01—Abstract
Summary
Summary of the 10-Q filed February 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Raymond James Financial, Inc. reported results for its fiscal first quarter of 2025 (three months ended December 31, 2024).
Net revenues rose to $3.54 billiona from $3.01 billion, and pre-tax income increased to $749 million from $630 million. Net income available to common shareholders was $599 million, and diluted earnings per share were $2.86, compared with $2.32 a year earlier. The firm attributes the growth mainly to higher asset management and related administrative fees, driven by market appreciation and net new fee-based assets, and to stronger investment banking revenue, particularly in merger & acquisition activity.
Offsetting these gains, combined net interest income and RJBDP fees from third-party banks declined 4% on lower short-term interest rates. The balance sheet remained strong, with total assets of $82.28 billionb and total shareholders' equity of $11.93 billion as of December 31, 2024. The firm reported a tier 1 leverage ratio of 13.0% and a total capital ratio of 25.0%, and all three of its banking-related regulated entities were categorized as well-capitalized.
Bank loans, net, rose to $47.16 billionc. In December 2024, the Board increased the quarterly common dividend to $0.50 per share and authorized up to $1.5 billion in share repurchases, of which $1.45 billion remained available at quarter end. Looking ahead, management expects the fiscal second quarter to be affected by two fewer billable days, which it expects to reduce asset management fees by approximately 2%.
It expects investment banking revenues to continue benefiting over the next few quarters. The filing also discloses an SEC inquiry into cash sweep program practices and three putative class action lawsuits, which the firm intends to vigorously defend.
02—Key points
Key Highlights
- Net revenues of $3.54 billion, up 17% from $3.01 billion in the prior-year quarter; pre-tax income of $749 million, up 19%.
- Diluted EPS of $2.86, up 23% from $2.32; adjusted diluted EPS of $2.93 (non-GAAP), up 22%.
- Asset management and related administrative fees rose to $1.74 billion from $1.41 billion, driven by fee-based account growth.
- Investment banking revenues rose to $325 million from $181 million, with merger & acquisition and advisory revenue up to $226 million from $118 million.
- Combined net interest income and RJBDP fees from third-party banks fell 4% to $673 million due to lower short-term interest rates.
- Quarterly common dividend raised 11% to $0.50 per share; $1.45 billion remained under the $1.5 billion repurchase authorization at quarter end.
- Tier 1 leverage ratio of 13.0% and total capital ratio of 25.0% at December 31, 2024; RJF, Raymond James Bank and TriState Capital Bank all categorized as well-capitalized.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed February 7, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $4.04B$3.52B | +14.6% |
| Net Income | $600.00M$498.00M | +20.5% |
| EPS (Basic) | $2.94$2.38 | +23.5% |
| EPS (Diluted) | $2.86$2.32 | +23.3% |
| Shares Outstanding (Basic) | 203.70M208.60M | −2.3% |
| Shares Outstanding (Diluted) | 209.20M213.80M | −2.2% |
05—Questions
Frequently Asked Questions
What drove the increase in revenue this quarter?
The filing attributes the increase mainly to higher asset management and related administrative fees, which rose to $1.74 billion from $1.41 billion on higher fee-based account assets from market appreciation and net new assets. Investment banking revenues also increased significantly, primarily from more favorable market conditions, particularly for merger & acquisition activity.
How are lower interest rates affecting the firm?
Combined net interest income and RJBDP fees from third-party banks declined 4%, to $673 million from $698 million, due to lower interest rates. Net interest income fell to $529 million from $546 million, and the Bank segment net interest margin decreased to 2.60% from 2.74%. Management expects a decrease in short-term rates to generally reduce net earnings, although there may be offsetting favorable impacts.
What is management's outlook for the next quarter?
Management expects the fiscal second quarter of 2025 to be negatively affected by two fewer billable days, which it expects to produce an approximate 2% decline in asset management and related administrative fees. It expects investment banking revenues to continue to benefit over the next few quarters, and it expects increased lending may raise provisions for credit losses in future periods.
What regulatory or legal risks does the filing disclose?
The SEC's Division of Enforcement requested information on the firm's cash sweep program practices for investment advisory clients, and the firm is cooperating with the inquiry. Three putative class action lawsuits alleging breaches of fiduciary duty or agreements regarding rates paid on cash sweep programs have been consolidated, and the firm intends to vigorously defend them. The filing states the upper end of the reasonably possible aggregate loss for matters where a range can be estimated is approximately $30 million in excess of accruals.
How much capital does the firm return to shareholders?
During the quarter the firm repurchased 310 thousand shares for $50 million at an average price of $161.13 per share. Common and preferred cash dividends declared totaled $116 million. The Board's December 2024 authorization of up to $1.5 billion replaced the previous authorization, leaving $1.45 billion available at December 31, 2024.
06—Continue