Raymond James Financial NYSE: RJF reported record fiscal second-quarter 2026 results, with management emphasizing resilient performance amid a “challenging and volatile market environment,” continued advisor recruiting momentum, and record balances in key areas including bank loans and fee-based assets.
Record revenue and earnings metrics
CEO Paul Shoukry said the firm’s performance reflected “disciplined execution” and a focus on being “the absolute best firm for financial professionals and their clients.” For the quarter, Raymond James posted record quarterly revenues of $3.86 billion, up 13% from the prior-year period and 3% from the preceding quarter. Pre-tax income totaled $735 million, up 10% year-over-year and 1% sequentially.
CFO Butch Oorlog reported net income available to common shareholders of $542 million, or $2.72 per diluted share. Adjusted results, excluding acquisition-related expenses, were $564 million and $2.83 per diluted share. The firm’s pre-tax margin was 19%, with an adjusted pre-tax margin of 19.7%. Oorlog said annualized return on common equity was 17.3% and annualized adjusted return on tangible common equity was 20.9%.
Private Client Group: asset growth, recruiting strength, and margin headwinds
Raymond James ended the quarter with $1.7 trillion of Private Client Group (PCG) client assets under administration, “down slightly” versus the preceding quarter but up 15% year-over-year, Shoukry said. Domestic net new assets were $23 billion, representing a 5.8% annualized growth rate for the quarter.
Recruiting remained a focal point. Shoukry said the firm recruited advisors into its domestic independent contractor and employee channels with trailing 12-month production of $141 million and nearly $21 billion of client assets at their prior firms, calling it the “second highest quarterly result” in company history for both recruited production and assets.
During Q&A, Shoukry attributed confidence in the recruiting pipeline to home office visit volume and “the volume of new commits of prospective advisors across our affiliation options,” adding the company is seeing “an uptick of commits in our employee affiliation option as well.” He also described private equity as having been “competitive over the last five years,” and said he had heard of firms that attempted to raise capital in recent months but were unable to do so, which he suggested could influence valuations and potentially become a future catalyst for advisor movement.
Financially, PCG generated pre-tax income of $416 million on record net revenues of $2.81 billion. Oorlog said PCG pre-tax income declined 3% year-over-year primarily due to interest rate reductions over the past year that reduced “non-compensable revenues.” Shoukry also noted that lower short-term rates create a spread-driven headwind to PCG margins as rates decline.
Asked about PCG compensation dynamics, Shoukry pointed to a mix shift in recruiting toward the independent channel, where payouts are higher because advisors cover their own overhead costs, and noted tiered payout grids can increase as production rises.
Capital Markets and Asset Management: improved banking activity and inflows
Capital Markets results improved during the quarter. Shoukry said the segment benefited from stronger investment banking revenues and highlighted “a particularly strong performance in the month of March.” Oorlog reported Capital Markets net revenues of $464 million and pre-tax income of $51 million, with year-over-year and sequential growth driven by higher debt and equity underwriting, plus higher M&A and advisory revenues.
Shoukry said the investment banking pipeline was “very promising,” citing activity levels and engagement letters signed, though he cautioned the firm does not know when pipelines will convert to revenues. He said much of the pipeline is driven by financial sponsors, describing “motivated buyers and sellers,” with buyers holding “capital and dry powder” and sellers often beyond original holding periods.
In Asset Management, Shoukry said net inflows into managed fee-based programs within PCG were strong, and Raymond James Investment Management also posted positive net inflows. Oorlog reported Asset Management pre-tax income of $137 million on record net revenues of $327 million, attributing results largely to higher assets under management from market appreciation and “strong net inflows into PCG fee-based accounts.”
Oorlog said asset management and related administrative fees totaled $2.02 billion, up 17% year-over-year and 1% sequentially, and that record PCG fee-based assets ended the quarter at $1.04 trillion, up 20% year-over-year. Looking ahead, he said the firm expects fiscal third-quarter asset management and related administrative fees to be higher by approximately 1% from the second quarter level, driven by one additional billing day and slightly higher quarter-end balances.
