Jefferies Financial reported earnings of $1.02 per share for the second quarter. Market expectations were for the company to earn $1.24 per share. Quarterly revenue came in at $2.21 billion. Analysts had expected revenue of $2.30 billion.
Jefferies CEO Richard Handler said momentum in the company’s core business segments continued in the second quarter and was strongly reflected in the company’s first-half performance. Handler stated that the company achieved record first-half net revenue across its combined revenue streams from advisory, total investment banking, equities, total capital markets, and investment banking and capital markets.
Jefferies’ investment banking net revenue rose 57 percent year-over-year in the second quarter to $1.21 billion. The company attributed this growth to market share gains in advisory and equity public offerings, as well as an expanding addressable market.
The company also stressed that the results indicate balanced performance and are not dependent on a single large transaction fee.
Handler said that Jefferies continues to expand its corporate mergers and acquisitions activities while maintaining its focus on areas where it has historically been strong, such as sponsor-backed transactions. The company reported a strong quarter, particularly with corporate clients in the healthcare, industrial, and energy sectors.
Jefferies said the new issue market has remained resilient and that it remains optimistic about the second half of 2026 due to the strength of its current backlog and new business bookings.
Capital markets net revenue rose 14% year-over-year to $799 million in the second quarter. The equities division, meanwhile, achieved record-high net revenue of $601 million, a 14 percent increase. Jeffries said this growth was driven by market share gains in cash and electronic trading activities across the EMEA, Asia, and Americas regions, as well as growth in prime brokerage services.
Jefferies stated that while customer-driven growth in prime brokerage balances increased the size of the balance sheet, it also made the company’s earnings profile more resilient by generating higher-quality and more stable revenues. It was also noted that the equity derivatives business grew alongside investment banking activities and contributed to providing strategic derivatives solutions for significant transactions by institutional clients.
Net revenue from fixed-income products rose 12 percent year-over-year to $199 million. This increase was driven by strong performance in the distressed, municipal bonds, and emerging markets segments.
In contrast, asset management fees and investment income fell 35 percent year-over-year to $46 million. The company attributed this decline to weak performance in certain fund strategies, as well as a reduction in capital allocated to certain funds as part of its plan to acquire a 50% stake in Hildene.
Jefferies announced that it aims to complete the Hildene investment in the third quarter and expects the transaction to immediately contribute positively to results upon completion.
