Piper Sandler Companies Reports Fourth Quarter and
Full Year 2024 Results; Declares Special Dividend of $3.00 Per Share and Quarterly Dividend of $0.65 Per Share
MINNEAPOLIS—January 31, 2025—Piper Sandler Companies (NYSE: PIPR), a leading investment bank, today announced its results for the fourth quarter and full year of 2024.
"For 2024, we delivered a strong fourth quarter and our second strongest year on record with over $1.5 billion of net revenues. We grew revenues in each of our businesses leading to increased profitability and earnings relative to 2023," said Chad Abraham, chairman and chief executive officer. "We are pleased with our momentum and remain focused on driving revenue growth and returns for our shareholders."
Fourth Quarter 2024 Results
Full Year 2024 Results
U.S. GAAP
Adjusted (1)
U.S. GAAP
Adjusted (1)
(Dollars in millions, except per share data)
Q4
vs.
vs.
Q4
vs.
vs.
vs.
vs.
2024
Q3-24
Q4-23
2024
Q3-24
Q4-23
2024
2023
2024
2023
Net revenues
$484
35
%
3
%
$499
42
%
9
%
$1,526
13
%
$1,541
16
%
Pre-tax margin
17.0
%
1.5pp
-1.2pp
24.4
%
6.0pp
2.7pp
14.3
%
5.2pp
19.7
%
3.7pp
Net income attributable to Piper Sandler Companies
$69
99
%
33
%
$87
88
%
20
%
$181
112
%
$228
37
%
Earnings per diluted common share
$3.86
97
%
29
%
$4.80
87
%
19
%
$10.24
106
%
$12.69
37
%
(1)A non-U.S. GAAP ("non-GAAP") measure. Management believes that presenting results and measures on an adjusted basis alongside U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods. The non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of financial performance prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see "Reconciliation of U.S. GAAP to Selected Summary Financial Information."
Financial & Business Highlights
•Net revenues of $484 million for the fourth quarter of 2024 and adjusted net revenues of $499 million both increased compared to the sequential and prior year quarters.
◦Advisory services revenues of $280 million represent our third strongest quarter on record, driven by strong contributions from our financial services, energy & power, healthcare and consumer groups.
◦Corporate financing revenues of $53 million represent our strongest quarter since 2021.
•Net revenues and adjusted net revenues of $1.5 billion for 2024 both increased compared to the prior year.
◦Corporate investment banking revenues of $983 million increased 17% over 2023, driven by more completed transactions, and six of our seven industry groups delivered year-over-year growth.
◦Municipal financing activity was robust across our specialty sector and governmental businesses, generating revenues of $123 million, up 47% over the prior year and our best year since 2021.
◦Fixed income services revenues of $186 million were up 11% over 2023, driven by increased activity among our depository clients following the Federal Reserve's action to reduce short-term interest rates.
Talent
•Hired one managing director into our financial services investment banking group who will operate within our asset and wealth management vertical and focus on advising family offices and their respective portfolio companies.
•Bolstered our fixed income team with the hiring of a managing director to serve as head of structured products.
•Expanded our energy equity research team with the addition of a senior research analyst covering oilfield services.
Capital
•Declared a special cash dividend of $3.00 per share of common stock and a quarterly cash dividend of $0.65 per share of common stock on January 31, 2025 to be paid on March 14, 2025 to shareholders of record as of March 4, 2025.
•Total dividend for fiscal year 2024 totaled $5.50 per share of common stock, a payout ratio of 43% of adjusted net income.
•Returned an aggregate of $140 million to shareholders during 2024 through share repurchases and dividends.
1
U.S. GAAP Selected Financial Data
The following summarizes our results on a U.S. GAAP basis.
Three Months Ended
Twelve Months Ended
(Dollars in thousands, except per share data)
Dec. 31,
Sept. 30,
Dec. 31,
Change vs.
Dec. 31,
Dec. 31,
2024
2024
2023
Q3-24
Q4-23
2024
2023
Change
Revenues
Investment banking:
Advisory services
$
279,602
$
188,047
$
284,317
49
%
-2
%
$
808,746
$
709,316
14
%
Corporate financing
52,751
17,903
30,178
195
%
75
%
173,876
131,077
33
%
Municipal financing
41,007
35,520
29,280
15
%
40
%
122,513
83,419
47
%
Total investment banking
373,360
241,470
343,775
55
%
9
%
1,105,135
923,812
20
%
Institutional brokerage:
Equity brokerage
61,232
52,480
55,003
17
%
11
%
215,275
209,512
3
%
Fixed income services
56,097
48,454
47,892
16
%
17
%
186,167
168,027
11
%
Total institutional brokerage
117,329
100,934
102,895
16
%
14
%
401,442
377,539
6
%
Interest income
10,095
7,831
7,302
29
%
38
%
32,908
26,723
23
%
Investment income/(loss)
(15,400)
10,693
20,235
N/M
N/M
(7,890)
30,039
N/M
Total revenues
485,384
360,928
474,207
34
%
2
%
1,531,595
1,358,113
13
%
Interest expense
1,277
1,356
2,356
-6
%
-46
%
5,681
10,146
-44
%
Net revenues
484,107
359,572
471,851
35
%
3
%
1,525,914
1,347,967
13
%
Non-interest expenses
Compensation and benefits
316,004
231,014
301,154
37
%
5
%
1,004,173
897,034
12
%
Non-compensation expenses
85,974
72,943
84,851
18
%
1
%
303,329
328,347
-8
%
Total non-interest expenses
401,978
303,957
386,005
32
%
4
%
1,307,502
1,225,381
7
%
Income before income tax expense
82,129
55,615
85,846
48
%
-4
%
218,412
122,586
78
%
Income tax expense
29,627
15,225
21,273
95
%
39
%
60,972
23,613
158
%
Net income
$
52,502
$
40,390
$
64,573
30
%
-19
%
$
157,440
$
98,973
59
%
Net income attributable to Piper Sandler Companies
$
69,059
$
34,789
$
52,025
99
%
33
%
$
181,114
$
85,491
112
%
Earnings per diluted common share
$
3.86
$
1.96
$
3.00
97
%
29
%
$
10.24
$
4.96
106
%
Ratios and margin
Compensation ratio
65.3%
64.2%
63.8%
65.8%
66.5%
Non-compensation ratio
17.8%
20.3%
18.0%
19.9%
24.4%
Pre-tax margin
17.0%
15.5%
18.2%
14.3%
9.1%
Effective tax rate
36.1%
27.4%
24.8%
27.9%
19.3%
N/M — Not meaningful
2
The following table summarizes additional business metrics for the periods presented.
