SNEX - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the StoneX Group Inc. Q1 FY21 Earnings Conference Call. At this time all participants lines are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be conference recorded. is Please Instructions]. [Operator hand over to I would speaker, conference to like CFO. now your the Bill Dunaway, please sir. go you, Thank ahead

William J. Dunaway

our release our My conference market XX, closed morning. name issued Bill results the Welcome Good a for we press is XXXX. After call our quarter first to for yesterday, ended reporting December Dunaway. earnings to as which quarter available our our on at refer www.stonex.com is we in XXXX. presentation, our slide release well this This of a discussions first quarterly fiscal as call results. on will website of the

need the webcast call’s to and order sign our also will You The archive conclusion. an to on on the will live webcast presentation after presentation. the to be in the of available view website

advise notes are and the as that as to contain XXA taken getting note should should and we our uncertainties, with SEC. of of the in unknown XX-Q discussion Act following include the conjunction and forward-looking and participants XXXX. statements of detailed thereto XXE Before the financial underway, SEC. all discussion This most with may well Form recent are These be the of you the Securities of the known Section meaning and Section Act forward-looking XXXX risks Securities filings statements within with which in the statements required Exchange

forward-looking I are company there will reasonable assumptions by from no upon results company’s statements. and conditions, materially results forward-looking regarding based new company’s market no can undertakes result not company’s be or Readers Although or any statements the assurances its The that otherwise. implied differ believes company forward-looking business the future over that are the not future that future expressed actual its the that, forward-looking obligation will are statements to any events, now or turn publicly call whether information, O’Connor, to of the With statements Sean as CEO. any performance. cautioned a guarantees update of revise

Sean O’Connor

everyone thanks fiscal XXXX morning, quarter and Good earnings for our first Thanks, Bill. call. joining

healthy hopefully. all we looking and start, hope XXXX Before sure I'm I forward are of are more of and all to normal a your and safe, families you us

know, earnings through also which presentation helpful start year deck, call the last is our our and to have on you changed today environments the with we you presentation. we presentation everyone. the As hopefully and comments changed then some overall market segment take I'll for

December than remain earlier the volatility levels still market the FX abated but levels. in quarter, and markets the During higher in from the XXXX, pre-pandemic securities elevated

volatility the above, can X didn't how to market gains energy Following although historically I'll multi-year our groups. see, quarterly the Slide of you the as the they both agricultural across start hit To led these results, the market strong affected soybeans. rise of in and very until conditions conditions mentioned our a market look levels, product ago versus at platform all a GAIN and share revenues year to in addition with positive recently saw retail in onset and we when metals of highs high and pandemic, products the see corn much change

later. addition revenues. gain of we the I and products is of of the seen added the on securities in here to a of the think capabilities for starting continued more GAIN takeaway over of traction, result increased as And that now have key last growth a course, exceptional which quarters the number couple are really that now years,

for a healthy increased, Looking operating XX% revenues listed at the the captured volumes derivative improvements various modest product up quarter. revenue in groups, drove and

operating declined slightly revenues. XX% resulting revenues XX%, in Our up revenue OTC derivatives a and a increase X%, securities while our volumes strong were up very in capture

with increase in the revenues of which segment retail payments Physical revenue market capture, to GAIN addition significantly trading sorry, the was for revenue precious showed the volumes conditions. continues positive were largely quarter. very platforms, Our global strong, I'm up very trading up FX in revenue, to metals, the modest product and and CFD XX% due both have

in derivative strongly the due pandemic. both Unfortunately, both security aggregate up market to Our decline side and on XX% stands side well billion. accommodation was more balances client Fed strong respectively, very share and and grew now the reaction at due rates by XX% $X.XX the growth the the as offset a in volumes gains the clients a in than interest float as as higher to

and fee XX%, results. which were line balances on has bottom direct interest revenue down Our our on a client impact

of a GAIN down earnings, ROE our year capital we quarter, XX%. and a QX Turning you few XX% net revenues in up to for XX.X up now walk items up resulted that the were down largely diluted which X, $X.XX, again, quarter. the have noise of earnings, acquisition. XX% ago, the to a XX% we primarily from slightly addition related Aggregate through. was earnings operating in to of million, and million, related of costs net primarily recorded some XXX much Slide larger was GAIN summarizes up -- the for of Once XX%, EPS due to meaningful I'll base but the our

