SNEX - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to the 2024 Third Quarter StoneX Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bill Dunaway, CFO. Please go ahead.

William Dunaway

Good morning. Dunaway. Bill is name My Welcome to ended our quarter call earnings XX, XXXX. conference June for third our After closed quarter our results the release for press market our yesterday, we third fiscal of a XXXX. issued reporting a and available on year-to-date refer at well we This release of slide this our our which call is presentation, on results. discussions www.stonex.com website as as our to and will quarterly archive available call's an and of on conclusion. website presentation will be the The also the our after webcast

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

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

Sean O'Connor

joining on Thanks, the morning, X the earnings for thanks Bill. Slide deck. of call. Starting everyone, and Good

despite represented was of of a $XX.X the per diluted result with million a This was third the book fiscal comparative for the for our $XXX.X and in ROE share. last was On $X.XX XX% XX% basis, in stated we're value our and in quarter prior period, XX% on where XX% us, up on a net The had solid value which X revenues in over years book a us EPS book increase XX% year. record of consecutive and of over increase XX.X% XXXX book a value XX.X% down EPS income year and quarter ROE up net income year a operating record XX% ago earnings the and versus diluted versus up XX%. We EPS. were million, quarterly tangible

compensation with in ago prior a to costs and quarter. Total were up which up executive part XX% the X%, compensation Fixed revenue and line the large X% quarter, variable to and to due is with quarter, not compensation activities. prior trading Our interest up up off our X% expense versus earned client and operating Net to carried that immediately revenues versus also related commission the introducing also as year record and clearing well as float operating related for versus expenses other officer. XX% a XX% broker relating were immediately which severance our include costs, in were is interest operating but on were fixed ago compared revenues, year only interest growth. net a up net costs up an income and

share, with our ago. a period $X.XX XX% just adjusted with third versus were up down ended $X.X versus $XXX.X recorded or slightly million billion, the down per months operating a prior XX-month revenues year was basis, trailing date, of net XXXX $XXX.X share, quarter up over diluted and income EPS value period. the comparative to earnings For XX% XX-month our up of $X.XX X%, book X million, $XX.XX, the we per versus On X%. We

us X Now ago. year environment low which Generally difficult the turning the speaking, deck, for to quarterly market extremely in revenues was product operating Slide a versus with compares earnings volatility. by

negatively this fact, fiscal complacency our countries of the In many understand been U.S. volatility has which difficult geopolitical the current impacted products. capture in year. revenue to uncertain the all-time lows This environment well much tensions, resulting the Low characterized of most of and cycle here in as situation. given the VIX was election to during quarter, and have economic market the other the in as tough close trading most

volatility of are better As we hopeful last see quickly over couple change market and the we may conditions indeed, ahead. recent we this have can And know, days out. events proved

power as continue and client products. should we footprint volumes generally earnings with client conditions. improved enhanced our trading increased The evident good most related to be evidenced engagement to However, increases see market across our by of share

clients, we rates. offset contract in with volume For strong by reduction of seeing our strong XX% the revenue quarter, saw institutional growth large in a listed with as gains segment derivatives institutional we saw gains both market XX%

most decline a year saw largely due capture and revenue largely Our spreads increase capture. in as due a renewable volumes a Securities due revenue X%. XX%, small Payments gains and to volumes last per were to up record was with strong were tighter in a year's rate both rates. down million revenues and our being increase payment period. OTC X% up due commercial volumes FX X% contract revenue our fuels of in segment XX% was down revenues to versus a down result up volumes down spread in to corridors. Physical of lower versus very a XX% XX% XX% in X%, key quarter, was XX% business. CFD revenue down prior

period. money income both the which increased a ago year FDIC versus client versus interest million market and the declined to listed balances us to includes and capturing rate XX% Our float, in higher sweep equity year. XX% aggregate period this, on and derivative balances Despite client client prior these our the due interest $XXX.X current fee

a it largely function measuring market rate engagement client versus is with the exception see of increase conditions. up the comes picture across were to most with per the is growth a FX revenue CFDs products volatility again, see X year. our contracts. on retraced and of Volumes XX%. exception the Turning can an a basis experienced important physical to market levels million, Again, across the for down of we And to capture us compared the CFDs, generally market FX looking for board, prior in of and up Revenue trailing of except XX% and which which penetration. again Slide when prior months. the to long-term year, good mixed same as higher indicator were We data at XX a and lower

