PIPER SANDLER COMPANIES

Net revenues on a U.S. GAAP basis were $357.3 million for the three months ended March 31, 2025, compared with $343.1 million in the prior-year period. For the three months ended March 31, 2025, adjusted net revenues were $383.3 million, compared with $333.9 million in the first quarter of 2024. 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 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 the first quarter of 2025, investment banking revenues increased 21.0 percent to $278.9 million, compared with $230.5 million in the prior-year period. For the three months ended March 31, 2025, advisory services revenues were $216.8 million, up 37.9 percent compared to $157.2 million in the first quarter of 2024, driven by a higher average fee. During the quarter, our advisory services performance across industry groups was broad based, and five of our seven groups delivered year-over-year growth. For the three months ended March 31, 2025, corporate financing revenues were $35.7 million, down 32.0 percent compared with $52.6 million for the three months ended March 31, 2024, due to fewer completed equity transactions and a lower average fee. Equity financing activity for us and the market was impacted by higher volatility and declining valuations. Performance during the first quarter of 2025 was led by the healthcare sector, and we served as book runner on 7 of 8 completed healthcare equity deals. Municipal financing revenues for the three months ended March 31, 2025 were $26.4 million, up 27.2 percent compared to $20.8 million in the prior-year period, driven by increased municipal negotiated issuance activity across both our governmental and specialty sector businesses resulting from more accommodative market conditions.

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 three months ended March 31, 2025, institutional brokerage revenues were $99.3 million, up 8.5 percent compared with $91.4 million in the prior-year period. Equity brokerage revenues were $54.3 million in the first quarter of 2025, up 9.6 percent compared with $49.5 million in the corresponding period of 2024 due to increased client activity resulting from higher market volatility. For the three months ended March 31, 2025, fixed income services revenues were $45.0 million, up 7.3 percent compared to $42.0 million in the prior-year period, driven by increased activity across most of our client verticals resulting from more accommodative markets.

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 three months ended March 31, 2025, interest income increased to $10.0 million, compared with $8.3 million for the three months ended March 31, 2024, primarily due to interest earned on installment fee receivables.

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 three months ended March 31, 2025, we recorded an investment loss of $29.6 million, compared to investment income of $14.2 million in the corresponding period of 2024. In the first quarter of 2025, we recorded losses on our investments and the noncontrolling interests in the alternative asset funds that we manage primarily due to lower public company equity valuations. Excluding the impact of noncontrolling interests, adjusted investment loss was $3.6 million for the three months ended March 31, 2025, compared with adjusted investment income of $5.0 million for the three months ended March 31, 2024.

Interest Expense

Interest expense represents amounts associated with financing, economically hedging and holding short inventory positions, including interest paid on our short-term financing arrangements, as well as commitment fees on certain short-term financing arrangements. For the three months ended March 31, 2025, interest expense decreased slightly to $1.3 million, compared with $1.4 million in the prior-year period.