This of but for we on the noise while closing shareholder but of just $X.X a statement, million. London incurred we denominated. the protect -- to Firstly, a corresponding income dollar to accounting results to hedge we $X.X the capital operating resulting valuation and amortizations capital. acquisition. in GAIN’s a the million Upon had dollar debt, we of would The customers the resulted order relating entity in entity, this elected issuing our do. protecting of to net our entity sterling uncertainty. this GAIN London also quarter the is The BREXIT by advise light objective intangible in denominated primary GAIN dollar credit had our transaction to of of we through the achieved in capital is back capital million quarter’s our especially of include acquired loss X.X the what result hedge The to denominated business the is we is dollars,

per the commodities we the to does have This is a reduction market. impact when derivatives cost where to we amount frequently sold a inventories and will and million underlying Additionally, an issue for but of was items This a lower these of at in against the hedge timing held in price, approximately $X.X higher a recognize inventory hedge was The carry happen had three recorded. at business offsetting our the gain it's impact losses quarter. EPS $X.XX physical share. be have physical on of

a percentage points would below of higher just ROE our been book tangible book. XX% on items these Excluding have and on stated couple

prior that and and earlier, results, also be did that business profitable acquisitions notes for additional on $X.X recognize expansion recent the the is most yield used businesses that on on which million the finance the QX quarter’s long-term along client cover that not mentioned the as of of view the flows $XX.X for considering bottom interest year, interest target was the last line. we with versus of year income in set I the to and the As expense fee can acquisition, the GAIN incurred efforts when our quarter-to-quarter. volatile million other declined part individual We was high note it the the to of The quarter interest GAIN modestly balances acquisition quarter.

it due net GAIN legacy in relevant strength the The our business and As will overall of interest become resiliency integrate support be we we measure and contribution here the our shows metric earnings to our the of significant segment centralized by acquisitions increasingly other continue on of the functions which difficult progress. income ascertain to and headwinds quarterly should to nature results rates. face

As interest we incurred an interest we continue on to on to XXXX have and GAIN expect explosive through upside float. accretive we including move rates our cycle, the the after business significant expense become

the Turning can to trends, due shows environment. can our EPS which you the ROE volatile X, and from be performance quarterly somewhat graph quarterly as to market our Slide see

an as and diverse diverse client have certainly volatility as hard having to this well flatten We increasingly worked base, a by set. capability products out

better trailing and focused our to a time months. I on think as we a XX over However, for franchise is the longer building such series, evaluate a the long-term way are performance

Our this worth The at ago, on the of over a GAIN. terms. accounting last so the argan shareholder’s see noting being target this would probably equal, the eight the has the below contribution which that and more towards driven time trailing to spike for for XX-month and absolute again, I for by way million which a was just It's excluding encompasses due this as for we and recent to XXXX last in And current all Obviously, better was results. around our more XX% GAIN’s acquisition, well anticipate XX%, target. ROE in of to results interest trailing impact resulted legacy purchase XX-month average quarter, benefit GAIN this, and representation achieved exceptional our Indeed, GAIN have the closing mentioned without trailing the long-term our of QX was XX% accounting businesses because numbers although are just in target rates. quarter, to hedge was trailing a the ROE the results, the led [ph] abnormal XX% lower XX%, below look quarters quarters is would ROE from treatment series, over things trend making our large the climbed COVID our steadily months. eight I just XX that as challenging has targets businesses, XXX the our or XX-month by from largely for metric. volatility grown legacy ROE, above equity current our

presented mentioned with as transaction as start we us pandemic could interest normalization long-term to we see over potential year we we as our ago. the the in prior GAIN target a see when exceeding XX% However, rates, the GAIN just the to the well

results. trailing obviously XXXX $X.XX, exceptional currently Our EPS is includes XX-month at the which

the and run of indicate Our current $X.XX. an annual hedge for EPS adjusted intangibles rate would EPS amortization around QX accounting

segment the to is Turning our slide, next summary. which

pleased to Just a are couple quarter as the that well was segment Bill a in our had revenue of into segment terms increase strong Institutional on see segments gets another touch I XX% quarter. details, client highlights board. income segment really performance segments to income, with in for operating of across all a standout before as more the up of

the highest addition segment income retail As was to this driven earlier, sequentially. of business the was full we for product increase The in largely although due quarter, saw GAIN flat offering. the by was securities

partner has activity M&A and its and seen pandemic of year product over the key is driven in growth revenue As securities and the income. in now largely by business, of segment our the our Global our last corporate banks closed I mentioned in large many institutional so Payments the slowed. earlier, temporarily markets bit flatten terms here and offering. segment This trajectory is takeaway a emerging largest investment

starting volume, I'll are see and was indeed segment every We in QX this revenue With income. business, rate segment that, metrics for of and detailed results. our more and hand a Bill. again a acceleration payment average to for in an per record almost Bill discussion all to Dunaway the metric over you daily million,