see the continue the In securities to of capture volumes lower-margin product addition, with in we effect change products. the mix in revenue and increased

summary X, our few before and on Bill just a Slide highlights Turning touch into more gets a now to details. segment

was For the terms marginally quarter. which the both segment quarter, and were prior revenues XX% of in segments segment All operating income year payments, lower. and up for revenues versus except up is were XX% up income,

revenues a revenues. revenues, offsetting listed income Our in were up the segment X% income quarter and lower and and commercial operating had physical a On revenues both derivatives back increase increased segment revenues operating off in operating and in and with X% up of with interest record sequential segment basis, the OTC XX% XX%, a segment income respectively.

XX% offering. driving with this segment segment and a in in a segment, segment operating sequential XXX% in Retail and payments were up prior decreased XX% income revenues segment institutional basis, X%, were increase this followed revenues increase realized tighter revenue revenues, digital XX%. and our segment key gains standout up had On standout the basis, XX%. versus were income. Operating X%. gains off and XX% a income into FX increase up XX% basis, corridors. down in revenues due revenues income sequential segment and down by increase the leverage Retail operational a with which strong income a operating in highlighting On operating and payment quarter, again was income translated down up operating In we operating segment we up in across revenues X% operating back immediately was the trailing was a income spreads Institutional up Our were X% up the segment of up X% interest primarily securities income XX% quarter. On X%, again revenues and segment a to income, XX-month was a payments board. XX% was our have

have of accounting been appears over of as Turning adjusted to gain financial top numbers provided and the now Slide deck. X on X, sets filings prior at the out appendix acquisition earnings the XX-month for page, trailing to in in These in quarters. reconciliation CDI disclosed our which the the the related treatment last this the which our performance

XX-month trailing operating On bars last side, the quarters. over our X the represent left-hand revenues the

trend, see, and and As been steadily our a has and smooth upward as have we this capabilities. expanded you can strongly footprint

XX% period this up for are average XX% revenues over operating a rate. growth Our compound

Our grown adjusted has a pretax income XX% CAGR. at significantly likewise

as line see have our significantly years to in right-hand XX% X outperformed compound the equity, return, the performance for the capitalization on The half over you. that, of financial market graph, you you an has XX% which which On period. net ROE, bottom even which measured right-hand shows over the stockholders' adjusted performance, I'll long-term our the growth is of a rate target, well side, XX The Bill now results. though both the the represents index the operating over Bill, which sets nearly our adjusted grown last income last the XX% Dunaway in graph side on can for has we bottom over grown capital is as hand both up slide CAGR. we right-hand and our our to years. With above out in shown this our discussion XX% bars, stockholder revenue dotted left have financial at which remained over our XX%

William Dunaway

of on which third of income Thank you, Sean 'XX. the statement for the operating consolidated Slide for quarter. starting be to quarter many summarizes highlights the Sean. I'll revenues fiscal covered related our the consolidated #X,

a then more at $X.X immediately some segment discussed as quarter then year for sale earnings on quarter which the recognized fluctuations our discussion. Operating derivative cover off the So million cost. in on inventories current I'll the realized prior related cost, revenues at mention physical preceding the with had nature, just quarter item realized an were a on inventories and gain the in Similar of gain call. expense $X.X carried for included consolidated on on one positions last million losses and carried finish of

expenses, business, of increased due The result $X.X Introducing volumes. declined prior activities, with our the deposits broker of the fixed the compared $X.X fixed as a $XX.X XXXX increased in on as incremental $XX income of in profile primarily the X, March used result commissions prior related prior consolidated million to a as income year, due as expense on securities interest maturity our in revolving prior business as the liquidity. the the rates, to increase increases period. on mature to on on clearing notes of versus Interest to interest in to $XXX of were secured increased down facility. notes Interest client XX% senior to Interest to as debt XXXX compared current and both on to notes, corporate case related to the paid decline the million expenses of float. expense listed million as our which due allowed funding lending due in issuance senior year which current and were flat secured million credit bolster to $X.X in million to the Moving diffuse securities institutional of year. of increase average at were relatively the increase volumes XXXX as our million short-term pay million in period year increased in transaction-based interest the borrowings million and were client existing balances our which to derivatives in addition, $XX.X $XX interest scheduled expense us well June to proceeds in expense well extend a these

