New York, October 30 /PRNewswire/ -- Oppenheimer Holdings Inc. (NYSE: OPY) (the "Company" or "we") today announced net income of $5.5 million for the third quarter of 2026, with basic earnings per share of $0.52 before dilution; compared to net income of $21.7 million for the third quarter of 2025, with basic earnings per share of $2.06.
Revenue for the third quarter of 2026 was $382 million, a 10.0% decrease year-over-year; the corresponding period in the prior year was $424.4 million. Year-to-date revenue through 2026 totaled $1.282 billion, a 10.0% increase year-over-year; the comparable period in 2025 was $1.1654 billion. Net income for the nine months ended September 30, 2026, was $12.2 million, with basic earnings per share of $1.14; net income for the same period last year was $74 million, with basic earnings per share of $7.05.
The company stated that its third-quarter 2026 results were impacted by a $21 million pre-tax expense related to a long-term employee incentive compensation plan for financial advisors, which is directly tied to OPY’s stock price. During the quarter, OPY Class A shares rose $12.42 to $117.96, compared to an increase of $8.14 to $73.91 during the same period last year. The company revised the plan’s formula beginning in 2026 to reduce the number of shares granted, but the full impact of the revised formula will take several years to fully materialize.
Adjusted net income, excluding the impact of this project, was $20.9 million, with adjusted basic earnings per share of $1.96; for the same period last year, these figures were $31.7 million and $3.01, respectively. For the nine months ended September 30, 2026, adjusted net income was $114.1 million, with adjusted basic earnings per share of $10.68; for the same period last year, these figures were $88.1 million and $8.39, respectively. The company stated that these non-GAAP metrics provide supplementary information regarding its core operating performance.
Robert S. Lowenthal, President and CEO, said: "The company's third-quarter operating results reflect an overall favorable market environment; however, profitability was disappointing due to reduced retail trading activity, lower investment banking volumes, and higher share-based compensation expenses driven by the company's stock price increase during the quarter. Client assets continued to grow, with assets under management (AUM) reaching a record high at the end of the quarter, and assets under custody (AUA) remaining above year-ago levels. However, trading activity declined from the elevated levels of the same period last year, and IPO activity slowed as issuers faced uncertain market reception, while investors navigated an environment characterized by interest rate uncertainty, persistent inflation concerns, and the approaching U.S. midterm election cycle."
Our wealth management business benefited from record-high AUM levels, which drove an increase in advisory fee income, but transaction-based revenue declined due to reduced retail trading activity. Our capital markets business was impacted by lower advisory and underwriting activity, as corporate clients adopted a more cautious approach to strategic transactions, and capital raising initiatives were generally difficult to secure for smaller issuers this quarter; meanwhile, some volatility created 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 remain robust. Our strong financial position enables us to continue investing in our business and employees while pursuing growth opportunities across the company.
Key points
- Revenue for the third quarter declined primarily due to lower investment banking income, reduced transaction-based commissions, and decreased certain transaction-related revenues, partially offset by higher advisory fees.
- As of September 30, 2026, both AUM and AUA were higher than the same period last year, with AUM reaching a new high.
- Salary expenses decreased compared to the same period last year, primarily due to reduced performance-based compensation accruals resulting from weaker performance, partially offset by higher share appreciation right expenses driven by the rise in stock price.
- Non-salary expenses increased year-over-year, primarily driven by higher communication and technology-related costs.
- As of September 30, 2026, shareholder equity reached a record high of $991.1 million.
Wealth management
Wealth management revenue for the quarter was $266.2 million, representing a 2.5% increase year-over-year. Pre-tax profit was $55.6 million, a 11.0% decrease compared to the same period last year. The number of financial advisors at the end of the quarter was 926, compared to 927 at the end of the third quarter last year.
Revenue
- Retail commissions decreased by 13.9% year-over-year, primarily due to reduced retail trading activity.
- Consultation fees increased by 15.3% year-over-year due to higher average AUM during the billing period.
- Bank deposit rollover income decreased by $2.8 million year-over-year due to lower average short-term interest rates compared to the same period last year.
- Interest income increased by 5.4% year-over-year, primarily due to higher average margin loan balances.
- Other income decreased by $3.9 million year-over-year, primarily due to a reduction in the market appreciation of the cash surrender value 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, a record high, and will serve as the basis for calculating advisory fees in October 2026.
- An increase of $4.5 billion compared to the same period last year, driven by a $6.2 billion rise in asset value from existing clients' holdings, partially offset by net outflows of $1.7 billion.
Total fee
- Compensation expenses increased by 6.6% year-over-year, primarily due to higher stock appreciation right expenses ($21 million compared to $13.5 million in the same period last year) and increased production-related costs.
- Non-salary expenses increased by 7.3% year-over-year, primarily due to higher communication and technology costs, as well as increased interest expenses.
Capital market
The capital markets business generated revenue of $114 million this quarter, a 29.7% decline compared to the same period last year. The pre-tax loss amounted to $9.9 million, compared to a pre-tax profit of $12.3 million in the same period last year.
