RJF · Q1 2026 Earnings

Cautious

Raymond James Financial

Reported January 28, 2026

30-second summary

Raymond James delivered Q1 FY2026 revenue of $3.74B (+6% YoY, flat QoQ) and non-GAAP EPS of $2.86, with record client AUA of $1.77T and adjusted ROTCE of 21.4%. The signal: Capital Markets revenue fell to $380M (-21% YoY), a sharp reversal from Q4's +6% YoY growth, and management is now guiding Q2 NII+RJBDP fees down ~3% QoQ — a step worse than last quarter's flat guide. Recruiting and PCG momentum remain intact (domestic PCG NNA at 8% annualized; PCG +9% YoY), but the bullish "more confident than ever" framing of Q4 has cooled to explicit acknowledgment of near-term headwinds.

Headline numbers

EPS

Q1 FY2026

$2.86

Revenue

Q1 FY2026

$3.73B

+6.0% YoY

Operating margin

Q1 FY2026

19.5%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$3.73B	+6.0%	$3.73B	+0.2%
EPS	$2.86	—	$3.11	-8.0%
Operating margin	19.5%	—	—	—

Guidance

Company reaffirmed FY2026 tax rate and provided Q2 FY2026 forward guidance signaling near-term headwinds: NII/RJBDP fees expected down ~3% QoQ due to lower rates and seasonality, with modest 1% QoQ growth in asset management fees.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Asset management and related administrative fees	Q1 FY2026	Higher by approximately 6.5% over Q4 FY2025 level	Actual reported in Q1 FY2026	in-line	Met
Net interest income and RJBDP fees (third-party banks)	Q1 FY2026	Approximately flat with Q4 FY2025 level	Actual reported in Q1 FY2026	in-line	Met

New guidance

Metric	Period	Guide	YoY
Asset management and related administrative fees	Q2 FY2026	Higher by approximately 1% over Q1 FY2026 level	—
Net interest income and RJBDP fees (third-party banks)	Q2 FY2026	Down approximately 3% from Q1 FY2026 level	—
Common share repurchases	Q2 FY2026	Approximately $400 million	—
Non-compensation expenses (adjusted)	FY2026	Approximately $2.3 billion, representing about 8% growth over prior year	+8% YoY

Reaffirmed unchanged this quarter: Effective tax rate (Approximately 24% to 25%)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Private Client Group	$2.768B	+9.0%
Capital Markets	$0.38B	-21.0%
Asset Management	$0.326B	+11.0%
Bank	$0.487B	+15.0%

Capital & returns

Q1 FY2026

Segment	Q1 FY2026
Bank Segment Net Interest Margin	2.81%
Tier 1 Capital Ratio	23.2%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Client Assets Under Administration	$1.773 trillion
Private Client Group Assets Under Administration	$1.708 trillion
Private Client Group Fee-Based Assets	$1.040 trillion
Financial Assets Under Management	$280.8 billion
Domestic PCG Net New Assets (Annualized Growth)	8.0%
Bank Loans, Net	$53.4 billion
Securities-Based Loans	$21.7 billion
Adjusted Return on Tangible Common Equity	21.4%

Management tone

Narrative arc: Q3 cautious-recruiting-acceleration → Q4 maximum-conviction-and-M&A-ready → Q1 capital-markets-cracks-and-rate-headwinds-acknowledged.

The dominant shift this quarter is from offensive to defensive framing. Last quarter management called itself "more confident than ever" and an active "buyer" with $2.6B of deployment-ready capital. This quarter, the same posture has been replaced by explicit hedging: "While in some ways there is more competition in our space, we are confident that our established approach and focus on the power of personal is setting us apart in our industry more than ever." The "power of personal" framing is new, and it's defensive — an acknowledgment that PE-backed roll-ups are pressuring market share enough to require a positioning answer rather than dismissal.

Capital Markets language has reversed across three quarters. Q3 staked out "next two quarters better than prior two." Q4 acknowledged tougher comps but pointed to a "robust pipeline." Q1 walks both back: "Given the very strong M&A results in the both year-ago and sequential periods, this quarter faced tough comparables. Even so, we enter the second quarter with a robust pipeline." The -21% YoY print is being explained by comparison difficulty rather than operational weakness, but the multi-quarter pattern shows the inflection management called for has not arrived. When Wolfe's Stephen Chuback flagged the 2025 advisory revenue gap (-20% RJF vs +20% peers), management redirected to sector mix and 5-7 year trends rather than reconfirming the $1B M&A fee target referenced in prior cycles.