William J. Dunaway

I was so CFD to versus increased and million Slide GAIN quarter decline covered in in which the business. quarter be just Sean. our Interest which the X.X the declined increased year, prior third year, versus year, fiscal being our and the few of funding end expenses the consolidated year growth fixed variable in acquisition. for to issuance move starting senior prior as the then Interest XX.X prior to versus business. XXXX. operating of million interest increased front these commodity short-term you, the as as the acquisitions Bad with on million is million note XX.X related growth XX Fixed quarter fixed increase increased XXXX FX of a geographic prior versus the fiscal end subsequent increased will being increased primarily prior compensation corporate many to related for year million the acquisitions compensation office incentive to debt prior the period. footprint, activities completed to physical of expense the I securities physical to of support income, related primarily XX.X XX.X a as in segment increase well to of with initiatives expense, including related the offset to statement expense revenues. XX.X which being lending, million secured borrowings the a the the with offering first the the on the remainder with of rates, out with Other primarily million X.X result and strategic a million year, increase build of will the of highlight product Sean prior of XX.X areas million versus Thank discussion. X, income year, to completed million initiatives. to with retail of Number shows support highlights our year, the the partially of versus the quarter, prior a in Variable result our related related compensation consolidated this X related subsequent by

out the share at closed represents with asset versus a quarter we net XX% the value per year. $XX.XX, increase Finally, which prior

to net this per rate carried on of revenues lower physical operating result in increased inventories net listed year. primarily prior a derivative physical physical at prior added XXX,XXX relatively listed increase some the customer unrealized of Operating increased million, XX%, segment. OTC revenues increased provide losses segment will current commercial is XX.X the flat. customers demand in information Number transaction domestic X.X The our X.X quarter held primarily as average volumes Slide versus realizable transactions OTC the the Moving grain X% primarily million in strong and a XX.X and from X, metals. volumes as derivative contract, were result or I The revenues operating from of a increase Within markets. for cost X.X value million in period. in revenues precious operating against as derivative million, year increased of on positions million on of more segment revenues

fiscal This million end the liquidation fourth to are which which recover in to from $X.X legal we Aspire certain a the which there loss of from is substantial the [ph] of recorded collection. action we of of but liquidation brings inventories, began -- in addition, energy In no pursuing quarter an these there's uncertainty XXXX. inventories

XX% result increase as operating XX% $XXX,XXX an in partially increase current claim decline average The million offset of interest declined a increase million at equity. prior XX% revenues in is in offset year client interest earned partially increase the to balances income of Segment period. by on short-term Finally, bad and or significant in X.X period. a was compared increased which as rates, in debt to the by compensation XX.X the fixed $XXX,XXX in

on by daily the Moving was revenues volume $XX.X transactions our continued as million Number market prior in operating segment XX.X revenues increase versus institutional Slide increase our year, primarily added driven of securities result to XX% XX, million average driven securities a in expanded in and the the by product offering volatility.

increased on a activities revenues to acquisition current In to $X.X versus and result result the income a XX% a were in in expense addition, were the million as income decline listed and XX.X a result rates. securities continued primarily as prior year. These million both volumes, derivatives by in market and of securities short-term decline sharp offset interest decline a lending in revenues volatility. operating increase fee Segment Interest million a from million XX% increases related derivative partially client increased in of XX.X balances of $X.X X.X the GAIN period. declined which lending of in the segment, million the listed

Moving the slide, retail driven revenues segment year, million XX.X from million to GAIN primarily next CFD operating and our the FX versus which added revenues in is acquisition. the by in XX.X prior

of the million X.X GAIN the quarter. added fee addition, business In revenue for

million base compensation in million our metals to $X on which in GAIN. next and to the the versus was and precious the XX.X variance client million direct compared of expenses prior acquisition per the is in earned income the increased increase daily Non-variable the of retail we payment the lower net and the by X slide, revenues primarily grow cost year, the year. easing Segment year business revenues, increases as The in current million market XX.X XXX,XXX Closing there continue on from Our negative prior versus related million the XXX,XXX adjustment by volumes. driven volume added income a of the and Segment current payments added global to prior pandemic X% to benefits of discussion average operating rate off expenses increased is to the variable period. modest effect the in GIROXX. increased driven segment operating period. XXX% were the and nonverbal acquisition a to dampening as of

covered unallocated were operating the pre-tax our across and capital XX.X is bridge Moving noted in a from million the XX, hedge lost, of decline primarily operating up on including on pre-tax The $X.X revenues Number revenues well variance however, last the our XX.X income income compensation, overall first the overhead to in operating variance unallocated between revenues Number million operating slide, period. revenue million year. in next current in the have X.X XXX.X period, to XX.X for previous XXXX quarter to million Slide XX, million which negative a current a XX% first quarter a represents over GAIN. to prior on XXX.X segments, Slide increase to related current The the represents Sean in noticed earlier. revenues million period for as bridge of or as related included of the changes million the the segments, the overhead of I year operating variable

including a that, million addition, $X.X I'd expenses, to In it $X million turn back million million compensation, With related in to for it GAIN X.X like includes increase discussion. to Sean including a other increase in finally $XX.X related and to fixed GAIN. strategy a

Sean O’Connor

reports all should received XXXX annual by our now. Bill. Thanks, you Hopefully, have

franchise. into StoneX a In and our more best for we articulate in clearly tried resegmenting business, to have addition financial class building vision to strategy our

on initiatives. You for included ESG our we first will policies also time the and report noticed a have

policy. playing on treating philosophy thing, in doing akin stakeholders believe easy approach all been ESG the and and creating always employees, a is even fairly, the a to Our by our than thing the for watching. right more one them We our all of always to when has merit no rewarding rules, opportunities over

and policy to this and now this. We into clear work to philosophy framework, we'll have hard a codify upon improve decided to approach continuously continue

stay that creating XX, our opportunity clients, before with to summarizes new the stay products us on ecosystem these capture focused already that clients markets. ahead in see Slide keep financial management to needs. we the is high them the relevant global services and strategic believe allow platform the making we each banks, of to firstly, and sure adding a by outside client the us. and objectives we want Dealing is bracket to level connect have to of need we to Turning best bulge which objectives our existing to and but we We of both turn, will that unique that

into Second, provided and work self-directed into is we expanding a we at share markets access new are us the with to customer customer market, and GAIN centric segments significant growing. trading to need our have and which and growing footprint existing customers and consistently new retail market customer where looking we channels. business serve

the all low service us to very front capabilities with of have have in addressable We types a market customers market penetration. of large all and currently

to but unless years our has back, the now will digitize of growth will which only we processes increase front with a for customer accelerated not of margins. This and been enhance scalability requires We underway offering. eventually achieve our and the necessary enhance some GAIN. increase not has rethink to This acquisition but scale engagements technology better

when a with supported our capital generated access resources we in capital growth appropriate manner. the and markets by to internally business disciplined and is need underpin Our capital

of our these and of very to a to Slide and address on large strategic Moving products number segments slides projects has objectives. each each of XX,

our of now front the of of In fact, of we resources us. have projects allocation challenges to is number one biggest the large prioritizing in

very is medium-sized but Here initiated have worked cash rolling point for platform all touch slide are and exciting that small could for a the in are payments gathering U.S. will with of enterprises, on out we The of the this that the just every of and the expansion GAIN trading to lot not being have momentum, GIROXX some I a acquired equity medium projects we on we on are Europe initiatives we side us term. new be electronic currently. opportunities and and these underway. meaningful here, the product that equities platform which in three on

trailing out we we level XX-month to metrics key Again, to think the at best on which lays our managed look XX, is this Moving Slide way a high basis. to. on

which when volatility. have continue very to our protect revenue structure cost a We we line bottom have flexible helps

the a However, will be a cost a continue to as enhanced of more more related broker spend less that fixed as our margins. platform and offerings costs up accelerate we should digitization and end technology even we noted with and less flexible structure, it scalable payouts with although result,

course is ratio as than like physical the a and of a after capital hedge impact additional higher mentioned, base like although, our are to And this we'd compensation on amortization, a Our higher ago. on our would we lower and than little slightly inventories target. the we're year much ROE is pretty than for close adjusting

shows Moving Slide XX, growth last three to years. our customer the over on this

As provide in slide what is customer around some of it should context regard. highest better mentioned our This aspect in revenue business. finds of this serve that intended noted data footprint. progress It our existing points This terms customers not and our to our drives to potential. every is earlier, to every be is priority grow the our equal

customers in in global does perhaps we revenue. aggregate which we is payments from organic and efforts we of drives bank representation worked retail our This global the of this have existing as not a has of built. more acquisitions. but our terms customers, customer bank validation important benefit is of as that well single terms show But the our shown revenue growing this in to is platform get are the strong existing from not a the wallet The footprint, our business example, customers been driver of growth as share have and For approach, for us, partners. thousands revenue, also in is slide our gaining only of thing worth strategy, particularly attracting slide

of the acquisition the clients recent and side. on You payment clearly on GAIN side our see the Tellimer acquisition on the the retail the GIROXX can side, institutional addition

category three you institutional Over years, four the over growth doubling. clients times, up the clients and can with customer retail nearly fold, strong every up than see last and in more commercial three global

Moving on easily aspects. to this a GAIN is to foundational us internalized This XX, dealing the seamlessly Starting Slide will focus will integration to been our with of it regulatory clients, has synergies. products and flow. approvals, also and really capabilities as as key as other all integration the this with combined GAIN for us, easily straight allow achieving more -- and all offer and well the synergy get

all major we now received nearly We approvals the regulatory have need.

the release have swap into and subsequent regulatory to moving after. We Gain next in the capital in StoneX days. be entity, thereafter. StoneX be moved entity capital and should wound by of entity. which release soon GAIN completed started hand a the are process released The the all and the has to end up the our entity swap with Singapore dealer March the capital is February U.S. of by been clients wind up clients UK should paying and approvals into dealer into are process This XX completed with move be in the clients

of the inevitably and support the that and serving Planned all Integration HR overall organization. offset been by into on by investment the audit, units activities. staffing growth the legal. to entire legacy been of area front. the internal in infrastructure, Accounting, progress integrated COVID have risk, hampered of areas strong the has single each rationalization So and in functions, compliance, slightly StoneX support potentially overall, co-IT support good very

are very resulted aggregate folks. areas that our number process are the many general our We of has and capabilities pleased now led upgrading in of in GAIN core a to by see this instances functional

revenue Looking we made at this to was for believe business we units. the this of trading to the track, achieve, hard capabilities never GAIN between any part to products of and projections integration measure, is hard flow, the as hard initially and transaction. portion exciting synergies really But the the

the fully compensation items of the vast cleared arrangements phased being with and needed, The GAIN clients all by StoneX the have So our been in majority attrition have now inside some staff little notable reduction with over very StoneX harmonized been now us. been payouts have rationalized here, to are ecosystem to future moved and where level. futures

have seen our We physical This capability. tangible evidence to some OTC quarters. revenues of lead of should additional coming cross-selling modest grains some in and

our integrated we benefits process. has which we what pricing precious platform, we the have into metals GAIN commercial is see and elsewhere many We institutional this and yielded as good believe may a proxy for continue

and costs. millions internalize win us As hedging We this our stage liquidity this single drive GAIN clients clients and pricing could improved low-digit the have which We gain, getting clients. a margin, metals, this we consolidated be at early estimate well. platform counterparties, tighter for in received result market on of turn better precious as a has which in drove adoption by adoption

and rerouting the this require those in immediate our of should some FX We have flows the result benefits combined million flows, but with in annually. range will of GAIN, trading StoneX single-digit

This XX offering the investment, so annualized the early cost achieved around pivot GAIN of believe started savings have benefits the cost retail same upgrades, XX team XXXX Dealing savings an have significantly. the of then project platform, initiated in cash platform. to out build million in We is do with the energy million. trading far, which we offerings forex.com of long-term the for the city accounts for the of thing for and we equities part but which U.S. the index will additional

rationalization which the and consolidation in centers, QX, take like. cost of contracts, of eases some million such which rationalization X longer approximately end consolidation of have runoff of should spaces We flight, hit start of data as to of in of may some

some mentioned we may stage which million but require investment fully revenue As believe to once $XX could above, achieve. we at annum are to per additional synergies we close implemented, have this early be

interest revenue rate we on what we original as and some of in been the Clearly, and the So But COVID we the has validation opportunities has have reduction early achieved of other delayed tangible believe probably feel home about on our GAIN GAIN. the progress pretty work float. does can and from plans, the leverage hand, between the so StoneX far. good we

So quarter, up despite as rates. final results to we impact adoption. StoneX capabilities growth activity legacy We XX. a clients to we and had the our that driven with onboarding. products expand with zero and client We've moving put Slide believe which businesses, solid metrics continued in of the has strong Number very volume interest client’s Very from the the strong demonstrated

are leveraging just our as GAIN capabilities trading into We mentioned. platform the I've

seen in continued navigated side without home customers, have lastly, a of an efforts investors continue to none thank on StoneX good have platforms progress of obviously be successfully this flights. acceleration the trading support and and now our work staff, happen. We just the make the businesses a epidemic. and and of new we platforms, largely believe large of in and for our from far we believe all have number which We of so the environment on could digitization And integration to

from thanks Executive much the So Team.

Operator. would questions. for I that, to with So like open

Operator

Instructions]. [Operator

Your the Dan Fannon line Jefferies. question comes first from with of

Dan Fannon

slide, new Good the helpful. very they and appreciate Thanks. morning are

in hoping, your you're if comments recovery a the payments was some of that, global upon re-engagement, So about and Sean upon would terms helpful? of that you expand on in expand could what's couple seeing could be activity going questions. I and the of you

Sean O’Connor

Sure.

on their margin was year it ways, certainly we I activity the banks stopped sort where the sort its continued generally delayed to say investments payments would and our making dead two payments in and plans, out of underlying as making was So, lot people I capital and volumes but saw flattening to get capital that weren't that weren’t clients corporate of last a related and changes tracks. larger we the we the investments, saw the in core acquisitions. hits, I related of pandemic, M&A from really think pandemic mean,

can relatively be dollars few significant. to they on nature, make payments much those obviously payments the are although larger in we be and those So, tend

getting to slowdown. that in quarters. track. definitely our prior that a be So think out noticed That kind we seems now on And I we dramatic called back of

good So us. a has that certainly impact for

payment we that some notice thing that of struggling payments some provide so to COVID, smaller some second right, they that of we corridors of service did getting the to is banks want pricing the wanted customers and really our we exactly couldn't to execute us closed was of because the level to had or sometimes not of some other go our in providers, and on. the third down banks meant The the and

So that its to the of way worked seems system. out also have

a I pandemic would So was where performance. bit saw conflict other of there volatility increased and increased in the say to our businesses we

was of payment on other the think side the side I that.

were really was is I And us. thing and really now bigger that that that small logic for had us hedge they excited obviously they institution GIROXX providing small about came of to a payments that think done needed behind GIROXX going felt successfully payments digital number forward one the medium had most starting the corporate be in to to acquisition. too. and Germany, acquisition to currency clients part with we of we They with and a sized large [indiscernible] the to are conclusion and startup, the leverage the and platform markets a a make

the a totally in be significant business. mentioned, small the now a really did payments U.S. has make for [ph] it's a much very for effectively could of given every I licenses of us rolling. acquisition those kind called was us That now pretty push but is what deal long a very, something took but part should've a company dormant FX BREXIT up it And lines them. we to acquired probably we time us the is mean caught And of and we I new us. need boat, that be very in U.S. close, to This And is that closed. in along the out given now Onco this will segment we state in is are starting that slow So it that

dealing term going to so, pieces in hit really primed to about pretty us ready are But place a payments we now We are to is are but do It's payments when that. up need business. medium I'm going we all rolling So that now new the licenses immediately, excited and segment we for open bill, not with start for those our a be banks. this back. to didn't

answered that hopefully So your question Dan.

Dan Fannon

Yes, retail the yes, things in a that's broadly. obviously, market, of of lot going happened helpful. to And kind going the what's have on, and you participation just then of the side some retail that frankly and

and precious recently. in You has been mentioned here headlines lot metals more a the the components silver

you're capture function So is to the and again retail that seeing it that of equities kind U.S. your market? then maybe of the the get to we're that able how benefits assume how and talk in cash ultimately out with a of some of just some trying in the and I index participation build about business elsewhere

Sean O’Connor

last So the first. let me with start part

I started wanted Glenn that's think of due So, I as sort the -- on the offering, with strategically think do always we identified GAIN, has we to something someone important and process that. equity when diligence

So, it's a priority.

I the equity in particularly clients business, as but U.S. U.S. you that And other equities, CFDs slightly clearer. commissions we've these if a of mean, can separate in because sort others think here stuff, for their regulatory can a through more do this you it's allows lending, and In some different the Citadel with Robin I you're investment. compete zero, real Robin environment, with stop benefit to to can the that for is trading and their be the think to seen of payment of clearer regulatory that in in right. way the to Hood cash requires flow. regime -- us, in and only they it's trading capture you order Hood trade can going complicated, the for platforms, where UK, the because case, monetize equity for flow, I flow they can became sell you obviously reason,

that equities out offering make of money core have any infrastructure, to it's hard really you unless So, platform. on your trading retail

we clearly clearer. are So

We capabilities. technology have bit a those of Obviously all a of it's build.

So strategic that a is priority.

Again, was start. the on. moving that thought now place better started are we city to We the index. probably We

do the the in and the over forex.com U.S. same roll platform. then with will We

a us. big for strategic clearly initiative that's very So

to all Hood I here Robin headlines think we've what's self-directed I happened. around think But mean, seen stay. the trading on. is I and obviously so

way market fact, income. I think we in entities, even do of I if what the can to ways to validation we done and build platforms And change of middle lot opportunity I we could think FX we right because we have some can we we've do and platforms the of the of it's in off a And ways operates. massive these can better want. GAIN. the how is many fixed that mean, equities, in have even with trading in are can do and we the in we other do futures a derivatives,

have is products both our We retail of allow on to all those all but clients. and institutional of desire by clients products those also be retail traded to platforms, by

the see as how guess that's market much it we to that going is is interesting I are the well. way and headlines the way of with moving very So kind

take So, advantage. are I to think we well-placed

if I answered please me. I Dan, didn't I if all So question tell know your aspects don't of

Dan Fannon

the more in component, terms flows to that some precious kind of seen The and how silver headlines and you? we've of recently metals of through

Sean O’Connor

Yeah. Okay.

fact -- the well up backing just little a bit. in So,

fact small couldn't individual. called was a a outfit, support gold struggling. about further year money needed real a inventories to minutes bit and ago like support an small Coin and He funded platform by up basically bit, a and in conversation GIROXX it access the and so hold which some on, that any it required the in had that little and to little just backing a So, retail a we very acquired It Invest. half are

a Honestly view of it into was the precious dollars, that side step it of of was, acquisition So retail business. very we of millions business. mean, sort the cheap. metals tentative tentative and digits of very price, sort I of the single acquired was a our sort

have back in our in earnings hit sort would pandemic one business. in it, quarter entire we luck that investments around and As the received of

-- and have happened. I base of think if obviously, can sort and we customer we right combine our So will bigger GAIN sort a offer now, they GAIN the much all obviously to gold physical And platforms and then got we two customers lucky there than has. and can of those flight platform now we of have in that's capabilities we retail

places. and some IG it fantastic So be a differentiator add I think a will that'll from other be the and of

for people, anyone us it store think can can else to I also trading you that. if buy accounts. and good from your you collateral give that we don't does with say on you can think gold I we us,

prospect. Again, now Glenn's that So, we time take this I is think there's exciting on. things working to through sort some that flow think a really so very will exciting of

have us terms all silver, happened supplies mean, in we I the from with to In we of physical coming others. the and what's U.S. business mint there, regular the events.

out us of that a once coins. silver see for literally to we to every is premiums headlines just cause we mock weekend, that, you for buy. What quickly, we because the sort sold little higher us when of that sold doesn't strong website, can when over variety can kind we we inventory, you the out, any had hit of demand we see piece see our it obviously When an silver. no risk start on do have and As of charge We peak bit. sell inventory it more we particularly have, like to up we inventory allow inventory the does to a of

now worst and happens in good and So mean, that to continue but environment I demand. on see don't hopefully like running our us. we that's the of kind for was that environment we platform, restocked we've inventory that good of out

a are because in at U.S. clunky We U.S. out little ship and well, it's the deliver capability sort platform in customs. to the with make that we looking moment sure roll as of a the have

Dan. that us again Does these retail So, question money more it's sort that the and can we that our of of and the a products to clients, of all sell to make. we're just answer more the going think our integrate client GAIN we I think all platforms have and together bases business and great monetize

Dan Fannon

very obviously previously a helpful. there had maybe rise and rates to then rates of I about remain has yes, and low. balance in continued And kind Bill, you talk charge interest to think Yes, sensitivity,

today to on that's based happening rate don't what backdrop you time under kind use, on So to the I is think of balances want there period are a based about way the now? current where earning versus, know

William J. Dunaway

interest like of Dan, now. falls right we that. to you line, the probably similar retain noted got at, versus revenue, maybe that year roughly We decline XX% you've kind of ago look of about million Yeah if a I bottom XX.X period before, mean, the XX%

And ago. from were a we're about if we down basis at that, points year look where you so XXX

So of put the that fall out the think last last year. time was we slide I

XXX roughly So million net income about points. points XXX effect was a $XX.X worth a basis for share every roughly of basis or of kind $X

So, you're of probably that's where XXX% that. about shy talking of just --

$XX million shy basis. about annualized probably an So on

Sean O’Connor

revenue our about have out, of I think is I shows one I you interest Dan, product, guess, sort would if go the the it's back to, at put say a which decline way And it's X about earned, way our look it and if that that the I year-on-year just we've of would at product you the EPS look it pretty around impact $X.XX. you if simple Slide revenue, sort say is, I thought of what significant. the in by

difference. just interest share absolute a revenue, the the So, in $X.XX per made has decline

rates on guess What's the be we as of is right if had I $X.XX a interest interest significantly ago a and a you complicated keep if on certainly all of balances. but client So, of would obviously which higher today's a safe balances, interesting guess. we interest year sort ago today's rate don't XX% it's if we impact sheets, we exactly sort don’t that than because higher, same if know and it's interest a not I that XX% had $X.XX math, It's closer more we are ago rates is higher. I year said, year the environment balance had to $X,

Dan Fannon

success. several me sense. that the is last business the of the product one and in being makes offering mentioned this times as guess right, for part Right, securities I you've expanded

just just versus that you overall could terms traction, are, gaining you actually how those and expand upon in So in products segmenting that generally what's higher obviously market? the specific of what volumes are

William J. Dunaway

maybe been a into Yeah. entrapped sections. try so Well, separate three has for this while, back me and let some it of of sort of sort

and it have about think people some we businesses and Fillmore, on with is for products. which think business started costs about addition, then a We started earnings, our dollars we us. I called to as And we had drag big all right. up buy we two pretty years of a ago revenue and acquired of tend I activities. who a the income in brokerage that Obviously all outsource who for So, income the was fixed broadened bottom want fixed hired couple And longer business a two prime trading that called of we liked million very our on additionally much. remember that had offering. a We GMP, been and we to business which we the do, made And into series years acquired us as that new a an period, acquisitions year. we why distressed offering we had subsequently team, all in of the ago, called of they because line somewhat for a out, it cheap

run but balances a I mean, a bottom I our has the the only outsource a materially rate their that have of bottom the the year. now $XX they expanding, of be show under with those broadened there star to point. at significant to good gone trading drag line business, all zero on management they capabilities, acquisitions and was sort a some sort business, all dealing are now So brokerage is pretty probably is have of which prime from of could line. started The and mean, about not really million have at news of big the add for

we a that whole further opportunity have So, change grow in that that's significant good a offering we to think out. and pretty

losing to we've bought, actually million that now couple of income us. business a we stabilized business, the side, which for and we've business, the profitable business resources that On GMP fixed was is dollars a year, that kind added nicely of

of So the changed of has that one sort things that's I category think years. over two last

The other category businesses. of income in our things fixed is

revenues have are us recently, they firm, made our And offering. we XX. doing, banks addition up GMP, they to they to joined period probably like critical hires bracket we've up four-year up started some who've diversify bulge and as In what from and their are a three product the coming over some because really to us see

income So, mean, backs, agencies, have now very convertibles. product offering, ourselves market way are trading from a high done seeing in trader a positioned SPACs treasuries, a even the I the we small business. broad all GMP had was mortgage fixed yield which with we

business. good a that's Now

income into fixed well side a made terms and of Luxembourg we through really little small in done expanding the -- London. that's in now very has acquisition expanding, expanding then into So, Europe,

So of just the product lot good a things in happening fixed income. in sort of of terms expansion

On market really us. prime as in maker cornerstone that and up brokerage, the a flow retail retail obviously of but clearing that our goes positioning thing recently the the our our from our business bit desk until equity position a has flow and into getting lot I of business equity side, as strong stocks for on mean, different. from is been foreign clearing benefiting a grows, little more business same solidified

the a every who It's sees place streets as us Virtue It business. vendor We with a us are firm large for and us. fantastic gives larger than a that Citadel and counterparty. business critical in relationship and almost on

electronic distant to that pretty at and thinking up. we've how nicely too the really And but our market us started in a for and Those some our ramping And, take are ago. starting domestic to earnest apply have could not electronic would that basically use now a we and surprised the business a future. that ago, in about be could start that think we guys elsewhere, are cases year honestly, clients that's make offerings narrow meaningful defined, eventually, we and we about it about we of Canadian I is equity and two contribution markets. offerings mainstay say that to positioned So years we started there providing that technology could

So potential those and we pretty offerings. revenue it's that of still it actually from meaningful on concept early days the be right. the we But, pretty have significant electronic and sort on get and we have now margin for bottom line the that's of the to runway proof if

a of of all those So, combination it's things. three

on, ramble a in going of but stuff. our lot a exciting lot to sorry there's So on company,

together sort it's quite of some of coming And nicely.

Dan Fannon

Thank all Yeah. you. Appreciate my you taking questions.

Sean O’Connor

Yeah.

Okay. is Thank you else. anyone Dan. Operator there

Operator

At this there time are further no questions.

Sean O’Connor

to speak for the we you. Well, months’ thanks Alright. you Thanks in And everyone. call. time, attending thank will three

Operator

gentlemen, participating. conference. for today's that you does and Thank Ladies conclude

now may You disconnect.

StoneX (SNEX) 9 Feb 212021 Q1 Earnings call transcript