Revenue
Investment bank
- Consulting fees from investment banking activities decreased by 8.4% year-over-year, primarily due to a reduction in merger and acquisition transactions.
- Stock underwriting fees decreased by 82.0% year-over-year, primarily due to lower trading volume and higher related expenses in the same period last year.
- Fixed income underwriting revenue declined, primarily due to reduced contribution from municipal bond underwriting activities.
Sales and Trading
- Stock sales and trading revenue increased by 14.7% year-over-year, primarily due to higher trading volumes and increased commission income from options.
- Fixed income sales and trading revenue decreased by 23.8% year-over-year, primarily due to lower activity levels and lower inventory valuations resulting from changes in the interest rate environment.
Total fee
- Salary expenses decreased by 25.1% year-over-year, primarily due to reduced accruals for production costs and incentive compensation.
- Non-salary expenses were essentially flat compared to the same period last year.
Other matters
- The board has declared a quarterly dividend of $0.20 per share, payable on November 27, 2026, to holders of record of Class A non-voting common stock and Class B voting common stock as of November 13, 2026.
- The salary expenses as a percentage of revenue for this period were 69.3%, essentially flat compared to 68.4% in the same period last year.
- The effective tax rate for this period is 38.5%, higher than 31.4% in the same period last year, primarily due to the greater impact of non-deductible expenses relative to lower pre-tax profit.
Note
(a) Represents a non-GAAP metric; for additional information on non-GAAP financial measures and a reconciliation of adjusted net income and earnings per share to U.S. GAAP, see the table attached at the end of this press release.
Company Information
Oppenheimer Holdings Inc., through its operating subsidiaries, is a leading mid-market investment bank and full-service broker-dealer engaged in a broad range of activities within the financial services industry, including retail securities brokerage, institutional sales and trading, investment banking (corporate and public finance), equity and fixed-income research, market making, trust services, and investment advisory and asset management services. Founded in 1881 and headquartered in New York, the company operates 88 retail branches across the United States and maintains institutional offices 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. 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 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, and actual results may differ materially from those described in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to: changes in overall economic and market conditions; fluctuations in interest rates; changes in securities markets and trading volumes; levels of retail trading, investment banking, underwriting, and advisory activities, as well as changes in client management and the value of assets under custody; volatility in the price of the company’s Class A common stock, which directly impacts expenses related to the company’s liability-classified stock appreciation rights and other equity-based incentive compensation plans, as well as the timing and magnitude 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 Part I, Item 1A "Risk Factors" of the company’s Annual Report on Form 10-K for the year ended December 31, 2025, and in subsequent filings with the U.S. Securities and Exchange Commission. Except as required by applicable law, the company undertakes no obligation to update or revise any forward-looking statements to reflect changes in events or circumstances after the date of this press release.
Percentages have no practical significance.
Non-GAAP Financial Metrics Explanation
The company has presented certain non-GAAP financial measures in this earnings press release to supplement the GAAP financial information. Adjusted results begin with information prepared in accordance with U.S. GAAP and then adjust for certain items to exclude or include them. Specifically, the company presents non-GAAP measures that adjust net income and earnings per share by excluding compensation expenses related to the mark-to-market revaluation of cash-settled, liability-based stock appreciation rights, as these expenses are largely driven by factors outside the company’s direct control, including changes in the fair value of Oppenheimer Holdings Inc.’s Class A common stock and its underlying volatility. Because these awards are remeasured each period, the recognized expenses primarily reflect fluctuations in the company’s stock price rather than management’s operating decisions or the underlying performance of the business, and thus may vary significantly between periods without corresponding changes in operating activities.
The non-GAAP metrics listed also exclude expenses related to the settlement of the "cash sweep" class action lawsuit in the first quarter of 2026, as management considers these, given the nature of the claims and the manner in which the lawsuit was initiated, to be outside the ordinary course of the company's business operations.
The company believes that these non-GAAP financial measures provide investors with additional useful information by enabling them to evaluate the company’s financial performance in the same manner as management. When presented alongside comparable GAAP measures, these non-GAAP financial measures also assist investors in comparing the company’s performance consistently across different reporting periods. However, these non-GAAP financial measures have limitations as analytical tools and should not be viewed in isolation or used as substitutes for, or superior to, the analysis of the company’s performance reported under GAAP. Other companies may calculate similarly titled non-GAAP measures differently, which may limit their comparability. Investors are encouraged to review the reconciliation tables provided in this press release between the non-GAAP financial measures and the most directly comparable GAAP measures.
The table below reconciles the company's non-GAAP financial measures to the corresponding GAAP measures.
GAAP Reconciliation of Net Income Attributable to Oppenheimer Holdings Inc. and Earnings Per Share
The reconciliation of net income attributable to Oppenheimer Holdings Inc. and adjusted net income attributable to Oppenheimer Holdings Inc., basic earnings per share and adjusted basic earnings per share, and diluted earnings per share and adjusted diluted earnings per share are as follows:
(1) Tax implications are estimated using the statutory tax rate applicable to the relevant entity.