What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-10-09 compared with 2026-07-09 · 213 added, 194 removed, 904 unchanged (31% of the section changed)

31 unchanged sentences

Effective tax rate 17.9 % 26.9 %

Six Months Ended

Nine Months Ended

$ in thousands 2026 2025 % Change

8 unchanged sentences

Effective tax rate 20.6 % 23.8 %

Post-Closing Adjustments to Previously Reported Results

Our results of operations for the three and nine months ended August 31, 2026, as reported in this Quarterly Report on Form 10-Q, differ from the results of operations previously presented in our Current Report on Form 8-K dated September 28, 2026.

The differences reflect post-closing adjustments related to the recognition of excess tax benefits associated with share-based awards, which increased our deferred tax asset and decreased our income tax expense.

The net impact of these adjustments was an increase in net earnings attributable to common shareholders of $23.3 million and $22.1 million for the three and nine months ended August 31, 2026, respectively, compared with the amounts previously disclosed.

These adjustments also increased total assets by $24.2 million, from $81.28 billion to $81.30 billion, and increased total shareholders’ equity by $24.2 million, from $10.69 billion to $10.71 billion.

Income tax expense decreased by $24.2 million for both the three and nine months ended August 31, 2026.

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.

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

Net earnings attributable to common shareholders were $283.9 million and $224.0 million for the three months ended August 31, 2026 and 2025, respectively.

Our effective tax rate was 17.9%, and 26.9% for the three months ended August 31, 2026 and 2025, respectively.

August 2026 Form 10-Q

Nine Months Ended August 31, 2026 Versus August 31, 2025

Net earnings attributable to common shareholders were $661.7 million and $439.9 million for the nine months ended August 31, 2026 and 2025, respectively.

Our effective tax rate was 20.6%, and 23.8% for the nine months ended August 31, 2026 and 2025, respectively.

The remainder of our “Consolidated Results of Operations” is presented on a detailed product and expense basis.

1 unchanged sentence

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.

May 2026 Form 10-Q

At August 31, 2026, we had 7,065 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 677 employees at August 31, 2026 and 1,797 employees at November 30, 2025 of our Stratos, Tessellis, HomeFed and M Science subsidiaries.

Revenues by Source

4 unchanged sentences

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.

Three Months Ended May 31,

Three Months Ended August 31,

$ in thousands Amount % of Net Revenues Amount % of Net Revenues % Change

2 unchanged sentences

Debt underwriting 177,072 8.0 249,525 12.2 (29.0)

Other investment banking 1,825 — (19,282) (1.2) N/M

Other investment banking 30,979 1.4 49,017 2.4 (36.8)

Total Investment Banking 1,331,423 60.0 1,135,325 55.5 17.3

10 unchanged sentences

Net revenues $ 2,221,934 100.0 % $ 2,047,432 100.0 % 8.5 %

Six Months Ended May 31,

Nine Months Ended August 31,

$ in thousands Amount % of Net Revenues Amount % of Net Revenues % Change

2 unchanged sentences

Debt underwriting 519,116 8.1 654,250 12.4 (20.7)

Other investment banking 4,163 0.2 (44,252) (1.4) N/M

Other investment banking 35,142 0.5 4,765 0.1 637.5

Total Investment Banking 3,555,536 55.1 2,602,324 49.3 36.6

10 unchanged sentences

Net revenues $ 6,445,515 100.0 % $ 5,274,898 100.0 % 22.2 %

N/M — Not Meaningful

(1) Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets.

9 unchanged sentences

• 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;

• our 45% share of net earnings from Berkadia, our commercial real estate joint venture, 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;

3 unchanged sentences

Three Months Ended

May 31, Six Months Ended

August 31, Nine Months Ended

2026 2025 2026 2025

4 unchanged sentences

Three Months Ended

May 31, Six Months Ended

August 31, Nine Months Ended

$ in billions 2026 2025 2026 2025

2 unchanged sentences

Public and private debt financings 137.8 154.2 343.8 401.7

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

Investment banking net revenues were $1.21 billion, up 57.5% compared to $766.3 million for the prior year quarter.

Advisory had its best quarter ever, with net revenues of $674.1 million, up 47.2% compared to $457.9 million for the prior year quarter, driven by market share gains and increased industry volumes.

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

Investment banking net revenues were $1.33 billion, up 17.3% compared to $1.14 billion for the prior year quarter.

Advisory had its best quarter on record, with net revenues of $817.8 million, up 24.7% compared to $655.6 million for the prior year quarter, driven by market share gains across multiple sectors.

Total underwriting net revenues were $482.6 million, up 12.0% from $430.7 million for the prior year quarter, primarily driven by market share gains and increased activity in Equity underwriting across most sectors.

Debt underwriting remained solid, but decreased compared to the prior year quarter primarily due to lower deal values and lower origination of asset-backed securities.

Other investment banking net revenues were $1.8 million, compared to net revenues of $(19.3) million for the prior year quarter, with higher mark-to-market net gains on certain investment positions for the current quarter.

Performance from our Jefferies Finance joint venture improved, while performance from our Berkadia joint venture declined from the prior year quarter.

Debt underwriting decreased compared to the prior year quarter, primarily due to lower deal values.

Other investment banking net revenues were $31.0 million, compared to net revenues of $49.0 million for the prior year quarter, with lower mark-to-market net gains on certain investment positions for the current quarter.

Performance from our Jefferies Finance joint venture improved, while performance from our Berkadia joint venture remained flat from the prior year quarter.

Our investment banking backlog remains strong, although the extent and timing of its realization is always subject to change.

1 unchanged sentence

Transactions not included in the estimate may occur, and expected transactions may be modified or cancelled.

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

Nine Months Ended August 31, 2026 Versus August 31, 2025

Investment banking net revenues were $3.56 billion, up 36.6% compared to $2.60 billion for the prior year period.

Advisory net revenues were a record $1.20 billion and increased 40.4% compared to $855.6 million for the prior year period, driven by market share gains and increased overall market opportunity.

Total underwriting net revenues were $1.02 billion, up 55.4% compared to $655.6 million for the prior year period, primarily driven by market share gains and increased activity in Equity underwriting across a range of sectors and in a stronger issuance market.

Debt underwriting remained solid but decreased compared to the prior year quarter primarily due to lower deal values.

Other investment banking net revenues were $4.2 million, compared to net revenues of $(44.3) million for the prior year period and include mark-to-market net gains on certain investment positions for the current quarter.

Performance from our Jefferies Finance joint venture improved, while performance from our Berkadia joint venture declined from the prior year period.

Advisory net revenues were a record $2.02 billion and increased 33.6% compared to $1.51 billion for the prior year period, driven by market share gains and increased overall market opportunity.

Total underwriting net revenues were $1.50 billion, up 38.2% compared to $1.09 billion for the prior year period, primarily driven by market share gains and increased activity in Equity underwriting across most sectors.

Debt underwriting decreased compared to the prior year period, primarily due to lower origination activity in our securitized products business.

Other investment banking net revenues were $35.1 million, compared to net revenues of $4.8 million for the prior year period, largely due to improved performance from our Jefferies Finance joint venture.

Equities Net Revenues

5 unchanged sentences

• wealth management services.

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

Equities net revenues were $600.8 million, up 14.2% from $526.2 million for the prior year quarter, marking our strongest quarter on record, due to market share gains and higher global trading volumes driving stronger results across most of our businesses, particularly within cash and electronic trading.

Additionally, prime services continues to expand.

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

Equities net revenues were a record $1.16 billion, up 23.9% compared to $935.3 million for the prior year period, marking our strongest six months on record, due to market share gains and higher trading volumes driving stronger results across most of our businesses, particularly within cash and global electronic trading.

