Jefferies Announces Second Quarter 2026 Financial Results

Jefferies Announces Second Quarter 2026 Financial Results NEW YORK--( BUSINESS WIRE)--Jefferies Financial Group Inc. (NYSE: JEF)

Q2 Financial Highlights

$ in thousands, except per share amounts

Quarter End

Year-to-Date

2Q26

2Q25

2026

2025

Net earnings attributable to common shareholders

226,234

88,017

382,161

215,955

Diluted earnings per voting common share

1.02

0.40

1.70

0.97

Return on adjusted tangible shareholders' equity 1

12.8

5.5

12.2

6.9

Total net revenues

2,206,451

1,634,447

4,223,581

3,227,466

Investment banking net revenues

1,206,820

766,307

2,224,113

1,466,999

Capital markets net revenues

799,292

704,155

1,578,048

1,402,439

Asset management net revenues

187,718

154,621

407,980

346,336

Pre-tax earnings

315,549

134,901

527,765

285,966

Book value per common share

51.95

49.96

51.95

49.96

Adjusted tangible book value per fully diluted share 3

34.55

32.84

34.55

32.84

Quarterly Cash Dividend and Stock Buyback Activity

The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.40 per Jefferies common share, payable on August 28, 2026 to record holders of Jefferies common shares on August 18, 2026.

During the quarter, we repurchased 4.0 million shares of common stock for $197 million, or an average price of $49.83 per share. Our Board of Directors has increased our share buyback authorization back to a total of $250 million.

Management Comments

"Our strong second quarter net revenues of $2.21 billion, net earnings attributable to common shareholders of $226 million, diluted earnings per voting common share of $1.02 and return on adjusted tangible shareholders' equity of 12.8% reflect the momentum and market position we have been building at Jefferies.

"The continued acceleration in our core businesses during the second quarter drove record first half net revenues in Advisory, total Investment Banking, Equities, total Capital Markets and combined Investment Banking and Capital Markets. We expect to build further on this momentum in coming periods.

“Investment Banking net revenues were $1.21 billion, up 57% from the prior year quarter. Growth was driven by continued market share gains and a growing addressable market in our Advisory and Equity Underwriting businesses and represent a balanced performance, as no single outsized fee drove our results. We continue to make progress in building our corporate M&A business, while staying focused on our historical areas of strength in sponsor-led activity and had very strong performance during the quarter with corporates particularly in the healthcare, industrials and energy sectors. The new issue market remains resilient. We continue to be optimistic about the second half of 2026, given the strength of our current backlog and new business bookings.

"Capital Markets net revenues were $799 million, up 14% from the prior year quarter. Equities delivered record net revenues of $601 million, up 14% from the prior year quarter. Our continued growth in Equities is being driven by market share gains in cash and electronic trading in EMEA, Asia and the Americas, as well as growth in prime services where we have become an increasingly important strategic partner to some of the most significant, well diversified, hedge funds in the world. While the growth of client-related prime brokerage balances has added to our overall balance sheet size, it has added a layer of high quality, consistent revenues that supports a more durable earnings profile. Additionally, our equity derivatives business continues to expand in sync with our investment banking business, and has allowed Jefferies to support some of our corporate clients' most important transactions with strategic derivative solutions. The shape and scale of growth in our Equities business is translating to higher overall equities operating margins after we invested the past few years in infrastructure to support meaningfully larger global volumes. Fixed Income net revenues were $199 million, up 12%, from the prior year quarter, reflecting strong performance in our distressed, municipal and emerging markets businesses.

"Asset management fees and investment return revenues were $46 million, down 35% compared to the prior year quarter due to weaker performance across several fund strategies, as well as the impact of our strategy to reposition the business by reducing capital allocated to certain funds in line with the announcement we made last fall when we disclosed our intent to acquire 50% of Hildene. In the short term, this has resulted in modestly lower investment return until we close our investment in Hildene, which we are targeting to complete in our third quarter, and should be immediately accretive to results."

