Breaking Down Nomura Holdings, Inc. (NMR) Financial Health: Key Insights for Investors

You're looking at Nomura Holdings, Inc. (NMR) right now, trying to square the strong headline numbers with the persistent 'Neutral' analyst sentiment, and honestly, that's the right tension to feel. The firm's financial health is defintely improving, showing a robust first half for the current fiscal year (FY2026), with net revenue reaching 1,038.8 billion yen for the six months ended September 30, 2025, and net income attributable to shareholders hitting 196.6 billion yen. That's a powerful signal. This performance is underpinned by the Wholesale division's strength, but the real strategic shift is in their fee-based businesses: Investment Management's assets under management (AUM) recently topped 100 trillion yen, showing they are serious about stable revenue. Still, we have to map the near-term risks, like the integration of the pending $1.8 billion acquisition of Macquarie asset management entities, which will test their operational discipline and capital deployment.

Revenue Analysis

You want to know where Nomura Holdings, Inc. (NMR) actually makes its money, and the short answer is: the global capital markets. For the fiscal year ended March 31, 2025, Nomura Holdings, Inc. reported consolidated net revenue of 1,892.5 billion yen (approximately $12.7 billion), representing a strong year-over-year increase of 21.2%. This growth wasn't just a fluke; it was driven by solid performance across all key business divisions, showing that their strategic diversification is defintely paying off. The core of their revenue is generated from three main business segments: Wholesale, Wealth Management, and Investment Management.

Primary Revenue Sources and Segment Contributions

Nomura Holdings, Inc.'s revenue streams are typical of a global financial powerhouse, coming from trading, investment banking fees, asset management fees, and commissions. The lion's share of the revenue comes from the Wholesale division, which handles global markets and investment banking. This segment is your risk-and-reward engine; it's volatile, but when markets are active, it generates massive returns.

The latest six-month results through September 30, 2025, show exactly how the revenue pie is currently sliced, including the introduction of a new segment. The total net revenue for that period was ¥1,038.8 billion, up 10.8% from the prior year, with Wholesale leading the charge. You can see the clear breakdown:

• Wholesale: ¥540.3 billion-Over half the revenue, primarily from Global Markets (equities and fixed income).
• Wealth Management: ¥222.3 billion-Stable, fee-based revenue from client assets and commissions.
• Investment Management: ¥111.4 billion-Revenue from managing assets for clients, a critical source of recurring income.
• Banking: ¥25.7 billion-A newly reported segment from April 2025, adding lending and trust revenue.

Here's the quick math on the segment contributions for that recent period, which maps out where the capital is working hardest:

Significant Shifts and Growth Drivers

The most significant change in Nomura Holdings, Inc.'s revenue structure is the formal establishment of the Banking segment in April 2025. This move signals a push to diversify beyond traditional capital markets and capture more stable, incremental lending and trust revenue. While only contributing 2.5% of the latest semi-annual net revenue, it's a strategic long-term play for a more balanced revenue mix.

Looking back at the full FY2025, the 21.2% overall revenue growth was largely fueled by the Wholesale division's 22.1% increase, thanks to strong Global Markets performance, especially in equities. The Investment Management division also saw a robust 24.9% increase in business revenue, reflecting an eighth consecutive quarter of net inflows into assets under management (AUM). This is a good sign because it shows the firm is growing its recurring revenue base, which acts as a buffer when the trading markets inevitably slow down. For more on the players driving these numbers, you should read Exploring Nomura Holdings, Inc. (NMR) Investor Profile: Who's Buying and Why?

The key takeaway is that Nomura Holdings, Inc. is not just relying on its trading arm anymore; it's building up its stable, fee-based businesses in Wealth and Investment Management, plus adding the new Banking pillar. That's a healthier, more resilient model for the long haul.

Profitability Metrics

You need to know if Nomura Holdings, Inc. (NMR) is turning its strong revenue growth into real bottom-line profit, and the short answer is yes-the fiscal year 2025 results show a significant jump in profitability, largely driven by expense control and surging top-line growth. The firm's net profit margin hit 18.00% for the year ended March 31, 2025, a solid performance that puts them in the competitive range for a global investment bank.

Looking at the full fiscal year 2025, the numbers show a clear trend of improving margins. Net revenue for Nomura Holdings, Inc. grew by 21.2% to 1,892.5 billion yen. The real story, though, is how much of that revenue flowed down: income before income taxes, a strong proxy for operating profit in financial services, increased by a massive 66.6% to 472.0 billion yen. That's a powerful sign of operating leverage at work.