Additionally, prime services continues to expand.

Our equity options, convertibles, and corporate derivatives businesses also produced strong results.

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

Equities net revenues were $626.2 million, up 28.7% from $486.7 million for the prior year quarter, marking our strongest quarter on record, driven by market share gains and higher global trading volumes, with stronger results across most of our businesses, particularly within cash and global electronic trading, equity options and corporate derivatives.

Additionally, our prime services business continues to expand.

Nine Months Ended August 31, 2026 Versus August 31, 2025

Equities net revenues were a record $1.79 billion, up 25.6% compared to $1.42 billion for the prior year period, marking our strongest nine months on record, driven by market share gains and higher trading volumes, with stronger results across most of our businesses, particularly within cash and global electronic trading, equity options, convertibles, and corporate derivatives.

Additionally, our prime services business continues to expand.

Fixed Income Net Revenues

3 unchanged sentences

• financing and other structuring services.

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

F ixed income net revenues were $198.5 million, up 11.6% compared to $177.9 million for the prior year quarter.

While both current and prior year quarters were impacted by major U.S.

policy and geopolitical events, the markets were modestly more supportive in the current quarter, which supported improved results in our distressed, municipal securities and emerging markets businesses.

May 2026 Form 10-Q

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

Fixed income net revenues were $418.8 million, down 10.3% compared to $467.1 million for the prior year period, as credit markets remained challenging in the current year for the products and services where we are most active, impacting the overall trading environment and several of our businesses.

Strong performance in our municipal securities, distressed and emerging markets businesses was more than offset by lower results from our securitized products business, which includes a gross mark-to-market loss of $58.7 million associated with Market Financial Solutions during the current period.

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

F ixed income net revenues were $176.0 million, down 25.6% compared to $236.7 million for the prior year quarter.

Although both current and prior year quarters were impacted by significant U.S.

policy and geopolitical events, market conditions were less favorable in the current quarter, which impacted results across several businesses.

August 2026 Form 10-Q

Nine Months Ended August 31, 2026 Versus August 31, 2025

Fixed income net revenues were $594.8 million, down 15.5% compared to $703.8 million for the prior year period, as credit markets remained challenging in the current year for the products and services where we are most active.

Strong performance in our municipal securities, distressed and emerging markets businesses was more than offset by lower results from several other businesses, including our securitized products business, which includes a gross mark-to-market loss of $64.7 million associated with Market Financial Solutions during the nine months ended August 31, 2026.

Asset Management

5 unchanged sentences

• Placement and distribution fees for raising capital from investors;

• Revenue from strategic affiliated asset managers where we are entitled to portions of their operating revenues and income based on our ownership interests in the affiliates.

• Revenue from strategic affiliated asset managers where we are entitled to portions of their operating revenues and income based on our interests in the affiliates.

Fees and revenues are generally tied to the value of assets under management and the performance of those assets.

11 unchanged sentences

Total Asset Management $ 85,635 $ 176,882 (51.6) %

Six Months Ended

Nine Months Ended

$ in thousands 2026 2025 % Change

7 unchanged sentences

(1) Amounts include our share of fees received by affiliated asset management companies with which we have revenue and profit share arrangements, as well as earnings on our ownership interest in affiliated asset managers.

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

Asset management fees and revenues were $15.2 million, down 27.0% compared to $20.8 million for the prior year quarter, reflecting lower management fees on funds and accounts managed by us, primarily Point Bonita, as well as funds and accounts managed by our strategic affiliates.

Investment return was $31.0 million, down 38.4% compared to $50.4 million for the prior year quarter, as strong performance from strategies with a long equity bias was offset by lower performance across other fund strategies and the impact of reduced capital allocated to certain funds based on our strategy to reduce capital committed and reposition the business in recognition of our upcoming acquisition of Hildene Holdings.

Other investments net revenues were $164.4 million, up 60.3% compared to $102.6 million in the prior year quarter, primarily due to improved results from HomeFed and mark-to-market gains on certain investments.

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

Asset management fees and revenues were $85.1 million, down 22.2% compared to $109.4 million for the prior year period, as higher performance fees from funds and accounts managed by our strategic affiliates were offset by lower performance fees largely in respect of Point Bonita.

Investment return was $120.0 million, up 168.1% compared to $44.8 million for the prior year period, due to improved performance across several fund strategies, particularly those with a long-equity bias.

Other investments net revenues were $248.0 million, up 8.5% compared to $228.5 million for the prior year period, primarily due to improved results from HomeFed and mark-to-market gains on certain investments.

Jefferies Financial Group Inc.

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

Asset management fees and revenues were $13.3 million, down 16.5% compared to $15.9 million for the prior year quarter, as higher management fees on funds and accounts managed by our strategic affiliates were offset by lower management fees on funds and accounts managed by us largely due to Point Bonita.

Investment return was $20.9 million compared to $68.0 million for the prior year quarter, due to lower performance across several fund strategies and the impact of reduced capital allocated to certain funds based on our strategy to reduce capital committed and reposition the business in recognition of our upcoming acquisition of Hildene Holdings.

Other investments net revenues were $72.8 million, down 34.7% compared to $111.5 million in the prior year quarter, primarily due to lower results from Tessellis and HomeFed.

Nine Months Ended August 31, 2026 Versus August 31, 2025

Asset management fees and revenues were $98.4 million, down 21.5% compared to $125.3 million for the prior year period, as higher performance fees from funds and accounts managed by our strategic affiliates were offset by lower performance fees largely associated with Point Bonita.

Investment return was $141.0 million, up 25.0% compared to $112.8 million for the prior year period, primarily driven by improved performance across several fund strategies, particularly those with a long-equity bias, partially offset by a decline in performance across several other funds, including Point Bonita.

Other investments net revenues were $320.9 million, down 5.6% compared to $340.0 million for the prior year period, as improved results from HomeFed and mark-to-market gains on certain investments were offset by lower results from Tessellis.

Assets Under Management

4 unchanged sentences

• unfunded capital commitments to a fund;

Jefferies Financial Group Inc.

• the fair value of any invested capital in our consolidated funds or separately managed accounts.

1 unchanged sentence

Assets under management:

$ in millions May 31,

$ in millions August 31,

2026 November 30,

17 unchanged sentences

Our definition of AUM may differ from that referenced in any of our investment management agreements, differs from the manner in which “Regulatory Assets Under Management” is reported to the SEC on Form ADV, and includes assets for which we do not act as an asset manager.

In addition to our investments directly in Jefferies’ and our strategic affiliates funds and separately managed accounts, we have capital invested in other equity method investees as part of our asset management business of $180.0 million and $174.0 million at May 31, 2026 and November 30, 2025, respectively.

In addition to our investments directly in Jefferies’ and our strategic affiliates funds and separately managed accounts, we have capital invested in other equity method investees as part of our asset management business of $190.0 million and $174.0 million at August 31, 2026 and November 30, 2025, respectively.

Other revenues include foreign currency transaction gains or losses, debt valuation adjustments on derivative contracts, gains and losses on investments held in deferred compensation plans or certain other corporate income items that are not attributed to business segments as management does not consider such amounts in assessing the financial performance of our operating businesses.

13 unchanged sentences

Total non-interest expenses $ 1,870,896 $ 1,715,617 9.1 %

Six Months Ended

Nine Months Ended

$ in thousands 2026 2025 % Change

11 unchanged sentences

Total Non-interest Expenses

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

Non-interest expenses were $1.89 billion, an increase of 26.1%, compared to $1.50 billion for the prior year quarter, primarily due to an increase in compensation and benefits expenses attributable to higher net revenues and higher brokerage and clearing fees on increased equities trading volumes.

