Oppenheimer Holdings Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net income of $5.5 million ($0.52 basic EPS) for Q3 2026, a 74.9% decrease from $21.7 million ($2.06 basic EPS) in Q3 2025.
• Q3 2026 revenue was $382.0 million, a 10.0% decrease from $424.4 million in Q3 2025; year-to-date revenue totaled $1,282.0 million, a 10.0% increase from $1,165.4 million in the same 2025 period.
• Net income for the nine months ended September 30, 2026, was $12.2 million ($1.14 basic EPS), down 83.5% from $74.0 million ($7.05 basic EPS) in 2025.
• Adjusted net income (non-GAAP) for Q3 2026 was $20.9 million ($1.96 adjusted basic EPS), compared to $31.7 million ($3.01 adjusted basic EPS) in Q3 2025.
• Adjusted net income for the nine months ended September 30, 2026, was $114.1 million ($10.68 adjusted basic EPS), up 29.5% from $88.1 million ($8.39 adjusted basic EPS) in 2025.
• Compensation expenses were $264.8 million in Q3 2026, down 8.8% from $290.2 million in Q3 2025.
• Non-compensation expenses were $108.5 million in Q3 2026, up 5.7% from $102.6 million in Q3 2025.
• Stockholders' equity reached a record $991.1 million at September 30, 2026, compared to $920.3 million in Q3 2025.
• Effective tax rate was 38.5% for Q3 2026, compared to 31.4% in Q3 2025.
• Book value per share was $92.53 at September 30, 2026, compared to $87.47 in Q3 2025.

Guidance and Future Outlook:

• No specific forward guidance or numerical outlook provided in the press release.
• Management stated financial strength provides flexibility to continue investing in businesses and people while pursuing growth opportunities.
• The revised long-term employee incentive compensation program formula, implemented in 2026 to reduce grants, is expected to take several years to fully reflect in results.

Business Segments and Product Lines:

• Wealth Management: Revenue increased 2.5% to $266.2 million; pre-tax income decreased 11.0% to $55.6 million.
  • Advisory fees increased 15.3% due to higher average AUM.
  • Retail commissions decreased 13.9% due to lower trading activity.
  • Bank deposit sweep income decreased $2.8 million due to lower short-term interest rates.
  • Assets under management (AUM) reached a record $59.6 billion; Assets under administration (AUA) were $153.7 billion.
• Capital Markets: Revenue decreased 29.7% to $114.0 million; reported a pre-tax loss of $9.9 million compared to a $12.3 million pre-tax income in Q3 2025.
  • Investment banking revenue declined significantly; advisory fees down 8.4%, equities underwriting fees down 82.0%, and fixed income underwriting revenue declined.
  • Equities sales and trading revenue increased 14.7% due to higher volumes and options commissions.
  • Fixed income sales and trading revenue decreased 23.8% due to lower activity and falling inventory valuations.

Market and Competitive Landscape:

• Market conditions described as generally constructive, though retail trading activity moderated from elevated prior-year levels.
• IPO activity slowed as issuers faced uncertain reception and investors navigated interest rate uncertainty, inflation concerns, and the U.S. midterm election cycle.
• Corporate clients adopted a cautious approach to strategic transactions and capital raising, with initiatives largely unavailable to smaller issuers.
• Pockets of volatility provided opportunities for certain trading businesses.

Risks and Challenges:

• Earnings were impacted by a $21.0 million pre-tax expense related to stock appreciation rights tied to the OPY stock price increase.
• A $70 million pre-tax legal accrual related to the "cash sweep" litigation settlement was recorded in Q1 2026.
• Future results are subject to risks including changes in economic/market conditions, interest rate fluctuations, trading volume volatility, and stock price volatility affecting compensation expenses.
• Risks include competition, ability to attract/retain talent, and regulatory matters.

Management Commentary and Tone:

• Robert S. Lowenthal, President and CEO, noted that earnings were disappointing due to lower retail trading, reduced investment banking volumes, and higher stock appreciation rights expense.
• Management highlighted record-high AUM levels and ample liquidity/capital as positive indicators of financial strength.
• The tone acknowledged the disconnect between record asset levels and lower earnings due to market-driven expense volatility and reduced transactional activity.

Other Key Points:

• The Board of Directors announced a quarterly dividend of $0.20 per share, payable on November 27, 2026, to holders of record on November 13, 2026.
• Compensation expense as a percentage of revenue was 69.3% in Q3 2026, compared to 68.4% in Q3 2025.
• Financial advisor headcount ended the quarter at 926, down from 927 in Q3 2025.
• Regulatory net capital was $477.9 million and regulatory excess net capital was $441.5 million at September 30, 2026.
• The company operates 88 retail branch offices in the U.S. and institutional businesses in London, Tel Aviv, and Hong Kong.