Raymond James posted record fiscal Q3 2026 net revenues of $3.93 billion (+16%) and diluted EPS of $3.01 (+42%), driven by 22% growth in fee-based client assets and a 40% investment-banking rebound, though a non-recurring legal charge and a loan-loss reserve release explain about half the profit jump.
Revenue
$3.9B
+15.6% YoY
Net income
$595M
+36.8% YoY
Diluted EPS
$3.01
+42.0% YoY
Operating margin
19.1%
Headline: record quarter, but about half the profit jump came from two items that won't repeat
Raymond James Financial's fiscal third quarter of 2026 (the three months to June 30, 2026; its fiscal year ends in September) produced record net revenues of $3.93 billion, up 16% from a year earlier. Pre-tax income rose 33% to $750 million, and earnings per diluted share rose 42% to $3.01.
The revenue growth came mostly from fees charged on client assets. Stock-market gains and new money brought in by recruited advisors lifted Private Client Group (PCG) fee-based assets 22% year over year to $1.15 trillion. Profit grew about twice as fast as revenue for a different reason: two costs from the prior-year quarter did not come back. That quarter included a $58 million legal settlement. It also included a $15 million provision for bad loans, where this quarter had a $26 million release. A provision is money set aside for loans that may not be repaid; a release (the filing calls it a "benefit") is money set aside earlier that is put back into profit because loans were paid down or improved. A lower tax rate added to earnings per share as well.
Key figures
Metric
Q3 FY2026
Q3 FY2025
YoY Change
Net revenues
$3,928M
$3,398M
+15.6%
Pre-tax income
$750M
$563M
+33%
Pre-tax margin
19.1%
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PCG client assets under administration (period-end)
$1,856.5B
$1,574.2B
+18%
PCG assets in fee-based accounts (period-end)
$1,153.8B
$943.9B
+22%
Domestic PCG net new assets (quarter)
$21.7B (5.5% annualized)
$11.7B (3.4% annualized)
+86%
Net interest income + sweep fees from third-party banks
$658M
$656M
flat
Firmwide net interest margin
2.67%
2.83%
-0.16 pts
Pre-tax margin is pre-tax income divided by net revenues: how many cents of each revenue dollar are left after all costs except income tax. Net new assets are client money coming in minus money going out. Market price changes are not counted. All figures are from the 10-Q for the quarter ended June 30, 2026. The last row's percentages were computed from the stated dollar amounts.
What drove revenue: fees on client assets, plus a recovery in dealmaking
Asset-management fees are the main driver. Many clients pay an annual fee based on the value of their account instead of paying commissions per trade. Most of these fees are billed on balances at the start of each quarter, so this quarter's revenue reflects asset levels at March 31. In the PCG segment, asset management and related administrative fees rose $272 million (19%). The 10-Q attributes this to "higher assets in fee-based accounts at the beginning of the current quarter... resulting from market appreciation and net new assets driven by financial advisor recruiting and retention." Brokerage (commission) revenue in PCG rose $65 million (15%) on higher client trading activity.
Net new assets nearly doubled. Domestic PCG net new assets were $21.7 billion in the quarter, versus $11.7 billion a year earlier. For the first nine months of the fiscal year they totaled $75.5 billion (6.6% annualized growth), versus $34.5 billion (3.3%) a year earlier. Organic growth like this does not depend on the stock market, so it is the most durable part of the fee story.
Investment banking rebounded. Capital Markets investment banking revenue rose 40% to $285 million:
M&A and advisory: $150M, up from $105M (+43%)
Debt underwriting: $85M, up from $60M (+42%)
Equity underwriting: $50M, up from $38M (+32%)
The 10-Q attributes the gain to more completed deals, larger individual transactions and, to a lesser extent, GreensLedge, a boutique investment bank specializing in structured products in which Raymond James bought a majority stake near the end of the prior quarter. Over nine months the recovery looks smaller. Investment banking revenue was up only 4%, and M&A advisory was down 11% because the prior year included larger individual deals.
Segment results
Segment
Net revenues
YoY
Pre-tax income
YoY
Private Client Group (wealth management)
$2,841M
+14%
$423M
+3%
Capital Markets (investment banking, trading)
$477M
+25%
$48M
vs. $54M loss
Asset Management
$362M
+24%
$143M
+14%
Bank (Raymond James Bank)
$488M
+7%
$206M
+67%
Other (corporate)
-$7M
n/m
-$70M
loss widened from -$42M
PCG: revenue up 14%, profit up only 3%. The segment's pre-tax margin fell to about 14.9% from 16.5% (computed from the table above). Two things caused this, according to the filing:
Revenue mix. Advisors are paid a share of fees and commissions but little or nothing from interest earned on client cash. Fee revenue grew while interest-related revenue shrank. The filing says this raised the firm-wide compensation ratio (pay as a share of revenue) to 65.7% from 64.8%, "as revenues with a higher associated direct compensation expense... increased, while interest-related revenues in the PCG segment, which have little associated direct compensation expense, decreased."