Three Months Ended
Twelve Months Ended
Dec. 31,
Sept. 30,
Dec. 31,
Change vs.
Dec. 31,
Dec. 31,
2024
2024
2023
Q3-24
Q4-23
2024
2023
Change
Advisory services
Completed M&A and restructuring transactions
63
57
62
11
%
2
%
220
213
3
%
Completed capital advisory transactions
29
14
26
107
%
12
%
68
56
21
%
Total completed advisory transactions
92
71
88
30
%
5
%
288
269
7
%
Corporate financings
Total equity transactions priced
25
11
14
127
%
79
%
81
73
11
%
Book run equity transactions priced
19
8
13
138
%
46
%
64
65
-2
%
Total debt and preferred transactions priced
9
6
5
50
%
80
%
36
15
140
%
Book run debt and preferred transactions priced
5
4
2
25
%
150
%
23
7
229
%
Municipal negotiated issues
Aggregate par value of issues priced (in billions)
$
4.3
$
5.5
$
3.2
-22
%
34
%
$
16.9
$
12.4
36
%
Total issues priced
148
157
100
-6
%
48
%
501
413
21
%
Equity brokerage
Number of shares traded (in billions)
3.1
2.7
2.6
15
%
19
%
11.3
10.7
6
%
NET REVENUES
For the fourth quarter of 2024, net revenues of $484.1 million increased 35% compared to the third quarter of 2024 and 3% compared to the fourth quarter of 2023.
Net revenues of $1.53 billion for 2024 increased 13% compared to the prior year.
Investment banking revenues of $373.4 million for the fourth quarter of 2024 increased 55% compared to the third quarter of 2024 and 9% compared to the fourth quarter of 2023.
For 2024, investment banking revenues of $1.11 billion increased 20% compared to 2023.
•Advisory services revenues of $279.6 million for the fourth quarter of 2024 increased 49% compared to the third quarter of 2024 driven by more completed deals and a higher average fee. Advisory services revenues for the current quarter were essentially flat compared to the fourth quarter of 2023 as more completed transactions were offset by a lower average fee.
Advisory services revenues of $808.7 million for 2024 increased 14% compared to the prior year driven by more completed deals and a higher average fee. We also benefited from increased activity from our private equity clients. Sector contributions were led by our financial services group and a record year from energy & power, followed by our healthcare, consumer and services & industrials teams.
•Corporate financing revenues of $52.8 million for the fourth quarter of 2024 increased 195% compared to the third quarter of 2024 and 75% compared to the fourth quarter of 2023 driven by more completed deals. In addition, compared to the sequential quarter, we generated a higher average fee during the current quarter.
Corporate financing revenues of $173.9 million for the year increased 33% compared to 2023 driven by more completed deals. Performance was led by our healthcare franchise which served as book runner on 40 of the 42 equity deals the team priced during the year. In addition, we grew our share of financial services corporate equity financings, which drove the year-over-year revenue growth.
3
•Municipal financing revenues of $41.0 million for the fourth quarter of 2024 increased 15% compared to the third quarter of 2024 and 40% compared to the fourth quarter of 2023 driven by increased issuance activity across our specialty sectors resulting from more accommodative market conditions.
Municipal financing revenues of $122.5 million for 2024 increased 47% compared to the prior year driven by increased issuance activity across both our specialty sector and governmental businesses as market conditions improved during 2024 relative to the prior year resulting from increased investor demand.
Institutional brokerage revenues of $117.3 million for the fourth quarter of 2024 increased 16% compared to the third quarter of 2024 and 14% compared to the fourth quarter of 2023.
Institutional brokerage revenues of $401.4 million for 2024 increased 6% compared to the prior year.
•Equity brokerage revenues of $61.2 million for the fourth quarter of 2024 increased 17% compared to the third quarter of 2024 and 11% compared to the fourth quarter of 2023. Equity brokerage revenues of $215.3 million for 2024 increased 3% compared to the prior year. Revenues increased compared to the prior periods due to increased client activity across our full suite of products.