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

Non-interest expenses were $3.70 billion, an increase of 25.6%, compared to $2.94 billion for the prior year period, primarily due to an increase in compensation and benefits expenses attributable to higher net revenues and higher brokerage and clearing fees on increased equities trading volumes.

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

Non-interest expenses were $1.87 billion, an increase of 9.1%, compared to $1.72 billion for the prior year quarter, primarily due to an increase in compensation and benefits expenses attributable to higher net revenues, higher brokerage and clearing fees on increased equities trading volumes and higher technology and communication expenses related to continued development of various trading and management systems as well as higher data related costs.

Nine Months Ended August 31, 2026 Versus August 31, 2025

Non-interest expenses were $5.57 billion, an increase of 19.5%, compared to $4.66 billion for the prior year period, primarily due to an increase in compensation and benefits expenses attributable to higher net revenues, higher brokerage and clearing fees on increased equities trading volumes and higher technology and communication expenses related to continued development of various trading and management systems as well as higher data related costs.

Compensation and Benefits

Compensation and benefits expense consists of salaries, benefits, commissions, annual cash compensation and share-based awards and the amortization of share-based and cash compensation awards to employees.

May 2026 Form 10-Q

August 2026 Form 10-Q

Cash and share-based awards granted to employees may contain provisions such that employees who terminate their employment or are terminated without cause may continue to vest in their awards, so long as those awards are not forfeited as a result of other forfeiture provisions (primarily non-compete clauses) of those awards.

2 unchanged sentences

In addition, certain awards to our Chief Executive Officer and our President contain performance conditions and the awards are amortized over their service periods.

Compensation and benefits expense for the current quarter and current year was $1.19 billion and $2.27 billion, respectively, compared to $854.8 million and $1.70 billion for the prior year quarter and prior year period, respectively.

Compensation and benefits expense for the current quarter and current year was $1.19 billion and $3.47 billion, respectively, compared to $1.08 billion and $2.78 billion for the prior year quarter and prior year period, respectively.

A significant portion of our compensation expense is highly variable with net revenues.

1 unchanged sentence

Compensation expense related to the amortization of share- and cash-based awards amounted to $154.4 million and $485.5 million for the current quarter and current year, respectively, compared to $140.3 million and $440.7 million for the prior year quarter and prior year period, respectively.

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.

Included within our global headcount are 677 employees at August 31, 2026 and 1,797 employees at November 30, 2025 of our Stratos, Tessellis, HomeFed, and M Science subsidiaries.

Non-interest Expenses (Excluding Compensation and Benefits)

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

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

Non-compensation expenses as a percentage of Net revenues was 30.5% compared to 30.9% for the current quarter and prior year quarter, respectively, and was impacted by the following:

1 unchanged sentence

• Technology and communication expenses were higher by $16.1 million related to the continued development of various trading and management systems as well as higher data related costs.

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

Nine Months Ended August 31, 2026 Versus August 31, 2025

Non-compensation expenses as a percentage of Net revenues was 32.6% compared to 35.6% for the current year and prior year period, respectively, and was impacted by the following:

2 unchanged sentences

• Other expenses were higher by $29.7 million compared to the prior year period, primarily due to the write-down of goodwill associated with the expected sale of Tessellis.

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

The provision for income taxes on continuing operations was $65.6 million and $43.5 million for the three months ended May 31, 2026 and 2025, respectively, representing an effective tax rate of 20.8%, and 32.3%, respectively.

The lower rate was primarily a result of investment tax credits and lower state and local taxes.

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

The provision for income taxes on continuing operations was $118.4 million and $57.7 million for the six months ended May 31, 2026 and 2025, respectively, representing an effective tax rate of 22.4%, and 20.2%, respectively.

The lower rate last year was primarily a result of the partial resolution of certain state and local tax matters in the prior year period.

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

The provision for income taxes on continuing operations was $62.8 million and $89.3 million for the three months ended August 31, 2026 and 2025, respectively, representing an effective tax rate of 17.9%, and 26.9%, respectively.

The lower rate was primarily driven by the recognition of excess tax benefits associated with share-based awards, investment tax credits and lower state and local taxes.

Nine Months Ended August 31, 2026 Versus August 31, 2025

The provision for income taxes on continuing operations was $181.2 million and $147.0 million for the nine months ended August 31, 2026 and 2025, respectively, representing an effective tax rate of 20.6%, and 23.8%, respectively.

The lower rate was primarily driven by the recognition of excess tax benefits associated with share-based awards, investment tax credits and lower state and local taxes.

Accounting Developments

47 unchanged sentences

We consider a variety of

May 2026 Form 10-Q

August 2026 Form 10-Q

factors including economic conditions nationally and in an investment’s geographic area of operation, adverse changes in the industry in which an investment operates, declines in business prospects, deterioration in earnings, increasing costs of operations and other relevant factors specific to the investee.

2 unchanged sentences

To the extent an investment is deemed to be other-than-temporarily impaired, an impairment charge is recognized for the amount, if any, by which the investment’s book value exceeds our estimate of the investment’s fair value.

At May 31, 2026, goodwill of $1.73 billion (excluding goodwill classified as held for sale) represents 2.2% of total assets.

At August 31, 2026, goodwill of $1.73 billion (excluding goodwill classified as held for sale) represents 2.1% of total assets.

The nature and accounting for goodwill is discussed in Note 2, Summary of Significant Accounting Policies in our consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended November 30, 2025 and Note 12, Goodwill and Intangible Assets in our consolidated financial statements included in this Quarterly Report on Form 10-Q.

17 unchanged sentences

Carrying values of goodwill by reporting unit:

$ in millions May 31,

$ in millions August 31,

2026 November 30,

7 unchanged sentences

Our valuation methodologies and the assessment of qualitative factors are sensitive to management’s forecasts of future probability.

At May 31, 2026, our Stratos reporting unit with allocated goodwill of $5.5 million is highly sensitive to the forecast assumptions used in our market approach valuation.

At August 31, 2026, our Stratos reporting unit with allocated goodwill of $5.5 million is highly sensitive to the forecast assumptions used in our market approach valuation.

Reductions in trading volumes and/or a decline in performance from the expected levels assumed in our forecast could cause a decline in the estimated fair value of our Stratos reporting unit and a resulting impairment of a portion of our goodwill.

1 unchanged sentence

We have evaluated the goodwill allocated to Tessellis and, based on the estimated sales proceeds, recorded an impairment to goodwill of $58.2 million in the first quarter of 2026, which is recognized within Other expenses.

At May 31, 2026, the remaining goodwill allocated to our Tessellis reporting unit is $56.1 million.

At August 31, 2026, the remaining goodwill allocated to our Tessellis reporting unit is $55.9 million.

Refer to Note 4, Assets and Liabilities Held for Sale and Note 12, Goodwill and Intangible Assets in our consolidated financial statements included in this Quarterly Report on Form 10-Q for further details on goodwill.

9 unchanged sentences

During 2026, we announced the sale of our interest in Tessellis S.p.A., which we anticipate to close during the first quarter of 2027.

D uring the six months ended May 31, 2026, we repurchased a total 7.0 million of our common shares for $371.7 million, or an average price of $53.42 per share, comprised of 5.0 million of our common shares for $264.9 million in the open market under our share repurchase program, and 2.0 million of our common shares for $106.8 million in connection with net-share tax withholding under our equity compensation plan.

