Jefferies Financial Group Inc. (JEF)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report may contain or incorporate by reference certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and/or the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our future and statements that are not historical or current facts. These forward-looking statements are often preceded by the words “should,” “expect,” “believe,” “intend,” “may,” “will,” “would,” “could” or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations and other results, and may include statements of future performance, plans and objectives. Forward-looking statements also include statements pertaining to our strategies for future development of our business and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in this report and other documents we file. You should read and interpret any forward-looking statement together with these documents, including the following:

•the description of our business and risk factors contained in our Annual Report on Form 10-K for the year ended November 30, 2025 and filed with the Securities and Exchange Commission (“SEC”) on January 28, 2026;

•the discussion of our analysis of financial condition and results of operations contained in this report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein;

•the discussion of our risk management policies, procedures and methodologies contained in this report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Risk Management” herein;

•the consolidated financial statements and notes to the consolidated financial statements contained in this report; and

•cautionary statements we make in our public documents, reports and announcements.

Any forward looking statement speaks only as of the date on which that statement is made. We undertake no obligation to update any forward looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as required by applicable law.

Our business, by its nature, does not produce predictable or necessarily recurring earnings. Our results in any given period can be materially affected by conditions in global financial markets, economic conditions generally and our own activities and positions.

Consolidated Results of Operations

Overview

Executive Summary

Three Months Ended May 31, 2026 Versus May 31, 2025

Net earnings attributable to common shareholders were $226.2 million and $88.0 million for the three months ended May 31, 2026 and 2025, respectively.

Our effective tax rate was 20.8%, and 32.3% for the three months ended May 31, 2026 and 2025, respectively.

Six Months Ended May 31, 2026 Versus May 31, 2025

Net earnings attributable to common shareholders were $382.2 million and $216.0 million for the six months ended May 31, 2026 and 2025, respectively.

Our effective tax rate was 22.4%, and 20.2% for the six months ended May 31, 2026 and 2025, respectively.

The remainder of our “Consolidated Results of Operations” is presented on a detailed product and expense basis. Our “Revenues by Source” is reported along the following business lines: Investment Banking, Equities, Fixed Income and Asset Management.

At May 31, 2026, we had 7,371 employees globally across all of our consolidated subsidiaries within our Investment Banking and Capital Markets and Asset Management reportable segments, compared to 7,787 at November 30, 2025. Included within our global headcount are 1,334 employees at May 31, 2026 and 1,797 employees at November 30, 2025 of our Stratos, Tessellis, HomeFed and M Science subsidiaries.

Revenues by Source

We present our results as two reportable business segments: Investment Banking and Capital Markets and Asset Management. Additionally, corporate activities are fully allocated to each of these reportable business segments.

Net revenues presented for our Investment Banking and Capital Markets reportable segment include allocations of interest income and interest expense as we assess the profitability of these businesses inclusive of these costs, including the net interest cost of allocated short- and long-term debt, which is a function of the mix of each business’s associated assets and liabilities and the related funding costs.

Debt valuation adjustments on derivative contracts, gains and losses on investments held in deferred compensation plans, foreign currency transaction gains or losses or certain other corporate income items are not considered by management in assessing the financial performance of our operating businesses and are, therefore, not reported as part of our business segment results.

N/M — Not Meaningful

(1)Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.

(2)Allocated net interest represents an allocation to Asset Management of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to make clearer actual Investment return. We believe that aggregating Investment return and Allocated net interest would obscure the Investment return by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.

Investment Banking Revenues

Investment banking is composed of revenues from:

•advisory services with respect to mergers and acquisitions, debt financing, restructurings and private capital transactions;

•underwriting services, which include debt underwriting, syndication and placement services related to investment grade debt, high yield bonds, leveraged loans, emerging market debt, global structured notes, municipal debt and mortgage-backed and asset-backed securities; and equity underwriting and placement services related to equity offerings, preferred stock and equity-linked securities;

•our 50% share of net earnings from our Jefferies Finance joint venture;

•our 45% share of net earnings from our commercial real estate joint venture, Berkadia, which includes commercial mortgage origination and servicing as well as investment sales;

•securities and loans received or acquired in connection with our investment banking activities; and

•certain revenue-sharing agreements with SMBC primarily associated with investment banking transactions.

