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Oppenheimer Holdings Inc. Reports First Quarter 2025 Earnings

1. OPY reported Q1 net income of $30.7 million, up 17.5%. 2. Revenue increased by 4.2% to $367.8 million in Q1 2025. 3. Wealth Management revenues rose, but pre-tax income fell 10.5%. 4. Capital Markets revenue exceeded the prior year, despite lower underwriting. 5. Company announced a quarterly dividend of $0.18 per share.

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Why Bullish?

OPY's strong earnings growth and revenue increase indicate solid operational performance, generally favorable for stock prices. Historical patterns show that consistent earnings increases often correlate with price appreciation.

How important is it?

Earnings performance and dividend announcements are significant drivers of investor sentiment and stock price. The reported positive trends in core revenue streams further substantiate the relevance of this report.

Why Short Term?

The reported strong quarterly results suggest immediate market confidence, which typically affects stock performance in the near term. Immediate shifts in sentiment could be seen as the market reacts to these results.

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, /PRNewswire/ - Oppenheimer Holdings Inc. (NYSE: OPY) (the "Company" or "Firm") today reported net income of $30.7 million or $2.93 basic earnings per share for the first quarter of 2025, compared with net income of $26.1 million or $2.50 basic earnings per share for the first quarter of 2024. Revenue for the first quarter of 2025 was $367.8 million, an increase of 4.2%, compared to revenue of $353.1 million for the first quarter of 2024. Albert G. Lowenthal, Chairman and CEO commented, "The Firm's solid performance for the quarter underscores the ability of our diversified businesses to deliver profitable operating results in increasingly uncertain macroeconomic conditions. During the quarter, all major indices receded from prior quarter highs as the financial markets digested the new administration's swift policy changes on trade, immigration and government spending as well as initiatives on decreased regulation. Concerns that recently enacted tariffs would likely provoke a wider trade war and spur "stagflation" – a combination of slower growth and higher inflation – produced increased volatility and lower valuations for equity securities as well as pressure on the U.S. dollar. The likelihood of a recession has increased significantly, coupled with reduced consumer confidence and expectations for higher inflation resulting from increased import prices. There are dimmed hopes for a resumption of active capital market activity with little probability of increased corporate issuances of common stock through IPOs or secondaries. Should market declines persist, this will also negatively impact our assets under management ("AUM") and fees earned from that activity. We hope that recent market turbulence will convince policy makers that recent "on-off" announcements of market-moving policy is significantly impacting likely economic outcomes and that they will significantly reduce such activity. Notwithstanding the increasingly negative market sentiment, our Wealth Management business delivered strong results with a number of improvements over the prior year. The volatile markets spurred robust trading by our clients, driving higher retail commissions. Asset-based advisory fees also increased since AUM, while slightly reduced from recently established all-time highs, remained well above AUMs outstanding during the comparable period. A decline in our interest-sensitive revenues, partially offset these improvements due to lower short term interest rates and reduced FDIC sweep balances.  Our Capital Markets revenues exceeded prior year levels despite challenging market conditions that saw lower underwriting activity amid postponed transactions by corporate clients owing to policy uncertainties and volatile markets that put a damper on deal making activities and new issuance levels.  Institutional trading volumes increased in the volatile markets seen during the latter part of the 1st quarter, which were favorable to our sales and trading revenues. The Firm ended the quarter with record equity levels and is well-positioned for our CEO-elect, Robert Lowenthal, to take advantage of the opportunities that lie ahead. I am confident that the Firm is heading into the next era with the right leadership team that will guide the Company to its best days yet."   