an the of until incurred XX, not million redeem issuance incremental due redeem redemption notes interest notes $X.X While is the used This par. the to XXXX, those at the the funds of period. diffusement in order the expense were new in from notes resulted during to XXXX, June

extending was on this out deferred on of our of we issue due us the transaction the we until of $X.X financing million notes, write-off leverage in completion on redemption recognized and of interest date. upon expense notes Overall, the diffused addition, escrow extinguishment interest by $X.X to unamortized held earned Partially the offsetting loss the In XXXX, in incremental X redemption the for million debt related income maturity original neutral while years. up funds costs. discount the profile

billion transaction, available capital have nearly our we $X.X and the to Following clients growth. long-term in our support

$XX.X severance year current million executive million in prior both $X.X well or officer. and $X.X the Moving of driven a on. million departure year, as $XXX,XXX in XX% the by the partially increased the revenues the severance which compared related costs versus XX% a incentive period. in in to compared prior year and $XX.X versus long-term million share-based compensation an of to prior year operating the increased accelerated increase as prior Variable compensation and net in Fixed represented million was $X.X as as compensation to

fixed Fixed in lines acceleration of to the compensation long-term an and rental, primarily fees, space in professional to in million $X.X principally increase well and increased in increase acquisition of facilitate share this immediately the technology London in well versus immediately risk million business fees, as due capabilities million a driven XX% $XX.X including million I merit expenses prior In legal million, $X.X trade $X occupancy XX% increase due additional the expenses in a presence a business that the support in our to and due $X.X equipment nontrading $XXX,XXX and preceding compensation as and noted. Other primarily increase or compared and growth million severance as fixed build-out and continued increase annual in increased areas increased and driven support information. expansion Compared year, non-variable from other increased X% quarter, in addition, preceding by $X.X increases. compensation an to as a the in the quarter, $XXX,XXX among systems offshore a a increase our principally of professional fees by increase increase India. resulting headcount, to just our in market of as salaries

of variance immediately debt million preceding the the to $X.X discussion expenses, respectively. we recoveries favorable net Finally, had prior the a of versus in $XXX,XXX off close of in quarters, bad and year

increased year The immediately quarter. other Commodity versus in XXXX the settlement received matter. Net the of for the fiscal current period. Options represents Exchange an the Gold which Futures XX% income prior gain versus class trading of $XX.X $X.X was in Net the of and XX% quarter decline a strong income action million third million, preceding quarter very

some following more preceding on million and our year to on segments. commercial versus increase when The increased the revenues compared U.S. operating revenue sanctions by metals driven Moving our driven in Slide principally spreads markets Russian and segment million in versus #X. operating I'll immediately the by million on provide prior widening U.K. a $X.X $XX.X metals. derivative information increased Operating the year quarter. prior ] volumes the and [ London in was to $XX.X increase

increases, to on carried Offsetting the revenues these operating In transactions addition, rates interest balances. million increased due interest due in costs prior declined to the higher earlier, gain I earned in strong realized performance as on compared physical fuels realized to of $XX.X prior client very client sale inventories balances year from physical principally mentioned the on at despite $XX.X year. the million renewable

the increased Finally, benefits OTC as million versus preceding prior the but costs headcount current versus in down declined in compared million and to primarily the primarily and quarter. versus prior Other prior $XXX,XXX operating increased fixed expenses immediately were $X million decline preceding the from Fixed $X.X the derivatives and period. due the severance markets. versus million revenues immediately Brazilian year, quarter, increased a $XXX,XXX to in to year, compensation in XX% $X.X primarily OTC $X.X volumes due year

and had we the we quarter. these marketing. year an special offsetting X% compared to year. Segment the XX% prior increases, $XXX.X and a debt in increases selling the to Partially and versus fees million in year, bad preceding income $X the period, prior for compared variance versus million of had increase positive was immediately net As recoveries the prior of of

costs As in current compliance, of do X technology, with to started provided and the will so and period We've associated of to our segments, a XXXX, segments the allocation human resources our quarter we this in each prospectively. expenses fiscal risk, continue a to and occupancy. portion allocate of each reminder, of operating including credit in corporate first our

