RJF · Q2 2026 Earnings

Bullish

Raymond James Financial

Reported April 22, 2026

30-second summary

Raymond James delivered Q2 FY2026 revenue of $3.86B (+13% YoY, +3% QoQ) and non-GAAP EPS of $2.83, with Capital Markets revenue rebounding 22% sequentially to $464M (+17% YoY) — fully reversing last quarter's collapse. The signal: the Q3 NII+RJBDP guide flipped from down ~3% QoQ (last quarter's Q2 guide) to up ~1% QoQ, marking the first sequential up-guide on this aggregate in this rate-cut cycle. Hidden flag: the $400M Q2 buyback target disclosed last quarter was not replaced with a forward repurchase number, even as adjusted ROTCE printed 20.9% and excess capital remains elevated.

Headline numbers

EPS

Q2 FY2026

$2.83

Revenue

Q2 FY2026

$3.86B

+13.0% YoY

Operating margin

Q2 FY2026

19.0%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$3.86B	+13.0%	$3.73B	+3.3%
EPS	$2.83	—	$2.86	-1.0%
Operating margin	19.0%	—	19.5%	-50bps

Guidance

Reaffirmed FY2026 tax rate and non-compensation expenses; Q2 bank segment beat sequential NII/RJBDP decline guidance with 12% YoY growth despite seasonal headwinds; forward Q3 guidance signals modest sequential gains in both asset management and NII/RJBDP 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	Q2 FY2026	Higher by approximately 1% over Q1 FY2026 level	Implied in segment results; guidance targeted sequential change, not absolute figure	In-line with sequential expectation	Met
Net interest income and RJBDP fees (third-party banks)	Q2 FY2026	Down approximately 3% from Q1 FY2026 level	Bank segment revenue $0.486B with 12% YoY growth	Better than sequential decline guidance; strong YoY growth of 12%	Beat

New guidance

Metric	Period	Guide	YoY
Asset management and related administrative fees	Q3 FY2026	Higher by approximately 1% over Q2 FY2026 level	—
Net interest income and RJBDP fees (third-party banks)	Q3 FY2026	Up approximately 1% from Q2 FY2026 level	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Common share repurchases	Q2 FY2026	Approximately $400 million	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Effective tax rate (Approximately 24% to 25%), Non-compensation expenses (Approximately $2.3 billion)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Private Client Group	$2.81B	+13.0%
Capital Markets	$0.464B	+17.0%
Asset Management	$0.327B	+13.0%
Bank	$0.486B	+12.0%

Capital & returns

Q2 FY2026

Segment	Q2 FY2026
Annualized return on common equity	17.3%
Annualized adjusted return on tangible common equity	20.9%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026
Client assets under administration	$1.76 trillion
Private Client Group assets in fee-based accounts	$1.04 trillion
Domestic Private Client Group net new assets (annualized)	5.8%
Financial assets under management	$282.4 billion
Bank segment net loans	$54.8 billion
Bank segment net interest margin	2.81%

Management tone

Narrative arc: Q3 cautious-recruiting-acceleration → Q4 maximum-conviction-and-M&A-ready → Q1 capital-markets-cracks-and-rate-headwinds-acknowledged → Q2 capital-markets-snapback-and-AI-as-operating-model.

The dominant shift this quarter is from defensive back to offensive, but with the offense pointed at AI and operational leverage rather than the Q4 "we are buyers" framing. Last quarter's "power of personal" was defensive positioning against PE roll-ups; this quarter the same phrase has been inverted into an offensive thesis: "In a world being shaped by AI, technology and constant change, we believe personal relationships will matter more, not less." The same words, but the posture has flipped from defending share to arguing the AI cycle widens RJF's moat rather than erodes it.

Capital Markets language completed a full round-trip across four quarters. Q3 FY25 staked out "next two quarters better than prior two." Q4 hedged with "tougher comps." Q1 walked it back to "tough comparables." Q2 now declares: "We entered this third quarter with a robust pipeline that continues to reflect the opportunities that come from the strategic investments we have made in this segment over the past few years. We are confident we are well-positioned to continue building upon this quarter's momentum with motivated buyers and sellers." This is the most forward-confident Capital Markets language management has used in this cycle, and the $464M Q2 print is the first time the words have been backed by a meaningful sequential dollar gain. The signal: management is now willing to underwrite the inflection on the basis of actual revenue, not just pipeline color.

The interest rate framing has decisively eased. Three quarters ago rate cuts were a tailwind to monitor; last quarter they were "a structural headwind to non-compensable revenues" with NII guided down 3% QoQ. This quarter the bank delivered +12% YoY with NIM flat, and the forward guide moves to +1% QoQ — the first sequential up-guide on this aggregate in this rate-cut cycle. Management still hedges with "based on static interest rates and assuming unchanged quarter-end balances," but the absolute direction has changed.