Here's the quick math on the core margins. The Gross Profit Margin, using the US GAAP figures, is an extremely high 96.26% (based on $30.09 billion Gross Profit on $31.26 billion Revenue). This is typical for a financial firm where the cost of revenue is minimal. More critically, the Operating Profit Margin of 24.94% and the Net Profit Margin of 18.00% demonstrate that the firm is capturing a good share of its revenue as profit.

Operational Efficiency and Cost Management

Operational efficiency is where Nomura Holdings, Inc. is making its biggest strides. A financial firm's efficiency is often measured by its cost-to-income ratio (or efficiency ratio), which is non-interest expenses as a percentage of net revenue. For FY2025, Nomura Holdings, Inc.'s efficiency ratio was approximately 75.06% (Non-interest expenses of 1,420.5 billion yen divided by Net Revenue of 1,892.5 billion yen).

• Non-interest expenses rose by a manageable 10.3% in FY2025, which is roughly half the 21.2% increase in net revenue.
• This differential is the engine driving the margin expansion.
• Management is defintely focused, with plans to cut an additional ¥28 billion (about $186 million) in costs, on top of a prior ¥62 billion savings package.

While the goal for top-tier global peers like Deutsche Bank is a cost-to-income ratio below 65% for 2025, Nomura Holdings, Inc.'s 75.06% shows there is still room for improvement in operational efficiency. Still, the massive 66.6% jump in operating profit suggests the firm is successfully growing its top line faster than its cost base, a crucial trend for investors. The continued focus on cost discipline is a clear signal that management understands the need to close this efficiency gap against global competitors. You can dive deeper into the firm's investor base and strategy by Exploring Nomura Holdings, Inc. (NMR) Investor Profile: Who's Buying and Why?

Peer Comparison and Profitability Trends

Nomura Holdings, Inc.'s Net Profit Margin of 18.00% places it squarely in the competitive range for the global banking sector, which typically sees net profit margins between 15% and 30%. Money center banks, which are a good comparable, have been averaging around 21.9% net profit margin. This means Nomura Holdings, Inc. is not a market leader on this metric yet, but the trajectory is strong.

The most important trend is the rate of change. The 66.6% increase in operating profit (Income before income taxes) for FY2025 shows the firm is moving aggressively toward its target of consistent double-digit Return on Equity (ROE). This momentum, fueled by a rebound in investment banking fees and strong equities trading across the industry in 2025, is what you should be watching. The key action for you now is to monitor the quarterly efficiency ratio-if it drops further below 75% in the next few quarters, it confirms the cost-cutting is taking hold and the firm is becoming a much more efficient profit machine.

Debt vs. Equity Structure

You're looking at Nomura Holdings, Inc. (NMR)'s balance sheet, and the first thing that jumps out is the sheer scale of its leverage. The direct takeaway is that, like all major global financial institutions, Nomura Holdings, Inc. operates with a high debt-to-equity ratio (D/E) because a significant portion of its liabilities are operational-think client deposits and collateralized financing-not just traditional corporate debt.

For the fiscal year ended March 31, 2025, Nomura Holdings, Inc.'s total debt-to-equity ratio stood at approximately 1,016.8%. This means the company uses over ten times more debt than equity to finance its assets. To be fair, this is a normal structural reality for a financial services giant, whose liabilities include client funds. The industry average for financial services is around 2.46, but that figure often excludes the operational liabilities that inflate a bank or brokerage's D/E ratio.

Debt Levels and Composition (FY2025)

Nomura Holdings, Inc. has a massive liability base, which is expected for a firm with 56,802.2 billion yen in total assets as of March 31, 2025. The firm's financing is a careful mix of short-term and long-term obligations, reflecting its diverse business lines from wholesale markets to wealth management.

• Short-Term Borrowings: Totaled approximately 1,117.3 billion yen as of March 31, 2025.
• Long-Term Unsecured Debt: Stood at 10,807.4 billion yen for FY2025, a key source of stable, non-operational funding.

Here's the quick math on the overall capital structure: Total liabilities reached 53,221.2 billion yen, versus total equity of 3,581.0 billion yen. That's a huge gap, but it's largely comprised of customer payables and collateralized agreements, which are the raw material of a wholesale financial business. It's a high-leverage model, but one that is tightly regulated.

