Institutional Financial Markets (NYSEAMERICAN:COHN) discussed a strong fourth quarter and full-year 2025 performance on its earnings call, highlighting continued growth in its full-service boutique investment bank, Cohen & Company Capital Markets (CCM), and increased activity across SPAC-related underwriting and advisory work.
Management cites strong 2025 results and expanding franchise
Chief Executive Officer Lester Brafman said results were driven by the continued expansion of the company’s client franchise, particularly through CCM, which focuses on what management described as “frontier technologies,” including digital assets, the energy transition, and natural resources.
In 2025, CCM closed $43 billion in transactions, and Brafman said that, according to SPAC Research, CCM ranked No. 1 in SPAC IPO underwritings by left bookrunner deals and in de-SPAC advisory, with a leading share in de-SPAC PIPE transactions.
Looking ahead, Brafman said CCM’s pipeline is “more robust than it was a year ago,” reflecting a strong IPO presence and “significant de-SPAC opportunities.” He also noted first-quarter 2026 revenue was trending “substantially higher” than first-quarter 2025.
Full-year metrics and dividend announcements
For the full year of 2025, Brafman reported basic and fully diluted net income attributable to the company per share of $8.33 and $4.35, respectively. Total revenue was $275.6 million, up 246% from 2024, with adjusted pre-tax income of $41.4 million, which he said represented 15% of total revenue. The company finished 2025 with $2.3 million of revenue per employee.
Management also highlighted shareholder returns, announcing a special dividend of $0.70 per share and a recurring quarterly dividend of $0.25 per share. The $0.70 special dividend follows a separate $2.00 per share special dividend that was announced in December 2025 and paid in January 2026.
Quarterly results: investment banking revenue, trading, and SPAC-related principal gains
Chief Financial Officer Joe Pooler said net income attributable to shareholders was $8.1 million for the quarter, or $1.48 per fully diluted share, compared with net income of $4.6 million in the prior quarter (or $2.58 per fully diluted share) and a net loss of $2.0 million in the year-ago quarter (or $1.21 per fully diluted share). Adjusted pre-tax income was $18.3 million for the quarter, compared with $16.4 million in the prior quarter and an adjusted pre-tax loss of $7.7 million in the year-ago quarter.
Pooler reiterated that adjusted pre-tax income is a key measure for the company because it incorporates enterprise earnings attributable to convertible non-controlling interests, which he said are substantially held by founder and Chairman Daniel Cohen through the company’s primary operating subsidiary, Cohen & Company, LLC.
Pooler said CCM generated $50.8 million of revenue in the fourth quarter and $184 million for full-year 2025, an increase of 370% from 2024. CCM represented 67% of total company revenue for the year.
Investment banking and new issue revenue totaled $55.0 million in the fourth quarter, compared with $69.0 million in the prior quarter and $8.2 million in the year-ago quarter. Pooler said $50.8 million of the fourth-quarter investment banking and new issue revenue came from CCM and was primarily driven by SPAC M&A and SPAC IPO transactions. He added that European insurance origination generated $3.6 million, and commercial real estate origination contributed $0.3 million for the quarter.
Pooler also noted an accounting presentation change: beginning in the fourth quarter (and reclassified historically), realized and unrealized gains or losses on financial instruments received as consideration for CCM services after transaction closing are now reported in the investment banking and new issue revenue line item.
Other revenue lines included:
- Net trading revenue of $13.8 million, up $0.3 million from the prior quarter and up $4.9 million from the year-ago quarter.
- Asset management revenue of $2.7 million, up $0.7 million sequentially and up $0.6 million year over year.
- Principal transactions and other revenue of positive $31.5 million, primarily tied to the completion of the business combination between the company’s sponsored SPAC, Columbus Circle Capital Corp I, and Procaps Group.
Pooler said the Dec. 5, 2025 closing of the Columbus Circle Capital Corp I and Procaps business combination resulted in $33.0 million of principal transactions revenue from the markup of consolidated founder and placement shares held primarily by the consolidated sponsor following the closing. He said this was partially offset by $16.5 million of compensation expense related to founder shares allocable to employees and an $8.5 million non-convertible non-controlling interest expense related to founder shares allocable to third-party investors. Pooler added that, at year-end, Cohen held 2.543 million shares of Procaps Group, which trades on Nasdaq under the symbol BRR.
Expenses, headcount, and balance sheet items
Compensation and benefits expense was $57.8 million in the fourth quarter, which Pooler said was higher than prior quarters mainly due to revenue-driven variable incentive compensation, including the $16.5 million expense tied to the founder shares allocable to employees from the Columbus Circle sponsor.
Companywide headcount was 126 employees at year-end, compared with 124 at the end of September and 113 at the end of the prior year.
Net interest expense was $1.5 million for the quarter, including $1.2 million on trust preferred securities, $0.2 million on senior promissory notes, and $45,000 on a bank credit facility. Loss from equity method affiliates totaled $5.1 million, driven primarily by $3.1 million of mark-to-market losses on a SPAC series fund investment, partially offset by a $1.5 million credit recorded in net income (loss) attributable to non-convertible non-controlling interest.
On the balance sheet, total equity at year-end was $103.1 million compared with $90.3 million at the end of the prior year. Pooler noted that non-convertible non-controlling interest was $0.4 million at year-end versus $11.5 million the prior year, and he calculated enterprise equity excluding that component at $102.6 million, up $23.8 million from $78.8 million a year earlier. Consolidated corporate indebtedness was carried at $33.0 million at quarter-end.
2026 priorities: diversify banking revenue and grow fixed income trading
During the Q&A, management described priorities for 2026. Brafman said the company aims to expand the investment bank’s footprint by adding more industry verticals and becoming less dependent on the SPAC product, while also growing the fixed income trading business. He said the company was looking to add “probably eight people or so” in fixed income trading, describing the effort as synergistic with its mortgage-led approach and related products.
Brafman also noted the fixed income trading business produced revenue “close to $50 million” in 2025 and said the company would like to increase that to about $60 million to $65 million, adding that potential rate cuts could provide “a little wind at our back.”
On pipeline visibility, Brafman said the company was ahead of where it was a year earlier, and reiterated CCM’s strength in SPAC and de-SPAC work, which he said also supports traditional M&A mandates, capital raises, and capital markets advisory assignments.
Regarding staffing, Pooler said the investment bank had 28 total employees at year-end and anticipated growth of about five employees in 2026 (excluding interns), while noting hiring could change if opportunities arise to add managing directors.
About Institutional Financial Markets (NYSEAMERICAN:COHN)
Cohen & Co, Inc engages in fixed income markets. It operates through the following segments: Capital Markets, Asset Management, and Principal Investing. The Capital Markets segment consists of fixed income sales, trading, matched book repo financing, and new issue placements in corporate and securitized products and advisory services, operating primarily through its subsidiaries. The Asset Management segment manages assets through investment vehicles, such as collateralized debt obligations, managed accounts, and investment funds.