Richard Handler, CEO, and Brian Friedman, President

Financial Summary (Unaudited)

$ in thousands

Three Months Ended

Six Months Ended

May 31,

2026

February 28,

2026

May 31,

2025

May 31,

2026

May 31,

2025

Net revenues by source:

Advisory

674,118

527,128

457,860

1,201,246

855,640

Equity underwriting

370,691

305,969

122,366

676,660

250,886

Debt underwriting

160,186

181,858

205,363

342,044

404,725

Other investment banking

1,825

2,338

(19,282

)

4,163

(44,252

)

Total Investment Banking

1,206,820

1,017,293

766,307

2,224,113

1,466,999

Equities

600,751

558,488

526,244

1,159,239

935,302

Fixed income

198,541

220,268

177,911

418,809

467,137

Total Capital Markets

799,292

778,756

704,155

1,578,048

1,402,439

Total Investment Banking and Capital Markets Net revenues 5

2,006,112

1,796,049

1,470,462

3,802,161

2,869,438

Asset management fees and revenues 6

15,169

69,910

20,766

85,079

109,396

Investment return

31,037

88,992

50,404

120,029

44,770

Allocated net interest 4

(22,935

)

(22,238

)

(19,144

)

(45,173

)

(36,365

)

Other investments, inclusive of net interest

164,447

83,598

102,595

248,045

228,535

Total Asset Management Net revenues

187,718

220,262

154,621

407,980

346,336

Other

12,621

819

9,364

13,440

11,692

Total Net revenues by source

2,206,451

2,017,130

1,634,447

4,223,581

3,227,466

Non-interest expenses:

Compensation and benefits

1,188,245

1,085,890

854,839

2,274,135

1,695,966

Compensation ratio 13

53.9

53.8

52.3

53.8

52.5

Non-compensation expenses

702,657

719,024

644,707

1,421,681

1,245,534

Non-compensation ratio 13

31.8

35.6

39.4

33.7

38.6

Total Non-interest expenses

1,890,902

1,804,914

1,499,546

3,695,816

2,941,500

Net earnings before income taxes

315,549

212,216

134,901

527,765

285,966

Income tax expense

65,571

52,870

43,506

118,441

57,722

Income tax rate

20.8

24.9

32.3

22.4

20.2

Net earnings

249,978

159,346

91,395

409,324

228,244

Net losses attributable to noncontrolling interests

(5,440

)

(15,858

)

(7,668

)

(21,298

)

(14,651

)

Preferred stock dividends

29,184

19,504

11,046

48,461

26,940

Net earnings attributable to common shareholders

226,234

155,700

88,017

382,161

215,955

Results Discussion

Three Months Ended May 31, 2026 Versus May 31, 2025

Six Months Ended May 31, 2026 Versus May 31, 2025

Investment Banking and Capital Markets

Asset Management

Non-interest Expenses

* * * *

Amounts herein pertaining to May 31, 2026 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”). More information on our results of operations for the three and six months ended May 31, 2026 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC, which we expect to file on or about July 9, 2026.

This press release contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current views and include statements about our future and statements that are not historical facts. These forward-looking statements are usually preceded by the words “should,” “expect,” “intend,” “may,” “will,” "would," or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements may also include statements pertaining to our strategies for future development of our businesses and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC. We undertake no obligation to update or revise any such forward-looking statement to reflect subsequent circumstances.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).

Consolidated Statements of Earnings (Unaudited)

$ in thousands, except per share amounts

Three Months Ended May 31,

Six Months Ended May 31,

2026

2025

2026

2025

Revenues

Investment banking

1,209,625

789,269

2,227,909

1,518,779

Principal transactions

488,666

338,507

976,164

745,737

Commissions and other fees

400,614

353,233

768,218

641,533

Asset management fees and revenues

9,788

20,076

77,150

105,484

Interest

853,962

878,025

1,667,081

1,723,196

Other

155,542

115,205

272,940

232,450

Total revenues

3,118,197

2,494,315

5,989,462

4,967,179

Interest expense

911,746

859,868

1,765,881

1,739,713

Net revenues

2,206,451

1,634,447

4,223,581

3,227,466

Non-interest expenses

Compensation and benefits

1,188,245

854,839

2,274,135

1,695,966

Brokerage and clearing fees

147,446

129,745

280,578

239,181

Underwriting costs

26,858

14,525

58,241

32,371

Technology and communications

162,860

146,198

322,718

285,673

Occupancy and equipment rental

34,499

30,711

68,359

60,910

Business development

89,108

80,070

164,530

152,361

Professional services

98,707

77,768

175,651

150,234

Depreciation and amortization

47,328

52,253

104,193

83,241

Cost of sales

31,253

42,961

61,173

84,529

Other expenses

64,598

70,476

186,238

157,034

Total non-interest expenses

1,890,902

1,499,546

3,695,816

2,941,500

Earnings before income taxes

315,549

134,901

527,765

285,966

Income tax expense

65,571

43,506

118,441

57,722

Net earnings

249,978

91,395

409,324

228,244

Net losses attributable to noncontrolling interests

(5,440

)