However, allocation previously we have periods. for not calculated reported similar

for allocation commercial For corporate the current period, segment costs this our of $X.X million. was

well increase the on increase Moving securities on in in X% result and rates the on prior in preceding Interest to grew in by increase The expense lending clients million to the immediately year increased income million Operating million to as year, million to to partially fixed primarily by respectively, year. offset primarily compared in revenues, the in increase client and a well increased revenues year quarter. the activities compared client increase increase a in balances. Segment income was income million prior segment million, a the money securities in a of $XXX.X client average period, year. Interest as fixed Segment of versus prior balances, of expenses. paid rates. as fixed by client driven interest quarter. balances versus by million result income equity the in of the $XX.X million up in volumes in in prior daily benefits earned #XX. interest as prior as $XX.X Slide increase earned offset $XX.X operating both revenues the was $XX.X and fee market $XX.X increase increased our operating a $X.X a in net versus partially other on result million trading increase an current in related million FDIC ADV decline the markets. million in securities increased $X.X Institutional average interest $X.X increase versus securities million client decreased balances income and equities to realized The preceding increased income the as prior fixed and increase while as to XX% which a $X.X sweep interest the versus due these as expense balances, year, transactions driven XX% a client the volume immediately at ADV which Interest was versus $X.X respectively, declines and average $XX.X compensation and was and in $XXX,XXX XX% securities

of the was For the allocation institutional current period, million. costs segment our $XX.X corporate for

an the revenues increased $X.X next increase our revenues the versus a as Moving slide. million in in of in CFD million driven million Operating retail on prior a the segment result as in to year, an result in by the prior compared the $X.X year. FX prior a and represents which to million income X% increase a XX% $X.X of the year. $X.X to an expenses, Segment X% RPM, and increase X% $XX.X quarter Operating rate million year. million was in versus preceding as was $X.X preceding prior in current high per all-time the to the at well period, the ADV immediate This as declined decline revenues fixed respectively, due over compared operating as revenues in despite and million was which increase compensation decline quarter. in a increase other

received we Fixed [ the In ] million quarter, addition, in action in the Gold matter. class current $X.X

it declined decline rate quarter. Sean. as to compared segment declined $X.X compensation payments slide, income payments period million. With the which $X.X as For for as $X.X our like quarters. Closing million million X% period, was over of the in out immediately revenues, result offset income in allocation declined a period, a the prior income the benefits. fixed versus million year were the XX% the year. compared million the in versus to of Segment And to corporate the was in next operating Segment costs a X% the for $XX.X back retail preceding despite immediately million to increase for that, our the and current to on turn preceding $XX.X segment $X.X million and X% by increased the declined I'd allocated segment decrease current discussion in corporate partially segment prior costs current the segment the revenues per operating ABV

Sean O'Connor

Bill. Thanks,

basic on strategy, up constructive us been Moving on we are and to repeating Slide strategy environment, probably discussed worth mentioned it in the again. served unchanged years XX, which focused calls sets I on. with have which a We well. And strategic high-level it's and our and objectives on numerous this which has XX for but has we remain over aligns approach This before, slide. industry is summarized think that

smaller Following to were in a response financial regulators was crisis, and financial and more oversight to the sufficient market. made robust key of more and as complex capital there the durable impacts requirements. firms remain create generate increased with the increase and to a due offerings from around given to narrow a and dramatically difficult This revenue process well product viable the world as cost massive costs those this significant comprehensive requirements. it The for capital

be has our broker result, the fairly be This been and consolidation at declined. by industry. evidenced continues a As of has dramatic number which can dealers, FCMs there massively and clearing to a looking in

directly indirectly find We this of business. process and as to participated through some firms benefited been our acquisitions forced have have their have for clients new also in

of customers. years. capability placed Both still have think the most market dynamics I've increasingly we We StoneX us advantage. The post banks the in directly having the consolidation ecosystem set, be go mentioned, allows the impacted in And StoneX to an withdrawal close this us way have. the from significant clients satisfy want and banks aggregate withdrawal for the just Tier of to markets. the space by firm Generally the looking market take becoming the lower context relevant our to best-in-class reevaluate is us strategic still banks X the the market have these from by We share keep banks over to for fairly existing opportunity reordering needs type significant I'm are but certain are fully, financial we of to creates this factors, single trading larger new a a our the will operations which long rules to us. to punitive trading best Basel large product CAGRs majority with our account XX and capital priority broad we capital clients. to us continue connect for a destination in as and withdraw a unparalleled of to there's is attractive significant and on And big as makes allowed and to the XX% our our franchise. structure. and markets retreating, known ecosystem. believe strategy. most speaking, to are forced market, building for accelerate last the This positively for the adopted requirements the a partner now their for continue clients end by financial and to global dearly The addition, to In remain to them their as focus growing the core seen have relevant I in they have services they if

