#USA #New York #Q3 2025 #investment banking #Oppenheimer Holdings

Oppenheimer Holdings Inc. Reports Q3 2025 Earnings

On October 31, 2025, Oppenheimer Holdings Inc. (NYSE: OPY) announced its earnings for the third quarter of 2025, showing a net income of $21.7 million, equating to $2.06 per basic share. This marks a decline from the $24.5 million or $2.38 per basic share reported in the same period the previous year. The results this quarter reflect notable impacts from increased pre-tax compensation expenses, amounting to $13.5 million or $0.95 per share after tax, driven by the rise in the OPY Class A share price which surged by $8.30 this quarter.

The firm’s revenue reached $424.4 million, representing a 13.7% increase compared to the $373.4 million recorded in Q3 2024. According to Robert S. Lowenthal, President and CEO, the firm experienced impressive operational performance with significant growth in investment banking revenues amidst a favorable capital-raising landscape. Lowenthal pointed out that market apprehensions regarding persistent inflation and a weakening labor market were outweighed by optimism surrounding the Federal Reserve's initiation of a new rate-cutting cycle, all while excitement over artificial intelligence (AI) continued to lift major indices to new heights in September.

This favorable environment prompted an upswing in new equity issuance volumes, translating into considerably higher investment banking revenues in Q3. Moreover, the positive financial market conditions also benefited Oppenheimer’s Wealth Management sector, with assets under management (AUM) reaching record highs, further boosting fee-based income and increasing transaction volumes and commissions. Nonetheless, this division faced challenges due to a reduction in interest-sensitive sweep income, primarily attributed to lower average balances and rates.

Despite the boost in the company’s share price reflecting its success, it also led to escalated compensation expenses linked to employee liability-based rewards, thus negatively impacting Q3 results.

Having surpassed the company's full-year 2024 operating results with three quarters of 2025 still to go, Oppenheimer Holdings remains committed to serving its clients and optimizing capital management and allocation. Lowenthal expressed optimism about future investment opportunities while maintaining a cautious view regarding emerging uncertainties.

Summary of Operating Results (Unaudited)

Wealth Management Performance

Wealth Management's revenue for Q3 2025 stood at $259.7 million, showing a 5.6% increase from the prior year, albeit with pre-tax income decreasing by 13.2% to $62.5 million. Despite the slight drop in financial advisor count, remaining steady at 927, the revenue was buoyed by higher retail commission volumes and increased advisory fees due to higher AUM.

For the Capital Markets segment, Q3 saw revenues soar by 30.7% to $162.1 million, propelling pre-tax income from a loss of $6.1 million to a profit of $12.3 million. This benefitted from intensified investment banking activities and a significant rise in equities underwriting fees.

The increased compensation attributed to production-related expenses significantly influenced the quarterly financials, pushing the compensation ratio higher. Non-compensation expenses also saw a rise, mainly due to elevated underwriting and technology-related costs. Overall, Oppenheimer’s total stockholders' equity and tangible book value per share hit new record highs, underscoring the firm’s strong financial performance.

Conclusion

This quarter has reinforced Oppenheimer Holdings’ capacity to navigate market fluctuations and capitalize on lucrative opportunities, setting the stage for continued growth in the investment banking sector as the company approaches the close of 2025. The firm is resolute in its mission to deliver exceptional client services, emphasizing the long-standing relationships that have fueled its success across various market cycles.