PIPER SANDLER COMPANIES

Net revenues on a U.S. GAAP basis were $1.53 billion for the year ended December 31, 2024, compared with $1.35 billion in the prior-year period. For the year ended December 31, 2024, adjusted net revenues were $1.54 billion, compared with $1.33 billion for the year ended December 31, 2023. The variance explanations for net revenues and adjusted net revenues are consistent on both a U.S. GAAP and non-GAAP basis unless stated otherwise. 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.

The following table provides supplemental business information:

Investment Banking Revenues

Investment banking revenues comprise all of the revenues generated through advisory services activities, which include mergers and acquisitions ("M&A"), equity and debt private placements, debt, restructuring and private capital advisory, and municipal financial advisory transactions. Collectively, debt advisory transactions and equity and debt private placements are referred to as capital advisory transactions. Investment banking revenues also include equity and debt corporate financing activities and municipal financings.

In 2024, investment banking revenues were $1.11 billion, up 19.6 percent compared to $923.8 million in the prior-year period. For the year ended December 31, 2024, advisory services revenues were $808.7 million, up 14.0 percent compared with $709.3 million in 2023, driven by more completed transactions and a higher average fee. We also benefited from increased activity from our private equity clients. Our advisory services activity during the year was broad based across sectors, led by our financial services and energy & power groups with solid contributions from the healthcare, consumer and services & industrials sectors. In addition, our debt advisory product team recorded strong results in 2024. For the year ended December 31, 2024, corporate financing revenues were $173.9 million, up 32.7 percent compared to $131.1 million in the prior-year period, due to more completed transactions. Equity financing activity improved during the year resulting from more favorable market conditions. Performance during the year was led by the healthcare sector, and we served as book runner on 40 of 42 completed healthcare equity deals. In addition, our financial services group completed several large equity capital raises for our depository clients during the year. Municipal financing revenues for the year ended December 31, 2024 were $122.5 million, up 46.9 percent compared to $83.4 million in the year-ago period, driven by increased issuance activity across both our specialty sector and governmental businesses as market conditions and investor demand improved relative to the prior year.

Institutional Brokerage Revenues

Institutional brokerage revenues comprise all of the revenues generated through trading activities, which principally consist of facilitating customer trades, as well as fees received for our research services and corporate access offerings. Our results may vary from quarter to quarter as a result of changes in trading margins, trading gains and losses, net interest spreads, trading volumes and the amount of fees received for research services.

For the year ended December 31, 2024, institutional brokerage revenues increased to $401.4 million, compared with $377.5 million in the prior-year period. In 2024, equity brokerage revenues were $215.3 million, up 2.8 percent compared with $209.5 million in 2023, due to increased client activity across our full suite of trading and research products. For the year ended December 31, 2024, fixed income services revenues were $186.2 million, up 10.8 percent compared with $168.0 million in the prior-year period, driven by increased client activity, particularly with our depository clients. Market conditions for fixed income improved during the second half of the year following the action of the U.S. Federal Reserve to reduce short-term benchmark interest rates and the normalization of the yield curve.

Interest Income

Interest income represents amounts earned from holding long inventory positions and cash balances, as well as interest earned on installment fee receivables. For the year ended December 31, 2024, interest income increased to $32.9 million, compared with $26.7 million in 2023, primarily due to higher interest rates on our cash balances.

Investment Income/(Loss)

Investment income/(loss) includes realized and unrealized gains and losses on investments, including amounts attributable to noncontrolling interests, in our alternative asset management funds, as well as management and performance fees generated from those funds. For the year ended December 31, 2024, we recorded an investment loss of $7.9 million, compared to investment income of $30.0 million in 2023. In 2024, we recorded unrealized losses on our investments and the noncontrolling interests in the alternative asset management funds that we manage. Excluding the impact of noncontrolling interests, adjusted investment income was $7.2 million in 2024, compared with $7.1 million in 2023.

Interest Expense

Interest expense represents amounts associated with financing, economically hedging and holding short inventory positions, including interest paid on our short- and long-term financing arrangements, as well as commitment fees on certain short-term financing arrangements. For the year ended December 31, 2024, interest expense decreased to $5.7 million, compared with $10.1 million in 2023. The decrease was primarily due to lower interest paid on long-term financing arrangements as we repaid $125 million of Class B unsecured fixed rate senior notes upon maturity on October 15, 2023.