Canaccord Genuity Group Inc.

Canaccord reported firm-wide revenue of $577 million, up 29% year over year. Adjusted net income was $57 million, up 120%, and adjusted diluted EPS was $0.36, up 177%. Pretax net income increased 128% year over year, and pretax operating margin improved by 5.7 percentage points. Non-compensation expenses, excluding significant items, fell $4 million, or 3%, to $142 million, equal to 25% of revenue versus 33% a year ago. Cash and cash equivalents were $1.2 billion and working capital was $817 million. By segment, wealth management revenue rose 26% to $305 million and capital markets revenue rose 30% to $261 million. Management said the company is on track to deliver the low single-digit improvement in firm-wide pretax operating margin previously guided, though the pace depends on market conditions.

Dan Daviau said the quarter showed broad-based strength across the global platform, with wealth and capital markets both contributing and client assets reaching a record. He emphasized that stable rates, stronger equity markets, active client engagement, and improving financing and advisory activity should continue to support the business. He also highlighted the employee partnership structure as a key cultural advantage and said the firm is focused on operating leverage, disciplined execution, and strategic growth in wealth.

Nadine Ahn said profitability grew faster than revenue, with pretax net income up 128% year over year versus 29% revenue growth, and pretax operating margin up 5.7 percentage points. She cited non-compensation expense discipline, with expenses down $4 million to $142 million, and explained that the firm-wide compensation ratio was 62% because of share-based payment awards tied to stock appreciation; excluding that charge, it would have been 59.5%. She also said the balance sheet remains liquid, with $1.2 billion in cash and cash equivalents and $817 million of working capital, and reiterated that the company is on track for the previously discussed low single-digit margin improvement.

Analysts focused on how much of the company’s working capital is actually deployable, and management said the answer has to be viewed at a regional regulated-entity level; Dan Daviau added that Canaccord does not see itself as balance-sheet constrained for acquisitions or growth investments. Questions also centered on the U.K. wealth partnership with HPS, where Daviau said there was nothing incremental to disclose and that management is still evaluating strategic options. Another thread was the U.K. capital markets business; Daviau said it is strategically important but operates in a difficult new issue market, so the goal is to keep it aligned with the rest of the franchise rather than make large new investments or divestitures.