Jefferies Financial Group reported third-quarter 2026 net revenue of $2.22 billion, compared with $2.05 billion in the prior-year quarter, as record results in investment banking and equities helped offset weaker fixed-income and asset-management performance.
Net earnings attributable to common shareholders increased to $260.6 million from $224.0 million, while diluted earnings per voting common share rose to $1.08 from $1.01.
Return on adjusted tangible shareholders’ equity was 13.5%, compared with 13.6% in the prior-year period.
Investment banking net revenue reached a quarterly record of $1.33 billion, increasing 17% from $1.14 billion a year earlier.
Advisory revenue increased 25% to a record $818 million, supported by market-share gains across multiple sectors. Jefferies said sponsor-led M&A activity was particularly strong across healthcare, industrials and energy.
Underwriting revenue increased 12% to $483 million, with equity underwriting rising 69%.
Capital markets net revenue increased 11% to $802 million.
Equities produced record quarterly net revenue of $626 million, increasing 29% from the prior-year period. Jefferies attributed the performance to higher global trading activity, particularly in cash and electronic trading, along with continued expansion of prime services, equity options and structured derivatives.
Fixed-income net revenue fell 26% to $176 million amid lower market activity.
Asset management net revenue was $85.6 million, compared with $176.9 million in the year-earlier quarter. Management said weaker performance across several fund strategies affected the business.
For the first nine months of fiscal 2026, Jefferies generated $6.45 billion of net revenue, up from $5.27 billion a year earlier. Net earnings attributable to common shareholders increased to $639.7 million from $439.9 million, while diluted EPS rose to $2.79 from $1.98.
Investment banking and capital markets generated record nine-month revenue, with investment banking revenue from advisory and underwriting reaching $3.52 billion and capital markets revenue totaling $2.38 billion.
Jefferies also continued returning capital to shareholders. The company repurchased 1.3 million shares for $70 million during the quarter at an average price of $52.34 per share.
Through the first nine months, it repurchased 8.3 million shares for $441 million. The board restored the company’s future share repurchase authorization to $250 million.
Jefferies also declared a quarterly dividend of $0.40 per common share, payable November 25 to shareholders of record on November 16.
The company continues to expand its strategic relationship with Sumitomo Mitsui Banking Corporation. SMBC has increased its ownership of Jefferies to approximately 20%, making it the company’s largest shareholder.
Jefferies and SMBC also plan to launch their Japanese wholesale equities and equity capital markets joint venture in January 2027.
KEY QUOTES:
“Our third quarter net revenues were $2.22 billion, net earnings attributable to common shareholders were $261 million, diluted earnings per voting common share were $1.08 and return on adjusted tangible shareholders’ equity was 13.5%, reflecting record quarterly results in Investment Banking and Equities, offset by a more subdued market for Fixed Income and a more challenging backdrop for certain funds in our Asset Management business.
“We believe the results of our third quarter demonstrate the strength and momentum of our business and are a strong foundation on which we can continue to build in future periods. We are very optimistic about the trajectory of Jefferies and our ability to achieve meaningfully higher operating margins and earnings as we complete the sale of Tessellis and continue to wind down the remainder of our legacy merchant banking investments. We are keenly focused on improving the consistency and quality of our earnings.
“Our Investment Banking and Equities businesses continued to gain momentum in the third quarter, driving quarterly record net revenues in Advisory, total Investment Banking, Equities and combined Investment Banking and Capital Markets. These results demonstrate the strength and breadth of our business, as well as the benefits of our long-term investments, and reflect the trust our clients put in us and our ability to serve them globally.
“Investment Banking net revenues were $1.33 billion, up 17% from the prior year quarter, with Advisory delivering a record quarter, up 25% versus last year, and Equity Underwriting up 69%. Our results were driven by a strong market opportunity and continued market share gains. We continue to expand our M&A business, led by strong sponsor-led activity during the quarter particularly in the healthcare, industrials and energy sectors. We are very optimistic about the balance of 2026 and our momentum heading into 2027, supported by the breadth and strength of our current backlog and new business activity.
“Capital Markets net revenues were $802 million, up 11% from the prior year quarter. Equities record quarterly net revenues of $626 million, up 29% from the prior year quarter, were driven by global cash and electronic trading, as well as continued growth in prime services. Our prime services business continues to strengthen its global position as a trusted partner to leading, well-diversified hedge funds, which enhances the quality, consistency and durability of our Equities revenues. Our equity options and structured derivatives businesses also continue to expand in partnership with our investment banking business. Fixed Income net revenues were $176 million, down 26% from the prior year quarter, reflecting ongoing slowness in market activity.
“Asset management fees and investment return revenues were $34 million compared to the prior year quarter of $84 million, reflecting weaker performance across several fund strategies. We remain confident in the long-term outlook for the business as we continue to reposition the platform by reducing capital allocated to certain existing funds consistent with the strategy we outlined last fall when we announced our intent to acquire and fund a 50% interest in Hildene.
“We are also continuing to expand our strategic alliance with SMBC. As expected, SMBC has increased its equity ownership in Jefferies to approximately 20% to become our largest shareholder. In Japan, our planned joint venture with SMBC represents a significant opportunity to align SMBC and SMBC Nikko’s domestic market expertise and balance sheet strength with Jefferies’ global Equities platform, global client relationships and trading technology. Expected to begin serving clients in January 2027, the joint venture is intended to scale a leading wholesale equities and equity capital markets business in Japan. We expect this to become a template for other ways to work together globally with our partners at SMBC.”
Richard Handler, CEO of Jefferies, and Brian Friedman, President of Jefferies