•Fixed income services revenues of $56.1 million for the fourth quarter of 2024 increased 16% compared to the third quarter of 2024 and 17% compared to the fourth quarter of 2023 driven by increased activity among our depository clients as banks and credit unions deployed liquidity. In addition, we advised clients on repositioning their balance sheets and executed several restructuring trades.
Fixed income services revenues of $186.2 million for 2024 increased 11% compared to the prior year driven by increased activity from our depository clients during the second half of the year following the action of the Federal Reserve to reduce short-term interest rates.
Investment income/(loss) for the fourth quarter of 2024 was a loss of $15.4 million compared to income of $10.7 million for the third quarter of 2024 and income of $20.2 million for the fourth quarter of 2023. Investment income/(loss) for 2024 was a loss of $7.9 million compared to income of $30.0 million for 2023. For the current and prior periods, investment income/(loss), which includes amounts attributable to noncontrolling interests, primarily related to the alternative asset management funds we manage.
NON-INTEREST EXPENSES
For the fourth quarter of 2024, non-interest expenses of $402.0 million increased 32% compared to the third quarter of 2024 and 4% compared to the fourth quarter of 2023.
Non-interest expenses of $1.31 billion for 2024 increased 7% compared to the prior year.
•Compensation ratio of 65.3% for the fourth quarter of 2024 increased compared to both the third quarter of 2024 and the fourth quarter of 2023 driven by higher acquisition-related compensation expenses as well as the investment loss attributable to noncontrolling interests relative to investment income for the comparable quarters.
Compensation ratio of 65.8% for 2024 decreased compared to 66.5% for the year-ago period driven by higher net revenues offset in part by the investment loss attributable to noncontrolling interests compared to investment income for 2023.
4
•Non-compensation expenses of $86.0 million for the fourth quarter of 2024 increased 18% compared to the third quarter of 2024 driven primarily by increased reimbursed deal expenses as well as higher non-compensation expenses from acquisition-related agreements. Non-compensation expenses for the fourth quarter of 2024 were essentially flat compared to the fourth quarter of 2023 as the increase in reimbursed deal expenses was offset by lower other operating expenses as well as a decline in restructuring and integration costs. Other operating expenses were higher during the fourth quarter of 2023 resulting from $5.2 million of expenses related to an estimated regulatory settlement with the SEC and CFTC regarding recordkeeping requirements for business-related communications.
Non-compensation expenses of $303.3 million for 2024 decreased 8% compared to 2023 primarily driven by lower other operating expenses, decreased acquisition-related intangible asset amortization, and a decline in restructuring and integration costs. Other operating expenses were higher during 2023 resulting from $21.5 million of expenses related to an estimated regulatory settlement with the SEC and CFTC regarding recordkeeping requirements for business-related communications as well as the write-off of a $7.5 million uncollectible receivable in our municipal financing business.
PRE-TAX INCOME
For the fourth quarter of 2024, we recorded pre-tax income of $82.1 million compared to $55.6 million for the third quarter of 2024 and $85.8 million for the fourth quarter of 2023.
Pre-tax income of $218.4 million for 2024 increased 78% compared to the prior year.
•Pre-tax margin of 17.0% for the fourth quarter of 2024 increased compared to 15.5% for the third quarter of 2024 resulting from higher net revenues. Pre-tax margin for the current quarter decreased compared to 18.2% for the fourth quarter of 2023 as the increase in net revenues was offset by a higher compensation ratio.
Pre-tax margin of 14.3% for 2024 increased compared to 9.1% for 2023 resulting from higher net revenues as well as a lower compensation ratio and non-compensation ratio.
EFFECTIVE TAX RATE
For the current and prior periods, the effective tax rate is impacted by the level of noncontrolling interests, the amount of non-deductible expenses, and the vesting of restricted stock awards. For the fourth quarter of 2024, the effective tax rate was 36.1% compared to 27.4% for the third quarter of 2024 and 24.8% for the fourth quarter of 2023. The effective tax rate for the current quarter was higher due to the net loss attributable to noncontrolling interests.
The effective tax rate for 2024 was 27.9% compared to 19.3% for 2023. The effective tax rate for the current year was higher due to the net loss attributable to noncontrolling interests.
NET INCOME & EARNINGS PER SHARE
For the fourth quarter of 2024, we generated net income of $69.1 million, or $3.86 per diluted common share. Results for the current quarter increased compared to the third quarter of 2024 due to increased net revenues and a higher pre-tax margin. Results for the current quarter increased compared to the fourth quarter of 2023 due primarily to increased net revenues.
For 2024, we generated net income of $181.1 million, or $10.24 per diluted common share. Results for the year increased compared to 2023 driven by an increased net revenues and a higher pre-tax margin.
5
Non-GAAP Selected Financial Data
The following summarizes our results on an adjusted, non-GAAP basis.
Three Months Ended
Twelve Months Ended
(Dollars in thousands, except per share data)
Dec. 31,
Sept. 30,
Dec. 31,
Change vs.
