StoneX(US:SNEX)2025-11-25 15:00Financial Data and Key Metrics Changes - Fourth quarter net income reached a record $85.7 million, representing a 12% growth year-over-year, while diluted earnings per share (EPS) grew by only 1% due to an increase in shares outstanding from the acquisition of RJ O'Brien [5] - Operating revenues exceeded $1.2 billion, up 31% compared to the previous year, and up 17% from the preceding quarter [6] - Full fiscal year net income was a record $305.9 million, up 17%, with an EPS of $5.89 and a return on equity (ROE) of 15.6%, surpassing the 15% target [8][50] Business Line Data and Key Metrics Changes - Transactional volumes increased across all product offerings except for FXCFDs, with operating revenues from listed contracts rising by 76% year-over-year, primarily due to the acquisition of RJO [9] - Operating revenues from OTC derivatives increased by 27% year-over-year but declined by 1% from the previous quarter [10] - The self-directed retail segment saw a decline in net operating revenues by 35% and segment income down 51%, attributed to a 4% decline in average daily volumes and a 31% decline in rate per million [15] Market Data and Key Metrics Changes - Interest and fee income on client balances increased by $52 million or 46% year-over-year, with the acquisition of RJO contributing $50 million [11] - Average client equity increased by 71%, while average money market FDIC sweep client balances rose by 25% [11] - FXCFD revenues decreased by 34% year-over-year due to a 7% decline in average daily volume and a 32% decline in rate per million, primarily from low volatility in FX markets [10] Company Strategy and Development Direction - The company has been active in M&A, completing six transactions in 2025, including the transformational acquisition of RJ O'Brien, which positions the company as the largest non-bank FCM in the U.S. [19][24] - The strategy focuses on being disciplined in acquisitions, ensuring they are accretive to the ecosystem and enhance market share [20][21] - The company aims to leverage its expanded capabilities and client base to drive organic growth alongside its acquisitions [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth despite challenges, highlighting the importance of the RJO acquisition in driving future performance [50] - The integration of RJO is expected to create significant value, with a focus on expanding product offerings and achieving cost synergies [41][48] - Management remains optimistic about long-term growth, supported by a strong balance sheet and diverse offerings [50] Other Important Information - The company recorded pre-tax acquisition-related charges of approximately $9.3 million in the current quarter, impacting diluted EPS by about $0.13 [5] - The company anticipates achieving $50 million in annual run-rate cost synergies from the RJO acquisition within 24 months [41][44] Q&A Session Summary Question: How are early cross-selling efforts with RJO clients going? - Management noted that early cross-selling efforts are progressing well, with significant interest from RJO in learning about new products, and some transactions have already occurred [51][52] Question: Did precious metals trading improve after gold was exempted from tariffs? - Management indicated that while there were challenges in the previous quarter due to low volatility and tariff disruptions, the situation has improved, and they expect a positive trend moving forward [56][59] Question: What drove the increase in RPC for listed derivatives? - The increase was attributed to the introduction of the RJO business, which had higher average rates per contract compared to the company's previous offerings [60]