Banking: record loans, stable credit, and cash sweep trends
Raymond James ended the quarter with record loans of $54.8 billion. Shoukry said growth was “primarily driven by continued outstanding growth in securities-based lending balances,” which increased more than $5 billion, or 31%, year-over-year and 6% sequentially. He added that credit quality “continues to be strong.”
Oorlog reported Banking net revenues of $486 million and pre-tax income of $166 million. He said net interest income increased marginally from the prior quarter, with loan growth largely offset by two fewer interest-earning days and the full-quarter impact of prior-quarter interest rate cuts.
On client cash balances, Oorlog said domestic cash sweep and Enhanced Savings Program balances ended the quarter at $57.8 billion, down 1% sequentially and representing 3.7% of domestic PCG client assets. Based on April activity, he said balances declined due to collection of record quarterly fee billings of approximately $1.9 billion and seasonal tax activity.
During Q&A, Shoukry addressed investor concerns about “agentic AI” tools potentially optimizing cash and pressuring sweep balances. He said the shift into higher-yielding alternatives has been underway since rates rose and “doesn’t require AI,” pointing to offerings such as the Enhanced Savings Program and access to institutional share classes of prime money market funds. Shoukry said sweep balances have “stabilized over the last several quarters,” aside from billing and tax season effects, and he did not see “much more of an incremental threat” from AI in the advised channel.
Technology investment, AI initiatives, acquisitions, and capital return
Shoukry reiterated more than $1.1 billion in annual technology spending, saying the “vast majority” is focused on PCG, which he described as a differentiator because the firm does not have to prioritize areas like credit cards and payments. He cited an internal AI operations agent—also referenced later as a solution called “Ray”—that provides natural-language guidance on operational questions and is being piloted with a few hundred advisors and teams, with “extremely positive” early feedback.
On the margin impact of AI, Shoukry said it is “hard to dimension the actual margin impact at this juncture,” calling it “too preliminary” to provide specific cost-reduction or margin-benefit estimates. He framed AI’s long-term benefit as helping advisors deliver more tailored advice while reducing administrative burdens, while arguing that personal client relationships remain central to the advised model.
On M&A, Shoukry said the firm remains committed to enhancing its platform through hiring and acquisitions, citing GreensLedge, which closed late in the quarter, and Clark Capital, which is expected to close in the current quarter. Asked about the potential for a larger deal, Shoukry said the challenge is that “a lot of great competitors…haven’t necessarily been for sale,” adding the firm prefers to “invite other firms to the Raymond James family” rather than pursuing “takeovers.”
Capital actions also featured prominently. Shoukry said the firm repurchased $400 million of common stock at an average share price of $155 and ended the quarter with a Tier 1 leverage ratio of 12.4%. Oorlog said the company returned $507 million to shareholders during the quarter through dividends and buybacks and redeemed all outstanding Series B preferred stock in January for $81 million. Over the past 12 months, Oorlog said the firm repurchased $1.6 billion of common shares and returned over $2 billion to common shareholders including dividends, representing a combined return of 94% of earnings.
Looking ahead on taxes, Oorlog said the quarter’s effective tax rate was 26%, including an unfavorable impact from non-deductible losses on the corporate-owned life insurance portfolio. He maintained an estimated fiscal 2026 effective tax rate of approximately 24% to 25%.
In closing remarks, Shoukry said the company delivered record revenues and record pre-tax income in the first half of the fiscal year and entered the third quarter with “record PCG fee-based assets under administration, record bank loans,” robust recruiting activity, and a strong investment banking pipeline.
About Raymond James Financial NYSE: RJF
Raymond James Financial is a diversified financial services firm headquartered in St. Petersburg, Florida. Founded in 1962, the company provides a range of services to individual investors, businesses and institutions through a combination of wealth management, capital markets, investment banking, asset management, banking and trust services. Its business model centers on a network of financial advisors and broker-dealer operations that deliver personalized financial planning, investment advisory services and brokerage solutions.
The firm's core offerings include private client wealth management delivered by independent and employee advisors, equity and fixed-income research, institutional sales and trading, and investment banking services such as mergers and acquisitions advisory and capital raising.
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