to Secondly, existing a and markets share we consistently clients. where our work footprint client need growing expanding client-centric and we into have are new at market we business,

new our all also all of seek look increasingly and of cross-sell and capabilities clients. existing segments various will channels, to serve We to to markets our

from effectively enhance engagement our been accelerate accelerated us achieve business. allow and through technology now, a client achieve should should GAIN, market not This powerful factors the of requires These unless increase on a bottom necessary us execution margins. leverage. which will scalability This revenue drive technology X is but line margins share, not we of could has acquisition been addition, processes side only the In to offering. front embrace to itself operational and a allow our for we growth digitize with initiative Success rethink but continue better years capture underway some in more be scale will back growth revenue has and margins. and driver better of our and the together the net on by side to digital gaining and to

capital, disciplined business access underpin with to a manner. our appropriate capital, when internally growth in approach and supported by need Finally, is we markets and capital generated acquisitions our

business for will be of requires of most believe franchise. regulatory capital the provide should in Our define balance sheet equity capital the we form on. fortress a this take client that long-term that permanent capital the to We client activity

slide. And revenues the in a last EPS results of of the was long-term million, a to operating conclusion, and represents our of XX%. delivering achieved solid fiscal XX% on $XX.X This record we third stated XX.X% in diluted XXXX, quarter million ahead book on ROE $XXX up $X.XX. Moving Earnings target.

up generated measure financial XX $XXX.X the EPS trailing book in ways, net For value per is XX%. some the months, share, of we growth for diluted the income performance clearest million best year and In share. $X.XX of per and is of which the last

strong the for a months trading lens conditions, that lower our long-term such business. When the our more despite to results is We through our see business slightly longer-term our trailing our the multiple demonstrates drivers generate trajectory, performance evens which stockholders which and which show the to continue upward quarterly returns earnings an volatility adjusted last as continues are CAGR, and XX challenging diversification XX% which of the pleased out over of viewed a years. strong to operating CAGR, and last results last XX% at the years, up our is growing is X XX% a up X anomalies, few over XX% years at over revenues our

conditions engagement. in products across base in revenues across trading trading our improve. continue the of XX result we of enhanced underlying speaks our these and Over should see as volumes This long-term all last which and segments, online client power growth in to growth most operating to earnings months, of our

our has financial global to wholesaler we legacy started franchise As a a reminder, continents. Saul XX our Company. offices XXX-year spanning egg Stone as grown small remarkable since company, a into & door-to-door think across our year, Again, namesake XXXX over what of celebrate anniversary X fiscal

market Our share the scope the long-standing from far unmatched the we available operator, still is recognize our track for questions. let's us. With to largely record sets the that, are industry. standard, line open of the opportunities realizing we we full in and Yet believe

Operator

we session. Jefferies. will time, Dan Fannon the from Our this first the question of Instructions] conduct question-and-answer of [Operator comes At line

Daniel Fannon

you short know very I'd the happened as good be to maybe around your start highlighted, more which assume low of or I this has given little seen kind I from last these that's but get in would like would recent on through is more of been elevated, just Sean, as term, you've volatility volatility quick both to just bad of if on kind remarks, curious a platform, helpful. all curious side. of the what I'm prepared trading would about characterize volume balance your context a the moves And perspective, some during just also but be of days. I kind extremes. as we you and handful

Sean O'Connor

Well, described. clients and end the in say of the would helpful as in extreme lot war, volatility days, of are the which the reasonable less volatility be handle. extreme those to to think financial volatility I've difficult always didn't time or is of last can just market debts dislocation, and I over you that We There's environments, environment X that end opinion, that we've moderate Ukraine or bad the of lot with can interest a and recent volatility COVID we up charge-offs because money up best but make get my said, sort saw for onset at Very at the defaulting. the during the I rates the a us. crisis in like.

