Raymond James Financial (RJF) Q3 2024 earnings summary

Executive summary

• Achieved record net revenues of $3.23 billion in fiscal Q3 2024, up 11% year-over-year and 4% sequentially, driven by higher asset management and administrative fees.

• Net income available to common shareholders was $491 million ($2.31 per diluted share), up 33% year-over-year; adjusted net income was $508 million ($2.39 per diluted share), up 27%.

• Client assets under administration reached a record $1.48 trillion, up 15% year-over-year, with Private Client Group fee-based assets at $820.6 billion, up 18%.

• For the nine months ended June 30, 2024, net revenues were $9.36 billion (up 9%) and net income available to common shareholders was $1.46 billion (up 12%).

• Repurchased 2 million shares for $243 million in the quarter; $945 million remains under repurchase authorization.

Financial highlights

• Asset management and related administrative fees grew 17% year-over-year to $1.61 billion.

• Brokerage revenues increased 15% year-over-year to $532 million.

• Investment banking revenues rose 21% year-over-year to $183 million, though M&A and advisory revenues remained subdued.

• Bank loans grew 2% sequentially to a record $45.1 billion, mainly from higher securities-based loans.

• Compensation ratio was 64.7%; adjusted compensation ratio was 64.4%.

Outlook and guidance

• Expect continued growth in fee-based assets and a positive impact on next quarter's results, with a strong advisor recruiting pipeline.

• Anticipate gradual recovery in capital markets, with a healthy M&A pipeline and improved investment banking revenues as market conditions stabilize.

• Plan to increase the pace of share repurchases, maintaining capital levels in line with targets.

• Non-compensation expenses for the fiscal year expected to be around $1.9 billion, consistent with prior guidance.

• Combined net interest income and RJBDP fees from third-party banks expected to remain stable for the rest of fiscal 2024, but sensitive to interest rates and client cash balances.