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The call presented multiple strong operational and financial highlights — double-digit revenue growth, record advisory and corporate banking results, margin expansion, robust capital returns, and platform/talent investments — offset by some near-term headwinds including an $8.5M litigation charge, declines in municipal financing, fixed income softness due to market volatility, and guidance that corporate financing and brokerage revenues may moderate in Q2. Management emphasized resilience, a diversified revenue base, and ongoing investment in strategic areas while cautioning that transaction timing is sensitive to market conditions.
Management guided Q2 Advisory revenues to be similar to Q1’s record $251 million, but said Q2 Corporate Financing revenues should decline from the strong Q1 level of $73 million; Municipal Financing (Q1 $24 million) is expected to improve modestly, while Equity Brokerage (record Q1 $60 million) and Fixed Income (Q1 $50 million) are expected to weaken as volatility and client caution persist. They reiterated capital and margin priorities after Q1 results of $470 million in adjusted net revenues (up 22% YoY), $94 million operating income (20% operating margin), $72 million net income and $1 adjusted EPS, and noted $171 million returned to shareholders in Q1 (dividends $101 million, $1.45 per share; repurchases ~884,000 shares for $70 million) plus a Board-approved quarterly dividend of $0.20 (up 14%) payable June 12. Management expects to remain at the low end of its 61.5%–62.5% compensation ratio target (Q1 was 61.6%), highlighted non‑comp expenses of $86 million (including an $8.5 million litigation charge) and an effective tax rate of 23.4% (30.8% excluding stock‑award tax benefits).
Net (adjusted) revenues of $470M in Q1 2026, up 22% year-over-year; operating income of $94M and operating margin of 20%; net income $72M and diluted adjusted EPS of $1. This was the tenth consecutive quarter of year-over-year revenue growth.
Corporate Investment Banking revenues of $324M, a first-quarter record and up 30% year-over-year, driven by robust corporate financing activity and advisory contributions.
Advisory revenues were a first-quarter record of $251M, up 16% year-over-year. Firm ranked #1 adviser in U.S. bank M&A by deal value (quarter), #2 in U.S. M&A by announced deals under $2B, and #3 under $5B; #1 adviser in U.S. medtech M&A by announced deals.
Corporate Financing revenues of $73M, up 122% year-over-year; equity underwriting fee pool up 73% year-over-year. Completed 36 equity, debt and preferred financings raising $14B for clients, with Healthcare leading issuance.
Equity Brokerage delivered record Q1 revenues of $60M, up 11% year-over-year driven by higher volatility and increased hedging activity; Fixed Income revenues of $50M, up 6% year-over-year (despite late-quarter volatility).
Operating income grew 37% year-over-year, outpacing revenue growth (22%). Compensation ratio improved to 61.6% (90 bps improvement year-over-year). Non-compensation expenses (ex-litigation) increased 4% y/y and were 16.6% of net revenues, a 300 bps improvement.
Returned $171M to shareholders in Q1 (dividends $101M / $1.45 per share including special dividend; share repurchases ~$70M for ~884k shares). Board approved a quarterly dividend of $0.20 per share, a 14% increase. Completed a 4-for-1 forward stock split.
Reached 192 investment banking Managing Directors (firm high); promoted 6 bankers and hired 3 MDs to strengthen Healthcare, IT, European Life Sciences and Upstream Energy capabilities. Private Capital Advisory and Debt Capital Markets Advisory showing positive momentum.
Good morning, and welcome to the Piper Sandler Company's First Quarter 2026 Earnings Conference Call. Today's call is being recorded and will include remarks by Piper Sandler management, followed by a question-and-answer session. I'll begin by turning the call over to Kate Winslow. Please go ahead.
Thank you, operator. Good morning, and thank you for joining the Piper Sandler Company's First Quarter 2026 Earnings Conference Call. Hosting the call today are Chairman and CEO, Chad Abraham; our President, Deb Schoneman, and CFO, Kate Clune. Earlier this morning, we issued a press release announcing Piper Sandler's First Quarter 2026 financial results, which is available on our website at pipersandler.com/earnings. Today's discussion of the results is complementary to the press release. A replay of this call will also be available at that same website later today. Before we begin, let me remind you that remarks made on today's call may contain forward-looking statements that are not historical or current facts, including statements about beliefs and expectations, and involve inherent risks and uncertainties. Factors that could cause actual results to differ materially from those anticipated are identified in the company's reports on file with the SEC which are available on our website at pipersandler.com and on the SEC website at sec.gov.
Today's discussion also includes statements regarding certain non-GAAP financial measures that management believes are meaningful when evaluating the company's performance. The non-GAAP measures should be considered in addition to and not a su...