PIPER SANDLER COMPANIES DELIVERS STRONG FINANCIAL PERFORMANCE IN 2024

Overview Piper Sandler Companies is a leading investment bank and institutional brokerage firm that provides a wide range of services to corporations, private equity groups, public entities, non-profit organizations, and institutional investors. The company operates through one business segment, leveraging its diversified expertise and broad relationships to deliver value to clients.

Piper Sandler’s core services include financial advisory, underwriting, municipal financing, institutional sales and trading, and research. The firm also manages alternative asset funds and invests its own capital. Piper Sandler’s long-term strategic objectives are to drive revenue growth, expand its market presence, gain market share, and maximize shareholder value.

Strong Financial Performance in 2024 In 2024, Piper Sandler delivered excellent financial results, with net revenues increasing 13.2% to $1.53 billion compared to the prior year. Adjusted net revenues, which exclude certain non-recurring items, grew 15.9% to $1.54 billion.

The company’s pre-tax income rose 78.2% to $218.4 million, while adjusted operating income increased 42.6% to $303.7 million. Net income attributable to Piper Sandler Companies more than doubled, growing 111.9% to $181.1 million. On an adjusted basis, net income increased 37.2% to $228.2 million.

Earnings per diluted share on a GAAP basis were $10.24, up 106.5% from the prior year. Adjusted earnings per diluted share were $12.69, a 36.7% increase.

Piper Sandler’s compensation ratio, a key metric measuring personnel costs as a percentage of net revenues, improved to 65.8% in 2024 from 66.5% in 2023. The adjusted compensation ratio decreased to 62.0% from 63.6% in the prior year. The firm’s pre-tax margin expanded to 14.3% in 2024 compared to 9.1% in 2023, while the adjusted operating margin increased to 19.7% from 16.0%.

Revenue Drivers The strong financial performance was driven by growth across Piper Sandler’s key business lines:

Investment Banking: Investment banking revenues, which include advisory services, corporate financing, and municipal financing, increased 19.6% to $1.11 billion. Advisory services revenues rose 14.0% to $808.7 million, reflecting more completed transactions and higher average fees. Corporate financing revenues grew 32.7% to $173.9 million due to increased equity and debt capital raising activity. Municipal financing revenues jumped 46.9% to $122.5 million as market conditions and investor demand improved.

Institutional Brokerage: Institutional brokerage revenues, comprising equity brokerage and fixed income services, increased 6.3% to $401.4 million. Equity brokerage revenues grew 2.8% to $215.3 million, while fixed income services revenues rose 10.8% to $186.2 million as client activity improved, particularly with depository clients.

Investment Income/Loss: Piper Sandler recorded an investment loss of $7.9 million in 2024, compared to investment income of $30.0 million in the prior year, primarily due to unrealized losses on the firm’s investments and the noncontrolling interests in its alternative asset management funds.

Expense Management Piper Sandler maintained disciplined expense control while investing in strategic growth initiatives. Total non-interest expenses increased 6.7% to $1.31 billion, while adjusted non-interest expenses grew 3.9% to $1.24 billion.

Compensation and benefits expenses, the largest component of costs, rose 11.9% to $1.00 billion, reflecting higher revenues and profitability. The compensation ratio improved to 65.8% from 66.5% in the prior year, and the adjusted compensation ratio decreased to 62.0% from 63.6%.

Non-compensation expenses increased 3.4% to $303.3 million, but the adjusted non-compensation ratio improved to 18.3% from 20.4% in 2023. The firm incurred $2.6 million in restructuring and integration costs related to the acquisition of Aviditi Capital Advisors, down significantly from $7.7 million in the prior year.

Strategic Initiatives and Outlook Piper Sandler continued to execute on its growth strategy in 2024, highlighted by the acquisition of Aviditi Capital Advisors, which added private capital advisory capabilities to the firm’s platform. The company also strengthened and expanded its sector and product coverage, particularly in areas like financial technology, residential and commercial services, asset management, chemicals, and financial sponsor coverage.

Looking ahead, Piper Sandler expects another year of growth in 2025, with a healthy pipeline of advisory services activity and improved conditions for corporate equity and debt financing. The firm’s equity brokerage and fixed income services businesses are also positioned for continued strong performance as market conditions remain favorable.

However, the outlook is not without some uncertainty. U.S. monetary policy, the new presidential administration’s policies, and geopolitical tensions could impact the firm’s client and business activity. Nevertheless, Piper Sandler’s diversified business model, disciplined expense management, and strong balance sheet position the company well to navigate the evolving market environment and capitalize on opportunities in 2025 and beyond.

Key Financial Highlights

Metric	2024	2023	% Change
Net Revenues	$1,525,914	$1,347,967	13.2%
Adjusted Net Revenues	$1,541,042	$1,330,197	15.9%
Income Before Income Tax Expense	$218,412	$122,586	78.2%
Adjusted Operating Income	$303,731	$212,943	42.6%
Net Income Attributable to Piper Sandler Companies	$181,114	$85,491	111.9%
Adjusted Net Income Attributable to Piper Sandler Companies	$228,225	$166,393	37.2%
Earnings Per Diluted Share	$10.24	$4.96	106.5%
Adjusted Earnings Per Diluted Share	$12.69	$9.28	36.7%
Compensation Ratio	65.8%	66.5%	-
Adjusted Compensation Ratio	62.0%	63.6%	-
Pre-Tax Margin	14.3%	9.1%	-
Adjusted Operating Margin	19.7%	16.0%	-

Conclusion Piper Sandler delivered exceptional financial results in 2024, driven by strong performance across its investment banking and institutional brokerage businesses. The firm’s diversified platform, strategic investments, and disciplined expense management enabled it to capitalize on favorable market conditions and gain market share.

Looking ahead, Piper Sandler is well-positioned to continue its growth trajectory in 2025, with a robust advisory pipeline, improved financing activity, and positive momentum in its brokerage operations. While economic and geopolitical uncertainties remain, the company’s proven business model, experienced management team, and strong balance sheet provide a solid foundation for navigating the evolving market environment and creating long-term value for shareholders.