StoneX(SNEX) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents StoneX Group Inc.'s unaudited condensed consolidated financial statements for Q1 2023, including balance sheets, income statements, cash flows, and key accounting notes Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets show an increase in total assets and stockholders' equity as of March 31, 2023, compared to September 30, 2022, driven by increases in securities purchased under agreements to resell, receivables from clients, and financial instruments owned, partially offset by a decrease in segregated assets | Metric | March 31, 2023 (in millions) | September 30, 2022 (in millions) | Change (in millions) | % Change | | :------------------------------------------------ | :----------------------------- | :------------------------------- | :------------------- | :------- | | Total assets | $21,918.9 | $19,859.6 | $2,059.3 | 10.4% | | Total liabilities | $20,671.6 | $18,789.5 | $1,882.1 | 10.0% | | Total equity | $1,247.3 | $1,070.1 | $177.2 | 16.6% | | Cash and cash equivalents | $1,263.9 | $1,108.5 | $155.4 | 14.0% | | Securities purchased under agreements to resell | $2,623.2 | $1,672.0 | $951.2 | 56.9% | | Financial instruments owned, at fair value | $5,049.1 | $4,167.3 | $881.8 | 21.2% | | Securities sold under agreements to repurchase | $5,023.1 | $3,195.6 | $1,827.5 | 57.2% | Condensed Consolidated Income Statements The Condensed Consolidated Income Statements show a decrease in net income for the three months ended March 31, 2023, compared to the prior year, primarily due to lower principal gains and higher interest expense, despite a significant increase in interest income | Metric | Three Months Ended March 31, 2023 (in millions) | Three Months Ended March 31, 2022 (in millions) | Change (in millions) | % Change | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Total revenues | $16,161.0 | $16,382.7 | $(221.7) | (1.4)% | | Operating revenues | $704.4 | $544.7 | $159.7 | 29.3% | | Net operating revenues | $399.4 | $400.3 | $(0.9) | (0.2)% | | Income before tax | $57.5 | $87.4 | $(29.9) | (34.2)% | | Net income | $41.7 | $64.0 | $(22.3) | (34.8)% | | Basic EPS | $2.02 | $3.18 | $(1.16) | (36.5)% | | Diluted EPS | $1.95 | $3.11 | $(1.16) | (37.3)% | | Metric | Six Months Ended March 31, 2023 (in millions) | Six Months Ended March 31, 2022 (in millions) | Change (in millions) | % Change | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Total revenues | $29,172.6 | $30,724.1 | $(1,551.5) | (5.0)% | | Operating revenues | $1,359.2 | $995.2 | $364.0 | 36.6% | | Net operating revenues | $781.4 | $714.1 | $67.3 | 9.4% | | Income before tax | $153.1 | $139.9 | $13.2 | 9.4% | | Net income | $118.3 | $105.7 | $12.6 | 11.9% | | Basic EPS | $5.77 | $5.27 | $0.50 | 9.5% | | Diluted EPS | $5.57 | $5.15 | $0.42 | 8.2% | Condensed Consolidated Statements of Comprehensive Income Comprehensive income increased for both the three and six months ended March 31, 2023, primarily due to a significant other comprehensive gain, net of tax, driven by cash flow hedges and foreign currency translation adjustments, offsetting a decline in net income for the three-month period | Metric | Three Months Ended March 31, 2023 (in millions) | Three Months Ended March 31, 2022 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Net income | $41.7 | $64.0 | $(22.3) | (34.8)% | | Other comprehensive gain/(loss), net of tax | $17.5 | $(16.9) | $34.4 | n/m | | Comprehensive income | $59.2 | $47.1 | $12.1 | 25.7% | | Metric | Six Months Ended March 31, 2023 (in millions) | Six Months Ended March 31, 2022 (in millions) | Change (in millions) | % Change | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Net income | $118.3 | $105.7 | $12.6 | 11.9% | | Other comprehensive gain/(loss), net of tax | $40.4 | $(18.3) | $58.7 | n/m | | Comprehensive income | $158.7 | $87.4 | $71.3 | 81.6% | Condensed Consolidated Statements of Cash Flows Cash, segregated cash, cash equivalents, and segregated cash equivalents decreased significantly for the six months ended March 31, 2023, primarily due to net cash used in operating activities, which was a reversal from the prior year's cash provided by operations | Metric | Six Months Ended March 31, 2023 (in millions) | Six Months Ended March 31, 2022 (in millions) | Change (in millions) | % Change | | :-------------------------------------------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Net cash (used in)/provided by operating activities | $(602.7) | $2,102.0 | $(2,704.7) | (128.7)% | | Net cash used in investing activities | $(28.6) | $(24.1) | $(4.5) | 18.7% | | Net cash provided by financing activities | $52.4 | $222.2 | $(169.8) | (76.4)% | | Net (decrease)/increase in cash, segregated cash, cash equivalents, and segregated cash equivalents | $(567.8) | $2,300.0 | $(2,867.8) | (124.7)% | | Cash, segregated cash, cash equivalents, and segregated cash equivalents at end of period | $5,717.3 | $8,809.5 | $(3,092.2) | (35.1)% | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased for both the three and six months ended March 31, 2023, primarily driven by net income, other comprehensive gain, and share-based compensation, despite no change in common stock or treasury stock | Metric | March 31, 2023 (in millions) | March 31, 2022 (in millions) | Change (in millions) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------- | :------- | | Total equity | $1,247.3 | $1,005.6 | $241.7 | 24.0% | | Retained earnings | $1,007.9 | $788.2 | $219.7 | 27.9% | | Accumulated other comprehensive loss, net | $(50.2) | $(43.4) | $(6.8) | 15.7% | | Additional paid-in-capital | $358.7 | $329.9 | $28.8 | 8.7% | Notes to Condensed Consolidated Financial Statements The notes provide detailed explanations of the Company's financial reporting, including its global financial services network, client base, accounting policies, fair value measurements, and specific financial instruments - StoneX Group Inc. operates a global financial services network connecting companies, organizations, traders, and investors to the global market ecosystem through digital platforms, clearing, execution, and expertise. It serves over 54,000 commercial, institutional, and global payments clients and over 400,000 retail clients in more than 180 countries[24] - The Company did not adopt any new accounting standards during the three and six months ended March 31, 2023[33] [Note 1 – Basis of Presentation and Consolidation and Accounting Standards Adopted](index=10&type