Raymond James posts record earnings, hails advisor growth in Q4

Raymond James Financial reported record results for its fiscal fourth quarter and full year, as a market rally and continued expansion in its advisor ranks helped drive growth across key business segments.

For the quarter ended September 30, the St. Petersburg, Florida-based firm posted adjusted earnings of $3.11 per share, surpassing the Wall Street consensus of $2.83, according to FactSet.

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Quarterly revenue reached $3.73 billion, up 8% from a year earlier and ahead of analyst expectations. Net income available to common shareholders was $603 million, or $2.95 per diluted share, with adjusted net income at $635 million. For the full fiscal year, Raymond James reported record net revenue of $14.07 billion and net income of $2.13 billion, both company highs.

The broker-dealer giant's shares edged up 0.6% in after-hours trading Wednesday following the results, closing regular trading at $166.04. Year to date, Raymond James stock has gained 7%, compared with a 14% rise for the S&P 500.

Client assets under administration climbed 10% year over year to a record $1.73 trillion, while assets in fee-based accounts rose 15% to $1.01 trillion. Net new assets for the private client group totaled $17.9 billion for the quarter, representing an annualized growth rate of 5.0%. For the year, net new assets reached $52.4 billion, or 3.8% growth from the start of the fiscal year.

Recruitment of financial advisors was a central theme in the company’s results. Raymond James ended the fiscal year with a record 8,943 advisors, a 2% increase from the prior year. The firm recruited advisors with $407 million in trailing 12-month production, up 21% from last year’s record, and those advisors brought with them approximately $58 billion in client assets from their previous firms. Counting assets recruited into the RIA and custody services division, total recruited client assets over the past year approached $63 billion.

Read more: Raymond James gives its indie advisors a helping hand in recruitment

“We had an outstanding year recruiting high-quality advisors onto our platform, a testament to our unique service-first culture, comprehensive capabilities, and strong balance sheet,” CEO Paul Shoukry said during the company’s earnings call, in what's likely a nod to his firm's continuing success in bringing over elite advisors from Commonwealth.

He added that Raymond James has “healthy pipelines for growth, including strong levels of advisor commitments to join over the coming year, and strong investment banking pipelines.”

The firm’s capital markets segment reported quarterly net revenue of $513 million, a 6% increase from the same period last year, driven by higher debt underwriting and affordable housing investments. However, M&A and advisory revenue fell 20% year over year, while equity underwriting revenue declined 6%.

Raymond James continued to invest in technology, allocating about $1 billion over the fiscal year, including initiatives in artificial intelligence. The company also returned over $1.5 billion to shareholders through share repurchases and dividends.

Looking ahead, Shoukry said the company is “more confident about our competitive positioning and path forward than we have ever been.” He pointed to a robust recruiting pipeline and ongoing investments as reasons for optimism, while noting that the current environment remains uncertain.

"While in some ways there’s more competition in our space, we are confident that our longstanding approach is becoming increasingly differentiated and unique," Shoukry said. "We are focused on the long term and providing a stable platform for our advisors, bankers, and associates, whereas so many of our competitors are increasingly looking for an exit in 3 to 5 years or even less."