StoneX(SNEX) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Fiscal Q2 2025 Performance Overview StoneX Group Inc. reported strong financial results for fiscal Q2 2025, with significant increases in net operating revenues, net income, and diluted EPS, driven by broad-based performance across products and segments. | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :----------------------- | :----------------- | :----------------- | :------- | | Net Operating Revenues | $487.3 | $422.3 | 15% | | Net Income | $71.7 | $53.1 | 35% | | Diluted EPS | $1.41 | $1.09 | 29% | | ROE | 15.7% | 14.0% | 1.7 pp | - Increased market volatility and strong client acquisition and engagement were key drivers, helping to offset the decline in short-term interest rates[3] Strategic Developments: R.J. O'Brien Acquisition StoneX Group Inc. announced a definitive agreement to acquire R.J. O'Brien, aiming to become a market leader in global derivatives. - StoneX reached a definitive agreement to acquire R.J. O'Brien, the oldest futures brokerage in the U.S., positioning StoneX as a market leader in global derivatives[4] - R.J. O'Brien generated approximately $766 million in revenue and $170 million in EBITDA during calendar 2024[4] - The acquisition is anticipated to close in the second half of 2025 and is expected to enhance margins, EPS, and ROE by adding nearly $6 billion in client float and approximately 190 million in annual listed derivative contract volumes[4] Consolidated Financial Results Summary Income Statement The company's consolidated income statement for Q2 2025 shows robust growth across most revenue categories, particularly in sales of physical commodities and securities. Three Months Ended March 31, 2025 vs. 2024 (in millions) | Revenue Category | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Sales of physical commodities | $35,992.6 | $21,321.9 | 69% | | Principal gains, net | $300.5 | $281.8 | 7% | | Commission and clearing fees | $164.3 | $136.2 | 21% | | Consulting, management, and account fees | $44.3 | $40.2 | 10% | | Interest income | $389.0 | $326.0 | 19% | | Total revenues | $36,890.7 | $22,106.1 | 67% | | Cost of sales of physical commodities | $35,934.7 | $21,287.9 | 69% | | Operating revenues | $956.0 | $818.2 | 17% | | Transaction-based clearing expenses | $91.8 | $78.5 | 17% | | Introducing broker commissions | $45.5 | $42.0 | 8% | | Interest expense | $316.6 | $259.2 | 22% | | Net operating revenues | $487.3 | $422.3 | 15% | | Total compensation and other expenses | $390.2 | $356.9 | 9% | | Income before tax | $97.1 | $72.3 | 34% | | Income tax expense | $25.4 | $19.2 | 32% | | Net income | $71.7 | $53.1 | 35% | Key Financial Ratios The company demonstrated improved profitability and shareholder returns in Q2 2025, with diluted EPS increasing by 29% and Return on Equity (ROE) rising to 15.7%. Key Financial Ratios (Three Months Ended March 31) | Metric | 2025 | 2024 | % Change | | :------------------------------------ | :----- | :----- | :------- | | Basic EPS | $1.49 | $1.12 | 33% | | Diluted EPS | $1.41 | $1.09 | 29% | | Weighted-average common shares (Diluted) | 49,376,423 | 47,248,414 | 5% | | Return on equity ("ROE") | 15.7% | 14.0% | | | ROE on tangible book value | 16.5% | 14.8% | | - All share and per share amounts have been retroactively adjusted for a three-for-two stock dividend effected on March 21, 2025[7] Interest Expense Analysis Total interest expense increased by 20% in Q2 2025, primarily driven by growth in fixed income securities and securities borrowing activities, as well as increased activities in physical precious metals and commodities businesses. Interest Expense Attributable to (Three Months Ended March 31, in millions) | Category | 2025 | 2024 | % Change | | :-------------------------------------------------- | :----- | :----- | :------- | | Institutional dealer in fixed income securities | $232.6 | $198.0 | 17% | | Securities borrowing | $21.4 | $14.0 | 53% | | Client balances on deposit | $31.1 | $31.4 | (1)% | | Short-term financing facilities of subsidiaries and other direct interest of operating segments | $31.5 | $15.8 | 99% | | Corporate funding | $14.8 | $16.2 | (9)% | | Total interest expense | $331.4 | $275.4 | 20% | - The increase in interest expense for fixed income securities and securities borrowing was due to the growth in these businesses[14] - Other direct interest expense increased due to higher activities in physical precious metals and commodities[14] Expense Structure: Variable vs. Fixed In Q2 2025, variable expenses constituted 54% of total non-interest expenses, increasing from 51% in the prior year, reflecting higher variable compensation and transaction-based clearing expenses in line with business growth. Variable vs. Non-Variable Expenses (Three Months Ended March 31, in millions) | Expense Category | 2025 | % of Total | 2024 | % of Total | | :-------------------------------- | :----- | :--------- | :----- | :--------- | | Variable compensation and benefits | $146.7 | 28% | $123.7 | 26% | | Transaction-based clearing expenses | $91.8 | 17% | $78.5 | 16% | | Introducing broker commissions | $45.5 | 9% | $42.0 | 9% | | Total variable expenses | $284.0 | 54% | $244.2 | 51% | | Fixed compensation and benefits | $120.4 | 23% | $110.7 | 23% | | Other fixed expenses | $123.0 | 23% | $122.9 | 26% | | Bad debts (recoveries), net | $0.1 | —% | $(0.4) | —% | | Total non-variable expenses | $243.5 | 46% | $233.2 | 49% | | Total non-interest expenses | $527.5 | 100% | $477.4 | 100% | Other Gains The company recognized nonrecurring gains of $5.7 million in the six months ended March 31, 2025, primarily from class action settlements. - Nonrecurring gains of $5.7 million were received from class action settlements during the six months ended March 31, 2025[18] Segment Performance Overview Consolidated Operating Revenues by Segment In Q2 2025, the Institutional and Commercial segments were the primary drivers of operating revenue growth, increasing by 21% and 24% respectively. Consolidated Operating Revenues by Segment (Three Months Ended March 31, in millions) | Segment | 2025 | 2024 | % Change | | :---------------- | :----- | :----- | :------- | | Commercial | $248.6 | $200.5 | 24% | | Institutional | $561.2 | $463.4 | 21% | | Self-Directed/Retail | $93.4 | $102.0 | (8)% | | Payments | $50.3 | $49.3 | 2% | | Corporate | $16.7 | $14.4 | 16% | | Eliminations | $(14.2) | $(11.4) | 25% | | Operating revenues | $956.0 | $818.2 | 17% | Consolidated Income by Segment The Institutional segment led segment income growth with a 41% increase in Q2 2025, followed by the Commercial segment at 13%. Consolidated Income by Segment (Three Months Ended March 31, in millions) | Segment | 2025 | 2024 | % Change | | :---------------- | :----- | :----- | :------- | | Commercial | $96.7 | $85.6 | 13% | | Institutional | $86.5 | $61.3 | 41% | | Self-Directed/Retail | $22.0 | $33.2 | (34)% |\n| Payments | $24.5 | $24.6 | —% | | Total segment income | $229.7 | $204.7 | 12% | | Income before tax | $97.1 | $72.3 | 34% | Key Operating Metrics by Product The company saw strong growth in operating revenues from Securities (25%) and Physical contracts (58%) in Q2 2025. Operating Revenues by Product (Three Months Ended March 31, in millions) | Product Category | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Listed derivatives | $128.4 | $111.7 | 15% | | Over-the-counter ("OTC") derivatives | $60.3 | $53.0 | 14% | | Securities | $426.7 | $340.7 | 25% | | FX/Contracts for difference ("CFD") contracts | $70.9 | $80.3 | (12)% | | Payments | $49.2 | $48.4 | 2% | | Physical contracts | $72.6 | $45.9 | 58% | | Interest/fees earned on client balances | $101.7 | $104.2 | (2)% | | Other | $43.7 | $31.0 | 41% | Volumes and Other Select Data (Three