Dec. 31,
Dec. 31,
2024
2024
2023
Q3-24
Q4-23
2024
2023
Change
Adjusted revenues
Investment banking:
Advisory services
$
279,602
$
188,047
$
284,317
49
%
-2
%
$
808,746
$
709,316
14
%
Corporate financing
52,751
17,903
30,178
195
%
75
%
173,876
131,077
33
%
Municipal financing
41,007
35,520
29,280
15
%
40
%
122,513
83,419
47
%
Total investment banking
373,360
241,470
343,775
55
%
9
%
1,105,135
923,812
20
%
Institutional brokerage:
Equity brokerage
61,232
52,480
55,003
17
%
11
%
215,275
209,512
3
%
Fixed income services
56,097
48,454
47,892
16
%
17
%
186,167
168,027
11
%
Total institutional brokerage
117,329
100,934
102,895
16
%
14
%
401,442
377,539
6
%
Interest income
10,095
7,831
7,302
29
%
38
%
32,908
26,723
23
%
Investment income/(loss)
(924)
2,965
5,506
N/M
N/M
7,238
7,123
2
%
Adjusted total revenues
499,860
353,200
459,478
42
%
9
%
1,546,723
1,335,197
16
%
Interest expense
1,277
1,356
2,085
-6
%
-39
%
5,681
5,000
14
%
Adjusted net revenues
498,583
351,844
457,393
42
%
9
%
1,541,042
1,330,197
16
%
Adjusted operating expenses
Adjusted compensation and benefits
300,475
219,903
290,144
37
%
4
%
955,446
845,976
13
%
Adjusted non-compensation expenses
76,698
67,160
68,182
14
%
12
%
281,865
271,278
4
%
Adjusted total operating expenses
377,173
287,063
358,326
31
%
5
%
1,237,311
1,117,254
11
%
Adjusted operating income
$
121,410
$
64,781
$
99,067
87
%
23
%
$
303,731
$
212,943
43
%
Adjusted income tax expense
34,654
18,519
26,422
87
%
31
%
75,506
41,404
82
%
Adjusted net income
$
86,756
$
46,262
$
72,374
88
%
20
%
$
228,225
$
166,393
37
%
Adjusted earnings per diluted common share
$
4.80
$
2.57
$
4.03
87
%
19
%
$
12.69
$
9.28
37
%
Adjusted ratios and margin
Adjusted compensation ratio
60.3%
62.5%
63.4%
62.0%
63.6%
Adjusted non-compensation ratio
15.4%
19.1%
14.9%
18.3%
20.4%
Adjusted operating margin
24.4%
18.4%
21.7%
19.7%
16.0%
Adjusted effective tax rate
28.5%
28.6%
26.7%
24.9%
19.9%
N/M — Not meaningful
Throughout this press release, including the table above, we present financial measures that are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Management believes that presenting results and measures on an adjusted basis alongside U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods and enhances the overall understanding of our current financial performance by excluding certain items that may not be indicative of our core operating results. The non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of financial performance prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see "Reconciliation of U.S. GAAP to Selected Summary Financial Information."
6
See page 3 for a summary of additional business metrics.
ADJUSTED NET REVENUES
For the fourth quarter of 2024, adjusted net revenues of $498.6 million increased 42% compared to the third quarter of 2024 driven by higher revenues across all of our businesses. Adjusted net revenues increased 9% compared to the fourth quarter of 2023 as higher revenues across corporate and municipal financing as well as institutional brokerage offset a decline in advisory revenues.
Adjusted net revenues of $1.54 billion for 2024 increased 16% compared to the prior year resulting from higher revenues across all of our businesses.
ADJUSTED OPERATING EXPENSES
For the fourth quarter of 2024, adjusted operating expenses of $377.2 million increased 31% compared to the third quarter of 2024 and 5% compared to the fourth quarter of 2023.
Adjusted operating expenses of $1.24 billion for 2024 increased 11% compared to the prior year.
•Adjusted compensation ratio of 60.3% for the fourth quarter of 2024 decreased compared to 62.5% for the third quarter of 2024 and 63.4% for the fourth quarter of 2023 driven by higher adjusted net revenues.
Adjusted compensation ratio of 62.0% for 2024 decreased compared to 63.6% for the year-ago period driven by higher adjusted net revenues.
•Adjusted non-compensation expenses of $76.7 million for the fourth quarter of 2024 increased 14% compared to the third quarter of 2024 and 12% compared to the fourth quarter of 2023 primarily due to higher reimbursed deal expenses as well as increased outside services expenses associated with recruiting and placement fees.
Adjusted non-compensation expenses of $281.9 million for 2024 increased 4% compared to the prior year driven by higher outside services expenses, increased marketing and business development costs, and higher reimbursed deal expenses.
ADJUSTED OPERATING INCOME
For the fourth quarter of 2024, adjusted operating income of $121.4 million increased 87% compared to the third quarter of 2024 and 23% compared to the fourth quarter of 2023.
For 2024, adjusted operating income of $303.7 million increased 43% compared to 2023.
•Adjusted operating margin of 24.4% for the fourth quarter of 2024 increased compared to 18.4% for the third quarter of 2024 and 21.7% for the fourth quarter of 2023 driven by higher adjusted net revenues and a lower adjusted compensation ratio.
Adjusted operating margin of 19.7% for 2024 increased compared to 16.0% for the prior year driven by higher adjusted net revenues as well as a lower adjusted compensation ratio and adjusted non-compensation ratio.
