Canaccord Genuity Group (TSE:CF) reported a sharp increase in revenue and earnings for its fiscal 2026 third quarter, citing supportive monetary policy, lower interest rates, elevated fiscal spending, and particularly strong mining-sector activity amid record gold prices and solid demand for industrial metals.
Revenue climbs to second-highest quarterly level on record
Chief Executive Officer Dan Daviau said firm-wide revenue was CAD 616 million for the three-month period, up 37% year-over-year and 16% sequentially, which he described as the company’s second-highest quarterly revenue on record. Daviau said contributions were evenly split between wealth management and capital markets, with year-over-year increases of 30% and 43%, respectively.
Capital markets lifted by new issue activity and Australia strength
Management pointed to an “excellent environment” for mining activity as a key driver of results, particularly in capital markets. On an adjusted basis, capital markets revenue rose 43% year-over-year to CAD 301 million, “mostly from new issue activity,” Daviau said. He noted corporate financing strength across regions and described Australia as an “exceptional” contributor, accounting for almost 50% of total investment banking revenues in the quarter, with more than 80% linked to natural resources activity.
Daviau also said approximately 13% of investment banking revenue in the Australian operation came from realized and unrealized gains on inventory positions. He added the firm uses a disciplined strategy to monetize those positions while preserving capital and meeting client needs.
Chief Financial Officer Nadine Ahn said capital markets delivered pre-tax net income of CAD 51 million, a 248% improvement from the prior-year period, and the adjusted pre-tax profit margin improved 10 percentage points to 17%. She attributed the revenue increase primarily to a 170% rise in investment banking revenue, alongside a 42% increase in commissions and fees to CAD 54 million, the highest level since fiscal Q4 2021.
Advisory revenue was CAD 65 million, down 9% year-over-year, with Ahn noting U.S. operations increased 38% to $43 million, partially offset by declines in Canada and the U.K. due to a tougher comparison from significant mandates completed in the prior-year period. Trading revenue fell 48% year-over-year, primarily reflecting the sale of the U.S. market-making business, with contributions from that unit reflecting about five weeks of activity prior to completion.
While management expressed satisfaction with the quarter’s activity levels, Daviau cautioned against treating them as a normalized run rate, saying some sector-driven revenues were benefiting from unusually strong conditions that are “more likely to moderate in the future.”
Wealth management growth aided by higher commissions and Wilsons Advisory
In wealth management, Ahn reported revenue of CAD 304 million and adjusted pre-tax net income of CAD 57 million, up 30% and 57%, respectively. She said results included contributions from Wilsons Advisory of CAD 16.1 million in revenue and CAD 1.8 million in adjusted pre-tax net income. Daviau said Wilsons Advisory, acquired on October 1, added scale and helped establish a national footprint in Australia.
Ahn said wealth revenue growth was driven by a 32% increase in commissions and fees to CAD 240 million—primarily from Australia and Canada—and a 154% increase in investment banking revenue to CAD 25 million, with 64% contributed by Canada and the remainder from Australia.
Client assets ended the quarter at a record CAD 145 billion, up 26% year-over-year, driven by market appreciation, acquisitions, and positive net flows, according to Ahn. She added that, in local currency, U.K. wealth assets grew 13% year-over-year to GBP 40 billion, while Canadian client assets rose 25% to CAD 53 billion. Australian assets reached AUD 17 billion, up from AUD 8 billion a year earlier, with about AUD 6.7 billion attributed to the Wilsons acquisition.
Cost actions, strategic moves, and key disclosures
Ahn said firm-wide non-compensation expenses (excluding significant items) declined CAD 5 million to CAD 152 million, representing 25% of revenue. Trading, settlement, and technology costs fell CAD 2.5 million, reflecting a CAD 6.5 million reduction tied to the sale of the U.S. wholesale market-making business, partly offset by higher costs in Australian wealth due to increased activity. Interest expense declined 16.8% to CAD 26 million, attributed to lower rates and the market-making sale. Total expenses as a percentage of revenue declined by 4.3 percentage points year-over-year, and Ahn said the company remains focused on margin expansion.
Strategically, Daviau highlighted three completed actions during the quarter:
- Sale of the U.S. wholesale market-making business (completed November 7), which management said reduces cost and risk while sharpening focus on integrated M&A and investment banking.
- Acquisition of CRC-IB, described as a leading renewable energy advisory firm, enabling the creation of an “energy transformation group.” Daviau said the firm exercised an option to acquire CRC-IB after performance exceeded expectations, and argued energy transition work should persist even amid policy changes, with potential for increased M&A activity.
- Acquisition of Wilsons Advisory in Australia, adding scale to wealth management.
Daviau also said the company continues to engage with U.S. regulators on a potential unified resolution of previously disclosed enforcement matters, but the timing remains uncertain. During Q&A, he said he does not believe progress has slowed, but acknowledged it has taken longer than expected and involves multiple regulators and process complexities; he added the company is comfortable with its existing financial provisions.
On the U.K. wealth management business, Daviau reiterated the company is assessing options in the context of its minority partner’s rights and investment horizon, market conditions, and other factors, and said there can be no assurance discussions result in a transaction or at valuations implied by market activity. Ahn added U.K. wealth margins were down by about two to three percentage points, primarily due to a higher cost base tied to acquisition integration and related professional and legal fees, which she said the company expects to “pivot” as it works through those costs.
In Australia, Daviau discussed a rights offering process intended to bring in employee and company equity while reducing debt taken on for the Wilsons acquisition, noting the company’s ownership will decline from 65% but it will retain control. In response to an analyst question, management said it expects to remain above 50% ownership after the rights offering.
Outlook and dividend
Looking ahead, Daviau said the company anticipates some moderation from third-quarter revenue levels but expects broadly supportive market conditions. He cited commodity prices and improving conditions for small- and mid-cap equities as supportive for capital raising and advisory, and said the firm is seeing strong advisory momentum with active pipelines and rising engagement. Regionally, management expects solid performance in Canadian capital markets, improving results in the U.S. and U.K., and a seasonally slower summer period in Australia.
Ahn said the company maintains sufficient working capital to meet regulatory commitments and support strategic priorities, while preserving flexibility as conditions evolve. She also announced the board approved a quarterly common share dividend of CAD 0.085.
About Canaccord Genuity Group (TSE:CF)
Canaccord Genuity Group Inc, a full-service financial services company, provides investment products, and investment banking and brokerage services to institutional, corporate, and private clients. It operates in two segments, Canaccord Genuity Capital Markets and Canaccord Genuity Wealth Management. The Canaccord Genuity Capital Markets segment offers investment banking, advisory, research, merger and acquisition, sales, and trading services. The Canaccord Genuity Wealth Management segment provides wealth management solutions, and brokerage and financial planning services to individual investors, private clients, charities, and intermediaries.