Months Ended March 31) | Metric | 2025 | 2024 | % Change | | :------------------------------------ | :------- | :------- | :------- | | Listed derivatives (contracts, 000's) | 61,153 | 53,805 | 14% | | Securities average daily volume ("ADV") (millions) | $8,915 | $7,473 | 19% | | FX/CFD contracts ADV (millions) | $11,539 | $10,453 | 10% | | Payments ADV (millions) | $77 | $64 | 20% | Commercial Segment The Commercial segment delivered strong performance in Q2 2025, with operating revenues increasing by 24% and segment income by 13%. Commercial Segment Financial Performance (Three Months Ended March 31, in millions) | Metric | 2025 | 2024 | % Change | | :-------------------------- | :----- | :----- | :------- | | Operating revenues | $248.6 | $200.5 | 24% | | Net operating revenues | $193.3 | $164.2 | 18% | | Segment income | $96.7 | $85.6 | 13% | Commercial Segment Operating Revenues by Product (Three Months Ended March 31, in millions) | Product Category | 2025 | 2024 | % Change | | :----------------------- | :----- | :----- | :------- | | Listed derivatives | $75.5 | $59.1 | 28% | | OTC derivatives | $60.3 | $53.0 | 14% | | Physical contracts | $71.4 | $43.9 | 63% | - Listed derivatives volumes in the Commercial segment increased by 19% to 11,434 thousand contracts[21] Institutional Segment The Institutional segment showed robust growth in Q2 2025, with operating revenues up 21% and segment income surging by 41%. Institutional Segment Financial Performance (Three Months Ended March 31, in millions) | Metric | 2025 | 2024 | % Change | | :-------------------------- | :----- | :----- | :------- | | Operating revenues | $561.2 | $463.4 | 21% | | Net operating revenues | $191.0 | $149.8 | 28% | | Segment income | $86.5 | $61.3 | 41% | Institutional Segment Operating Revenues by Product (Three Months Ended March 31, in millions) | Product Category | 2025 | 2024 | % Change | | :----------------------- | :----- | :----- | :------- | | Securities | $398.8 | $314.9 | 27% | | Commission and clearing fees | $95.4 | $74.8 | 28% | | Interest income | $337.4 | $273.3 | 23% | - Securities average daily volume (ADV) increased by 19% to $8,915 million, and average client equity for listed derivatives grew by 12% to $4,902 million[23] Self-Directed/Retail Segment The Self-Directed/Retail segment experienced a decline in Q2 2025, with operating revenues down 8% and segment income decreasing by 34%. Self-Directed/Retail Segment Financial Performance (Three Months Ended March 31, in millions) | Metric | 2025 | 2024 | % Change | | :-------------------------- | :----- | :----- | :------- | | Operating revenues | $93.4 | $102.0 | (8)% | | Net operating revenues | $64.0 | $74.3 | (14)% | | Segment income | $22.0 | $33.2 | (34)% | Self-Directed/Retail Segment Operating Revenues by Product (Three Months Ended March 31, in millions) | Product Category | 2025 | 2024 | % Change | | :----------------------- | :----- | :----- | :------- | | FX/CFD contracts | $63.0 | $72.7 | (13)% | | Principal gains, net | $50.2 | $61.8 | (19)% | | Sales of physical commodities | $37.1 | $11.9 | 212% | - FX/CFD contracts average daily volume (ADV) increased by 34% to $8,591 million, but the rate per million (RPM) decreased by 34% to $116[26] Payments Segment The Payments segment maintained stable performance in Q2 2025, with operating revenues increasing slightly by 2% and segment income remaining flat. Payments Segment Financial Performance (Three Months Ended March 31, in millions) | Metric | 2025 | 2024 | % Change | | :-------------------------- | :----- | :----- | :------- | | Operating revenues | $50.3 | $49.3 | 2% | | Net operating revenues | $47.6 | $46.8 | 2% | | Segment income | $24.5 | $24.6 | —% | - Payments average daily volume (ADV) increased by 20% to $77 million, while Payments rate per million (RPM) decreased by 15% to $10,526[27] Overhead Costs and Expenses Total