ADJUSTED EFFECTIVE TAX RATE
For the fourth quarter of 2024, our adjusted effective tax rate was 28.5%, essentially flat compared to 28.6% for the third quarter of 2024. The adjusted effective tax rate for the current quarter increased compared to 26.7% for the fourth quarter of 2023 due to higher non-deductible expenses in 2024.
For 2024, our adjusted effective tax rate of 24.9% increased compared to 19.9% for the prior year driven by a lower tax benefit related to the vesting of restricted stock awards.
7
ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE
For the fourth quarter of 2024, we generated adjusted net income of $86.8 million, or $4.80 of adjusted earnings per diluted common share. Results for the fourth quarter of 2024 increased compared to the third quarter of 2024 and the fourth quarter of 2023 driven primarily by a higher adjusted operating margin.
For 2024, we generated adjusted net income of $228.2 million, or $12.69 of adjusted earnings per diluted common share. Results for the current year increased compared to 2023 due to a higher adjusted operating margin, offset in part by a higher adjusted effective tax rate.
Capital
DIVIDENDS
On January 31, 2025, our Board of Directors declared a special cash dividend on the company's common stock of $3.00 per share related to our financial results for fiscal year 2024 to be paid on March 14, 2025, to shareholders of record as of the close of business on March 4, 2025. Including this special cash dividend, our total dividend related to fiscal year 2024 amounts to $5.50 per share of common stock, a payout ratio of 43% of adjusted net income.
In addition, our Board of Directors declared a quarterly cash dividend on the company's common stock of $0.65 per share to be paid on March 14, 2025, to shareholders of record as of the close of business on March 4, 2025.
During the fourth quarter of 2024, we paid a quarterly cash dividend of $0.65 per share of common stock, for an aggregate of $12.6 million. For 2024, we returned an aggregate of $73.7 million, or $3.50 per share of common stock, to shareholders through quarterly cash dividends and a special cash dividend, which was paid in the first quarter of 2024.
SHARE REPURCHASES
During the fourth quarter of 2024, we repurchased approximately 22,000 shares, or $6.5 million, of the company's common stock, at an average price of $294.08 per share, from restricted stock award recipients selling shares upon the award vesting to meet their employment tax obligations.
For 2024, we repurchased approximately 347,000 shares, or $66.4 million, of the company's common stock, at an average price of $191.44 per share, from restricted stock award recipients selling shares upon the award vesting to meet their employment tax obligations.
Additional Information
Dec. 31,
Sept. 30,
Dec. 31,
2024
2024
2023
Human Capital
Full-time employees
1,805
1,813
1,725
Corporate investment banking managing directors
183
184
169
Shareholder Information (amounts in millions)
Common shareholders’ equity
$
1,227.8
$
1,167.3
$
1,085.5
Shares outstanding:
Common shares outstanding
16.1
15.9
15.2
Restricted shares outstanding
1.7
1.9
2.6
Total shares outstanding
17.8
17.8
17.8
8
Management Conference Call
Chad Abraham, chairman and chief executive officer; Deb Schoneman, president; and Kate Clune, chief financial officer, will host a conference call to discuss the financial results on Friday, January 31, 2025, at 9 a.m. Eastern Time (8 a.m. Central Time). Participants can access the call by dialing 888 394-8218 (in the U.S.) or +1 773 305-6853 (outside the U.S.) and passcode number 7788151. Callers should dial in at least 15 minutes prior to the call time. The conference call will also be accessible as an audio webcast through the company's website at pipersandler.com/earnings. A replay of the conference call will be available beginning approximately three hours after the event through the same link.
About Piper Sandler
Piper Sandler Companies (NYSE: PIPR) is a leading investment bank driven to help clients Realize the Power of Partnership®. Securities brokerage and investment banking services are offered in the U.S. through Piper Sandler & Co., member SIPC and NYSE; in the U.K. through Piper Sandler Ltd., authorized and regulated by the U.K. Financial Conduct Authority; in the EU through Aviditi Capital Advisors Europe GmbH, authorized and regulated by BaFin as a tied agent of AHP Capital Management GmbH; and in Hong Kong through Piper Sandler Hong Kong Limited, authorized and regulated by the Securities and Futures Commission. Alternative asset management and fixed income advisory services are offered through separately registered advisory affiliates.
This press release and the conference call to discuss the contents of this press release contain forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are subject to significant risks and uncertainties that are difficult to predict. These forward-looking statements cover, among other things, statements made about the outlook for future periods, e.g., 2025, for corporate advisory (i.e., M&A), corporate financing, public finance, equity brokerage, and fixed income brokerage, current deal pipelines (or backlogs), growth plans for our businesses, including corporate investment banking and fixed income, our recruiting pipeline, anticipated financial results for future periods (including expectations regarding revenue levels, non-compensation expenses, effective tax rate, compensation ratio, compensation and benefits expense, operating margins, and earnings per share), our strategic priorities, the payment of our quarterly and special cash dividends to our shareholders, our share repurchase program, economic, geopolitical, and market conditions generally, or other similar matters.
