First quarter 2026 results were adversely affected by a $70 million (pre-tax) legal accrual for the settlement of the "cash sweep" program litigation announced on April 24, 2026 and a $22.3 million (pre-tax) expense associated with a recurring liability-based employee compensation award program for financial advisors that is tied to our stock price, which increased by $16.90 per Class A share during the quarter (from $72.29 to $89.19). Adjusted net income(a), a non-GAAP measure which excludes the impact of these items, was $47.5 million or $4.46 adjusted basic earnings per share for the first quarter of 2026, compared with adjusted net income of $28.6 million or $2.74 adjusted basic earnings per share for the first quarter of 2025. Management believes these non-GAAP measures provide supplemental insight into the Firm's core operating performance.
Robert S. Lowenthal, President and CEO commented, "Notwithstanding the unfavorable impact of the "cash sweep" settlement on the Company's overall results for the first quarter, the Firm's core businesses delivered solid operating results. Despite an increasingly challenging geopolitical environment, the strength of our franchise proved its ability to support clients across all business environments. The ongoing conflict with Iran disrupted global energy flows and intensified inflationary pressure on oil and gas prices, which in turn weighed negatively on the financial markets during March. As a result of the conflict, equity markets exhibited significant volatility with indices now hovering at or near their all-time highs.
While the pre-tax results for our Wealth Management segment were lowered by the impact of our stock-based compensation program for financial advisors, underlying performance across the business remained solid. Commission revenues benefited from heightened market volatility, which drove elevated client trading. Although assets under management ("AUM") eased from last quarter's all-time highs, they remained meaningfully above prior year levels, supporting continued strength in our asset-based advisory fees. Overall segment results were negatively impacted by higher compensation expense related to liability-based stock appreciation rights benefiting advisors that rose in value in direct correlation with the significant increase in our share price throughout the quarter.
Our Capital Markets business delivered a strong start to the year, driven by higher investment banking fees, when compared with the prior year period, reflecting the successful closing of advisory and underwriting mandates. Sales and trading revenue within our Equities and Fixed Income businesses were also boosted by higher volatility in both the debt and equity markets.
We are pleased to have resolved the "cash sweep" litigation and to put this matter behind us. Despite the settlement's negative impact to our quarterly results, our operating businesses performed well. Our capital position remains robust, enabling us to return additional value to stockholders as highlighted by our announced 11.1% increase in the quarterly dividend to $0.20 per share. Looking ahead, we remain focused on supporting our clients across the enterprise as they continue to navigate uncertain markets."
Summary Operating Results (Unaudited)
('000s, except per share amounts or otherwise indicated)
Firm
1Q-26
1Q-25
Revenue
$ 445,095
$ 367,825
Compensation Expenses
$ 296,001
$ 227,091
Non-compensation Expenses
$ 176,095
$ 99,358
Pre-tax (Loss) Income
$ (27,001)
$ 41,376
Income Tax (Benefit) Provision
$ (6,432)
$ 10,721
Net (Loss) Income (1)
$ (20,578)
$ 30,655
Adjusted Net Income (Non-GAAP) (1)(a)
$ 47,491
$ 28,627
(Loss) Earnings Per Share (Basic) (1)
$ (1.93)
$ 2.93
Adjusted Earnings Per Share (Basic) (Non-GAAP)(1)(a)
$ 4.46
$ 2.74
(Loss) Earnings Per Share (Diluted) (1)
$ (1.93)
$ 2.72
Adjusted Earnings Per Share (Diluted) (Non-GAAP) (1)(a)
$ 4.21
$ 2.54
Book Value Per Share
$ 88.95
$ 82.87
Tangible Book Value Per Share (2)
$ 72.28
$ 65.85
Wealth Management
Revenue
$ 253,680
$ 241,986
Pre-tax Income
$ 43,554
$ 67,864
Assets Under Administration (billions)
$ 139.8
$ 129.9
Assets Under Management (billions)
$ 54.1
$ 48.9
Capital Markets
Revenue
$ 189,122
$ 123,261
Pre-tax Income (Loss)
$ 35,441
$ (5,097)
(1) Attributable to Oppenheimer Holdings Inc.
(2) Represents book value less goodwill and intangible assets divided by number of shares outstanding
Highlights
Higher revenue in the first quarter of 2026 was driven primarily by significantly higher investment banking fees, increased transaction-based commissions and higher advisory fees reflecting growth in billable AUM
Assets under management and administration both increased year-over-year as of March 31, 2026, primarily due to market appreciation
Compensation expenses rose from the prior year quarter due mainly to elevated costs associated with stock appreciation rights tied to the Company's share price, higher production-related costs and greater incentive compensation accruals
Non-compensation expenses significantly increased from the prior year quarter primarily due to higher legal costs associated with our settlement of the "cash sweep" class action litigation
The Board of Directors increased the quarterly dividend to be paid on May 29, 2026 by 11.1% to $0.20 per common share
Wealth Management
Wealth Management reported revenue for the current quarter of $253.7 million, 4.8% higher compared with the prior year period. Pre-tax income was $43.6 million in the current quarter, a decrease of 35.8% compared with a year ago. Financial advisor headcount at the end of the current quarter was 932, flat when compared to 933 at the end of the first quarter of 2025.
('000s, except otherwise indicated)
1Q-26
1Q-25
Revenue
$ 253,680
$ 241,986
Commissions
$ 60,379
$ 56,911
Advisory Fees
$ 141,694
$ 128,792
Bank Deposit Sweep Income
$ 26,118
$ 30,075
Interest
$ 20,863
$ 21,485
Other
$ 4,626
$ 4,723
Total Expenses
$ 210,126
$ 174,122
Compensation
$ 155,800
$ 119,648
Non-compensation
$ 54,326
$ 54,474
Pre-Tax Income
$ 43,554
$ 67,864
Compensation Ratio
61.4 %
49.4 %
Non-compensation Ratio
21.4 %
22.5 %
Pre-Tax Margin
17.2 %
28.0 %
Assets Under Administration (billions)
$ 139.8
$ 129.9
Assets Under Management (billions)
$ 54.1
$ 48.9
Cash Sweep Balances (billions)
$ 3.0
$ 2.9
Revenue:
Retail commissions increased 6.1% from the prior year period primarily due to higher retail transaction volumes
Advisory fees increased 10.0% from a year ago due to higher AUM during the billing period
Bank deposit sweep income decreased $4.0 million from a year ago ...