Subsequent to August 31, 2026, Stratos Group International, LLC (“Stratos”), a subsidiary of Jefferies, entered into a definitive agreement with AvaTrade Markets Ltd.

to sell substantially all of its assets and business operations.

The acquired assets are expected to be migrated over the next 120 days.

We maintain modest leverage to support our investment grade ratings.

11 unchanged sentences

A significant portion of our financial instruments are valued on a daily basis and we monitor and employ balance sheet limits for our various businesses.

$ in millions May 31,

$ in millions August 31,

2026 November 30,

13 unchanged sentences

Total securities loaned and securities sold under agreements to repurchase $ 16,943.7 $ 14,697.5 15.3 %

Total assets at May 31, 2026 and November 30, 2025 were $79.54 billion and $76.01 billion, respectively, an increase of 4.6%.

During the three and six months ended May 31, 2026, average total assets were higher by 9.2% and 8.7%, respectively, than total assets at May 31, 2026.

Our total Financial instruments owned inventory was $28.04 billion and $27.72 billion at May 31, 2026 and November 30, 2025, respectively.

During the six months ended May 31, 2026, our total Financial instruments owned increased primarily due to increased U.S.

government and agency securities and corporate equity securities, partially offset by a decrease in loans, derivative contracts and investments at fair value.

Financial instruments sold, not yet purchased inventory was $14.55 billion at May 31, 2026, an increase of 9.2% from $13.32 billion at November 30, 2025, with the increase primarily driven by increases in corporate equity securities, corporate debt securities and derivative contracts, partially offset by a decrease in U.S.

government and agency securities.

Our overall net inventory position was $13.49 billion and $14.40 billion at May 31, 2026 and November 30, 2025, respectively, with the decrease primarily due to decreases in corporate equity securities, derivative contracts, corporate debt securities, loans and investments at fair value, partially offset by increases in U.S.

government and agency securities.

Total assets at August 31, 2026 and November 30, 2025 were $81.30 billion and $76.01 billion, respectively, an increase of 7.0%.

During the three and nine months ended August 31, 2026, average total assets were higher by 11.8% and 8.3%, respectively, than total assets at August 31, 2026.

Our total Financial instruments owned inventory was $27.28 billion and $27.72 billion at August 31, 2026 and November 30, 2025, respectively.

During the nine months ended August 31, 2026, our total Financial instruments owned decreased primarily due to decreases in derivative contracts, loans at fair value, investments at fair value, sovereign obligations, corporate debt securities and U.S.

government and agency securities, partially offset by increases in corporate equity securities, mortgage and asset-backed securities and municipal securities.

Financial instruments sold, not yet purchased inventory was $15.10 billion at August 31, 2026, an increase of 13.3% from $13.32 billion at November 30, 2025, with the increase primarily driven by increases in corporate equity securities and sovereign obligations, partially offset by decreases in U.S.

government and agency securities, derivative contracts, loans sold at fair value, corporate debt securities and mortgage and asset-backed securities.

Our overall net inventory position was $12.19 billion and $14.40 billion at August 31, 2026 and November 30, 2025, respectively, with the decrease primarily due to decreases in corporate equity securities, derivative contracts, sovereign obligations, loans, investments at fair value and corporate debt securities, partially offset by increases in U.S.

government and agency securities, mortgage and asset-backed securities and municipal securities.

Level 3 assets:

$ in millions May 31,

2026 Percent November 30, 2025 Percent

$ in millions August 31,

2026 Percent November 30,

Investment Banking $ 128.6 14.4 % $ 111.7 15.1 %

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Total $ 891.4 100.0 % $ 737.8 100.0 %

(1) At May 31, 2026 and November 30, 2025, $214.9 million and $195.8 million, respectively, are attributed to Other investments within our Asset Management reportable segment.

(1) At August 31, 2026 and November 30, 2025, $168.5 million and $195.8 million, respectively, are attributed to Other investments within our Asset Management reportable segment.

August 2026 Form 10-Q

Securities financing assets and liabilities include financing for our financial instruments trading activity, matched book transactions and mortgage finance transactions.

Matched book transactions accommodate customers, as well as obtain securities for the settlement and financing of inventory positions.

May 2026 Form 10-Q

Our average month end balance of total reverse repos and stock borrows during the three and six months ended May 31, 2026 was 24.1% and 13.9% higher, respectively, than the balance at May 31, 2026.

Our average month end balance of total repos and stock loans during the three and six months ended May 31, 2026 was 32.7% and 34.6% higher, respectively, than the balance at May 31, 2026.

Our average month end balance of total reverse repos and stock borrows during the three and nine months ended August 31, 2026 was 18.4% and 15.9% higher, respectively, than the balance at August 31, 2026.

Our average month end balance of total repos and stock loans during the three and nine months ended August 31, 2026 was 21.1% and 16.7% higher, respectively, than the balance at August 31, 2026.

Select information related to repurchase agreements:

$ in millions Six Months Ended May 31, 2026 Year Ended

$ in millions Nine Months Ended

August 31, 2026 Year Ended

November 30, 2025

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Leverage Ratios:

$ in millions May 31,

$ in millions August 31,

2026 November 30,

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To ensure that we do not need to liquidate inventory in the event of a funding stress, we seek to maintain surplus cash capital.

Our total long-term capital of $25.31 billion at May 31, 2026 exceeded our cash capital requirements.

Our total long-term capital of $26.07 billion at August 31, 2026 exceeded our cash capital requirements.

Our businesses are diverse, and our liquidity needs are determined by many factors, including market movements, collateral requirements and client commitments, all of which can change dramatically in a difficult funding environment.

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MLO is based on a scenario that includes both a market-wide stress and firm-specific stress, characterized by some or all of the following elements:

• Global recession, default by a medium-sized sovereign, low consumer and corporate confidence, and general financial instability.

Jefferies Financial Group Inc.

• Global recession, default by a medium-sized sovereign, low consumer and corporate confidence, and general financial instability.

• Severely challenged market environment with material declines in equity markets and widening of credit spreads.

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Based on the sources and uses of liquidity calculated under the MLO scenarios, we determine, based on a calculated surplus or deficit, additional long-term funding that may be needed versus funding through the repurchase financing market and consider any adjustments that may be necessary to our inventory balances and cash holdings.

At May 31, 2026, we had sufficient excess liquidity to meet all contingent cash outflows detailed in the MLO for at least 30 days without balance sheet reduction.

At August 31, 2026, we had sufficient excess liquidity to meet all contingent cash outflows detailed in the MLO for at least 30 days without balance sheet reduction.

We regularly refine our model to reflect changes in market or economic conditions and our business mix.

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Financial instruments that are cash and cash equivalents or are deemed by management to be generally readily convertible into cash, marginable or accessible for liquidity purposes within a relatively short period of time:

$ in millions May 31,

$ in millions August 31,

2026 Average Balance

Quarter Ended May 31, 2026 (1)

November 30, 2025

Quarter Ended August 31, 2026 (1)

Cash and cash equivalents:

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(1) Average balances are calculated based on weekly balances.

(2) At May 31, 2026 and November 30, 2025, $9.56 billion and $10.12 billion, respectively, was invested in U.S.

August 2026 Form 10-Q

(2) At August 31, 2026 and November 30, 2025, $12.69 billion and $10.12 billion, respectively, was invested in U.S.

government money funds that invest primarily in cash, securities issued by the U.S.

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government-sponsored entities, and repurchase agreements that are fully collateralized by cash or government securities.

The remaining balances at May 31, 2026 and November 30, 2025 are primarily invested in AAA-rated prime money funds.

The remaining balances at August 31, 2026 and November 30, 2025 are primarily invested in AAA-rated prime money funds.