Forward-looking statements involve inherent risks and uncertainties, both known and unknown, and important factors could cause actual results to differ materially from those anticipated or discussed in the forward-looking statements. These risks, uncertainties and important factors include, but are not limited to, the following:
•the volume of anticipated transactions – including corporate advisory (i.e., M&A), equity financing, and debt financing – and the corresponding revenues from the transactions may vary from quarter to quarter significantly, particularly if there is a decline in macroeconomic conditions or the financial markets;
•revenues from corporate advisory (i.e., M&A) engagements and equity and debt financings may vary materially depending on the number, size, and timing of completed transactions, and completed transactions do not generally provide for subsequent engagements;
•market, geopolitical and economic conditions or developments may be unfavorable, including in specific sectors in which we operate, and these conditions or developments, such as market fluctuations or volatility, may adversely affect our business, revenue levels and profitability;
•market, geopolitical and economic conditions or developments may be unfavorable, including in specific sectors in which we operate, and these conditions or developments, such as market fluctuations or volatility, may adversely affect our business, revenue levels and profitability;
•interest rate volatility, especially if the changes are rapid or severe, could negatively impact our fixed income institutional business and the negative impact could be exaggerated by reduced liquidity in the fixed income markets; and
•our stock price may fluctuate as a result of several factors, including but not limited to, changes in our revenues and operating results.
A further listing and description of these and other risks, uncertainties and important factors can be found in the sections titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, and updated in our subsequent reports filed with the SEC (available at our Web site at www.pipersandler.com and at the SEC Web site at www.sec.gov).
Forward-looking statements speak only as of the date they are made, and readers are cautioned not to place undue reliance on them. We undertake no obligation to update them in light of new information or future events.
###
10
Piper Sandler Companies
Results of Operations (U.S. GAAP – Unaudited)
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share data)
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
2024
2024
2023
2024
2023
Revenues
Investment banking
$
373,360
$
241,470
$
343,775
$
1,105,135
$
923,812
Institutional brokerage
117,329
100,934
102,895
401,442
377,539
Interest income
10,095
7,831
7,302
32,908
26,723
Investment income/(loss)
(15,400)
10,693
20,235
(7,890)
30,039
Total revenues
485,384
360,928
474,207
1,531,595
1,358,113
Interest expense
1,277
1,356
2,356
5,681
10,146
Net revenues
484,107
359,572
471,851
1,525,914
1,347,967
Non-interest expenses
Compensation and benefits
316,004
231,014
301,154
1,004,173
897,034
Outside services
15,835
13,525
13,634
55,756
51,754
Occupancy and equipment
17,256
16,481
16,300
66,530
64,356
Communications
13,408
13,712
12,477
54,917
52,718
Marketing and business development
9,712
10,392
8,078
42,239
37,734
Deal-related expenses
12,111
6,050
8,017
30,491
28,189
Trade execution and clearance
5,302
5,153
5,340
19,836
19,972
Restructuring and integration costs
834
775
3,846
2,586
7,749
Intangible asset amortization
2,994
2,572
4,799
10,288
19,440
Other operating expenses
8,522
4,283
12,360
20,686
46,435
Total non-interest expenses
401,978
303,957
386,005
1,307,502
1,225,381
Income before income tax expense
82,129
55,615
85,846
218,412
122,586
Income tax expense
29,627
15,225
21,273
60,972
23,613
Net income
52,502
40,390
64,573
157,440
98,973
Net income/(loss) attributable to noncontrolling interests
(16,557)
5,601
12,548
(23,674)
13,482
Net income attributable to Piper Sandler Companies
$
69,059
$
34,789
$
52,025
$
181,114
$
85,491
Earnings per common share
Basic
$
4.30
$
2.19
$
3.44
$
11.44
$
5.72
Diluted
$
3.86
$
1.96
$
3.00
$
10.24
$
4.96
Dividends declared per common share
$
0.65
$
0.65
$
0.60
$
3.50
$
3.65
Weighted average common shares outstanding
Basic
16,052
15,921
15,143
15,838
14,958
Diluted
17,870
17,769
17,367
17,695
17,224
11
Piper Sandler Companies
Preliminary Selected Summary Financial Information (Non-GAAP – Unaudited) (1)
Three Months Ended
Twelve Months Ended
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
(Amounts in thousands, except per share data)
2024
2024
2023
2024
2023
Adjusted revenues
Investment banking
$
373,360
$
241,470
$
343,775
$
1,105,135
$
923,812
Institutional brokerage
117,329
100,934
102,895
401,442
377,539
Interest income
10,095
7,831
7,302
32,908
26,723
Investment income/(loss)
(924)
2,965
5,506
7,238
7,123
Adjusted total revenues
499,860
353,200
459,478
1,546,723
1,335,197
Interest expense
1,277
1,356
2,085
5,681
5,000
Adjusted net revenues (2)
498,583
351,844
457,393
1,541,042
1,330,197
Adjusted operating expenses
Adjusted compensation and benefits (3)
300,475
219,903
290,144
955,446
845,976
Adjusted non-compensation expenses (4)
76,698
67,160
68,182
281,865
271,278
Adjusted total operating expenses (5)
377,173
287,063
358,326
1,237,311
1,117,254
Adjusted operating income (6)
121,410
64,781
99,067
303,731
212,943
Interest expense on long-term financing
—
—
271
—
5,146
Adjusted income before adjusted income tax expense (7)
121,410
64,781
98,796
303,731
207,797
Adjusted income tax expense (8)
34,654
18,519
26,422
75,506
41,404
Adjusted net income (9)
$
86,756
$
46,262
$
72,374
$
228,225
$
166,393
Adjusted earnings per diluted common share (10)
$
4.80
$
2.57
$
4.03
$
12.69
$
9.28
Adjusted weighted average diluted common shares outstanding (11)
18,060
18,009
17,937
17,988
17,939
Adjusted ratios and margin
Adjusted compensation ratio (12)
60.3%
62.5%
63.4%
62.0%
63.6%
Adjusted non-compensation ratio (13)
15.4%
19.1%
14.9%
18.3%
20.4%
Adjusted operating margin (14)
24.4%
18.4%
21.7%
19.7%
16.0%
Adjusted effective tax rate (15)
28.5%
28.6%
26.7%
24.9%
19.9%
This presentation includes non-GAAP measures. The non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see "Reconciliation of U.S. GAAP to Selected Summary Financial Information."