Financing Strategy and Credit Health

The company actively manages its capital structure, balancing debt financing against equity funding to optimize its cost of capital. For the 2025 fiscal year, Nomura Holdings, Inc. saw significant cash inflows from financing activities-specifically, 1,679.7 billion yen-due primarily to new issuances of long-term borrowings. This demonstrates a continued reliance on the debt markets for growth and liquidity management.

The market's perception of this debt is reflected in the firm's credit ratings, which remain investment-grade with a stable outlook from major agencies. For Nomura Holdings, Inc., the long-term credit ratings as of early 2025 were: Moody's at Baa1 (Stable), S&P at BBB+ (Stable), and Fitch at A- (Stable). Rating and Investment Information, Inc. (R&I) even affirmed an A rating with a Positive outlook in April 2025. These solid ratings are defintely critical, keeping the cost of borrowing manageable for its global operations. If you want to dive deeper into who is funding this structure, you should check out Exploring Nomura Holdings, Inc. (NMR) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know how Nomura Holdings, Inc. (NMR) can meet its near-term obligations, and the quick answer is: its regulatory liquidity is defintely solid, but the cash flow statement shows a reliance on external funding. For the fiscal year ended March 31, 2025, Nomura's core liquidity ratios are stable, which is typical for a major financial institution with a high volume of trading assets and liabilities.

The firm's Current Ratio for FY2025 stood at 1.51, a slight improvement from the prior year's 1.47. This ratio, which measures current assets against current liabilities, tells us that Nomura has ¥1.51 in short-term assets for every yen of short-term debt. The Quick Ratio, which strips out less-liquid assets like inventory (though less relevant for a bank), was 1.25 for the same period. While these ratios seem low compared to non-financial companies, they are healthy for a broker-dealer whose current assets are largely high-quality, marketable securities.

The real strength lies in the Liquidity Coverage Ratio (LCR), which is a key regulatory metric for banks. As of the three months ended September 30, 2025, Nomura's average LCR was a robust 216.5%. This means the firm holds more than double the high-quality liquid assets required to cover net cash outflows under a 30-day severe stress scenario. Plus, the overall liquidity portfolio stood at ¥10,877.6 billion as of September 30, 2025, a massive buffer against market volatility.

Here's the quick math on their core liquidity assets:

• Current Ratio (FY2025): 1.51
• Quick Ratio (FY2025): 1.25
• Average LCR (Q2 FY2026): 216.5%
• Liquidity Portfolio (Sep 30, 2025): ¥10,877.6 billion

The working capital trend, while positive in the ratio, is complex. For a financial firm, working capital is often negative or small because liabilities like short-term borrowings and payables are high. The slight rise in the current ratio suggests a stable, if not expanding, short-term asset base relative to obligations, but what this estimate hides is the high velocity of these assets and liabilities, which change daily based on trading activity. For a deeper dive into their long-term strategy, check out the Mission Statement, Vision, & Core Values of Nomura Holdings, Inc. (NMR).

Cash Flow Statements Overview

Looking at the cash flow statement for the full fiscal year 2025 (ended March 31, 2025) reveals the underlying funding dynamic. The firm had a significant cash outflow from its core operations and investments, which was entirely covered by financing activities.

The ¥678.6 billion cash outflow from operating activities is a key point. This is not necessarily a red flag for a financial firm, as it's primarily driven by increases in trading assets and investments, meaning they are putting capital to work. Still, it highlights that Nomura must continually access capital markets to fund its growth and investment-heavy business model. The ¥1,679.7 billion inflow from financing activities, largely from issuing long-term borrowings, shows a successful and active funding strategy to support the outflows from operations and investing.

The main liquidity strength is the regulatory cushion and the size of the liquidity portfolio. The primary near-term risk is the consistent negative cash flow from operating and investing activities, which makes the firm reliant on its ability to consistently issue debt and manage its funding costs. This is not unusual for a global investment bank, but it's a trend you must monitor closely.

Valuation Analysis

You're looking at Nomura Holdings, Inc. (NMR) and wondering if the market is giving you a fair deal. Based on the latest 2025 fiscal year data, the stock appears to be undervalued when measured against its book value and earnings, suggesting a potential opportunity for value-focused investors.

The core of this valuation call rests on two key metrics: the price-to-earnings (P/E) ratio and the price-to-book (P/B) ratio. For a global financial firm, these ratios tell a compelling story about investor sentiment versus underlying assets and profitability.

Is Nomura Holdings, Inc. (NMR) Overvalued or Undervalued?