The average balance of U.S.

government money funds for the quarter ended May 31, 2026 was $6.46 billion.

May 2026 Form 10-Q

government money funds for the quarter ended August 31, 2026 was $9.45 billion.

(3) Consists of unencumbered high-quality sovereign government securities and reverse repurchase agreements collateralized by U.S.

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In addition to the cash balances and liquidity pool presented above, the majority of financial instruments (both long and short) in our trading accounts are actively traded and readily marketable.

At May 31, 2026, we had the ability to readily obtain repurchase financing for 76.7% of our inventory at haircuts of 10% or less, which reflects the liquidity of our inventory.

At August 31, 2026, we had the ability to readily obtain repurchase financing for 78.2% of our inventory at haircuts of 10% or less, which reflects the liquidity of our inventory.

In addition, as a matter of our policy, all of these assets have internal capital assessed, which is in addition to the funding haircuts provided in the securities finance markets.

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Financial instruments by asset class that we consider to be of a liquid nature and the amount of such assets that have not been pledged as collateral:

May 31, 2026 November 30, 2025

August 31, 2026 November 30, 2025

$ in millions Liquid Financial

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For those asset classes not eligible for central clearing house financing, we seek to execute our bi-lateral financings on an extended term basis and the tenor of our repurchase and reverse repurchase agreements generally exceeds the expected holding period of the assets we are financing.

The weighted average maturity of cash and noncash repurchase agreements for non-clearing corporation eligible funded inventory is approximately seven months at May 31, 2026.

The weighted average maturity of cash and noncash repurchase agreements for non-clearing corporation eligible funded inventory is approximately six months at August 31, 2026.

Our ability to finance our inventory via central clearinghouses and bi-lateral arrangements is augmented by our ability to draw bank loans on an uncommitted basis under our various banking arrangements.

At May 31, 2026, short-term borrowings, which must be repaid within one year or less include bank loans, overdrafts and borrowings under revolving credit facilities.

At August 31, 2026, short-term borrowings, which must be repaid within one year or less include bank loans, overdrafts and borrowings under revolving credit facilities.

Letters of credit are used in the normal course of business mostly to satisfy various collateral requirements in favor of exchanges in lieu of depositing cash or securities.

Average short-term borrowings outstanding were $1.75 billion and $1.78 billion for the three and six months ended May 31, 2026, respectively.

At May 31, 2026 and November 30, 2025, our borrowings under bank loans in Short-term borrowings were $454.5 million and $533.8 million, respectively.

Average short-term borrowings outstanding were $1.66 billion and $2.50 billion for the three and nine months ended August 31, 2026, respectively.

At August 31, 2026 and November 30, 2025, our borrowings under bank loans in Short-term borrowings were $316.1 million and $533.8 million, respectively.

Our borrowings include credit facilities that contain certain covenants that, among other things, require us to maintain a specified level of tangible net worth, require a minimum regulatory net capital requirement for our U.S.

broker-dealer, Jefferies LLC, and impose certain restrictions on the future indebtedness of certain of our subsidiaries that are borrowers.

Interest is based on rates at spreads over the federal funds rate or other adjusted rates, as defined in the various credit agreements, or at a rate as agreed between the bank and us in reference to the bank’s cost of funding.

At May 31, 2026, we were in compliance with all covenants under these credit facilities.

broker-dealer, Jefferies LLC, and impose certain restrictions on

Jefferies Financial Group Inc.

the future indebtedness of certain of our subsidiaries that are borrowers.

At August 31, 2026, we were in compliance with all covenants under these credit facilities.

In addition to the above financing arrangements, we issue notes backed by eligible collateral under master repurchase agreements, which provide an additional financing source for our inventory (our “repurchase agreement financing program”).

The notes issued under the program are presented within Other secured financings.

At May 31, 2026, the outstanding notes totaled $2.28 billion, bear interest primarily at a spread over the Secured Overnight Funding Rate (“SOFR”) and mature from June 2026 to October 2028.

At August 31, 2026, the outstanding notes totaled $2.29 billion, bear interest primarily at a spread over the Secured Overnight Funding Rate (“SOFR”) and mature from September 2026 to October 2028.

Total Long-Term Capital

At May 31, 2026 and November 30, 2025, we had total long-term capital of $25.31 billion and $23.14 billion, respectively, resulting in a long-term debt to equity capital ratio of 1.390:1 and 1.17:1, respectively.

$ in thousands May 31,

At August 31, 2026 and November 30, 2025, we had total long-term capital of $26.07 billion and $23.14 billion, respectively, resulting in a long-term debt to equity capital ratio of 1.17:1 and 1.17:1, respectively.

$ in thousands August 31,

2026 November 30,

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Total Long-Term Capital $ 26,071,480 $ 23,137,451

(1) Amounts at May 31, 2026 and November 30, 2025 exclude our secured long-term debt, $741.3 million and $869.5 million, respectively, of our Callable Notes as the notes matured on January 15, 2027 and April 16, 2026, respectively , and $45.5 million and $45.2 million, respectively, of our Floating Senior Notes as the notes matured on June 19, 2026.

The amounts at May 31, 2026 and November 30, 2025 also exclude $97.8 million and $102.7 million, respectively, of structured notes as the notes mature within one year.

(1) Amounts at August 31, 2026 and November 30, 2025 exclude our secured long-term debt.

Amounts at August 31, 2026 exclude $744.1 million and $352.6 million of our Senior Notes as the notes mature January 2027 and June 2027, respectively.

Amounts at November 30, 2025 exclude $869.5 million of our Callable Notes as the notes matured April 2026 and $45.2 million of our Floating Senior Notes as the note matured on June 2026.

The amounts at August 31, 2026 and November 30, 2025 also exclude $138.6 million and $102.7 million, respectively, of structured notes as the notes mature within one year.

Long-Term Debt

During the six months ended May 31, 2026, long-term debt increased by $2.15 billion to $18.04 billion at May 31, 2026, as presented in our Consolidated Statements of Financial Condition.

This increase is primarily due to proceeds of $2.81 billion from the issuances of unsecured senior notes, $350.0 million from a drawdown of a revolver, $89.8 million from net issuances of structured notes, $30.1 million from increased subsidiaries’ borrowings, $26.4 million from valuation adjustments and $29.0 million from currency losses on foreign currency borrowings.

These increases were partially offset by repayments of $1.12 billion on our unsecured senior notes and the reclassification of $51.9 million of Tessellis’ borrowings to liabilities held for sale (refer to Note 4, Assets and Liabilities Held for Sale for further information).

At May 31, 2026, our unsecured long-term debt has a weighted average maturity of approximately 7.5 years.

At May 31, 2026 and November 30, 2025, our borrowings under several credit facilities classified within Long-term debt in our Consolidated Statements of Financial Condition amounted to $1.05 billion and $803.2 million, respectively.

During the nine months ended August 31, 2026, long-term debt increased by $2.56 billion to $18.46 billion at August 31, 2026, as presented in our Consolidated Statements of Financial Condition.

This increase is primarily due to proceeds of $4.53 billion from the issuances of unsecured senior notes, $169.2 million from net issuances of structured notes, $32.6 million from valuation adjustments and $18.4 million from currency losses on foreign currency borrowings.

These increases were partially offset by repayments of $1.55 billion on our unsecured senior notes, paydowns of $566.2 million in subsidiary debt and the reclassification of $51.9 million of Tessellis’ borrowings to liabilities held for sale (refer to Note 4, Assets and Liabilities Held for Sale for further information).

At August 31, 2026, our unsecured long-term debt has a weighted average maturity of approximately 7.5 years.

