Raymond James Financial FY2026: EPS +16% to $11.91, but underlying pre-tax profit grew about 8%

Raymond James Financial closed its fiscal year on September 30, 2026, and reported both its fiscal fourth quarter (July to September 2026) and the full fiscal 2026 year in one earnings release on October 28. For the year, net revenues rose 12% to a record $15.79 billion and earnings per diluted share rose 16% to $11.91. The growth came mostly from fees on client assets, which do not depend on interest rates. The 16% EPS figure, though, overstates how fast the business itself grew. A legal charge in fiscal 2025 did not come back, the bank released loan-loss reserves instead of adding to them, and a 4% smaller share count did a quarter of the per-share work. Set those aside and pre-tax profit grew about 8%.

The full 10-K for fiscal 2026 has not been filed yet. This analysis uses the earnings release and the earnings presentation filed with the 8-K, so detail such as the cash flow statement and management's full discussion of results is not yet available.

Key figures: fiscal 2026

Pre-tax margin is pre-tax income divided by net revenues: how many cents of each revenue dollar remain after all costs except income tax. We use it as this company's operating margin. Net new assets are client money coming in minus money going out; market gains and losses are not counted. Return on common equity is annual profit as a share of shareholders' equity.

Fiscal fourth quarter

Net revenues and per-share earnings were company records for a single quarter. Compared with the June quarter, net revenues rose 9% and pre-tax income rose 15%. The release credits "higher asset management and related administrative fees, as well as increases in investment banking revenues and affordable housing investments business revenues."

What drove the year: fees up, interest flat

Raymond James makes money in two main ways. It charges fees on client investments, and it earns interest on client cash it holds or places with other banks. In fiscal 2026, the two moved very differently.

Fees grew. Asset management and related administrative fees rose 19% to $8,397 million for the year and 23% to $2,307 million in the fourth quarter. The release attributes the PCG (Private Client Group, the firm's network of financial advisors) increase to "market appreciation and net inflows into fee-based accounts." Net inflows were strong: domestic PCG net new assets of $98.3 billion were 88% higher than fiscal 2025's $52.4 billion. CEO Paul Shoukry credits "solid financial advisor retention and record recruiting results." New money from recruited advisors does not depend on the stock market, so it is the steadiest part of the growth.

Interest income stood still. Net interest income plus the fees earned from sweeping client cash to third-party banks totaled $2,649 million, up 0.6%. Interest rates fell, so the yield Raymond James earned on cash placed at outside banks dropped to 2.76% for the year from 3.01%. PCG's fees from those banks fell 17% to $402 million. The bank grew its loan book, which offset most of that.

Segment results (fiscal year)

Private Client Group: revenue up 13%, profit up 1%. The segment's pre-tax margin fell to 15.1% from 16.9% (our calculation from the table above). There are two reasons in the figures. First, advisors are paid a share of the fees and commissions they generate, so as fees replace interest income, more revenue is paid out to advisors: total financial advisor compensation rose 18% to $6,811 million. Second, recruiting and retention pay for advisors rose 24% to $460 million. These costs pay for the net new assets above, so they are an investment, but they kept segment profit flat for the year. The fourth quarter looked the same: revenue rose 15%, pre-tax income rose 10%, and the release says growth in asset-management fees "was partially offset by higher financial advisor commissions... and increased expenses supporting record recruiting results."

Capital Markets: most of the 47% is a prior-year charge. Fiscal 2025 included a $58 million reserve for settling a legal matter over bond underwritings from 2013 to 2015. Without it, segment pre-tax income rose about 5% ($214 million versus $204 million, our calculation). Dealmaking picked up at the end of the year. Fourth-quarter M&A and advisory revenue rose 34% to $218 million, and segment pre-tax income rose 18% to $106 million. Fixed income brokerage revenue fell 28% to $71 million in the quarter.

Asset Management: growth helped by an acquisition. Financial assets under management rose 25% to $342.9 billion. That includes Clark Capital, an asset manager bought on April 30, 2026, which brought $36 billion of managed assets. Part of the 20% revenue growth was bought rather than earned organically, and the release does not separate the two.

Bank: larger loan book, plus a reserve release. Net interest income (interest earned on loans and securities minus interest paid on deposits) rose 10% to $1,881 million. Net loans grew 11% to a record $57.5 billion, led by securities-based loans, which are loans backed by a client's investment portfolio. Those rose 32% to $26.2 billion. The bank's net interest margin, the spread it earns on its assets, was 2.73% for the year, up from 2.68%. In the fourth quarter, however, it fell to 2.60% from 2.71% in both the prior-year quarter and the June quarter. The 48% jump in bank pre-tax income partly reflects credit costs. The bank recorded a $32 million benefit for credit losses this year (money set aside earlier for bad loans and released back into profit) against a $37 million provision in fiscal 2025. Without that swing, bank pre-tax income still rose about 31% (our calculation: $693 million versus $528 million).

