Jefferies Financial Group disappointed investors and analysts with an 8 percent decline in revenue in the first fiscal quarter, raising early doubts about whether 2025 will indeed bring the hoped-for comeback for global investment banking. The reported revenue was 1.6 billion USD, about 15 percent below the analyst consensus (Visible Alpha). The company is traditionally considered an early indicator of business development in the capital market.
Unlike its major US rivals such as JPMorgan, Goldman Sachs, or Morgan Stanley, Jefferies is almost exclusively focused on investment banking and trading. Around 90 percent of the revenue comes from these sectors, while the integrated major banks can also rely on income from lending and deposit business or wealth management.
The emission business developed particularly weakly. Revenues from equity underwriting fell by 39 percent compared to the previous year – twice as much as the market expected. Revenues from traditional advisory business (M&A, corporate finance) also disappointed: The increase of 17 percent was clearly below the expected growth. Trading, the second supporting pillar of investment banking, also came under pressure: Trading volumes in equities and bonds decreased by 4 percent.
The fact that Jefferies, under CEO Rich Handler one of the most consistent players on Wall Street, falls short of expectations causes nervousness. The expectation was that a change of government in the USA would provide new impetus for IPOs and mergers. Instead, geopolitical uncertainty and new tariffs are dampening customers' risk appetite.
Despite the short-term weakness, Jefferies sees itself well positioned in the long term. Since 2019, the bank has increased the number of its managing directors by 70 percent and maintains close relationships with private equity firms – a segment that, according to Bain & Company, still has over $1.2 trillion in uninvested capital.
In the market for mergers and acquisitions, the knot has not yet burst: Only 161 transactions with a volume over $1 billion were reported in 2025 – significantly fewer than in the previous year, according to data from LSEG. There is hope that, with improved conditions, a catch-up effect will occur.
