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Oppenheimer Holdings Inc. Delivers Strong Earnings for 2024

Oppenheimer Holdings Inc. (NYSE: OPY) has unveiled its financial outcomes for the fourth quarter and the complete year of 2024, presenting a net income of $10.7 million which equates to $1.04 in basic earnings per share. This marks a slight decline from $11.1 million or $1.07 per share reported in the fourth quarter of 2023. The company's revenue significantly rose to $375.4 million, reflecting a robust increase of 21.8% compared to $308.3 million in the same quarter of the prior year.

For the entire year ending December 31, 2024, Oppenheimer Holdings noted a net income of $71.6 million or $6.91 in basic earnings per share, a remarkable uplift from the net income of $30.2 million or $2.81 per share in 2023. Full-year revenue also saw an increase, reaching $1.4 billion, compared to $1.2 billion in the previous year, which translates to a growth of 14.7%.

One of the primary contributors to the impacted financial results in 2024 was the rise in pre-tax compensation expenses due to liability-based awards, totaling $20.5 million for the fourth quarter and $32.6 million for the full year. This surge is primarily linked to the uptick in the price of OPY Class A shares.

Wealth Management Segment Performance

Oppenheimer has restructured its business segments, merging its previous Private Client and Asset Management segments into the new Wealth Management segment effective from the fourth quarter of 2024. This segment reported a revenue of $253.5 million in the fourth quarter, denoting a 12.5% increase from the previous year. However, pre-tax income decreased to $53.7 million from $60.1 million in the same quarter last year. The firm attributed the revenue growth in a large part to higher advisory fees, driven by increased assets under management (AUM) resulting from elevated market values.

At the close of the fiscal year, Oppenheimer reported record-level AUM of $49.4 billion, showcasing significant growth compared to $43.9 billion a year earlier. This achievement is pivotal for the advisory fee structures, as fees are based on the AUM values.

Compensation expenses for the Wealth Management segment increased sharply by 27.5% year-over-year, primarily due to heightened production related expenses and increased costs linked to stock appreciation rights given to financial advisors. Total expenses for this segment also swelled, but a reduction in non-compensation expenses helped cushion the financial performance.

Capital Markets Segment Overview

The Capital Markets division generated $119.3 million in revenue in the fourth quarter, standing at a remarkable 46.5% increase compared to the fourth quarter of the previous year. Despite these gains, the segment still reported a pre-tax loss of $5.0 million, although this is an improvement from a loss of $18.2 million documented in the prior year.

The increase in revenue was primarily attributable to higher advisory fees and investing banking activities, which surged by 137.6% compared to the last year. Furthermore, Oppenheimer noted a rise in equity underwriting fees, greatly influenced by improved market conditions that provided an environment conducive to transactions.

Oppenheimer’s successful navigation through considerably challenging markets demonstrates a promising outlook for its operations moving forward into 2025. CEO Albert G. Lowenthal expressed optimism regarding the company’s future, applauding the firm’s ability to record significant revenue, stockholders' equity, and book value per share levels.

With a strong balance sheet after redeeming its Senior Secured Notes, Oppenheimer Holdings is poised to leverage favorable market conditions and continue its growth trajectory. The firm remains focused on delivering exceptional service to its clients while navigating the ever-changing financial landscape.