Piper Sandler Companies

Good morning and welcome to the Piper Sandler Company's third quarter 2025 earnings conference call. Today's call is being recorded and will include remarks by Piper Sandler management followed by a question and answer session. I'll begin by turning the call over to Kate Winslow. Please go ahead.

Thank you, operator. Good morning and thank you for joining the Piper Sandler Company's third quarter 2025 earnings conference call. Hosting the call today are Chairman and CEO Chad Abraham, our President, Deb Shoneman, and CFO, Kate Kloon. Earlier this morning, we issued a press release announcing Piper Sandler's third quarter 2025 financial results, which is available on our website at pipersandler.com slash earnings. Today's discussion of the results is complimentary to the press release. A replay of this call will also be available at that same website later today. Before we begin, let me remind you that remarks made on today's call may contain forward-looking statements that are not historical or current facts, including statements about beliefs and expectations, and involve inherent risks and uncertainties. Factors that could cause actual results to differ materially from those anticipated are identified in the company's reports on file with the SEC, which are available on our website at PiperSandler.com and on the SEC website at SEC.gov. Today's discussion also includes statements regarding certain non-GAAP financial measures that management believes are meaningful when evaluating the company's performance. The non-GAAP measure should be considered in addition to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in our earnings release issued today. I will now turn the call over to Chad.

Thank you, Kate. Good morning, everyone. Thank you for joining our third quarter 2025 earnings call. The market environment improved significantly in the third quarter. Equity markets reached record highs, and with lower volatility, equity underwriting meaningfully improved. Investor sentiment was helped by a calmer outlook on trade tensions and easing of monetary policy. Against this backdrop, we performed well with quarterly adjusted net revenues of $455 million, a 21.2% operating margin, and adjusted EPS of $3.82, all higher compared to the same period last year. Our strategy, anchored in deep sector expertise, market leadership, and a comprehensive suite of products across the client lifecycle, continues to resonate with clients. We have now achieved eight consecutive quarters of year-over-year growth, underscoring our consistent execution and sustained momentum. This progress is supported by our investments in the business, the diversification of our platform, and an improving market backdrop. During the third quarter, we generated $292 million in corporate investment banking revenues, reflecting significant growth over the prior year, and delivered one of our strongest third quarter performances on record. Our leading financial services and healthcare franchises each generated strong advisory and corporate financing revenues during the quarter. While both franchises have been perennial market leaders, we continue to expand these industry teams with additional subsector capabilities, product expertise, and connectivity with private equity clients. Our healthcare and financial services investment banking groups are among the largest teams in these sectors, led by senior bankers who have long tenures at Piper Sandler, a testament to our commitment to internal development and continuity. Additionally, we continue to advise on some of the most significant transactions in these sectors. We advised on the largest U.S. bank M&A deal that has closed in 2025 and served as book runner for one of the largest biopharma capital raises in the market. As the outlook improves in both healthcare and financial services, We are well positioned to support our clients and deliver strong results for our shareholders. Specific to the advisory component of corporate investment banking, revenues for the quarter were $212 million, up 13% year-over-year as we completed 82 transactions. Sector performance was led by our financial services group, with results bolstered by a resurgence in bank M&A activity. We advised on six of the ten largest bank mergers that closed during the third quarter, and we rank as the top advisor to banks based on the number of announced U.S. M&A transactions this year. We also had strong contributions from our healthcare, consumer, and energy, power, and infrastructure teams during the quarter. In addition, our non-M&A advisory teams continue to drive revenue growth. In recent years, we have made substantial investments in the advisory capabilities, which include debt capital markets advisory, private capital advisory, and restructuring to expand client offerings and increase market share, especially with private equity. Our debt capital markets advisory business is on pace to deliver a third consecutive record year, reflecting higher average fees as well as a broader and more diversified client base. The combination of our industry expertise and deep relationships with a broad range of capital providers enables us to deliver best-in-class outcomes for our clients. Looking ahead, our advisory pipeline is robust and building. The fourth quarter is typically our strongest quarter, and this year is shaping up to be no different. We expect advisory revenues for the fourth quarter of 2025 to be similar to last year's fourth quarter. Turning to corporate financing, markets were strong throughout the quarter and we generated 80 million of revenues, our strongest quarterly results since 2021. We completed 38 financings, raising 14 billion for corporate clients. Increased transaction activity and significantly higher average fees contributed to our strong relative performance. Revenues for the quarter were driven by health care and financial services. Piper Sandler served as book runner on all 13 of the equity deals completed for health care companies, driven by an improved capital raising environment for biotech clients, fueled by M&A activity, promising drug therapies, and lower interest rates. We were also active during the quarter, raising both equity and debt capital for financial services companies. Our performance underscores the strength of our execution capabilities and the earnings potential in a favorable market environment for our core sectors. As we look ahead, our pipeline remains strong and diverse. However, we expect fourth quarter corporate financing revenues to moderate from the particularly strong third quarter. Shifting to Talent. We finished the quarter with 183 investment banking managing directors. Three MDs joined our technology group as we closed the G-squared acquisition, which adds expertise in government services and defense technology. Early in the fourth quarter, we announced the hiring of two MDs focused on enterprise risk and resiliency and artificial intelligence. In total, we have added eight new MDs to our technology group this year. Building out this franchise remains a strategic priority given the sector's fee pool. Overall, our third quarter results were strong and we are pleased with our performance year to date. The combination of improved activity levels, strong execution across business lines, and a constructive market environment positions us well as we head into year end. We are entering the fourth quarter with good momentum. strong client engagement, and meaningful opportunities to gain share. With that, I will turn the call over to Deb to discuss our public finance and brokerage businesses.