At August 31, 2026 and November 30, 2025, our borrowings under several credit facilities classified within Long-term debt in our Consolidated Statements of Financial Condition amounted to $670.2 million and $803.2 million, respectively.

Interest on these credit facilities is based on an adjusted SOFR plus a spread or other adjusted rates, as defined in the various credit agreements.

The credit facility agreements contain certain covenants that, among other things, require us to maintain specified levels of tangible net worth and liquidity amounts, certain credit and rating levels and impose certain restrictions on future indebtedness of and require specified levels of regulated capital and cash reserves for certain of our subsidiaries.

At May 31, 2026 , we were in compliance with all covenants under theses credit facilities.

and require specified levels of regulated capital and cash reserves for certain of our subsidiaries.

At August 31, 2026 , we were in compliance with all covenants under these credit facilities.

Long-term debt ratings:

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While certain aspects of a credit rating downgrade are quantifiable pursuant to contractual provisions, the impact on our business and trading results in future periods is inherently uncertain and depends on a number of factors, including the magnitude of the downgrade, the behavior of individual clients and future mitigating action taken by us.

On July 7, 2026, we priced €850.0 million aggregate principal amount of 4.500% Senior Unsecured Notes due 2033.

The offering is expected to close several business days after the pricing date, subject to customary closing conditions.

Equity Capital

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On April 27, 2023, we entered into an Exchange Agreement with Sumitomo Mitsui Banking Corporation’s (“SMBC”), which entitles SMBC to exchange shares of our voting common stock for shares of the Series B Preferred Stock at a rate of 500 shares of voting common stock for one share of Series B Preferred Stock and SMBC is required to pay $1.50 per share of voting common stock so exchanged.

As of November 30, 2025, SMBC had exchanged approximately 27.6 million shares of voting common stock for 55,125 shares of Series B Preferred Stock.

On September 19, 2025, our Board of Directors established Series B-1 Non-Voting Convertible Preferred Shares with a par value of $1.00 per share (“Series B-1 Preferred Stock”) and designated 17,500 shares as Series B-1 Preferred Stock with a liquidation preference of $500 per share.

May 2026 Form 10-Q

voting common stock for shares of the Series B-1 Preferred Stock at a rate of 500 shares of voting common stock for one share of Series B-1 Preferred Stock.

During 2024, we issued 55,125 shares of Series B Preferred Stock to SMBC in exchange for approximately 27.6 million shares of voting common stock.

These preferred shares were subsequently converted by SMBC into 27.6 million shares of non-voting common stock on June 30, 2026.

As of August 31, 2026 , there is no outstanding Series B Preferred Stock.

August 2026 Form 10-Q

preference of $500 per share.

Additionally, on September 19, 2025, we entered into an amended and restated Exchange Agreement (the “Amended and Restated Exchange Agreement”) with SMBC, which entitles SMBC to exchange shares of our voting common stock for shares of the Series B-1 Preferred Stock at a rate of 500 shares of voting common stock for one share of Series B-1 Preferred Stock.

The Amended and Restated Exchange Agreement is limited to 17,500 shares of Series B-1 Preferred Stock.

Under the Amended and Restated Exchange Agreement, SMBC is permitted to increase its economic ownership in the Company to up to 20% on an as-converted and fully diluted basis, while continuing to own less than 5% of a voting interest in the Company.

As of May 31, 2026, there are no outstanding Series B-1 Preferred Stock.

As of August 31, 2026, there is no outstanding Series B-1 Preferred Stock.

Common Shares

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Voting Common Shares

On March 26, 2026, shareholders approved an Amended and Restated Certificate of Incorporation, which decreased authorized voting common shares to 552,264,500 from 565,000,000.

At May 31, 2026 and November 30, 2025, we had 194,145,489 and 206,296,167 voting common shares outstanding, respectively.

At May 31, 2026, we had 16,746,087 share-based awards that do not require the holder to pay any exercise price and 5,064,740 stock options that require the holder to pay an exercise price of $22.69 per share.

During the six months ended May 31, 2026, we repurchased a total 7.0 million of our common shares for $371.7 million, or an average price of $53.42 per share, including 5.0 million of our common shares for $264.9 million in the open market under our share repurchase program, and 2.0 million of our common shares for $106.8 million in connection with net-share tax withholding under our equity compensation plan.

In June 2026, the Board of Directors has authorized the repurchase of common stock up to $250.0 million under a share repurchase program.

On March 26, 2026, shareholders approved an Amended and Restated Certificate of Incorporation, which decreased authorized voting common shares to 552.3 million from 565.0 million.

At August 31, 2026 and November 30, 2025, we had 189.1 million and 206.3 million voting common shares outstanding, respectively.

At August 31, 2026, we had 16.2 million share-based awards that do not require the holder to pay any exercise price and 5.1 million stock options that require the holder to pay an exercise price of $22.69 per share.

During the nine months ended August 31, 2026, we repurchased a total of 8.3 million of our common shares for $441.2 million, or an average price of $53.25 per share, including 6.3 million of our common shares for $333.0 million in the open market under our share repurchase program, and 2.0 million of our common shares for $108.2 million in connection with net-share tax withholding under our equity compensation plan.

In September 2026, the Board of Directors has authorized the repurchase of common stock up to $250.0 million under a share repurchase program for future repurchases.

Non-Voting Common Shares

On March 26, 2026, shareholders approved an Amended and Restated Certificate of Incorporation, which increased authorized non-voting common shares to 47,735,500 from 35,000,000.

On April 27, 2026, SMBC exchanged 9,247,081 voting common shares for non-voting common shares on a 1:1 basis.

At May 31, 2026, we had 9,247,081 non-voting common shares outstanding.

At May 31, 2026, SMBC owns approximately 18.7% of our common stock and 17.2% on a fully-diluted basis.

On June 30, 2026, SMBC converted 55,125 preferred shares into 27,562,500 non-voting common shares in accordance with the Exchange Agreement.

On March 26, 2026, shareholders approved an Amended and Restated Certificate of Incorporation, which increased authorized non-voting common shares to 47.7 million from 35.0 million.

On April 27, 2026, SMBC exchanged 9.2 million voting common shares for non-voting common shares on a 1:1 basis.

On June 30, 2026, SMBC converted 55,125 preferred shares into 27.6 million non-voting common shares in accordance with the Exchange Agreement.

On July 10, 2026, SMBC also exchanged 3.8 million shares of Jefferies’ voting common shares for non-voting common shares on a 1:1 basis.

At August 31, 2026, we had 40.6 million non-voting common shares outstanding.

At August 31, 2026, SMBC owns 19.6% of our combined voting and non-voting common stock on a fully-diluted basis.

We paid the following dividends to our voting and non-voting common stockholders and to our Series B Preferred stockholders:

Six Months Ended May 31, 2026

Nine Months Ended August 31, 2026

Declaration Date Record Date Payment Date Per Common Share Amount

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March 25, 2026 May 18, 2026 May 29, 2026 $0.40

On June 24, 2026, the Board of Directors declared a dividend of $0.40 per common share to be paid on August 28, 2026 to common shareholders of record at August 18, 2026.

During both three and six months ended May 31, 2026 and 2025, we paid cash dividends with respect to the Series B Preferred stock of $11.0 million and $22.1 million, respectively.

June 24, 2026 August 18, 2026 August 28, 2026 $0.40

On September 28, 2026, the Board of Directors declared a dividend of $0.40 per common share to be paid on November 25, 2026 to common shareholders of record at November 16, 2026.

No cash dividends were paid on the Series B Preferred Stock during the three months ended August 31, 2026, as all outstanding shares were converted into non-voting common stock before the dividend record date.