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Item 7. Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking Statements

This report may contain or incorporate by reference certain

“forward-looking statements” within the meaning of Section 27A

of the Securities Act of 1933, Section 21E of the Securities

Exchange Act of 1934 and/or the Private Securities Litigation

Reform Act of 1995. Forward-looking statements include

statements about our future and statements that are not

historical or current facts. These forward-looking statements are

often preceded by the words “should,” “expect,” “believe,”

“intend,” “may,” “will,” “would,” “could” or similar expressions.

Forward-looking statements may contain expectations regarding

revenues, earnings, operations and other results, and may include

statements of future performance, plans and objectives. Forward-

looking statements also include statements pertaining to our

strategies for future development of our business and products.

Forward-looking statements represent only our belief regarding

future events, many of which by their nature are inherently

uncertain. It is possible that the actual results may differ, possibly

materially, from the anticipated results indicated in these

forward-looking statements. Information regarding important

factors that could cause actual results to differ, perhaps

materially, from those in our forward-looking statements is

contained in this report and other documents we file. You should

read and interpret any forward-looking statement together with

these documents, including the following:

•the description of our business contained in this report under

the caption “Business”;

•the risk factors contained in this report under the caption “Risk

Factors”;

•the discussion of our analysis of financial condition and results

of operations contained in this report under the caption

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations” herein;

•the discussion of our risk management policies, procedures

and methodologies contained in this report under the caption

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations—Risk Management” herein;

•the consolidated financial statements and notes to the

consolidated financial statements contained in this report; and

•cautionary statements we make in our public documents,

reports and announcements.

Any forward-looking statement speaks only as of the date on

which that statement is made. We undertake no obligation to

update any forward-looking statement to reflect events or

circumstances that occur after the date on which the statement

is made, except as required by applicable law.

Our business, by its nature, does not produce predictable or

necessarily recurring earnings. Our results in any given period

can be materially affected by conditions in global financial

markets, economic conditions generally and our own activities

and positions. For a further discussion of the factors that may

affect our future operating results, refer to the risk factors

contained in this report under the caption “Risk Factors”.

Our results of operations for the years ended November 30, 2025

(“2025”) and November 30, 2024 (“2024”) are discussed below.

For a discussion of our results of operations for the year ended

November 30, 2023 (“2023”) and our 2024 results of operations

as compared to our 2023 results of operations, refer to

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations” in Part II, Item 7 of our Annual Report

Form 10-K for the year ended November 30, 2024, which was

filed with the SEC on January 28, 2025.

Consolidated Results of Operations

Overview

N/M — Not Meaningful

Executive Summary

Year Ended November 30, 2025 Versus November 30, 2024

Net earnings attributable to common shareholders were

$630.8 million and $669.3 million for the year ended November

30, 2025 and 2024, respectively.

Our effective tax rate was 21.2%, and 29.2% for the year ended

November 30, 2025 and 2024, respectively.

The remainder of our “Consolidated Results of Operations” is

presented on a detailed product and expense basis. Our

“Revenues by Source” is reported along the following business

lines: Investment Banking, Equities, Fixed Income and Asset

Management.

At November 30, 2025, we had 7,787 employees globally across

all of our consolidated subsidiaries within our Investment

Banking and Capital Markets and Asset Management reportable

segments, compared to 7,822 at November 30, 2024. Included

within our global headcount are 1,797 employees at

November 30, 2025 and 2,063 employees at November 30, 2024

of our Stratos, Tessellis, HomeFed and M Science subsidiaries.

Revenues by Source

We present our results as two reportable business segments:

Investment Banking and Capital Markets and Asset Management.

Additionally, corporate activities are fully allocated to each of

these reportable business segments.

Net revenues presented for our Investment Banking and Capital

Markets reportable segment include allocations of interest

income and interest expense as we assess the profitability of

these businesses inclusive of these costs, including the net

interest cost of allocated short- and long-term debt, which is a

function of the mix of each business’s associated assets and

liabilities and the related funding costs.

Debt valuation adjustments on derivative contracts, gains and

losses on investments held in deferred compensation plans,

foreign currency transaction gains or losses or certain other

corporate income items are not considered by management in

assessing the financial performance of our operating businesses

and are, therefore, not reported as part of our business segment

results.

N/M — Not Meaningful

(1)Allocated net interest is not separately disaggregated for Investment Banking

and Capital Markets. This presentation is aligned to our Investment Banking

and Capital Markets internal performance measurement.

(2)Allocated net interest represents an allocation to Asset Management of our

long-term debt interest expense, net of interest income on our Cash and cash

equivalents and other sources of liquidity. Allocated net interest has been

disaggregated to increase transparenc

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