What the headline numbers hide

One-offs flattered the year-over-year comparison. Of the $361 million increase in pre-tax income, $127 million came from two items: the $58 million legal charge in fiscal 2025 that did not recur, and the $69 million swing from a loan-loss provision to a release. Without both, pre-tax income grew about 8.3% (our calculation: $3,043 million versus $2,809 million). Revenue grew 12.3%. Underlying profit therefore grew more slowly than revenue, which is consistent with the rising compensation ratio. Compensation costs took 65.5% of net revenues, up from 64.5%.

The bank's loss cushion got thinner. The allowance for credit losses fell to $384 million, or 0.66% of loans held for investment, from $452 million (0.88%), while loans grew 11%. Credit quality supports the release so far. Nonperforming assets fell to $155 million (0.22% of bank assets), and net charge-offs were $35 million for the year. Most of the growth is in securities-backed and mortgage loans, which usually carry lower expected losses. However, if the release reverses, fiscal 2027 profit loses that help.

Buybacks did a quarter of the EPS growth. Diluted shares fell 4.0% to 198.3 million. The firm repurchased $1.25 billion of stock at an average of $156 per share and paid $428 million in dividends (from the earnings presentation's quarterly figures). That is why EPS grew 15.6% while net income grew 11.0%. Buying slowed sharply in the fourth quarter, to $50 million from $400 million in each of the first three quarters, and $1.05 billion of authorization remains.

Tax worked the other way. The effective tax rate rose to 23.0% from 21.3% for the year, and to 22.7% from 17.4% in the fourth quarter. At last year's Q4 rate, Q4 net income would have been about $712 million rather than $666 million (our calculation). The June-quarter report noted that this rate moves with market-linked gains on company-owned life insurance, which are not taxed.

Adjusted EPS excludes recurring acquisition costs. Adjusted EPS of $12.41 excludes $126 million of pre-tax acquisition-related costs, up from $97 million. Most of that is retention pay and amortization of acquired intangible assets (the accounting cost of customer relationships and similar assets acquired in deals). Raymond James keeps buying firms (Clark Capital and GreensLedge this year), so these costs recur, and the gap to GAAP EPS ($0.50 a share) is likely to persist. Tangible book value per share, which excludes goodwill and intangibles, grew only 3% to $55.96, against 9% for book value per share. The deals and buybacks absorbed much of the year's retained earnings.

Cash conversion can't be checked yet. The release has no cash flow statement. It will appear in the 10-K.

On balance, the year is flattered: EPS rose 16%, but pre-tax income rose about 8% once the non-recurring fiscal 2025 legal charge and the swing to loan-loss releases are set aside, and buybacks added about 4 points. The fourth quarter on its own was close to clean, with underlying pre-tax growth of about 16% and a higher tax rate working against it.

Takeaway: Raymond James finished fiscal 2026 earning more from fees on client assets ($8.4 billion, +19%) while income from client cash was flat ($2.65 billion, +0.6%) despite lower rates. Its earnings now depend mostly on stock-market levels and advisor recruiting, not Fed policy. Underlying profit grew about 8%. The rest of the 16% EPS gain came from one-offs, reserve releases and buybacks, and those cannot repeat at the same size.

Did last time's read hold up?

Our fiscal Q3 report said four things to watch in Q4. They held up as follows:

• Fee revenue would grow on a higher starting asset base. It did: asset management and related fees rose 11% from the June quarter to $2,307 million.
• Interest margin would keep slipping. It did: firmwide net interest margin fell to 2.60% from 2.67%, and bank margin fell to 2.60% from 2.71%. Interest income plus third-party sweep fees still rose 2% from the prior quarter to $674 million because the loan book grew.
• Pre-tax margin would stay near 19-20%. Slightly better than expected: 20.2%, the highest of the last five quarters.
• Could operating growth alone keep EPS near $3? Yes. EPS rose to $3.40 even though the reserve release shrank to $8 million from $26 million and the tax rate rose to 22.7% from 20.7% in Q3.

Outlook

Management gave no numerical guidance for fiscal 2027 in the release or the presentation. Shoukry said the firm enters the year "with record client asset levels, a strong investment banking pipeline, and attractive growth opportunities," while noting "several geopolitical and macroeconomic uncertainties."

Our read:

• Fee revenue starts fiscal Q1 2027 from a high base. Fee-based assets were $1.163 trillion at September 30, up 1% from June 30. Most advisory fees are billed on start-of-quarter balances, so the December quarter has a strong starting point, but not as big a step-up as the September quarter had (fee assets grew 11% during the June quarter).
• Investment banking is the swing factor. Fourth-quarter M&A revenue rose 45% from the June quarter, and management calls the pipeline strong. This is the most volatile line in the business.
• Comparisons get harder. Fiscal 2027 will not have a prior-year legal charge to lap, and the allowance is already 0.66% of loans, so another $32 million release is unlikely. EPS growth will need to come from fees, loans and buybacks.
• The buyback pace is the open question. Q4's $50 million was an eighth of the prior quarterly rate. Capital ratios (tier 1 leverage 12.1%, total capital 24.2%) leave room. Whether buybacks return to $400 million a quarter will make a few points of difference to EPS growth.

Based on this year's pattern (results in late January, April, July and October), fiscal Q1 2027 results would be expected around late January 2027. That date is an estimate, not one the company has announced.