During the nine months ended August 31, 2026, we paid cash dividends of $22.1 million.

During the three and nine months ended August 31, 2025, we paid cash dividends related to the Series B Preferred stock of $11.0 million and $33.1 million, respectively.

The payment of dividends is subject to the discretion of our Board of Directors and depends upon general business conditions and other factors that our Board of Directors may deem to be relevant.

Jefferies LLC is a broker-dealer registered with the SEC and a member firm of the Financial Industry Regulatory Authority (“FINRA”) and is subject to the SEC Uniform Net Capital Rule (“Rule 15c3-1”), which requires the maintenance of minimum net capital, and has elected to calculate minimum capital requirements using the alternative method permitted by Rule 15c3-1 in calculating net capital.

Jefferies LLC, as a dually-registered U.S.

broker-dealer and futures commission merchant (“FCM”), is also subject to Regulation 1.17 of the Commodity Futures Trading Commission (“CFTC”) under the Commodity Exchange Act, which sets forth minimum financial requirements.

Jefferies LLC is also an Introducing Broker subject to Regulation 1.17 of the Commodity Futures Trading Commission (“CFTC”) under the Commodity Exchange Act, which sets forth minimum financial requirements.

In June 2026, Jefferies LLC changed its registration status with the CFTC and the NFA from a futures commission merchant to an Introducing Broker.

The minimum net capital requirement in determining excess net capital for a dually registered U.S.

broker-dealer and FCM is equal to the greater of the requirement under SEA Rule 15c3-1 or CFTC Regulation 1.17.

broker-dealer and CFTC Introducing Broker is equal to the greater of the requirement under SEA Rule 15c3-1 or CFTC Regulation 1.17.

FINRA is the designated examining authority for Jefferies LLC and the National Futures Association (“NFA”) is the designated self-regulatory organization (“DSRO”) for Jefferies LLC as an FCM.

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The SEC is the designated examining authority for JFSI in its capacity as an SBS Dealer and OTCDD, while the NFA is the DSRO for JFSI, as a CFTC registered swap dealer.

Jefferies Financial Group Inc.

Certain non-U.S.

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and Jefferies GmbH, which is subject to the regulatory supervision of the German Federal Financial Supervisory Authority.

Jefferies Financial Group Inc.

At May 31, 2026, net capital and excess net capital were as follows:

At August 31, 2026, net capital and excess net capital were as follows:

$ in thousands Net

Capital Excess Net Capital

Capital Excess Net

Jefferies LLC $ 3,713,973 $ 3,485,328

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(1) Represents an equivalent capital requirement in the respective jurisdiction.

At May 31, 2026, Jefferies LLC, JFSI, JIL and Jefferies GmbH are in compliance with their applicable requirements.

At August 31, 2026, Jefferies LLC, JFSI, JIL and Jefferies GmbH are in compliance with their applicable requirements.

The regulatory capital requirements referred to above may restrict our ability to withdraw capital from our regulated subsidiaries.

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As a registered broker dealer that clears and carries customer accounts, Jefferies LLC is subject to the customer protection provisions under SEC Rule 15c3-3 and is required to compute reserve formula requirement for customer accounts and deposit cash or qualified securities into a special reserve bank account for the exclusive benefit of customers.

At May 31, 2026, Jefferies LLC had $219.1 million in cash and qualified U.S.

At August 31, 2026, Jefferies LLC had $225.5 million in cash and qualified U.S.

Government securities on deposit in special reserve bank accounts for the exclusive benefit of customers.

As a registered broker dealer that clears and carries proprietary accounts of brokers or dealers (commonly referred to as “PAB”), Jefferies LLC is also required to compute a reserve requirement for PABs pursuant to SEC Rule 15c3-3.

At May 31, 2026, Jefferies LLC had $264.9 million in cash and qualified U.S.

At August 31, 2026, Jefferies LLC had $528.2 million in cash and qualified U.S.

Government securities in special reserve bank accounts for the exclusive benefit of PABs.

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We continue to closely monitor the status of global sanctions and restrictions, trading conditions related to Russian securities and the credit risk and nature of our counterparties.

Global markets continue to experience disruption and volatility following the geopolitical instability from the ongoing conflicts along Israel’s border with the Gaza Strip and elsewhere in the Middle East, including the recent military conflict among the U.S., Israel, and Iran.

Our investments and assets in our growing business in the Persian Gulf, Saudi Arabia and Israel, as well as the related global macroeconomic climate, could be negatively affected by consequences from the geopolitical instability, including disruptions in the Strait of Hormuz and military conflict

throughout the region.

Global markets continue to experience disruption and volatility following the geopolitical instability from the ongoing conflicts along Israel’s border with the Gaza Strip and elsewhere in the Middle East, including the ongoing military conflict among the U.S., Israel, and Iran.

We continue to monitor these and other geopolitical conflicts and assess their potential impact on our business.

Throughout 2025, the United States introduced actions through various means to increase import tariffs at various rates, including on certain products imported from almost all countries.

Since 2025, the United States has introduced actions through various means to increase import tariffs at various rates, including on certain products imported from almost all countries.

Other countries have responded with retaliatory actions or plans for retaliatory actions.

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That process will take months to years to complete and, given the fraud, the recovery is highly uncertain.

Our investment as it relates to exposure to First Brands as of this quarter has been valued at zero.

Our investment as it relates to exposure to First Brands is valued at zero.

Point Bonita Capital's portfolio also included accounts receivable purchased from Royalline Trading Pte Ltd (subsequently

August 2026 Form 10-Q

renamed Radiant Corporation World Pte.

Ltd) ("Radiant") and Sapphire Minmetals Corporation Ltd ("Sapphire"), and due from third-party commodity traders including Glencore, Vitol and Gunvor.

Receivables purchased from these entities had been paid in full since 2021.

However, starting in January 2026, purchased receivables began to enter into default.

Point Bonita Capital has subsequently obtained substantial prima facie evidence that Radiant and Sapphire were engaged in a sophisticated and systematic fraud involving extensive falsification of documents.

LAM Trade Finance Group II, an entity within the Point Bonita Capital fund, has now commenced proceedings against Radiant, Sapphire and their respective principals in the English High Court for deceit, conspiracy, breach of contract and restitution and has obtained a worldwide freezing order to prevent dissipation of assets by the defendants.

Separately, Apex Credit Partners LLC (“Apex”), a wholly owned subsidiary of Jefferies Finance, 50%-owned by us, manages on behalf of third-party institutional and other investors certain CLOs that invest in broadly syndicated loans with approximately $4.1 billion in assets under management.

12 CLOs managed by Apex own approximately $52 million in the aggregate of First Brands’ term loans (including PIK interest) and $10 million of First Brands’ debtor-in-possession term loans, which is approximately 1% of the CLO assets managed by Apex.

Additionally, approximately, $1 million of First Brands’ term loans (including PIK interest) and $0.2 million of debt-in-possession term loans

May 2026 Form 10-Q

were transferred from an Apex-managed CLO warehouse to Apex in anticipation of a CLO closing in January 2026.

12 CLOs managed by Apex own approximately $52 million in the aggregate of First Brands’ term loans (including PIK interest), which is approximately 1% of the CLO assets managed by Apex.

Additionally, approximately, $1 million of First Brands’ term loans (including PIK interest) and $0.2 million of debt-in-possession term loans were transferred from an Apex-managed CLO warehouse to Apex in anticipation of a CLO closing in January 2026.

Apex beneficially owns a portion of the equity tranche and other senior tranches in an amount to comply with applicable securitization risk-retention rules and in certain instances such additional amounts which are not material.

