Executive Summary
Jefferies delivered a strong Q3 2025 with net revenues of $2.05 billion, up 22% year-over-year, underpinned by a record advisory performance and gains in debt underwriting, though fixed income and equity underwriting showed mixed results. In comparison with peers like Goldman Sachs, Morgan Stanley, and Citigroup, Jefferies’ investment banking growth is competitive on advisory but lags in scale against megabanks. Key strategic levers include market share gains in M&A, scaling capital markets, and controlling costs to protect margins amid volatile credit and macroeconomic conditions.
Analysis
Jefferies’ most recent Q3 2025 results suggest that its long-term strategy to invest in talent, markets reach, and product capabilities is paying dividends. Total net revenues rose to $2.05 billion from $1.68 billion a year earlier — a ~22% increase. Investment banking net revenues climbed to $1.14 billion (up 17%), driven especially by advisory fees that reached a record ~$655-656 million. Debt underwriting improved, though equity underwriting and fixed income trading underperformed relative to other segments. Non-interest expenses rose, but Jefferies has maintained efficiency in non-compensation costs, while its return on adjusted tangible shareholders’ equity hit 13.6% compared to 10.3% a year earlier [1][6][7].
Comparatively, megabanks are seeing even stronger IB fee growth in absolute terms. Goldman Sachs reported ~$2.66-$2.70 billion in IB fees (up ~42%) in its Global Banking & Markets division; Morgan Stanley posted ~$2.1 billion in IB revenues, also up ~44% YoY [1][8]. Citigroup recorded a 17% YoY increase in its IB-related revenues, driven by advisory and equity capital markets, contributing to overall revenue growth of 9% to $22.1 billion [2]. Jefferies is solidly positioned among middle-tier banks, showing disproportionately strong gains in advisory, possibly benefiting from megadeal activity, but lacks scale against the largest players in debt underwriting and comprehensive banking operations.
Strategic implications include Jefferies’ increasing clout in global M&A and advisory mandates, which could lead to higher fee capture and further market share gains. However, its exposure to fixed income, credit markets, and equity underwriting remains more sensitive to market volatility and investor risk appetite. Rising non-interest expenses also pose a threat to margin expansion. Open questions surround its ability to sustain underwriting volumes, compete on global scale against Wall Street heavyweights, and navigate regulatory/shifting interest rate regimes. As macro conditions improve or stabilize, Jefferies may benefit disproportionately given its structure, but downside risk from tightening credit spreads or geopolitical disruption remains material.
Supporting Evidence
– Jefferies’ Q3 2025 net revenues were $2.05 billion, up ~22% YoY from $1.68 billion in the prior year quarter [1][7].
– Investment banking net revenues rose to $1,135,325 million ($1.14 billion), from $943,566 million a year ago—up ~17% YoY [1][6].
– Advisory net revenues hit a record $655.6-656 million, driven by higher M&A deal values across most sectors [6][8].
– Equity underwriting also improved, but fixed income net revenues declined YoY, affected by tight credit conditions and lower client flow activity in certain businesses [1][8].
– Return on adjusted tangible shareholders’ equity increased to 13.6% from 10.3% YoY, signaling improved capital efficiency [1].
– Total non-interest expenses rose ~20% YoY, though non-compensation expenses as a percentage of revenues declined to ~30.9% vs ~32.2% in Q3-2024, helping partially offset cost pressures [1].
– Compared with Goldman Sachs’ ~$2.66 billion IB fees (up ~42%) and Morgan Stanley’s ~$2.1 billion (up ~44%), Jefferies’ $1.14 billion investment banking is growing fast but still smaller in scale [8][1].
– Citigroup’s IB revenues rose ~17% YoY; overall revenues were $22.1 billion, up 9%, with strong growth in advisory and equity capital markets contributions [2].
Sources
- [1] www.businesswire.com (BusinessWire) — September 29, 2025
- [2] www.zacks.com (Zacks) — October 14, 2025
- [6] www.investing.com (Investing.com) — September 29, 2025
- [7] www.nasdaq.com (Nasdaq) — October 3, 2025
- [8] www.nasdaq.com (Nasdaq) — October 22, 2025