overhead costs and expenses increased by 4% in Q2 2025, primarily due to higher fixed compensation and benefits and non-trading technology and support costs. Overhead Costs and Expenses (Three Months Ended March 31, in millions) | Category | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Variable compensation and benefits | $15.9 | $16.4 | (3)% | | Fixed compensation and benefits | $55.5 | $48.7 | 14% | | Non-trading technology and support | $16.1 | $13.6 | 18% | | Occupancy and equipment rental | $12.1 | $13.1 | (8)% | | Total overhead costs and expenses | $124.0 | $119.6 | 4% | | Overhead costs and expense, net of allocation to operating segments | $80.6 | $80.2 | —% | - Overhead costs include shared services such as IT, accounting, treasury, credit and risk, legal and compliance, and human resources[28] Balance Sheet Summary As of March 31, 2025, StoneX Group Inc. reported an increase in total assets, driven by higher securities purchased under agreements to resell, financial instruments owned, and receivables from clients. Summary Asset Information (in millions) | Asset Category | March 31, 2025 | September 30, 2024 | | :-------------------------------------------------- | :------------- | :----------------- | | Cash and cash equivalents | $1,307.3 | $1,269.0 | | Securities purchased under agreements to resell | $6,917.6 | $5,201.5 | | Receivables from clients, net and notes receivable, net | $1,354.9 | $1,013.1 | | Financial instruments owned, at fair value | $8,200.9 | $6,767.1 | | Goodwill and intangible assets, net | $90.0 | $80.6 | Summary Liability and Stockholders' Equity Information (in millions) | Liability/Equity Category | March 31, 2025 | September 30, 2024 | | :-------------------------------------------------- | :------------- | :----------------- | | Payables to clients | $10,712.6 | $10,345.9 | | Securities sold under agreements to repurchase | $11,137.3 | $8,581.3 | | Financial instruments sold, not yet purchased, at fair value | $3,806.1 | $2,853.3 | | Stockholders' equity | $1,882.0 | $1,709.1 | | Net asset value per share | $38.59 | $35.75 | Additional Company Information About StoneX Group Inc. StoneX Group Inc. is a global financial services network connecting various market participants to the global market ecosystem through digital platforms, clearing, execution services, and expertise. - StoneX Group Inc. operates a global financial services network, providing digital platforms, end-to-end clearing and execution services, high-touch service, and deep expertise[34] - The company serves over 54,000 commercial, institutional, and payments clients, and more than 400,000 retail accounts from over 80 offices across six continents[34] - StoneX Group Inc. is a Fortune-500 company headquartered in New York City and listed on the Nasdaq Global Select Market (NASDAQ:SNEX)[34] Forward-Looking Statements & Risks The press release contains forward-looking statements regarding the company's financial condition, operations, business strategy, and the anticipated R.J. O'Brien acquisition. - Forward-looking statements pertain to financial condition, results of operations, business strategy, financial needs, and the anticipated timing and impact of the R.J. O'Brien acquisition[35] - Known and unknown risks and uncertainties include adverse changes in economic, political, and market conditions, losses from market-making and trading activities, global trade policies, loss of key personnel, increased competition, changes in government regulation, and fiscal/monetary policies[36] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by law, and readers are cautioned not to place undue reliance on them[37] Investor Relations Contact For investor inquiries, Kevin Murphy can be contacted at (212) 403-7296 or kevin.murphy@stonex.com. - Investor inquiries can be directed to Kevin Murphy at (212) 403-7296 or kevin.murphy@stonex.com[38]