Interest rate framing has shifted from tailwind-stabilizing to active headwind. Q3: rate cuts feeding through deposit pricing. Q4: NII guided flat for Q1 — stabilization. Q1: "Interest rates have declined 125 basis points since early November 2024...Pre-tax income declined 5% year-over-year, primarily due to the impact on this segment of interest rate reductions, which reduced our non-compensable revenues." The Q2 guide for NII+RJBDP fees down ~3% QoQ is the first time in this cycle management has guided sequential decline rather than flat-to-stable. The "two fewer interest earning days" explanation is real but doesn't carry the full delta.

The M&A buyer narrative softened from active to selective. Q4's "$2.6B excess capital, we are buyers" has been replaced this quarter by the Clark Capital and Greensledge announcements being framed through cultural-fit and valuation-discipline language. The "active corporate development with capital available" message survives, but the explicit buyer-of-size posture has receded. This is consistent with the rest of the tone — RJF is still deploying, but no longer telegraphing aggression.

The recruiting story remains the bright spot and the tone here has not changed. Q1 NNAs of $31B (second-best quarter ever, per Q&A) and 8% annualized PCG NNA growth validate the Q4 "strongest pipeline ever" framing. The $1.1B technology investment and AI hires referenced last quarter are now being deployed as recruiting differentiators against PE platforms — the narrative is internally consistent across three quarters.

Recurring themes management leaned on this quarter:

Interest rate headwinds on non-compensable revenues and NIIStrong advisor recruiting momentum and retention as differentiatorAsset management and fee-based program growth offsetting capital markets volatilityStrategic M&A (Clark Capital, Greensledge) to enhance organic capabilitiesBalance sheet strength and capital deployment flexibilityShift to 'power of personal' as competitive positioning narrative

Risks management surfaced:

Lower interest rates reducing non-compensable revenues and net interest incomeCapital markets segment facing tough year-over-year and sequential comparablesSeasonal headwinds in Q2 including fewer billing days and payroll tax resetIntensified competitive pressures in the spaceVariables affecting balance sheet including loan and deposit balance changes

Q&A highlights

Michael Cho · J.P. Morgan

Asked about net new assets acceleration to 8% this quarter and what segments/approach changes drove it, plus pipeline outlook.

$31 billion in NNAs was second-best quarter ever. Attributed to robust, broad-based recruiting (tilted toward independent contractors), strong retention (highest advisor satisfaction since 2014), culture respecting independence and book ownership, $1.1 billion technology investment including AI, and 'power of personal' value proposition differentiating from competitors.

$31 billion in NNAs (second-best quarter ever)Recruiting heavily tilted toward independent contractorsAdvisor satisfaction highest since 2014$1.1 billion technology investment this year

Ben Budish · Barclays

Asked about competitive intensity from PE roll-ups, sustainability of NNA growth in tough environment, and near-term capital markets pipeline outlook.

Management views PE roll-ups as 'short-term noise.' Key differentiation is long-term stability versus PE's 3-5 year exit model; advisors value Raymond James' independence and balance sheet strength. Capital markets pipeline described as very strong with pent-up M&A demand; cannot predict timing but confident in demand given financial sponsors' dry powder and holdings beyond original periods.

PE roll-ups offering 3-5 year destinations creating advisor disruptionRaymond James positioned as long-term stable alternativeStrong capital markets pipeline with pent-up M&A demandMany engagement letters being signed in M&A business

Bill Katz · TD Cowen

Asked about Clark Capital acquisition rationale, path to 10% leverage ratio, and interest-earning asset growth funding.

Clark Capital exemplifies M&A priorities: cultural fit (client-focused, long-term), strategic fit (treating advisors as clients, maintaining brand independence), and sound financials. Described as high-growth with differentiated products. Company has active corporate development, abundant capital, and strong integration capabilities. For asset growth, will use multiple levers including sweep cash, third-party cash redeployment, and Tri-State Capital Bank deposit gathering.

Clark Capital selected for cultural and strategic fitWill maintain Clark's brand independenceSecurities-based loans grew nearly $2 billion this quarterDiversified funding sources for growth include sweep cash and Tri-State Capital deposits

Stephen Chuback · Wolf Research

Asked about M&A performance gap vs peers (Raymond James down 20% vs peers up 20% in 2025) and viability of $1 billion M&A fee target.

Management attributes gap to sector/client mix differences; notes public company M&A led recovery (not Raymond James strength), while regional/growth-oriented firms have different sector strengths. Adding high-quality MDs. Cautioned against over-indexing on quarterly results due to timing; emphasized strong 5-7 year trend. Referenced analyst investor day for long-term trends.

2025 advisory revenue down 20% vs peers up 20%Public company M&A and bolt-bracket deals led recovery (not RJ focus)Adding MDs across organization5-7 year long-term trend described as very strong and attractive vs peers

Michael Cypress · Morgan Stanley

Asked about alternatives platform expansion strategy and aspirations over next 12-24 months.