Summary Operating Results (Unaudited) ('000s, except per share amounts or otherwise indicated) Firm 1Q-25 1Q-24 Revenue $  367,825 $  353,138 Compensation Expenses $  227,091 $  221,713 Non-compensation Expenses $    99,358 $    93,970 Pre-Tax Income $    41,376 $    37,455 Income Tax Provision $    10,721 $    11,711 Net Income (1) $    30,655 $    26,054 Earnings Per Share (Basic) (1) $        2.93 $        2.50 Earnings Per Share (Diluted) (1) $        2.72 $        2.37 Book Value Per Share $      82.87 $      77.47 Tangible Book Value Per Share (2) $      65.85 $      60.41 Wealth Management Revenue $  241,986 $  237,961 Pre-Tax Income $    67,864 $    75,785 Assets Under Administration (billions) $      129.9 $      124.9 Assets Under Management (billions) $        48.9 $        46.6 Capital Markets Revenue $  123,261 $  112,083 Pre-Tax Loss $    (5,097) $    (6,702) (1) Attributable to Oppenheimer Holdings Inc. (2) Represents book value less goodwill and intangible assets divided by number of shares outstanding. Highlights Increased revenue for the first quarter of 2025 was primarily driven by significantly higher advisory fees attributable to a rise in billable AUM and an increase in transaction-based commissions as well as sales and trading revenue Assets under administration and under management at March 31, 2025 modestly decreased below recently established records Compensation expenses increased from the prior year quarter largely as a result of inflationary pressures on wages and higher production-related expenses Non-compensation expenses increased from the prior year quarter primarily due to higher interest and technology related expenses and higher clearing and execution costs attributable to higher volumes Total stockholders' equity, book value and tangible book value per share reached new record highs as a result of positive earnings Wealth Management Wealth Management reported revenue for the current quarter of $242.0 million, 1.7% higher compared with a year ago. Pre-tax income was $67.9 million in the current quarter, a decrease of 10.5% compared with a year ago. Financial advisor headcount at the end of the current quarter was 933, compared to 936 and 931 at the end of the first quarter of 2024 and fourth quarter of 2024, respectively. ('000s, except otherwise indicated) 1Q-25 1Q-24 Revenue $  241,986 $  237,961 Commissions $ 56,911 $ 52,794 Advisory Fees $  128,792 $  114,836 Bank Deposit Sweep Income $ 30,075 $ 36,685 Interest $ 21,485 $ 20,196 Other $    4,723 $ 13,450 Total Expenses $  174,122 $  162,176 Compensation $  119,648 $  115,572 Non-compensation $ 54,474 $ 46,604 Pre-Tax Income $ 67,864 $ 75,785 Compensation Ratio 49.4 % 48.6 % Non-compensation Ratio 22.5 % 19.6 % Pre-Tax Margin 28.0 % 31.8 % Assets Under Administration (billions) $    129.9 $    124.9 Assets Under Management (billions) $      48.9 $      46.6 Cash Sweep Balances (billions) $        2.9 $        3.2 Revenue: Retail commissions increased 7.8% from a year ago primarily due to higher retail trading activity Advisory fees increased 12.2% due to higher AUM during the billing period Bank deposit sweep income decreased $6.6 million from a year ago due to lower cash sweep balances and lower short-term interest rates Interest revenue increased 6.4% from the prior year period due to higher average margin loan balances Other revenue decreased from a year ago primarily due to a decline in the cash surrender value of Company-owned life insurance policies, which fluctuates based on changes in the fair value of the policies' underlying investments Assets under Management (AUM): AUM totaled $48.9 billion at March 31, 2025, which is the basis for advisory fee billings for April 2025 The increase in AUM from the prior year period was comprised of higher asset values of $2.8 billion on existing client holdings, offset by net distributions of $0.5 billion Total Expenses: Compensation expenses increased 3.5% from a year ago primarily due to higher production related expenses, partially offset by lower deferred compensation expenses and decreased costs associated with share appreciation rights Non-compensation expenses increased 16.9% from a year ago primarily due to an increase in legal expenses and higher external portfolio management costs, which are directly related to the increase in AUM Capital Markets Capital Markets reported revenue for the current quarter of $123.3 million, 10.0% higher when compared with the prior year period.  Pre-tax loss was $5.1 million compared with a pre-tax loss of $6.7 million a year ago. ('000s) 1Q-25 1Q-24 Revenue $  123,261 $  112,083 Investment Banking $     44,980 $     47,918 Advisory Fees $     25,962 $     31,868 Equities Underwriting $     13,399 $     13,179 Fixed Income Underwriting $       5,301 $       2,447 Other $          318 $          424 Sales and Trading $     76,879 $     63,659 Equities $     41,744 $     30,266 Fixed Income $     35,135 $     33,393 Other $       1,402 $          506 Total Expenses $  128,358 $  118,785 Compensation $     87,344 $     81,588 Non-compensation $     41,014 $     37,197 Pre-Tax Loss $     (5,097) $     (6,702) Compensation Ratio 70.9 % 72.8 % Non-compensation Ratio 33.3 % 33.2 % Pre-Tax Margin (4.1) % (6.0) % Revenue: Investment Banking Advisory fees earned from investment banking activities decreased 18.5% compared with a year ago primarily due to fewer private placement transactions Equities underwriting fees were flat when compared to the prior year period Fixed income underwriting fees increased 116.6% compared with the prior year period primarily due to higher public finance transaction revenue Sales and Trading Equities sales and trading revenue increased 37.9% compared with the prior year period mostly due to higher trading volumes and greater options-related revenue Fixed income sales and trading revenue increased 5.2% compared with a year ago largely due to higher interest income on trading inventory Total Expenses: Compensation expenses increased 7.1% compared with a year ago largely due to costs associated with opportunistic new hires and greater production related expense Non-compensation expenses were 10.3% higher than a year ago primarily due to an increase in communication and technology expenses and execution-related fees Other Matters (In millions, except number of shares and per share amounts) 1Q-25 1Q-24 Capital Stockholders' Equity (1) $       872.3 $       801.5 Regulatory Net Capital (2) $       384.1 $       431.4 Regulatory Excess Net Capital (2) $       355.4 $       412.6 Common Stock Repurchases Repurchases $           0.1 $           8.4 Number of Shares 1,530 214,723 Average Price $       58.79 $       39.05 Period End Shares 10,525,495 10,346,862 Effective Tax Rate 25.9 % 31.3 % (1) Attributable to Oppenheimer Holdings  Inc. (2) Attributable to Oppenheimer & Co. Inc. broker-dealer The Board of Directors announced a quarterly dividend of $0.18 per share payable on May 23, 2025 to holders of Class A non-voting and Class B voting common stock of record on May 9, 2025 Compensation expense as a percentage of revenue at 61.7% was relatively flat with the same period last year The effective tax rate for the current period was 25.9% compared with 31.3% for the prior year period. The effective tax rate for the first quarter of 2025 was positively impacted by fewer non-deductible expenses and a higher tax benefit upon the vesting of share awards Company Information Oppenheimer Holdings Inc., through its operating subsidiaries, is a leading middle market investment bank and full service broker-dealer that is engaged in a broad range of activities in the financial services industry, including retail securities brokerage, institutional sales and trading, investment banking (corporate and public finance), equity and fixed income research, market-making, trust services, and investment advisory and asset management services. With roots tracing back to 1881, the Company is headquartered in New York and has 89 retail branch offices in the United States and institutional businesses located in London, Tel Aviv, and Hong Kong. Forward-Looking Statements This press release includes certain "forward-looking statements" relating to anticipated future performance. For a discussion of the factors that could cause future performance to be different than anticipated, reference is made to Factors Affecting "Forward-Looking Statements" and Part 1A – Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Oppenheimer Holdings Inc. Consolidated Income Statements (Unaudited) ('000s, except number of shares and per share amounts) For the Three Months Ended March 31, 2025 2024 % Change REVENUE Commissions $               110,878 $                  95,850 15.7 Advisory fees 128,803 114,847 12.2 Investment banking 47,623 50,537 (5.8) Bank deposit sweep income 30,075 36,685 (18.0) Interest 36,369 26,766 35.9 Principal transactions, net 8,975 18,234 (50.8) Other 5,102 10,219 (50.1) Total revenue 367,825 353,138 4.2 EXPENSES Compensation and related expenses 227,091 221,713 2.4 Communications and technology 26,182 24,576 6.5 Occupancy and equipment costs 16,009 15,848 1.0 Clearing and exchange fees 7,752 5,842 32.7 Interest 21,396 20,548 4.1 Other 28,019 27,156 3.2 Total expenses 326,449 315,683 3.4 Pre-Tax Income 41,376 37,455 10.5 Income tax provision 10,721 11,711 (8.5) Net Income $                 30,655 $                  25,744 19.1 Less: Net loss attributable to non-controlling interest, net of tax — (310) * Net income attributable to Oppenheimer Holdings Inc. $                 30,655 $                  26,054 17.7 Earnings per share attributable to Oppenheimer Holdings Inc. Basic $                      2.93 $                       2.50 17.2 Diluted $                      2.72 $                       2.37 14.8 Weighted average number of common shares outstanding Basic 10,465,771 10,407,454 0.6 Diluted 11,277,939 11,001,669 2.5 Period end number of common shares outstanding 10,525,495 10,346,862 1.7 * Percentage not meaningful SOURCE Oppenheimer Holdings Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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