New York, October 30th / PRNewswire / -- Oppenheimer Holdings Inc. (New York Stock Exchange ticker: OPY) (hereinafter referred to as the "Company" or "this Company") announced today that its net profit for the third quarter of 2026 was $5.5 million, with a basic earnings per share before dilution of $0.52; whereas in the third quarter of 2025, the net profit was $21.7 million, with a basic earnings per share of $2.06.

Revenues in the third quarter of 2026 were $382 million, a year-on-year decrease of 10.0%; in the same period last year, they were $424.4 million. As of now in 2026, total revenues amount to $1.282 billion, a year-on-year increase of 10.0%; in the same period of 2025, they were $1.1654 billion. Net profit for the nine months ending September 30, 2026, was $12.2 million, with a basic earnings per share of $1.14; in the same period last year, net profit was $74 million, with a basic earnings per share of $7.05.

The company stated that its performance in the third quarter of 2026 was affected by a pre-tax expense of $21 million, which was related to a long-term employee incentive compensation plan for financial advisors that is directly linked to the price of OPY stock. During the quarter, the price of OPY A shares rose by $12.42 to $117.96; whereas in the same period last year, the price increased by $8.14 to $73.91. The company has adjusted the formula for this plan since 2026 in order to reduce the number of shares granted, but the impact of the revised formula will not be fully reflected until over several years.

After excluding the impact of that item, the adjusted net profit was $20.9 million, and the adjusted basic earnings per share were $1.96; in the same period last year, they were $31.7 million and $3.01 respectively. For the nine months ending September 30, 2026, the adjusted net profit was $114.1 million, and the adjusted basic earnings per share were $10.68; in the same period last year, they were $88.1 million and $8.39 respectively. The company stated that these non-GAAP indicators can provide supplementary information for its core operating performance.

President and CEO Robert S stated: "The company's third-quarter operating results reflect a generally favorable market environment. However, due to reduced retail trading activities, a decline in investment banking business volume, and increased expenses related to stock option incentives as the company's stock price rose during the quarter, the profit performance was disappointing. The scale of customer assets continued to grow, with managed assets ( AUM ) reaching a record high at the end of the quarter, and custodial assets ( AUA ) remaining higher than the same period last year. Nevertheless, trading activity has fallen from its highs of the same period last year, and IPO activities have also slowed down, as issuers face uncertain market acceptance, while investors are coping with interest rate uncertainties, ongoing inflation concerns, and the approaching mid-term election cycle in the United States."

Our wealth management business has benefited from record-high AUM levels, which has driven an increase in consulting fee revenue. However, a decline in retail trading activities has led to a reduction in transaction-based income. Our capital markets business has been affected by the decrease in consulting and underwriting activities, as corporate clients have adopted a more cautious approach to strategic transactions. Moreover, this quarter, raising capital has not been as easy for smaller issuers; at the same time, some volatility has also presented opportunities for certain of our trading businesses.

"At the end of this quarter, the company's shareholders' equity reached a record high, and our liquidity and capital levels are also very ample. Our financial strength enables us to continue investing in our business and employees while seeking growth opportunities for the entire company."

Key Points

• Third-quarter revenue declined, mainly due to reduced income from investment banking, decreased transaction-based commissions, and a reduction in some transaction-related revenues, but this was offset by higher consulting fees.
• As of September 30, 2026, both AUM and AUA have surpassed their levels from the same period last year, with AUM setting a new high.
• Compared with the same period last year, compensation expenses have decreased, mainly due to weaker performance leading to a reduction in incentive compensation provisions. However, this decrease is offset by the increase in stock appreciation rights expenses brought about by rising stock prices.
• Non-salary expenses increased year-on-year, mainly driven by increases in communication and technology-related costs.
• As of September 30, 2026, shareholders' equity reached a historic high of $991.1 million.

Wealth Management

Financial management business revenue for this quarter was $266.2 million, an increase of 2.5% compared to the same period last year. Pre-tax profit was $55.6 million, a decrease of 11.0% compared to the same period last year. At the end of this quarter, there were 926 financial advisors, compared to 927 at the end of the third quarter last year.

Revenue

• Retail commissions decreased by 13.9% year-on-year, mainly due to a reduction in retail trading activities.
• Consulting fees increased by 15.3% year-on-year, due to the higher average AUM during the billing period.
• Bank deposit rollover income decreased by $2.8 million year-on-year, due to lower average short-term interest rates compared to the same period last year.
• Interest income increased by 5.4% year-on-year, mainly due to a higher average balance of margin loans.
• Other revenues decreased by $3.9 million year-on-year, mainly due to the reduced market appreciation of the cash surrender values of the company's own life insurance policies; this item fluctuates with changes in the fair value of the underlying investments of the policies.

AUM

• As of September 30, 2026, AUM reached $59.6 billion, setting a new historical high and will serve as the basis for charging consulting fees in October 2026.
• An increase of $4.5 billion compared to the same period last year, of which the value of existing customers' positions increased by $6.2 billion, but this was offset by a net outflow of $1.7 billion.

Total cost

• Salary expenses increased by 6.6% year-on-year, mainly due to the rise in stock option expenses ($21 million, compared to $13.5 million in the same period last year), as well as an increase in production-related costs.
• Non-salary expenses increased by 7.3% year-on-year, mainly due to increased communication and technology costs as well as rising interest expenses.

Capital Market

Capital market business revenue for this quarter was $114 million, a decrease of 29.7% compared to the same period last year. The pre-tax loss was $9.9 million, whereas the pre-tax profit for the same period last year was $12.3 million.

