PIPER SANDLER COMPANIES

Overview of Operations

Our business principally consists of providing investment banking and institutional brokerage services to corporations, private equity groups, public entities, non-profit entities and institutional investors in the U.S. and Europe. We operate through one reportable business segment in order to maximize the value we provide to clients by leveraging our diversified expertise and broad relationships of the experienced professionals across our company.

Investment banking services include financial advisory services, management of and participation in underwritings, and municipal financing activities. Revenues are generated through the receipt of advisory and financing fees. Institutional sales, trading and research services focus on the trading of equity and fixed income products with institutions, corporations, and government and non-profit entities. Revenues are generated through commissions and sales credits earned on equity and fixed income institutional sales activities, net interest revenues on trading securities held in inventory, profits and losses from trading these securities, and fees for research services and corporate access offerings. In order to invest firm capital and to manage capital from outside investors, we have created alternative asset management funds in merchant banking and healthcare. We receive management and performance fees for managing these funds, and also record investment gains and losses.

Our Business Strategy

Our long-term strategic objectives are to drive revenue growth, expand our market presence, continue to gain market share, and maximize shareholder value. In order to meet these objectives, we are focused on the following:

•Continuing to expand our business through strategic investments and selectively adding partners who share our client-centric culture and who can leverage our platform to better serve clients;

•Growing our investment banking platform through market share gains, accretive combinations, developing internal talent, and continued sector, product and geographic expansion. We also believe there is an opportunity to continue to capitalize on the strength of our U.S. franchises by expanding in Europe;

•Leveraging the scale within the equity brokerage and fixed income services platforms, driven by our expanded client base and product offerings, to continue to grow market share; and

•Prudently managing capital to maintain our balance sheet strength with ample liquidity and flexibility through all market conditions.

Strategic Activities

We have taken the following important steps in the execution of our business strategy:

•As part of our growth strategy, on August 23, 2024, we completed the acquisition of Aviditi Capital Advisors, LLC ("Aviditi Advisors"), an alternative investment bank providing full lifecycle services to financial sponsors, global alternative investment managers and limited partner investors. The transaction adds private capital advisory capabilities to our platform.

•Our corporate investment banking managing directors increased to 183, up 8.3 percent from 2023. We strengthened and expanded our sector and product coverage in 2024, notably in financial technology, residential and commercial services, asset management, chemicals, and financial sponsor coverage.

•Our public finance business expanded further into Missouri, with a team focused on school districts and other governmental issuers. In addition, our special district group expanded into new states.

•We grew our fixed income services team during the year with the strategic build out of our algorithmic trading strategies, structured product capabilities and municipal trading. Additionally, our continued investment in our research services and specialized sales and trading teams are key differentiators in supporting our finance activity.

Financial Highlights

(1)See "Explanation and Reconciliation of Non-GAAP Financial Measures" for a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures and a reconciliation of U.S. GAAP to adjusted, non-GAAP financial information.

External Factors Impacting Our Business

Performance in the financial services industry in which we operate is highly correlated to the overall strength of macroeconomic conditions, financial market activity and the effect of geopolitical events. Overall market conditions are a product of many factors, which are beyond our control, often unpredictable and at times inherently volatile. These factors may affect the financial decisions made by investors, including their level of participation in the financial markets. In turn, these decisions may affect our business results. With respect to financial market activity, our profitability is sensitive to a variety of factors, including the demand for investment banking services as reflected by the number and size of advisory transactions, equity and debt corporate financings, and municipal financings; the relative level of volatility of the equity and fixed income markets; changes in interest rates and credit spreads (especially rapid and extreme changes); overall market liquidity; the level and shape of various yield curves; the volume and value of trading in securities; and overall equity valuations.

Factors that differentiate our business within the financial services industry also may affect our financial results. For example, our capital markets business focuses on specific industry sectors while serving principally a middle-market clientele. If the business environment for our focus sectors is impacted adversely, our business and results of operations could reflect these impacts. In addition, our business, with its specific areas of focus and investment, may not track overall market trends. Given the variability of the capital markets and securities businesses, our earnings may fluctuate significantly from period to period, and results for any individual period should not be considered indicative of future results.

Market Data

The following table provides a summary of relevant market data:

(a)Source: Refinitiv (transactions with reported deal value between $100 million and $1 billion and transactions with an undisclosed deal value that had a financial advisor).

(b)Source: Dealogic and Piper Sandler & Co. Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with reported deal value greater than $10 million).

(c)Source: Dealogic and Piper Sandler & Co. Equity Capital Markets (offerings with reported deal value greater than $10 million).

(d)Source: Dealogic and Piper Sandler & Co. Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with deal values greater than $10 million and PIPEs/RDs greater than $5 million; SPAC IPO fees are represented as the standard two percent upfront fee unless noted differently on the IPO cover).

(e)Source: Dealogic and Piper Sandler & Co. Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with deal values greater than $10 million and PIPEs/RDs greater than $5 million for sub-$5 billion market cap issuers; SPAC IPO fees are represented as the standard two percent upfront fee unless noted differently on the IPO cover).

(f)Source: Refinitiv (sole/senior negotiated and private placement transactions for the overall market).

(g)Source: Refinitiv (sole/senior negotiated and private placement transactions for sub-$500 million).

(h)Calculated based on the 10-year MMD index rate divided by the 10-year treasury rate.

Outlook for 2025

U.S. monetary policy remains a prevalent factor impacting the economy and financial markets. The U.S. Federal Reserve lowered its short-term benchmark interest rate by 100 basis points in the second half of 2024, however inflationary risks persist and the U.S. Federal Reserve has indicated that any further rate cuts will be data dependent. Tariffs, tax, regulatory and other policies of the new U.S. presidential administration may impact our client and business activity. Additionally, geopolitical concerns, including the conflicts in the Middle East and Eastern Europe, could negatively impact financial market activity.

Our advisory services results continue to benefit from our sector and product diversification. Our pipeline for advisory services remains healthy and activity for 2025 has started strong. With improving market conditions and the potential from an improved regulatory landscape, we expect another year of growth in advisory services revenues with seasonality generally similar to 2024.

Our corporate equity financing results benefited from favorable market conditions, which drove improvement in issuance activity during the year. We expect our equity and debt financing activity to increase in 2025 as companies raise needed capital to execute on their strategic plans.

Our equity brokerage business continues to benefit from the quality of our research product and trade execution. We experienced strong client activity in 2024 as equity markets steadily climbed higher during the year on better volumes and with generally muted volatility. We expect our 2025 revenues to be similar to 2024.

Client activity within fixed income services increased during the second half of 2024 as market conditions improved. The fixed income asset class represents an increasingly attractive investment opportunity, which should drive increased activity in 2025. We expect clients to be more active during the year as the yield curve continues to normalize.

Overall market conditions for our municipal financing business steadily improved during 2024. Our municipal negotiated issuance activity increased across both our specialty sector and governmental businesses driven by strong investor demand and a normalizing yield curve. We anticipate market conditions and issuance volumes to remain favorable in 2025.