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For a discussion of our governance and risk management structure and our risk management framework, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended November 30, 2025 .

Jefferies Financial Group Inc.

Risk Considerations

5 unchanged sentences

In addition, commodity price risk results from exposure to the changes in prices and volatilities of individual commodities, commodity baskets and commodity indices, and foreign exchange risk results from changes in foreign currency rates.

Jefferies Financial Group Inc.

Market risk is present in our capital markets business through market making, proprietary trading, underwriting and investing activities and is present in our asset management business through investments in separately managed accounts and direct investments in funds.

12 unchanged sentences

2026 Daily Firmwide VaR

$ in millions Daily VaR for the Three Months Ended May 31, 2026

$ in millions Daily VaR for the Three Months Ended August 31, 2026

Risk Categories Average High Low

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2026 Daily Firmwide VaR

$ in millions Daily VaR for the Three Months Ended February 28, 2026

$ in millions Daily VaR for the Three Months Ended May 31, 2026

Risk Categories Average High Low

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2026 Daily Capital Markets VaR

$ in millions Daily VaR for the Three Months Ended May 31, 2026

$ in millions Daily VaR for the Three Months Ended August 31, 2026

Risk Categories Average High Low

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2026 Daily Capital Markets VaR

$ in millions Daily VaR for the Three Months Ended February 28, 2026

$ in millions Daily VaR for the Three Months Ended May 31, 2026

Risk Categories Average High Low

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Diversification benefit equals the difference between aggregated VaR and the sum of VaRs for the four risk categories and arises because the market risk categories are not perfectly correlated.

May 2026 Form 10-Q

August 2026 Form 10-Q

The efficacy of the VaR model is tested by comparing our actual daily net revenues for those positions included in the calculation of VaR with the daily VaR estimate.

5 unchanged sentences

, once in every 20 days).

During the three months ended May 31, 2026, there were no days when the aggregate net trading loss exceeded the 95% one day VaR.

During the three months ended August 31, 2026, there were no days when the aggregate net trading loss exceeded the 95% one day VaR.

The chart below presents our daily firmwide and capital markets VaR over the last four quarters.

The fluctuations in VaR during the first and second quarters of 2026 were primarily driven by volatility in the equity markets.

The fluctuations in VaR during the first, second and third quarters of 2026 were primarily driven by volatility in the equity markets.

Daily Net Trading Revenue

There were no days with firmwide trading losses out of a total of 63 trading days during the three months ended May 31, 2026.

There were 7 days with firmwide trading losses out of a total of 64 trading days during the three months ended August 31, 2026.

The histogram below presents the distribution of our actual daily net trading revenue for substantially all of our trading activities:

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Such procedures include performing stress tests and profit and loss analysis.

The table below presents the potential reduction in earnings associated with a 10% stress of the fair value of the positions that are not included in the VaR model at May 31, 2026:

The table below presents the potential reduction in earnings associated with a 10% stress of the fair value of the positions that are not included in the VaR model at August 31, 2026:

$ in thousands 10% Sensitivity

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The impact of changes in our own credit spreads on our structured notes for which the fair value option was elected is not included in VaR.

The estimated credit spread risk sensitivity for each one basis point widening in our own credit spreads on financial liabilities for which the fair value option was elected was an increase in value of approximately $2.0 million at May 31, 2026, which is included in other comprehensive income.

The estimated credit spread risk sensitivity for each one basis point widening in our own credit spreads on financial liabilities for which the fair value option was elected was an increase in value of approximately $1.9 million at August 31, 2026, which is included in other comprehensive income.

We are also subject to interest rate risk on our long-term fixed interest rate debt.

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Additional hypothetical scenarios are also conducted on a sub-portfolio basis to assess the impact of any relevant idiosyncratic stress events as needed.

May 2026 Form 10-Q

August 2026 Form 10-Q

Counterparty Credit Risk

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The loans outstanding to certain of our officers and employees are extended pursuant to a review by our most senior management.

Current counterparty credit exposures at May 31, 2026 and November 30, 2025 are summarized in the tables below and provided by credit quality, region and industry.

Current counterparty credit exposures at August 31, 2026 and November 30, 2025 are summarized in the tables below and provided by credit quality, region and industry.

Credit exposures presented take netting and collateral into consideration by counterparty and master agreement.

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At At At At At At

$ in millions May

$ in millions August

2026 November

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At At At At At At

$ in millions May

$ in millions August

2026 November

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At At At At At At

$ in millions May

$ in millions August

2026 November

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Total $ 524.4 $ 697.2 $ 2,304.3 $ 1,520.3 $ 177.9 $ 648.0 $ 3,006.6 $ 2,865.5 $ 16,883.6 $ 14,043.9 $ 19,890.2 $ 16,909.4

(1) Includes a $250.0 million secured revolving credit facility to Jefferies Finance at both May 31, 2026 and November 30, 2025.

May 2026 Form 10-Q

(1) Includes a $250.0 million secured revolving credit facility to Jefferies Finance, of which $188.5 million and $250.0 million is unfunded at August 31, 2026 and November 30, 2025, respectively.

August 2026 Form 10-Q

Country Risk Exposure

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We define the country of risk as the country of jurisdiction or domicile of the obligor and monitor country risk resulting from both trading positions and counterparty exposure, which may not include the offsetting benefit of any financial instruments utilized to manage market risk.

The following tables reflect our top ten exposures at May 31, 2026 and November 30, 2025 to the sovereign governments, corporations and financial institutions in those non- U.S.

The following tables reflect our top ten exposures at August 31, 2026 and November 30, 2025 to the sovereign governments, corporations and financial institutions in those non- U.S.

countries in which we have net long issuer and counterparty exposure:

August 31, 2026

Issuer Risk Counterparty Risk Issuer and Counterparty Risk

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United Kingdom $ 1,869.4 $ (923.2) $ (593.4) $ 36.0 $ 196.9 $ 50.6 $ 0.6 $ 636.3 $ 636.9

Germany 2,768.3 (2,530.3) 42.2 — 112.1 0.1 19.7 392.4 412.1

France 1,051.1 (552.1) (211.9) 0.3 279.8 — 1.4 567.2 568.6

Taiwan 2,555.8 (2,794.5) 297.3 — 196.6 — — 255.2 255.2

India 24.7 (26.7) 9.6 — — — 222.4 7.6 230.0

Hong Kong 65.7 (49.9) 6.6 — 72.8 — 132.8 95.2 228.0

Spain 783.1 (660.0) 43.9 — 58.6 0.5 1.7 226.1 227.8

Japan 2,615.9 (2,594.2) 70.0 — 88.1 0.4 156.5 180.2 336.7

Canada 167.5 (87.4) (38.8) 0.4 63.6 114.0 0.4 219.3 219.7

Hong Kong 440.0 (392.2) (2.7) — 16.0 — 234.5 61.1 295.6

Italy 862.7 (1,525.7) 923.9 — 0.3 2.5 1.4 263.7 265.1

Canada 158.9 (91.3) 18.4 0.2 49.3 88.1 0.3 223.6 223.9

Spain 927.2 (616.9) (167.7) — 76.7 — 1.4 219.3 220.7

India 21.3 (15.9) (0.4) — — — 190.8 5.0 195.8

Taiwan 2,174.4 (2,314.0) 175.9 — 140.8 — — 177.1 177.1

Australia 647.0 (555.0) (53.0) 1.5 11.6 — 122.1 52.1 174.2

Total $ 10,767.9 $ (9,580.5) $ 159.1 $ 38.0 $ 859.5 $ 141.6 $ 709.0 $ 2,385.6 $ 3,094.6

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis