StoneX(US:SNEX)2025-11-25 15:02Financial 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 [2][3] - Operating revenues exceeded $1.2 billion, up 31% compared to the previous year and 17% sequentially [3] - 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% [4][23] 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, driven by the acquisition of RJO [5][6] - Operating revenues from OTC derivatives increased by 27% year-over-year but declined by 1% sequentially [5] - The self-directed retail segment saw a decline in net operating revenues by 35% and segment income by 51%, primarily due to a decrease in average daily volumes [7] 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 [5] - Average client equity increased by 71% and average money market FDIC sweep client balances rose by 25% [5] - The payments segment's net operating revenues increased by 8% year-over-year but decreased by 3% sequentially [5] 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. [8][11] - The strategy focuses on organic growth and leveraging acquisitions to enhance product offerings and market share [8][9] - The company aims to achieve significant cost and capital synergies from the RJO acquisition, estimating $50 million in annual run rate cost synergies [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative potential of the RJO acquisition, highlighting strong client growth and integration progress [15][22] - The company anticipates that the combination of acquisitions and organic growth will drive results for 2026 [23] - Management noted that the overall attrition of clients post-acquisition has been limited, indicating successful integration efforts [22] Other Important Information - The company reported a notable increase in client assets under custody, contributing to a stable and predictable income stream [23] - The company has made significant enhancements to its product offerings, including the build-out of a metals vault and improvements in digital asset services [13][14] Q&A Session Summary Question: How are early cross-selling efforts with RJO clients going? - Management indicated that cross-selling efforts are progressing well, with significant interest from RJO clients in new products, although tracking revenue synergies remains challenging [25][26] Question: Did precious metals trading improve after gold was exempted from tariffs? - Management noted that the precious metals business faced challenges due to low volatility and tariff disruptions but has shown improvement in the current quarter [28] 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 [30]