Less: Net losses attributable to noncontrolling interests

—

(570

)

—

(2,561

)

Net earnings from discontinued operations attributable to common shareholders for basic and diluted earnings per share

$

—

$

6,933

$

—

$

1,073

Net earnings attributable to common shareholders for basic earnings per share

$

223,986

$

167,128

$

439,912

$

462,719

Net earnings attributable to common shareholders for diluted earnings per share

$

223,986

$

167,128

$

439,912

$

462,719

Denominator for earnings per common share:

Weighted average common shares outstanding

206,272

206,418

206,191

209,997

Weighted average shares of restricted stock outstanding with future service required

(2,224

)

(2,305

)

(2,259

)

(2,346

)

Weighted average restricted stock units outstanding with no future service required

11,245

10,339

11,045

10,455

Weighted average basic common shares

215,293

214,452

214,977

218,106

Stock options and other share-based awards

4,643

4,189

4,915

3,369

Senior executive compensation plan restricted stock unit awards

2,779

3,058

2,647

2,705

Weighted average diluted common shares

222,715

221,699

222,539

224,180

Earnings per common share:

Basic from continuing operations

$

1.04

$

0.75

$

2.05

$

2.12

Basic from discontinued operations

—

0.03

—

—

Basic

$

1.04

$

0.78

$

2.05

$

2.12

Diluted from continuing operations

$

1.01

$

0.72

$

1.98

$

2.06

Diluted from discontinued operations

—

0.03

—

—

Diluted

$

1.01

$

0.75

$

1.98

$

2.06

$ in thousands

Three Months Ended

August 31,

Nine Months Ended

August 31,

2025

2024

2025

2024

Net earnings attributable to common shareholders (GAAP)

$

223,986

$

167,128

$

439,912

$

462,719

Intangible amortization and impairment expense, net of tax

9,163

5,958

22,053

15,900

Adjusted net earnings to common shareholders (non-GAAP)

233,149

173,086

461,965

478,619

Preferred stock dividends

28,559

20,785

55,528

48,501

Adjusted net earnings to total shareholders (non-GAAP)

$

261,708

$

193,871

$

517,493

$

527,120

Adjusted net earnings to total shareholders (non-GAAP) ¹

$

1,046,832

$

775,484

$

689,991

$

702,827

Net earnings impact for net (earnings) losses from discontinued operations, net of noncontrolling interests

—

(6,933

)

—

(1,073

)

Adjusted net earnings to total shareholders from continuing operations (non-GAAP)

261,708

186,938

517,493

526,047

Adjusted net earnings to total shareholders from continuing operations (non-GAAP) ¹

1,046,832

747,752

689,991

701,396

May 31,

November 30,

2025

2024

2024

2023

Shareholders' equity (GAAP)

$

10,305,025

$

9,875,056

$

10,156,772

$

9,709,827

Less: Intangible assets, net and goodwill

(2,060,019

)

(2,057,302

)

(2,054,310

)

(2,044,776

)

Less: Deferred tax asset, net

(502,033

)

(512,042

)

(497,590

)

(458,343

)

Less: Weighted average impact of dividends and share repurchases

(66,561

)

(57,836

)

(208,901

)

(157,739

)

Adjusted tangible shareholders' equity (non-GAAP)

$

7,676,412

$

7,247,876

$

7,395,971

$

7,048,969

Return on adjusted tangible shareholders' equity (non-GAAP) ¹

13.6

%

10.7

%

9.3

%

10.0

%

Return on adjusted tangible shareholders' equity from continuing operations (non-GAAP) ¹

13.6

%

10.3

%

9.3

%

10.0

%

$ in thousands, except per share amounts

August 31, 2025

Book value (GAAP)

$

10,438,724

Stock options ⁽¹⁾

114,939

Intangible assets, net and goodwill

(2,052,740

)

Adjusted tangible book value (non-GAAP)

$

8,500,923

Common shares outstanding (GAAP)

206,280

Preferred shares

27,563

Restricted stock units ("RSUs")

14,214

Stock options ⁽¹⁾

5,065

Other

1,587

Adjusted fully diluted shares outstanding (non-GAAP) ⁽²⁾

254,709

Book value per common share outstanding

$

50.60

Adjusted tangible book value per fully diluted share outstanding (non-GAAP)

$

33.38

⁽¹⁾

Stock options added to book value are equal to the total number of stock options outstanding as of August 31, 2025 of 5.1 million multiplied by the weighted average exercise price of $22.69 on August 31, 2025.

⁽²⁾

Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans until the performance period is complete. Fully diluted shares outstanding also include all stock options and the impact of convertible preferred shares if-converted to common shares.

1.

Return on adjusted tangible shareholders' equity and Return on adjusted tangible shareholders' equity from continuing operations represent non-GAAP financial measures and are based on full year or annualized amounts. Refer to schedule on page 8 for a reconciliation to U.S. GAAP amounts.

2.

Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as common shares outstanding plus preferred shares, restricted stock units, stock options and other shares. Refer to schedule on page 9 for a reconciliation to U.S. GAAP amounts.

3.

Adjusted tangible book value per fully diluted share (a non-GAAP financial measure) is defined as adjusted tangible book value (a non-GAAP financial measure) divided by shares outstanding on a fully diluted basis (a non-GAAP financial measure). Refer to schedule on page 9 for a reconciliation to U.S. GAAP amounts.

4.

Allocated net interest represents an allocation to Asset Management of certain of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to present direct Asset Management revenues. We believe that aggregating Allocated net interest would obscure the revenue results by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.

5.

Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.

6.

Asset management fees and revenues include management and performance fees from funds and accounts managed by us as well as our share of fees received by affiliated asset management companies with which we have revenue and profit share arrangements, as well as earnings on our ownership interest in affiliated asset managers.

7.

Number of trading loss days is calculated based on trading activities in our Investment Banking and Capital Markets and Asset Management business segments, excluding certain Other investments.

8.

VaR estimates the potential loss in value of trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended November 30, 2024.

9.

Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.

10.

Tangible shareholders' equity (a non-GAAP financial measure) is defined as shareholders' equity less Intangible assets and goodwill. We believe that tangible shareholders' equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible shareholders' equity, making these ratios meaningful for investors.

11.

Leverage ratio equals total assets divided by total equity.

12.

Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and intangible assets divided by tangible shareholders' equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio.

13.

Beginning in fiscal 2024, we now refer to "Merchant banking" as "Other investments" in our Asset Management reportable segment.

14.

Beginning in the fourth quarter of 2024, revenues from corporate equity derivative transactions historically included within Other investment banking net revenues were reclassified to Equities net revenues as the underlying business has matured and has started to generate meaningful revenues. Prior year amounts have been revised to conform to this reclassification change to the current year reporting.

15.

Compensation ratio equals total compensation expense divided by total net revenues. Non-compensation ratio equals total non-compensation expense divided by total net revenues.