In short, Nomura Holdings, Inc. looks undervalued right now. The market is pricing the company at less than its net asset value, which is a classic signal for a value play, even considering the high leverage typical in the financial sector. Here's the quick math on the key multiples:

• Price-to-Earnings (P/E): The trailing twelve-month P/E ratio, as of late 2025, is a lean 8.50. This is significantly lower than the broader market average, indicating that investors are paying less than nine dollars for every dollar of the company's annual earnings.
• Price-to-Book (P/B): The P/B ratio stands at just 0.84. This means the stock is trading at 84% of its book value per share. You're buying a dollar of assets for only 84 cents, which is defintely a value indicator.

While Enterprise Value-to-EBITDA (EV/EBITDA) is less common for banks due to their complex balance sheets, we know the 2025 EBITDA was strong at $23.703 billion. The low P/E and sub-1.0 P/B are the clearest signals that the stock is priced like a deep value stock, not a growth stock.

Stock Performance and Analyst Sentiment

The stock price trend over the last 12 months shows positive momentum, but it's still trading below its longer-term potential. Nomura Holdings, Inc. started 2025 trading around $5.79 per share. By November 2025, the price had climbed to approximately $7.39, representing a gain of nearly 20% year-to-date. Still, its 52-week high of $7.59 suggests there's limited upside resistance in the near-term, but the low P/B ratio indicates a lot of potential long-term upside.

Analyst consensus leans toward a positive outlook. The current average brokerage recommendation is a Buy, with a breakdown that includes one Strong Buy and one Hold rating from the analysts covering the stock. This split shows some caution, but the overall sentiment is positive, with a short-term price target around $7.50 from one analyst.

Dividend Health and Investor Payouts

For income-focused investors, the dividend profile is attractive. The company's dividend yield is healthy, sitting between 5.42% and 6.42% as of November 2025. This is a strong yield in the current market environment.

More importantly, the payout ratio-the percentage of earnings distributed as dividends-is sustainable. For the fiscal year ended March 31, 2025, the consolidated payout ratio was 49.4%. A ratio near 50% is comfortable for a financial institution, leaving plenty of capital for reinvestment, regulatory requirements, and weathering market volatility.

Here's a quick look at the 2025 dividend metrics:

If you want to understand who is actually buying into this value proposition, you should check out Exploring Nomura Holdings, Inc. (NMR) Investor Profile: Who's Buying and Why?, as institutional ownership often confirms a value thesis.

Risk Factors

You're looking at Nomura Holdings, Inc. (NMR) and seeing strong net income-¥340.7 billion for the fiscal year ended March 31, 2025-but a seasoned investor knows to look past the headline number. The reality is that Nomura, like any global investment bank, is a complex machine with significant, near-term risks you need to factor into your valuation.

The most pressing risks for Nomura Holdings, Inc. (NMR) are a combination of persistent financial leverage, market volatility's impact on its Wholesale division, and the ever-present threat of regulatory missteps. Honestly, managing a global footprint means you're always fighting a two-front war: macro-economic shifts and internal control failures.

Operational and Financial Headwinds

The biggest internal challenge is financial risk, specifically liquidity and leverage. For the full fiscal year ended March 31, 2025, the company reported cash flows from operating activities as an outflow of ¥678.6 billion, largely due to increases in trading assets and private equity investments. That's a massive outflow, and while the firm has a liquidity portfolio of ¥10,877.6 billion as of September 30, 2025, it highlights the capital-intensive nature of their business and the risk of negative cash conversion.

Also, the firm has been working hard to hit its profitability targets. While the wholesale segment's expense ratio improved to 84% for the first nine months of FY 2025, down from 95% a year prior, there's still uncertainty about reaching the long-term Return on Equity (ROE) target of 8%-10% for FY 2025. It's a defintely a key metric to watch, because missing it signals a structural challenge in generating sufficient returns on shareholder capital.

• High leverage poses a financial risk.
• Fixed-income underperformance can drag down Wholesale earnings.
• Operational failures (IT, compliance) can trigger reputational damage.

External Market and Geopolitical Exposure

Nomura's revenue is heavily exposed to global financial market fluctuations and geopolitical events. The Wholesale division, which saw net revenue of ¥540.3 billion for the six months ended September 30, 2025, is particularly sensitive to trading volumes and market volatility. If global central banks, like the U.S. Federal Reserve, shift monetary policy unexpectedly, it can instantly compress trading margins.