12
Piper Sandler Companies
Reconciliation of U.S. GAAP to Selected Summary Financial Information (1) (Unaudited)
Three Months Ended
Twelve Months Ended
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
(Amounts in thousands, except per share data)
2024
2024
2023
2024
2023
Net revenues:
Net revenues – U.S. GAAP basis
$
484,107
$
359,572
$
471,851
$
1,525,914
$
1,347,967
Adjustments:
Investment (income)/loss related to noncontrolling interests (16)
14,476
(7,728)
(14,729)
15,128
(22,916)
Interest expense on long-term financing
—
—
271
—
5,146
Adjusted net revenues
$
498,583
$
351,844
$
457,393
$
1,541,042
$
1,330,197
Compensation and benefits:
Compensation and benefits – U.S. GAAP basis
$
316,004
$
231,014
$
301,154
$
1,004,173
$
897,034
Adjustment:
Compensation from acquisition-related agreements
(15,529)
(11,111)
(11,010)
(48,727)
(51,058)
Adjusted compensation and benefits
$
300,475
$
219,903
$
290,144
$
955,446
$
845,976
Non-compensation expenses:
Non-compensation expenses – U.S. GAAP basis
$
85,974
$
72,943
$
84,851
$
303,329
$
328,347
Adjustments:
Non-compensation expenses related to noncontrolling interests (16)
(2,081)
(2,127)
(2,181)
(8,546)
(9,434)
Restructuring and integration costs
(834)
(775)
(3,846)
(2,586)
(7,749)
Amortization of intangible assets related to acquisitions
(2,994)
(2,572)
(4,799)
(10,288)
(19,440)
Non-compensation expenses from acquisition-related agreements
(2,780)
(309)
(658)
(3,089)
1,102
Non-compensation expenses from regulatory settlements
(587)
—
(5,185)
3,045
(21,548)
Adjusted non-compensation expenses
$
76,698
$
67,160
$
68,182
$
281,865
$
271,278
Income before income tax expense:
Income before income tax expense – U.S. GAAP basis
$
82,129
$
55,615
$
85,846
$
218,412
$
122,586
Adjustments:
Investment (income)/loss related to noncontrolling interests (16)
14,476
(7,728)
(14,729)
15,128
(22,916)
Interest expense on long-term financing
—
—
271
—
5,146
Non-compensation expenses related to noncontrolling interests (16)
2,081
2,127
2,181
8,546
9,434
Compensation from acquisition-related agreements
15,529
11,111
11,010
48,727
51,058
Restructuring and integration costs
834
775
3,846
2,586
7,749
Amortization of intangible assets related to acquisitions
2,994
2,572
4,799
10,288
19,440
Non-compensation expenses from acquisition-related agreements
2,780
309
658
3,089
(1,102)
Non-compensation expenses from regulatory settlements
587
—
5,185
(3,045)
21,548
Adjusted operating income
$
121,410
$
64,781
$
99,067
$
303,731
$
212,943
Interest expense on long-term financing
—
—
(271)
—
(5,146)
Adjusted income before adjusted income tax expense
$
121,410
$
64,781
$
98,796
$
303,731
$
207,797
Continued on next page
13
Piper Sandler Companies
Reconciliation of U.S. GAAP to Selected Summary Financial Information (1) (Unaudited)
Three Months Ended
Twelve Months Ended
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
(Amounts in thousands, except per share data)
2024
2024
2023
2024
2023
Income tax expense:
Income tax expense – U.S. GAAP basis
$
29,627
$
15,225
$
21,273
$
60,972
$
23,613
Tax effect of adjustments:
Compensation from acquisition-related agreements
3,293
2,325
2,507
10,224
10,467
Restructuring and integration costs
126
205
1,046
590
2,053
Amortization of intangible assets related to acquisitions
741
682
1,375
2,675
5,152
Non-compensation expenses from acquisition-related agreements
715
82
162
797
(292)
Non-compensation expenses from regulatory settlements
152
—
59
248
411
Adjusted income tax expense
$
34,654
$
18,519
$
26,422
$
75,506
$
41,404
Net income attributable to Piper Sandler Companies:
Net income attributable to Piper Sandler Companies – U.S. GAAP basis
$
69,059
$
34,789
$
52,025
$
181,114
$
85,491
Adjustments:
Compensation from acquisition-related agreements
12,236
8,786
8,503
38,503
40,591
Restructuring and integration costs
708
570
2,800
1,996
5,696
Amortization of intangible assets related to acquisitions
2,253
1,890
3,424
7,613
14,288
Non-compensation expenses from acquisition-related agreements
2,065
227
496
2,292
(810)
Non-compensation expenses from regulatory settlements
435
—
5,126
(3,293)
21,137
Adjusted net income
$
86,756
$
46,262
$
72,374
$
228,225
$
166,393
Earnings per diluted common share:
Earnings per diluted common share – U.S. GAAP basis
$
3.86
$
1.96
$
3.00
$
10.24
$
4.96
Adjustment for inclusion of unvested acquisition-related stock
(0.05)
(0.03)
(0.15)
(0.20)
(0.38)
$
3.81
$
1.93
$
2.85
$
10.04
$
4.58
Adjustments:
Compensation from acquisition-related agreements
0.68
0.49
0.49
2.17
2.36
Restructuring and integration costs
0.04
0.03
0.16
0.11
0.33
Amortization of intangible assets related to acquisitions
0.13
0.11
0.20
0.43
0.83
Non-compensation expenses from acquisition-related agreements
0.12
0.01
0.03
0.13
(0.05)
Non-compensation expenses from regulatory settlements
0.02
—
0.30
(0.19)
1.23
Adjusted earnings per diluted common share
$
4.80
$
2.57
$
4.03
$
12.69
$
9.28
Weighted average diluted common shares outstanding:
Weighted average diluted common shares outstanding – U.S. GAAP basis
17,870
17,769
17,367
17,695
17,224
Adjustment:
Unvested acquisition-related restricted stock with service conditions
190
240
570
293
715
Adjusted weighted average diluted common shares outstanding
18,060
18,009
17,937
17,988
17,939
This presentation includes non-GAAP measures. The non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
14
Piper Sandler Companies
Notes to Non-GAAP Financial Schedules
(1)Selected Summary Financial Information are non-GAAP measures. Management believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods.
(2)A non-GAAP measure which excludes (a) investment (income)/loss related to noncontrolling interests (see (16) below) and (b) interest expense on long-term financing.
(3)A non-GAAP measure which excludes compensation expenses from acquisition-related agreements.
(4)A non-GAAP measure which excludes (a) non-compensation expenses related to noncontrolling interests (see (16) below), (b) restructuring and integration costs related to acquisitions and/or headcount reductions, (c) amortization of intangible assets related to acquisitions, (d) non-compensation expenses from acquisition-related agreements and (e) non-compensation expenses from regulatory settlements with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
(5)A non-GAAP measure which is computed as the summation of adjusted compensation and benefits and adjusted non-compensation expenses (see (3) and (4) above).
(6)A non-GAAP measure which excludes (a) investment (income)/loss and non-compensation expenses related to noncontrolling interests (see (16) below), (b) interest expense on long-term financing, (c) compensation and non-compensation expenses from acquisition-related agreements, (d) restructuring and integration costs related to acquisitions and/or headcount reductions, (e) amortization of intangible assets related to acquisitions and (f) non-compensation expenses from regulatory settlements with the SEC and CFTC.
(7)A non-GAAP measure which excludes (a) investment (income)/loss and non-compensation expenses related to noncontrolling interests (see (16) below), (b) compensation and non-compensation expenses from acquisition-related agreements, (c) restructuring and integration costs related to acquisitions and/or headcount reductions, (d) amortization of intangible assets related to acquisitions and (e) non-compensation expenses from regulatory settlements with the SEC and CFTC.
(8)A non-GAAP measure which includes the income tax effect of the adjustments for (a) compensation and non-compensation expenses from acquisition-related agreements, (b) restructuring and integration costs related to acquisitions and/or headcount reductions, (c) amortization of intangible assets related to acquisitions and (d) non-compensation expenses from regulatory settlements with the SEC and CFTC.
(9)A non-GAAP measure which represents net income attributable to Piper Sandler Companies adjusted for (a) the exclusion of compensation and non-compensation expenses from acquisition-related agreements, (b) the exclusion of restructuring and integration costs related to acquisitions and/or headcount reductions, (c) the exclusion of amortization of intangible assets related to acquisitions, (d) the exclusion of non-compensation expenses from regulatory settlements with the SEC and CFTC and (e) the income tax impact allocated to the adjustments.
(10)A non-GAAP measure which is computed based on a quotient of which the numerator is adjusted net income and the denominator is adjusted weighted average diluted common shares outstanding.
(11)A non-GAAP measure which assumes the vesting of restricted stock with service conditions granted pursuant to all acquisitions since January 1, 2020.
(12)A non-GAAP measure which represents adjusted compensation and benefits expenses as a percentage of adjusted net revenues.
(13)A non-GAAP measure which represents adjusted non-compensation expenses as a percentage of adjusted net revenues.
(14)A non-GAAP measure which represents adjusted operating income as a percentage of adjusted net revenues.
(15)A non-GAAP measure which represents adjusted income tax expense as a percentage of adjusted income before adjusted income tax expense.
(16)Noncontrolling interests include investment income/(loss) and non-compensation expenses from consolidated alternative asset management entities that are not attributable, either directly or indirectly, to Piper Sandler Companies.