Revenue

Investment Bank

• Consulting fees generated by investment banking activities decreased by 8.4% year-on-year, mainly due to a reduction in mergers and acquisitions transactions.
• Stock underwriting fees decreased by 82.0% year-on-year, mainly due to reduced transactions and the higher related fees incurred in the same period last year.
• Fixed-income underwriting income has declined, mainly due to a reduction in contributions from municipal bond underwriting activities.

Sales and Transactions

• Stock sales and trading revenue increased by 14.7% year-on-year, mainly due to an increase in trading volume and growth in commission revenue related to options.
• Fixed-income sales and trading revenue decreased by 23.8% year-on-year, mainly due to lower activity levels and the impact of changes in the interest rate environment, which led to a decline in inventory valuation.

Total cost

• Salary expenses decreased by 25.1% year-on-year, mainly due to a reduction in production costs and provisions for incentive compensation.
• Non-salary expenses remained roughly the same as in the same period last year.

Other Matters

• The board of directors announced a quarterly dividend of $0.20 per share, which will be paid on November 27, 2026, to holders of Class A non-voting common shares and Class B voting common shares registered as of November 13, 2026.
• The cost of compensation for this period accounted for 69.3% of revenue, which is basically the same as 68.4% in the same period last year.
• The effective tax rate for this period is 38.5%, which is higher than the 31.4% of the same period last year. This is mainly due to the impact of non-deductible expenses, which are proportionally larger relative to the lower pre-tax profits.

Note

(a) Represents indicators other than GAAP; for more details on non-GAAP financial indicators, as well as the reconciliation of adjusted net profit and earnings per share with those of the US GAAP, please refer to the table attached at the end of this press release.

Company Information

Oppenheimer Holdings Inc. Through its subsidiaries, it is a leading mid-sized market investment bank and full-service brokerage firm, with operations covering a wide range of financial services including retail securities brokerage, institutional sales and trading, investment banking (corporate finance and public finance), equity and fixed income research, market making, trust services, as well as investment consulting and asset management services. The company's history dates back to 1881, with its headquarters located in New York. It has 88 retail branches in the United States and also operates institutional businesses in London, Tel Aviv, and Hong Kong.

Forward-looking Statements

This press release contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933 (as amended) and Section 21E of the Securities Exchange Act of 1934 (as amended). The forward-looking statements in this release include, but are not limited to, statements regarding the company’s future financial performance, business strategy, growth initiatives, market conditions, and its ability to attract and retain talent. These statements are based on management’s current expectations and judgments and are subject to various risks and uncertainties. Actual results may differ significantly from those described in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to: changes in the overall economic and market conditions; fluctuations in interest rates; changes in the securities market and trading volume; levels of retail trading activities, investment banking, underwriting, and consulting services, as well as changes in customer management and the value of managed assets; fluctuations in the price of the company’s Class A common stock, which directly affect expenses related to the company’s debt-based stock options and other equity-based incentive compensation plans tied to stock prices, as well as the timing and extent of adjustments to these plans that reduce such expenses; the impact of current and future regulations; competition in the financial services industry; the company’s ability to attract and retain key personnel (including financial advisors); litigation and regulatory matters; and other factors described in Item 1A “Risk Factors” of the first section of the company’s annual report on Form 10-K for the year ending December 31, 2025, and in subsequent filings submitted to the U.S. Securities and Exchange Commission. Except as required by applicable law, the company has no obligation to update or revise any forward-looking statements after the date of this press release to reflect changes in events or circumstances.

* Percentages have no practical meaning.

Non-GAAP Financial Indicator Explanation

In this press release on financial results, the company presented several non-GAAP financial indicators to complement the financial information under U.S. Generally Accepted Accounting Principles (GAAP). The adjusted results are based on the information prepared in accordance with U.S. GAAP, and certain items were adjusted to be excluded or included. Specifically, the company presented non-GAAP indicators and made adjustments to net profit and earnings per share by excluding compensation expenses related to cash-settled stock-based incentive plans that are revalued based on market value. These expenses are subject to significant fluctuations over time due to factors that the company cannot directly control, including changes in the fair value of Class A common stock and its underlying volatility. Since these incentives are remeasured each period, the recognized expenses mainly reflect changes in the company's stock price, rather than management's operational decisions or the underlying performance of the company's business. As a result, there may be significant fluctuations from one period to another that do not correspond to changes in operating activities.

The indicators listed, excluding those marked with GAAP, also exclude the expenses related to the settlement of the class action cash sweep in the first quarter of 2026. Management believes that, given the nature of the claims and the manner in which the lawsuit was initiated, these expenses do not constitute ordinary litigation matters in the company's daily operations.

The company believes that these non-GAAP financial indicators can provide investors with additional useful information, as they enable investors to assess the company's financial performance in the same manner as management does. When presented in conjunction with comparable GAAP indicators, these non-GAAP financial indicators also help investors to compare the company's performance across different fiscal reporting periods in a consistent way. However, these non-GAAP financial indicators have their limitations as analytical tools and should not be considered in isolation, nor should they replace or take precedence over the analysis of the company's performance as reported according to GAAP. Other companies may calculate the same-named non-GAAP indicators in different ways, which may limit their comparability. Investors are advised to refer to the reconciliation table listed in this press release that compares the non-GAAP financial indicators with the most directly comparable GAAP indicators.

The following table compares the company's non-GAAP financial indicators with the corresponding GAAP indicators.

Oppenheimer Holdings Inc. Reconciliation of GAAP for net profit and earnings per share

Oppenheimer Holdings Inc. The reconciliation of the net profit that should be accounted for and the adjusted net profit that should be accounted for, as well as the reconciliation of the basic earnings per share and the adjusted basic earnings per share, and the reconciliation of the diluted earnings per share and the adjusted diluted earnings per share are as follows:

(1) Tax implications are estimated based on the statutory tax rates of the applicable entity.