PIPER SANDLER COMPANIES

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. Refer to our Annual Report on Form 10-K for the year ended December 31, 2024 for a full description of our business, including our business strategy.

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

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.

N/M – Not meaningful

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.

Outlook for the Remainder of 2025

During the first quarter of 2025, uncertainty concerning the outlook for the U.S. economy increased in response to announcements by the U.S. presidential administration concerning its trade policy, including the implementation of increased global tariffs. The effects of announced U.S. trade policy, and any retaliatory actions (i.e., "trade wars") by global trading partners, including China and the European Union, and their potential impact on inflation, supply chains, and global trade is difficult to predict and has led to volatility in financial markets. Furthermore, there are concerns that this uncertainty has begun to lead to a global economic deceleration, and increased fears of a recession in the U.S. Monetary policy in the U.S. remains a prevalent factor impacting the economy and financial markets. The U.S. Federal Reserve held its short-term benchmark interest rate steady in the first quarter of 2025, indicating that it will monitor the inflationary impacts of U.S. trade policy as it balances its goals of maximum employment and stable prices. In addition, geopolitical concerns, including the conflicts in the Middle East and Eastern Europe and increased tensions with China as a result of the current trade war, could negatively impact financial market activity. These risks and uncertainties may pose consequences for the global economy and inject periods of heightened volatility into the U.S. equity and debt markets and may impact our overall client and business activity. A significant decrease in uncertainty, or resolutions to trade disputes and geopolitical concerns, would likely be constructive for global and U.S. economic conditions, and consequently, our client and business activity.

Our advisory services performance for the first quarter of 2025 was broad-based across industry groups as our results continue to benefit from our sector and product diversification. With heightened volatility, we expect active mergers and acquisitions ("M&A") transaction cycles to slow and new transaction announcements to be delayed. We anticipate that the conversion of our pipeline will be impacted and that second quarter of 2025 advisory services revenues will decline from the first quarter levels. However, we expect certain areas of the M&A market to remain active, such as service-based business models, and those companies that are less impacted by trade barriers will continue to transact at strong valuations. When markets become more constructive, we anticipate a strong and fairly broad rebound in activity, particularly with financial sponsors, which we are well positioned to capitalize on.

Our corporate financing activity declined in the first quarter as the market environment for equity financing weakened. Declining equity valuations and increased uncertainty resulted in a meaningful decline in the economic fee pool year-over-year, while the healthcare economic fee pool decreased over 60 percent from the first quarter of 2024. Equity financing activity has been very slow to start the second quarter and we expect that trend to continue until volatility subsides and valuations stabilize.

The equity markets experienced increased volatility and higher volumes during the first quarter of 2025. Our equity brokerage business continues to benefit from the quality of our trade execution and research product, especially during periods of heightened volatility. The second quarter of 2025 has started strong, and as long as volatility persists, activity should remain elevated as clients actively position their portfolios in this rapidly evolving landscape.

Our fixed income services business experienced solid activity across most of our client verticals during the first quarter of 2025 due to more accommodative markets. The near-term fixed income outlook remains cautious as persistent rate volatility continues to hamper client activity. However, the combination of potential short-term benchmark interest rate cuts by the U.S. Federal Reserve, a steepening yield curve, and reduced day-to-day volatility should increase investor confidence in committing capital into fixed income markets.

Our municipal financing activity was robust in the first quarter of 2025 across both our governmental and specialty sector businesses. Favorable market conditions, combined with growing infrastructure needs, led many issuers to access the market. However, activity in the second quarter of 2025 has started slowly as significant rate volatility has made it challenging to price transactions and several transactions have been postponed. We have a robust pipeline of issuers looking to access the market, but our near-term outlook is dependent on stabilization of the market.