Raymond James Posts 5 Percent Q3 Gain

Key Points

• - GAAP revenue was $3.40 billion for Q3 FY2025, exceeding the $3.38 billion analyst estimate for Q3 FY2025 and rising 5% from the prior year’s fiscal third quarter.

• - Non-GAAP EPS of $2.18 missed estimates by 8% and declined 9% year over year, pressured by a legal reserve charge and higher expenses.

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Raymond James Financial (NYSE:RJF), a diversified financial services firm known for its wealth management, banking, and capital markets businesses, released results for Q3 FY2025 on July 23, 2025. The company reported GAAP revenue that beat Wall Street expectations, at $3.398 billion versus an expected $3.376 billion. However, profit came in softer than forecast, with Non-GAAP earnings per share at $2.18 compared to the $2.37 consensus estimate. Profitability was affected by legal expenses and higher costs, while growth in key client assets and segments remained solid. The quarter provided a mixed picture, highlighting strong top-line momentum but also notable cost and margin pressures for the period.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Recent Focus Areas

Raymond James Financial provides a range of financial services, geared toward individuals, corporations, and institutions. Its main business segments are Private Client Group, Capital Markets, Asset Management, Bank, and Other. The company is notable for its vast network of financial advisors and its focus on supporting these advisors through multiple affiliation options and resources.

Recently, the company has invested in advisor recruitment and strengthened compliance infrastructure due to ongoing regulatory developments. Its chief success factors revolve around advisor expansion, retention, and strong asset growth, particularly in fee-based accounts.

Quarter Highlights and Segment Results

The quarter showed growth in revenue and client assets, accompanied by rising expenses and notable legal charges. The Private Client Group continued to be a critical contributor, with net revenues rising 3% from the prior year. Assets under administration for fee-based accounts climbed 15% to $943.9 billion, and total PCG assets reached $1.57 trillion, up 11% from June 2024. However, annualized net new asset growth in the Private Client Group fell to 3.4%, down from 5.2% in Q3 FY2024. This shows that while total client asset values grew, the pace at which new client assets were added slowed. The group’s pre-tax income dropped 7%, with management pointing to the impact of lower interest rates.

Legal costs had a material effect on profitability. The company took a $58 million legal reserve linked to the settlement of a bond underwriting matter, impacting the Capital Markets segment’s reported pre-tax income. Without this one-time charge, the segment would have delivered positive results with a small pre-tax profit. However, as reported, the Capital Markets segment registered a $54 million pre-tax loss despite a 15% year-over-year revenue gain to $381 million, supported mostly by higher investment banking, fixed income, and equity brokerage activities.

Asset Management, which provides portfolio management services, stood out for positive momentum. The segment grew revenues 16% and pre-tax income 22% over the first nine months of fiscal 2025, with assets under management totaling $263.2 billion, up 15% from June 2024. The Bank segment also delivered revenue and earnings growth, with net interest margin—a measure of lending profitability—rising to 2.74%, up from 2.64% in Q3 FY2024. Net loans increased 10% to $49.8 billion, fueled in part by a 5% sequential increase in securities-based lending.

One-time items and capital decisions were notable. The $58 million legal reserve depressed overall profitability, and non-compensation expenses climbed 28% from the prior year. At the same time, the company repurchased $451 million in common stock at an average price of $137 per share, continuing its practice of returning capital to shareholders. On the risk management front, capital ratios like the Tier 1 leverage and total capital ratios remained strong and well above required minimums, supporting ongoing business stability.

Looking Ahead: Outlook and Considerations

Management did not give detailed financial guidance for the next quarter or full fiscal year in this release. However, commentary suggested optimism about the investment banking pipeline and general business setup going into the fourth quarter, with continued focus on recruiting financial advisors and capital strength as ongoing priorities.

Looking forward, investors may want to monitor ongoing expense trends, the pace of net new asset growth in the Private Client Group, and the potential for additional one-time legal or regulatory charges. Interest rate sensitivity remains a key consideration, as does continued performance in asset management and capital markets.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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