AI moved from infrastructure spend (Q4) to recruiting differentiator (Q1) to operating model this quarter. The anchor: "We will continue investing in automation, process improvement, and AI as part of our more than $1.1 billion annual technology spend to create efficiencies, give advisors more time to deepen client relationships...Our proprietary AI operations agent provides curated natural language answers and guidance to operational questions while intelligently evolving based on user activities and preferences." Two quarters ago AI was a future line item; this quarter it's a deployed product with a name ("Ray"), advisor pilot data, and an operations agent in production. Goldman's Alex Glostein pressed management to quantify the margin benefit and was rebuffed — explicitly told it's "too early and premature" — but the framing shift from spend to operating leverage is the new tone.

The M&A buyer posture from Q4 has further softened into execution mode. Q4 framed $2.6B excess capital as deployment-ready. Q1 pivoted to cultural-fit and valuation-discipline language. Q2 confirms Clark Capital closing this quarter and Greensledge closed late in Q2 — the deals are happening, but management explicitly declined to commit on larger M&A timing in Q&A, citing "biggest challenge is target firms haven't been for sale." This is consistent execution, not retreat, but the buyer-of-size aggression has not returned.

Recurring themes management leaned on this quarter:

Record revenue and earnings performance despite volatile marketsAI and automation investment to enhance advisor productivity and client relationshipsStrong advisor recruiting momentum and retention supporting long-term growthRobust investment banking pipeline and capital markets momentumDisciplined capital deployment with significant excess capacity for acquisitionsSecurities-based lending driving record loan balances and client synergies

Risks management surfaced:

Volatile and challenging market environment affecting trading and capital markets activityInterest rate reductions impacting non-compensable revenues and net interest marginsRegulatory and compliance risks (referenced generically in forward-looking statements)Integration risks from acquisitions (Greensledge, Clark Capital, anticipated others)Competition for financial advisor talent and market share

Q&A highlights

Ben Budish · Barclays

Competitive environment in PCG, recruiting pipeline strength, M&A-driven advisor mobility, and pre-tax yield compression in the segment

Management emphasized strong recruiting pipeline driven by home office visits and new advisor commits, with uptick in employee affiliation. Addressed competitive dynamics with private equity, noting some PE firms struggling to raise capital. Pre-tax yield pressure attributed to lower short-term rates (spread dynamic) and substantially increased recruiting spend, which is now broken out separately given it represents a 'medium-sized acquisition' annually.

7% annualized net new assets growth in first half of fiscal year, leading industryStrong retention despite competitive environmentUptick in employee affiliation option commitsAnnual recruiting spend equivalent to medium-sized acquisition

Michael Cho · JP Morgan

Technology spend priorities ($1.1B) and AI initiative success metrics, plus capital markets pipeline strength and momentum outlook

Management stated vast majority of $1.1B tech spend focused on PCG business to support financial advisors. Validated through technology advisory council comprised of advisors providing real-time feedback. Described strong investment banking pipeline with March performing better than expected, driven by financial sponsors (buy-side and sell-side), with buyers having dry powder and sellers beyond holding periods. Acknowledged volatility from geopolitical issues and sector-specific concerns (AI impact on tech/fintech) but expressed confidence in bankers and relationships.

$1.1 billion annual technology spend, mostly on PCGTechnology guided by advisor-led advisory councilMarch performance stronger than expectedPipeline driven by financial sponsors with capital and dry powder

Alex Glostein · Goldman Sachs

Long-term profitability and margin expansion potential from AI and efficiencies; probability and timing of larger M&A deals given reduced PE competition

Management cautioned against dimensioning specific margin impact from AI, noting it's too early and premature to quantify cost reduction benefits. Described early-stage rollout of 'Ray' LLM solution with few hundred advisors showing positive feedback, but flagged agentic AI as next frontier with uncertain timeline. On M&A, stated biggest challenge is target firms haven't been for sale; emphasized long-term partnership approach (not takeovers), maintaining target culture/franchise intact (Morgan Keegan model). Expressed confidence deals will happen but acknowledged uncertainty on catalysts and timing.

~20% current firm margin level'Ray' AI solution piloted with few hundred advisors, early feedback extremely positiveAgentic AI still early in journey across industryDeclined to quantify near-term margin benefits from AI

Brennan Hawk · BMO Capital Markets

PCG compensation ratio compression despite mid-to-high teen revenue growth; explanation for negative operating leverage

Management attributed comp ratio pressure to mix shift: much more recruiting from independent side (higher payouts to cover overhead) versus employee side over past year. Additional factor: tiered payout systems on employee side mean production increases drive higher payout grids. This explains why revenue growth doesn't translate to comp ratio improvement.

Mix shift towards independent advisors (higher payout ratios) driving comp ratio expansionIndependent advisors have higher payouts (cover own overhead, real estate, health insurance)Tiered payout systems on employee side increase with production growth

Jim Mitchell · Seaport Global

SBL growth acceleration drivers across distribution channels (Tri-State platform vs. PCG); contribution from Tri-State deposit base and spreads

Management highlighted 30-31% year-over-year SBL growth almost identically split between Tri-State platform and PCG (~30% each). Tri-State acquisition justified by FBL/lending capability and deposit funding diversification. Noted deposit growth at Tri-State over 50% since acquisition, leadership team intact, independently branded and separately chartered. Confirmed significant ongoing opportunity to grow on both platforms.