obviously volatility. there's in a spike So

So orderly, were of a sort were as spreads of far market were some us. us, for bit. are that's that major probably no But spiked, spiked. obviously, I dislocations. any a didn't environment obviously, but by major out as it people for right? But good about the not good sort think, caught And see see who we've we extreme. dislocations. market little didn't last We The was days And there major heard volume we there. it's aware, X trading offsides damage

volatility, that of say question. but high any your would if I So problems, answers without sort major

Daniel Fannon

or of Yes. risk changes what's terms guess of and kind noting there? That's in like that's I happened, helpful. And worth any balances

Sean O'Connor

are there Obviously, the have lots calls of discern to be margin moment. can we environment, that made. Nothing that at that in

problems. was sort continues, think All of major low of extreme volatility. see volatility were didn't though, tend happen to done I fashion, orderly at this does an that if we What and any in

think right, I mean XX happen, basis, So cut of the of the you get require though to for which maybe to activity. the the volatility. slightly to reasons had off balances the balances higher may COVID That's more mix new exchange elevated client war months the it even up saw volatility to low. certainly going hit, in down higher what requirements situation, may level volatility to a off and not come we put sort higher be is I one be that spike Ukraine probably back ago. tends sustain had recalibrated When same was because much we and we XX of were of the

So we levels. balances of get in margins an may see a uptick recalibrated because higher sort just little or of volatility bit

Daniel Fannon

Got it.

quite see is revenue quarter the of expense the terms And fixed base obviously, just then itself, we're to Okay. continuing But grow. strong. in

I at number some on X-month look basis, in But one-timers a things year, called I last expenses this pretty healthy growing out, think around if are versus of there the terms fixed the severance. just reported rate. year Bill, you a were versus

fixed there'd get of process incremental get we because trying longer the a to you but period variable we like So higher be about that wanted think a revenues, and sense on understanding are have think where efficient, side will of move bit with more digitization more I as in little a this to comp transition would in more frankly, term thought margin this.

William Dunaway

Dan. Sure,

as I I little up acceleration. million vast that, certainly, So we majority about Yes. some sequentially. was $X The I a some mean, fixed of had nonvariable sure. related compensation on compensation mean, and as to touched out my bit, called severance during I so on portion

go-forward equipment build-out So we that that level basis. I on occupancy a expect certainly, We've wouldn't have to seen rental. think a of

digitization. trying some are We offshore to and go the with steps development of take to our

going additional taken flowing like space the of which have think we'll and is in benefits to we forward. we'd India, So some that through see

us So the that have side. growth. fixed pretty We we to a focus try we a for drive certainly, think and that operating the seen obviously, really have I would on in growth margin that to to going think it's forward focus good the like

But them a fees, your is cetera. it certainly, of an being bit focus area like little professional Some end control, up et out for of of us.

in So growth to rate the be at as here, the continue of kind it, the you expect would in to not we've we certainly it was year-over-year that noted. seen

Sean O'Connor

of think to institutional some that comp got and it, X to to business Dan, continue a of X grow. compensation sort big continues sort And the there's fixed We've people of right? revenues ways I of to grow, lot people say, costs our expand teams hire that sort high-touch variable and or compensation about buckets sort of business. recruit would there's obviously I where variable when And obviously, guess, of adds and that and comp. we of, business

delivering to what don't to we've sort it's that, is I mean think we hope growing. stop think got deliver. going is So the sure I that's make that of going I to growth incremental revenue,

to of the trying the sort we a client-facing that locations. efficient is that's have that, we high where lot think game because the much the And you'll the of that it's and see element technology more real there's starting down sort And factor got that well. revenue. what retail and the I that. because for on. so X a side, almost we're to cost hope cost comp doing technology, do of certainly to it to money as you've base see we're in think there's but I again, build attaching margins by variable hope fixed On you And pushing cost to platform old And there to developers spend line, exceptionally is see the of

I'm got the Poland. big cost we've some some on got mean XXX-plus We've of it's there. So cost that XXX-plus but we've other regions. those me a up in wrong, Bill, I in And numbers, correct spinning lower round got in pretty in delta there's we're people got, if We've India. places. now people people XX% or greater

efficiencies we So you can of cost base. lot a if the refactor get

having offices we're do to Now that. to build

refactor leverage some as start that that to And coming through, we'll come the And think, But leverage that revenue hopefully, start cost think I but come fixed we'll operational see cost, I we once going base. costs have You high that's from to a see we the think through. revenues costs. should sort high operational to of that. of cover have very

internal we're try get other tech our we sort of bit and company. functions an to we're The of centralize efficiency simplify try some of things within believe stack, doing and out utility little thing internally undergoing is to reorg a are the

efficient spend hard we're So working to as see try make as to possible. can that we that

