01—Abstract
Summary
Summary of the 10-Q filed May 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Raymond James Financial, Inc. reported higher results for the fiscal second quarter ended March 31, 2025.
Net revenues were $3.40 billiona, up 9% from the prior-year quarter, and pre-tax income was $671 million, up 10%. Net income available to common shareholders was $493 million, up 4%, and diluted earnings per share were $2.36, up 6%. Adjusted diluted earnings per share, which exclude $19 million of expenses related to prior-year acquisitions, were $2.42.
For the six months ended March 31, 2025, net revenues were $6.94 billionb (up 13%), pre-tax income was $1.42 billion (up 15%), and diluted earnings per share were $5.22 (up 15%). The filing attributes the revenue growth mainly to higher asset management and related administrative fees from higher fee-based client assets, and to stronger investment banking and brokerage revenues. Lower short-term interest rates reduced combined net interest income and RJBDP fees from third-party banks, which fell 6% in the quarter to $651 million.
The balance sheet remained well capitalized. Total assets were $83.13 billionc and total shareholders' equity was $12.23 billion at March 31, 2025. The tier 1 leverage ratio was 13.3% and the total capital ratio was 24.8%, and RJF, Raymond James Bank, and TriState Capital Bank were all categorized as well-capitalized.
Bank loans, net, rose to $48.27 billiond, largely from growth in securities-based loans. The bank loan provision for credit losses was $16 million in both the quarter and the six-month period. The company repurchased $250 million of common stock in the quarter and had $1.20 billion remaining under its repurchase authorization.
It declared $0.50 per common share in quarterly dividends. The filing also discloses risks. The SEC's Division of Enforcement has requested information about 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 over rates paid on cash sweep balances have been consolidated, and the firm intends to vigorously defend them. The company also expects some interest-rate-sensitive revenue to decline as short-term rates fell, and it notes that the effective tax rate rose to 26.2% in the quarter because of non-deductible valuation losses on company-owned life insurance.
02—Key points
Key Highlights
- Q2 FY2025 net revenues of $3.40 billion (up 9%), pre-tax income of $671 million (up 10%), and diluted EPS of $2.36 (up 6%); adjusted diluted EPS of $2.42.
- Six-month net revenues of $6.94 billion (up 13%), pre-tax income of $1.42 billion (up 15%), and diluted EPS of $5.22 (up 15%).
- Annualized return on common equity of 16.4% for the quarter, and return on tangible common equity of 19.2%, compared with 17.5% and 21.0% a year earlier.
- Total client assets under administration of $1.54 trillion and PCG client assets in fee-based accounts of $872.8 billion at quarter end.
- Combined net interest income and RJBDP fees from third-party banks fell 6% to $651 million as short-term interest rates declined; the Fed cut rates by 50 basis points in September 2024 and by 25 basis points twice in fiscal 2025.
- Capital remained strong, with a tier 1 leverage ratio of 13.3% and a total capital ratio of 24.8%; $250 million of stock repurchased in the quarter and $1.20 billion left under the authorization.
- The SEC's Division of Enforcement is reviewing cash sweep program practices, and three consolidated class actions have been filed over rates paid on cash sweep balances.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed May 7, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $3.85B$3.64B | +5.7% |
| Net Income | $495.00M$476.00M | +4.0% |
| EPS (Basic) | $2.41$2.27 | +6.2% |
| EPS (Diluted) | $2.36$2.22 | +6.3% |
| Shares Outstanding (Basic) | 204.30M208.30M | −1.9% |
| Shares Outstanding (Diluted) | 208.70M213.40M | −2.2% |
05—Questions
Frequently Asked Questions
How did Raymond James perform in the fiscal second quarter of 2025?
Net revenues were $3.40 billion, up 9% from the prior-year quarter. Pre-tax income was $671 million, up 10%, and net income available to common shareholders was $493 million, up 4%. Diluted earnings per share were $2.36, up 6%, and adjusted diluted earnings per share were $2.42.
What drove revenue growth, and what held it back?
Asset management and related administrative fees rose on higher fee-based client assets from market appreciation and net new assets. Brokerage and investment banking revenues also increased on more favorable market conditions. Offsetting this, combined net interest income and RJBDP fees from third-party banks declined 6% to $651 million because of lower short-term interest rates.
How strong is the firm's capital and liquidity position?
The tier 1 leverage ratio was 13.3% and the total capital ratio was 24.8%, and all three regulated banking entities were well-capitalized. The company held $2.5 billion of corporate cash and repurchased $250 million of common stock in the quarter, leaving $1.20 billion under its repurchase authorization. Quarterly dividends declared were $0.50 per common share.
What legal or regulatory risks does the filing disclose?
The SEC's Division of Enforcement has requested information about the firm's cash sweep program practices for investment advisory clients, and the firm is cooperating. Three putative class actions alleging breaches of fiduciary duties or agreements over rates paid on cash sweep balances have been consolidated, and the firm intends to defend them vigorously.
Why did the effective tax rate increase?
The effective tax rate was 26.2% in the quarter compared with 21.8% a year earlier. The filing attributes the increase mainly to non-deductible valuation losses on company-owned life insurance policies, compared with nontaxable valuation gains in the prior-year quarter.
06—Continue