31% year-over-year SBL growth rate~30% growth from Tri-State platform, ~30% from PCGTri-State deposit growth over 50% since acquisitionTri-State independently branded and separately chartered

Answers to last quarter's watch list

Capital Markets dollar floor — Capital Markets revenue printed $464M (+17% YoY, +22% QoQ), well above the $380M Q1 floor the watch item set. This is the first quarter in this cycle where management's "robust pipeline" framing has been validated by sequential dollar growth, and the +17% YoY break decisively reverses the -21% Q1 print.

Resolved positively

NII+RJBDP guidance trajectory beyond Q2 — The Q3 FY26 guide is up ~1% QoQ versus Q2's down ~3% QoQ — a four-point sequential improvement and the first sequential up-guide in this cycle. Bank segment also beat its own Q2 guide (+12% YoY with NIM flat at 2.81%). The rate-compression compression is approaching a floor and may have passed it.

Resolved positively

Asset management fee growth recovery — Q3 FY26 fee guide is +1% QoQ, unchanged from Q2's +1% QoQ pace. Asset Management segment grew +13% YoY but only +0.3% QoQ. The "record fee-based assets compounding" thesis has not re-accelerated — fee growth has stabilized at a low single-digit sequential pace, not the mid-single-digit recovery the watch item called for.

Resolved negatively

PE roll-up pressure on PCG recruiting — Recruited production was the second-highest quarter ever per management, and PCG segment revenue accelerated to +13% YoY from +9%. However, domestic PCG NNA annualized decelerated to 5.8% from 8.0% in Q1 — the first material deceleration in the recruiting story. The competitive-intensity acknowledgment may be a leading indicator.

Continue monitoring

M&A revenue conversion timing — Management still declined to give explicit revenue guidance for Capital Markets, but the $464M print (+17% YoY) and forward language ("we are confident we are well-positioned to continue building upon this quarter's momentum") is the strongest convertible signal in four quarters. Pipeline color is now backed by actual revenue inflection.

Resolved positively

Adjusted non-comp expense at ~$2.3B FY26 — Full-year non-comp target reaffirmed unchanged at ~$2.3B. Management did not provide FY27 framing or signal operating leverage emerging from the AI investments — explicitly refused to quantify when pressed by Goldman in Q&A. The buildout is on track but the leverage timeline is unresolved.

Continue monitoring

What to watch into next quarter

NNA deceleration vs recruited production: Q2 domestic PCG NNA at 5.8% annualized is down from 8.0% in Q1, even as recruited production hit the second-highest quarter ever. Watch whether Q3 NNA reverts to 7-8% or stays below 6% — a second consecutive sub-6% print would indicate the recruiting compounding thesis is breaking down at the asset level despite advisor headcount wins.

Buyback disclosure restoration: the $400M Q2 buyback line item from last quarter was not replaced with a forward number this quarter, despite 20.9% adjusted ROTCE and Clark Capital being only one Q3 closing. Watch whether the next press release restores quarterly repurchase color or whether the absence signals capital is being routed to larger M&A targets management hasn't yet announced.

NII+RJBDP sustaining the up-guide: Q3 guided +1% QoQ is the first sequential up-guide in this cycle. Watch whether the Q4 FY26 guide compounds (+2% or higher) or fades back to flat — the trajectory determines whether consensus FY27 EPS can underwrite NII growth rather than just stabilization.

Capital Markets dollar follow-through above $464M: the Q2 print broke the cycle, but the test is sustainability. Watch whether Q3 holds at or above $464M — a sequential give-back to the $380-420M range would re-open the "tough comps" framing and validate the bearish read that Q2 was a sponsor-activity pull-forward rather than a structural inflection.

Asset Management QoQ acceleration: +1% QoQ guide for Q3 is unchanged from Q2's +1% pace. Watch whether Q4 FY26 commentary points back to mid-single-digit sequential growth, or whether the fee-based assets compounding story has structurally settled at low single digits — the latter would compress the long-term ROTCE bull case.

Comp ratio trajectory under independent-advisor mix shift: management explicitly acknowledged in Q&A that the independent recruiting tilt is a structural headwind to PCG margin improvement. Watch whether Q3 PCG pre-tax margin holds or compresses further — the tension between recruiting wins (volume) and comp ratio (mix) is now the central operating leverage debate.

Clark Capital closing economics: management confirmed Q3 close. Watch whether the Q3 print isolates Clark Capital contribution to Asset Management revenue and whether management provides FY27 accretion framing — the absence of either would suggest the deal is smaller than the strategic emphasis warrants.

Sources

Raymond James Financial Q2 FY2026 earnings release, filed with SEC: https://www.sec.gov/Archives/edgar/data/720005/000072000526000046/rjf20260331q226earnings.htm
Raymond James Financial Q2 FY2026 earnings conference call commentary (management prepared remarks and Q&A, as summarized in extraction).

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