We trying up should that's know see margins. hopefully, And don't continue be of think mean, efficient, technology go I of I see sort we think to day, revenues right, create end And what grow, we I the go side, that may incremental what operational as still add still expand continue high-touch making you to about to that's leverage forward. right? you we using we're should if we jobs people. find may we really should we to it, the But with you time. offset So costs means, and increasing may do is how cost at now our but on what because over on is hopefully, sure the see focus the

margins. may see definitely we is want to we So what want revenues costs to grow, increased but grow,

Daniel Fannon

and are as that for what And then might on offset about off else the Understood. cuts, remind the I rates income? rolling your lower us swaps prospectively, interest to interest can be rates or on you potential think

William Dunaway

the lower we current close we off. saw. what do swaps rates just still The on Sure, is Dan. or bps rolled market The than vast one have of majority are pretty all to maybe XX

of now. that in point a $XX deck, or on everybody fair we on is either business. where table have, shows sensitivity there just delta what what But obviously million the increase is drop we that side, do focused drop. that that a I are kind the in of that the XXX a institutional it paying And clients, about is factor particularly a does on spread will kind the say So or amount drop for is still basis earnings

really X/X paying So there's capture about will then overall not on. going that of X/X affect affect And it balances you're that with the interest probably to our basis. probably there's another in those partially a a where really X/X net and rates, it drop on it's not

won't the overall, be it's net drop the captured sensitivity kind on a rate So of dollar-for-dollar in interest it but downside. table,

make just fact are will sense? by the it we that spread muted earning So on of it. a some that Does be some

Daniel Fannon

the just Yes. inorganic this a on more just guys No, been up, been kind growth guess I this, you location several but for environment. bit does the quiet for then It's This Sean, positive. does. create it quarters, has little of following like organic opportunities?

about in dialog this and set So curious about the just as M&A you opportunity think environment?

Sean O'Connor

sort banks growth hearing we're mean, seen to Yes. of of it the really from their We're now. organic struggling dealing the I I it some us good organic we've really think a And are at the and I business. with just number moment. banks opportunity. feels mean having that to refocus

of of and lot a seeing we're of lot talent available being a So clients sort becoming loose. shaken

can I've we an as same. for significant. think if net as sort us but for opportunity bring organic the not an almost It's of that's acquisition, is So discussed accounted people, teams of result the like right? I before, acquisition, the And recorded is pretty on or

if You right. chunk big incremental with that coming revenue end a up do of across, you

So that's moment. the very at constructive

generally you think I extreme. opportunity for X is have like what days In getting can come we if at seeing provides nothing that last stuff. saw at desks, But There's of the this and mention point of significant. think more lot as seems I environment it the said a extreme terms is better. us. we certainly, a I previously, don't more across bunch acquisitions, we're in our that's we're looking dislocation, definitely

made interest away. that's I little it was think Higher bid of earlier. volatility the of I a sort lot to blip sort a that bit does to that it a going see these struggling. private does was during I of of are itself. money feel in discrete It of X unrealistic any X, like years up free period have create of sort a is I going all equity and sort COVID sort start-ups when that opportunities harder. and on look little of and don't businesses spun of said like sort the But were of them a good are rates going those available was to bit. it think lot expectations mean, now up

So from it's that interesting. becoming quite sense,

be to of a going lot are coming of that. opportunities there think interesting I out

not be at are Now businesses may does that do think and of coming us there's a I the and roost, lot some viable home where all a stuff of give chickens lot of just opportunities. to to those sort us. interesting not But

So how it we'll goes. see

Operator

questions I'm this time. remarks. turn I at it to O'Connor like showing further for to no back would closing now Sean

Sean O'Connor

so the for to for you Hemisphere the the time everyone, in much. in enjoy rest here Thanks Well, X we'll listen. thanks, to of appreciate And months' the time. summer, Northern everyone We anyway, speak taking it. and

Operator

conclude the your for you participation conference. does Thank in today's This program.

disconnect. You may now

StoneX (SNEX) 7 Aug 242024 Q3 Earnings call transcript