Recruiting costs. Recruiting and retention pay for advisors rose 21% to $117 million.
Lower interest rates also squeezed the "sweep" program. Raymond James earns a fee when it moves clients' idle brokerage cash into deposit accounts at partner banks. The average yield it earned from third-party banks fell to 2.75% from 2.96%, and those fees dropped 11% to $98 million.
Capital Markets returned to profit. The prior-year quarter's $54 million loss included the $58 million legal settlement. Without it, that quarter would have been roughly break-even. The $48 million profit this quarter is still a real improvement driven by the investment banking rebound.
Asset Management set a revenue record. Financial assets under management rose to $345.0 billion, up 31% from June 2025. That includes about $36 billion from Clark Capital, an asset management firm acquired on April 30, 2026 that contributed two months of revenue. Compensation costs in the segment rose 41% and other costs 28%, partly from the acquisition and higher fees paid to outside sub-advisors. As a result, pre-tax income grew 14%, less than revenue.
Bank. Net interest income (interest earned on loans and securities minus interest paid on deposits) rose 7% to $472 million. The growth came from a larger loan book, "particularly securities-based and residential mortgage loans." Securities-based loans are loans backed by a client's investment portfolio, and they grew 34% to $24.8 billion according to the earnings release. The bank's net interest margin, the interest spread earned on its assets, slipped to 2.71% from 2.74% and was 10 basis points below the prior quarter. Most of the 67% jump in pre-tax income came from the swing in credit costs: a $26 million release this quarter against a $15 million provision a year earlier. The 10-Q attributes the release to "net paydowns in our corporate loan portfolio and improved credit quality."
Other. This segment's loss widened because of interest on the $1.5 billion of senior notes issued in September 2025 and higher outside legal fees.
How much of the growth is underlying?
Two prior-year items explain $99 million of the $187 million increase in pre-tax income:
$58 million: the prior-year legal settlement, which did not recur
$41 million: the credit-cost swing, from a $15 million provision to a $26 million release
Removing both, underlying pre-tax income grew about 14% (our calculation: $724M vs. $636M). That is slightly less than the 16% revenue growth, which is consistent with the higher compensation ratio.
The tax rate fell to 20.7% from 22.6% because of non-taxable gains on company-owned life insurance, which rise and fall with markets. The earnings release says quarter-on-quarter net income rose 10% on only 2% pre-tax growth, "largely due to a lower effective tax rate."
Buybacks also raised per-share figures. Raymond James repurchased $400 million of stock during the quarter at an average of $152 per share, and $1.2 billion over nine months. That helps explain why EPS rose 42% while net income rose 37%.
Takeaway: Raymond James now earns more from fees on client assets than from interest on client cash. Net interest income plus sweep fees were flat at $658 million while total revenue rose $530 million, so the growth came almost entirely from fee-based assets (+22%) and investment banking (+40%). That makes earnings more sensitive to stock-market levels than to Fed policy. Underlying profit growth was about 14%, not the headline 33%.
Balance sheet and capital
Total assets were $94.24 billion at June 30, 2026, up 7% since September 2025. Net bank loans grew $4.7 billion over that period, funded mainly by a $4.42 billion increase in bank deposits. The tier 1 leverage ratio was 11.7% and the total capital ratio was 22.5%. Both are well above regulatory minimums; they measure the equity cushion available to absorb losses. The firm held $2.5 billion of parent-company corporate cash.
Common equity tier 1 capital fell to $10.65 billion from $11.08 billion at September 30, 2025. The drivers were buybacks and a $673 million rise in goodwill and intangible deductions from the Clark Capital and GreensLedge deals. Growth through acquisitions and share repurchases is using up some of the surplus capital.
Outlook
Management gave no numerical guidance in the 10-Q or the earnings release. CEO Paul Shoukry said the firm enters the fiscal fourth quarter "with significant momentum, supported by historically strong business drivers, robust financial advisor recruiting and strong investment banking pipelines."
Our read:
Q4 fee revenue looks set to grow. Most advisory fees are billed on beginning-of-quarter balances, and PCG fee-based assets rose 11% during the June quarter. That gives the September quarter a higher starting base.
Interest income is the offset. Firmwide net interest margin fell to 2.67% from 2.83% after the Fed's cuts through December 2025. Bank-segment margin fell 10 basis points from the prior quarter. Interest on the September 2025 notes weighs on the Other segment.
Margins are unlikely to jump. The compensation ratio drifts up as fee revenue replaces interest revenue, and recruiting and acquisition costs keep expenses high. We would expect pre-tax margins to stay near the 19-20% seen in the last three quarters.
Quality of the next beat. Two of this quarter's profit sources, the credit release and the insurance-related tax benefit, cannot be counted on to repeat. In fiscal Q4, the useful question is whether operating growth alone can keep EPS near $3.
Raymond James's fiscal year ends September 30, 2026. Based on this year's cadence (quarterly results on January 28, April 22 and July 22), full-year and Q4 results would be expected around late October.