(7,668

)

(21,298

)

(14,651

)

Preferred stock dividends

29,184

11,046

48,461

26,940

Net earnings attributable to common shareholders

226,234

88,017

382,161

215,955

Financial Data and Metrics (Unaudited)

Three Months Ended

Six Months Ended

May 31,

2026

February 28,

2026

May 31,

2025

May 31,

2026

May 31,

2025

Other Data:

Number of trading days

124

Number of trading loss days 7

Average VaR (in millions) 8

10.31

9.78

11.89

10.05

12.50

In millions, except other data

May 31,

2026

February 28,

2026

May 31,

2025

Financial position:

Total assets

79,540

74,380

67,285

Cash and cash equivalents

14,315

11,963

11,260

Financial instruments owned

28,038

28,079

25,570

Level 3 financial instruments owned 9

839

849

763

Goodwill and intangible assets, net 14

1,974

1,979

2,060

Total equity

10,607

10,662

10,382

Total shareholders' equity

10,567

10,611

10,305

Tangible shareholders' equity 10

8,593

8,632

8,245

Other data and financial ratios:

Leverage ratio 11

7.5

7.0

6.5

Tangible gross leverage ratio 12

9.0

8.4

7.9

Number of employees at period end

7,371

7,596

7,671

Number of employees excluding Tessellis and Stratos at period end

6,236

6,221

5,949

Non-GAAP Reconciliations

The following tables reconcile our non-GAAP financial measures to their respective U.S. GAAP financial measures. Management believes such non-GAAP financial measures are useful to investors as they allow them to view our results through the eyes of management, while facilitating a comparison across historical periods. These measures should not be considered a substitute for, or superior to, measures prepared in accordance with U.S. GAAP.

Return on Adjusted Tangible Equity Reconciliation

$ in thousands

Three Months Ended

May 31,

Six Months Ended

May 31,

2026

2025

2026

2025

Net earnings attributable to common shareholders (GAAP)

226,234

88,017

382,161

215,955

Intangible amortization and impairment expense, net of tax 15

1,682

5,824

48,170

13,093

Adjusted net earnings to common shareholders (non-GAAP)

227,916

93,841

430,331

229,048

Preferred stock dividends

29,184

11,046

48,461

26,940

Adjusted net earnings to total shareholders (non-GAAP)

257,100

104,887

478,792

255,988

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

1,028,400

419,548

957,584

511,976

February 28,

November 30,

2026

2025

2024

Shareholders' equity (GAAP)

10,610,845

10,204,228

10,574,696

10,156,772

Less: Goodwill and intangible assets, net

(1,978,652

)

(2,037,906

)

(2,040,147

)

(2,054,310

)

Less: Deferred tax asset, net

(493,427

)

(507,452

)

(459,052

)

(497,590

)

Less: Weighted average impact of dividends and share repurchases

(112,340

)

(67,343

)

(244,489

)

(157,540

)

Adjusted tangible shareholders' equity (non-GAAP)

8,026,426

7,591,527

7,831,008

7,447,332

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

12.8

5.5

12.2

6.9

Adjusted Tangible Book Value and Fully Diluted Shares Outstanding Reconciliation

Reconciliation of book value (shareholders' equity) to adjusted tangible book value and common shares outstanding to fully diluted shares outstanding:

$ in thousands, except per share amounts

May 31, 2026

May 31, 2025

Book value (GAAP)

10,566,996

10,305,025

Stock options (1)

114,939

Goodwill and intangible assets, net (2)

(1,974,240

)

(2,060,018

)

Adjusted tangible book value (non-GAAP)

8,707,695

8,359,946

Voting common shares outstanding (GAAP)

194,145

206,272

Non-voting common shares outstanding (GAAP)

9,247

—

Preferred shares

27,563

Restricted stock units ("RSUs")

14,251

14,099

Stock options (1)

5,064

Other

1,758

1,566

Adjusted fully diluted shares outstanding (non-GAAP) (3)

252,028

254,564

Book value per common share outstanding

51.95

49.96

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

34.55

32.84

(1)

Stock options added to book value are equal to the total number of stock options outstanding as of May 31, 2026 and 2025 of 5.1 million multiplied by the exercise price of $22.69 on May 31, 2026 and 2025.

(2)

Includes goodwill and intangible assets related to Tessellis which were reclassified to assets held for sale during the first quarter of 2026.

(3)

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.

Notes