Management emphasized quality over quantity approach; only offering products with critical mass of demand and thorough operational/investment diligence. Not using alts as retention friction or profit driver, but ensuring clients understand liquidity impact. Heavy emphasis on education and ensuring appropriate allocation by individual client needs.

Quality over quantity approach to alternatives platformWill not use alts as advisor retention frictionSignificant education investment in alternativesFocus on helping advisors understand liquidity impact for clients

Answers to last quarter's watch list

M&A action vs M&A talk — RJF announced two acquisitions (Clark Capital, Greensledge) since the Q4 print, validating the "buyer" framing. Sizes were not disclosed in the inputs, but the cadence of two deals plus continued $400M quarterly buybacks confirms the deployment-ready posture is being executed rather than just signaled.

Resolved positively

Capital Markets YoY re-acceleration — Capital Markets revenue fell to $380M (-21% YoY), well below the Q4 $513M run-rate the watch item required. Management's "tough comparables" explanation acknowledges the pipeline has not converted into reported revenue, and the Q2 framing remains "robust pipeline" without timing commitment. The Q3 FY25 "next two quarters better than prior two" promise has now decisively broken.

Resolved negatively

Asset management fee QoQ growth vs guide — Asset Management revenue of $326M (+11% YoY) is consistent with the +6.5% QoQ guide management delivered, and PCG fee-based assets crossed $1.04T. The Q1 print is fine, but the Q2 guide of only +1% QoQ is a sharp deceleration that re-opens the question for next quarter. Status: Resolved positively (for Q1); continue monitoring Q2

NII+RJBDP fees turning vs staying flat — Q1 actuals held flat as guided, but FY26 commentary has degraded rather than improved: Q2 is now guided down ~3% QoQ explicitly attributed to lower rates and seasonality. Deposit pricing has not stabilized at a level that supports growth.

Resolved negatively

AI spend disclosure — FY26 adjusted non-comp expense guide is ~$2.3B (+8% YoY), versus the ~$2.1B FY25 baseline — a ~$200M step-up that is consistent with the "significant increase in AI expense" Q4 commitment, though management did not isolate the AI portion. The $1.1B total technology investment figure cited by the CEO in Q&A is the closest the company came to quantifying.

Resolved positively

Domestic PCG NNA run-rate sustaining $17.9B+ — Domestic PCG NNA annualized at 8.0% was disclosed; total NNAs of $31B (Q&A) was the second-best quarter ever. The recruiting narrative is intact and the absolute dollar pace appears to have held or exceeded the Q4 $17.9B print.

Resolved positively

What to watch into next quarter

Capital Markets dollar floor: Q1 printed $380M, near the Q3 FY25 trough. Watch whether Q2 FY26 holds above $380M or breaks below — a third consecutive sequential decline in this segment would force RJF to walk back the "robust pipeline" framing it has now repeated for three quarters.

NII+RJBDP guidance trajectory beyond Q2: Q2 guided down ~3% QoQ. The next print's full-year FY26 framing on this aggregate is the cleanest read on whether rate-cut compression is approaching a floor or whether management expects another step-down. A second consecutive down-guide would materially compress consensus FY26 EPS paths.

Asset management fee growth recovery: Q2 guide of +1% QoQ is the weakest quarterly fee guide in this cycle. Watch whether Q3 FY26 commentary points back toward mid-single-digit QoQ growth — if not, the "record fee-based assets compounding" thesis weakens materially.

PE roll-up pressure on PCG recruiting: management framing has shifted from dismissing PE competition to defending against it with "power of personal" language. Watch whether Q2 NNA stays at or above the 8% annualized pace, or whether the competitive intensity acknowledgment is a leading indicator of recruiting deceleration.

M&A revenue conversion timing: management has now signed engagement letters and called the pipeline strong across four quarters without revenue follow-through. Watch for explicit revenue guidance (rather than pipeline color) on the Q2 FY26 call — continued refusal to quantify would confirm Capital Markets is in a structural soft period, not a timing one.

Adjusted non-comp expense at ~$2.3B FY26: the +8% YoY step-up funds the AI buildout. Watch whether the run-rate compounds further in FY27 commentary or whether management signals leverage emerging — the operating margin durability case depends on this.

Sources

Raymond James Financial Q1 FY2026 earnings release, filed with SEC: https://www.sec.gov/Archives/edgar/data/720005/000072000526000030/rjf20251231q126earnings.htm
Raymond James Financial Q1 FY2026 management commentary (as captured in extraction inputs; no full transcript available).

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