You also have the external risk of intense competition. Nomura Holdings, Inc. (NMR) is competing not just with other global investment banks but also with non-financial companies entering the financial services space. Plus, the ongoing geopolitical tensions, like U.S.-China trade dynamics, can dampen market volatility, which paradoxically reduces trading income opportunities. The firm's global expansion, including the acquisition of Macquarie asset management entities for about $1.8 billion (approximately ¥278.9 billion) in cash, is a strategic opportunity, but it also increases exposure to diverse regulatory and political environments.

Mitigation and Risk Management Strategy

The good news is that management is not sitting still. Their primary mitigation strategy is a push for stable, recurring revenue, mainly through the Wealth Management and Investment Management segments, which saw client assets hit ¥162.3 trillion and assets under management reach ¥101.2 trillion as of September 30, 2025.

Here's the quick math: more fee-based revenue from these stable segments acts as a buffer against volatile trading income. On the capital front, the Common Equity Tier 1 (CET1) ratio of 13.00% as of September 30, 2025, is comfortably above regulatory minimums, providing a strong capital cushion against unexpected losses. They've also increased hedge positions by 40% to proactively manage volatility in certain assets. For a deeper dive into the ownership structure behind these moves, check out Exploring Nomura Holdings, Inc. (NMR) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking at Nomura Holdings, Inc. (NMR) and wondering where the next wave of growth comes from, especially after a solid fiscal year 2025 where net revenue hit 1,892.5 billion yen, a 21.2% increase year-over-year. The short answer is a deliberate, multi-front expansion into global asset management and private markets, plus a renewed focus on core wholesale strengths.

The firm is not just relying on its traditional Japanese market dominance; it's making concrete moves to become a truly global financial powerhouse. This strategy is backed by a goal to consistently achieve income before income taxes of over 500 billion yen by 2030, a clear signal of their long-term ambition.

Strategic Drivers: Global Asset Management and Private Markets

The biggest near-term catalyst is the acquisition of Macquarie's U.S. and European public asset management business, a deal valued at US$1.8 billion (approximately ¥278.9 billion) that is expected to close by the end of December 2025. This single move is a game-changer for the Investment Management division.

Here's the quick math: the acquisition is projected to boost Nomura's total Assets Under Management (AuM) to around US$770 billion, with over 35% managed outside of Japan. This gives them a scaled hub in Philadelphia and immediate, well-established distribution networks in the U.S. and Europe. Plus, the firm is aggressively pursuing M&A and joint ventures to expand its alternative investment (private markets) capabilities, targeting asset classes like real estate, infrastructure, and private credit. This is a defintely smart move to capture the higher-margin, stickier capital that institutions and wealthy clients are increasingly allocating.

• Boost AuM to approximately US$770 billion post-acquisition.
• Expand into higher-margin private market asset classes.
• Strengthen focus on the Americas, particularly the U.S.

Financial Trajectory and Earnings Estimates

Looking ahead, the market anticipates continued, albeit moderated, growth following the strong fiscal 2025 performance. For the next fiscal year (FY2026), consensus estimates project a revenue of around $12.77 billion and an earnings per share (EPS) of approximately $0.79. This represents an expected EPS growth of about 5.26% from the prior year's estimate of $0.76, showing that analysts see steady, incremental improvement.

The firm's own 2030 strategy targets an overall Return on Equity (ROE) of 8% to 10% or more, which is the kind of consistent profitability investors want to see. In the Investment Management segment specifically, the target is to lift assets under management to over 150 trillion yen by fiscal 2030/31, which is a massive leap from the 101.2 trillion yen reported as of September 30, 2025.

Competitive Advantages and Actionable Initiatives

Nomura Holdings, Inc.'s competitive edge starts with its unparalleled position in the Japanese capital markets, a foundation it's leveraging globally. Its extensive global network, built over a century, allows it to connect Asian capital with opportunities in the West, and vice-versa. The firm's strong financial base, with a Common Equity Tier 1 ratio of 13.00% as of September 30, 2025, provides the capital needed for strategic growth and risk-taking. Exploring Nomura Holdings, Inc. (NMR) Investor Profile: Who's Buying and Why?

Beyond its three core segments (Wealth Management, Investment Management, and Wholesale), the establishment of a new Banking Division on April 1, 2025, is a key initiative. This new segment generated ¥25.7 billion of net revenue in its first six months, diversifying the revenue streams and adding incremental lending and trust revenue. Also, the Wholesale division is actively strengthening its interest rate and currency trading units globally, betting that increased market volatility will drive demand and revenue in the Global Markets business. They are building a better moat.