SNEX - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Fourth Quarter Full Year 2024 StoneX Group Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like now to turn the conference over to Bill Dunaway, Chief Financial Officer. Sir, please go ahead.

William Dunaway

morning. Good earnings our our September quarter call XXXX. XX, conference to fourth for ended Welcome closed issued of yesterday, reporting market the After we for fourth our a the fiscal quarter XXXX. results release press on our presentation, results. in fiscal slide will our This release of we is website www.stonex.com quarterly as which this as on to year our at refer discussion a well call, full available and

an the be and presentation available call's archive after our website webcast also The of will on conclusion. the

are advise conjunction well should statements you we most participants required be note that discussion thereto all as financial underway, following should XX-K to be filed getting Before as to Form and notes recent with with and the the the in taken the SEC.

within the are uncertainties, XXA of statements amended These the SEC. statements the involve Exchange XXXX the as amended. and This meaning Securities and our Section of of unknown discussion of which XXE of filings Act forward-looking with detailed known and in Securities contain Section Act as may XXXX forward-looking risks

will any company implied statements the assurances reasonable business differ company's are its statements. regarding conditions, based future the actual believes from or forward-looking market assumptions, company's results can the materially and be that that results there no expressed upon Although not its forward-looking by

are publicly statements The events forward-looking or future information, or company are whether revise that no result obligation any of new update of as otherwise. undertakes guarantees to any a future forward-looking statements, cautioned not Readers performance.

call company's CEO. turn now the the I'll over to that, O'Connor, Sean With

Sean O'Connor

XX.X% fourth net XX% and of preceding EPS. of call. were value ago, increase despite quarter, Starting XX% [indiscernible] us share net in the book immediately period stated X represented year joining record XXXX XXXX an a increase everyone, for quarter years. up the as per diluted X our the over earnings quarter earnings earnings we ROE to income Good a with up income was fiscal of XX% morning, and earnings for a Bill. Thanks, comparative these This million Slide were XX% And last of the result fiscal XX%, $XX.X XX.X% a -- and deck. last The value thanks on on compared on book the measures and and year respectively. and over tangible in ROE XX% in a book fourth

$XXX.X We million, the operating up year. versus of prior had revenues XX% record

compensation revenue the compensation costs operating were in up with in preceding Total immediately XX% compared X%, record versus But revenues, interest other the the expenses the Fixed Just broker quarter. and operating a include fixed also interest year up reminder, expense versus on off not versus a clearing is to interest up X% income costs achieved and for variable down that X% ago. year But which rate. well were X% growth float. nets our as quarter. as quarter, down only XX% to immediately ago, operating were Net revenues up activities. but earned related and our net introducing with line compensation were client carried preceding a related trading commissions

of in year strategy our This believe strong understood the full in has robust operating finish and year year the for we validates row, to resulted earnings third our which franchise. a fiscal record potential results our

$XX.XX, XX.X% stated year We net up million, book $XXX.X prior with the a on book X%. $X.X up Net adjusted per year year. income Our the $XXX.X was ago. of value. fiscal XX%. year tangible and million versus book The full ended on EPS value on XXXX $X.XX return of was share, XX.X% up the equity with up for XX% versus share X% were was year operating up revenues XX% record income per billion, a

low a versus which deck, Slide by what in product to speaking, been market periodically fiscal the exceptions of has with in fourth and except revenue for the the of earnings the our year, most impacted generally to in was Generally in product volatility, Turning foreign products it quarter X quarterly some for areas, capture exchange most similar some which CFDs. year of compares ago. negatively revenues environment operating our

see As can indeed, know, conditions are volatility all and that events change have we ahead. this we hopeful out, we quickly prove recent and market may better

products. as to continue share engagement by capture all good of we However, volumes evidenced market client our and across increased see

The trading footprint earnings more be even should power enhanced conditions. evident with client from improved our

XX%, ] strong large we fourth were with by segment, revenue in quarter, the by make XX% growth driven a institutional clients. rates. in of offset [ to with derivatives factors institutional contract listed which volume reduction For saw gains solid XX% continued gains of Both

X%. volumes In with down volumes derivatives decline up addition, Securities year. was and to slightly partially were higher rate to both contract as prior rate by increased million. offset up volumes, commercial and by XX% a capture being was XX% up segment the revenue and per largely compared per XX%, revenue X% which in the revenue down XX% offset OTC due

of of we several last of products, due down on spreads revenue capture rate this with was mix tighter a the volume, key we switch down for in XX%. corridors, the now theme couple has to although business revenue the higher have have out. X seen impact the years, Over flattened to XX%, our payments million seen margin quarters per last Payments much lower

were volume was on However, FX XX%, consecutive which and CFDs positive to year-over-year volumes third up revenues note, gains growth. and capture. in quarter both X% a due the were up volumes spread

those listed money client FDIC versus the our increased balances achieve XX% float, on and on sweep earned market we prior Our year as higher balances. interest derivative rates interest and fee including both aggregate income equity client our

That was partially year. X% offset versus by balances decline in these prior a the

and OTC same see payments securities, for Slide for year in the up again On CFDs. client revenue down FX derivatives, and products our basis, market Turning over physical commodities. We comes a data for CFDs engagement revenue across of this to it exception was volumes the FX for and growth full penetration. us long-term listed indicator an X were at important The to the the is XXXX. looking good and fiscal with all derivatives, board measuring and when

prior However, a we mixed experienced rate conditions. of volatility can function as see of levels which And XX% in million. compared the retrace FX the Up market market is a lower the to increase year, generally revenue picture exception per and versus largely again CFDs, with capture a year. significant to prior

we change continue product addition, of in lower-margin effect to securities with volumes on increased the the in In million mix rate products. per see a

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

except segment and prior payments X% being income were revenues year. XX% up operating revenue quarter, outlier. was the were both segments positive For the up institutional and income, All segment in with versus for up the

Our listed income. revenue. had realistically OTC revenue XX% offset largely quarter both income the commercial record segment Operating listed respectively, and derivative a versus down Stronger quarter. derivative was revenue by immediately revenues prior and revenues flat and in XX%, -- segment operating lower were segment

derivatives XX%, revenues As I increases in and prior segment the quarter by increases equity noted market-making, segment XX% riveting earlier, in of driven Institutional year over had in interest income. and particular, respectively, and record both with income a upper

X% a X%, segment retail basis, the income XX%. both soft to income a a and was segment FX income again, X%, up increase and tighter the down revenues X% segment due several our basis, and our sequential revenues in up were were revenue in segment income and inherent is was director revenues XX%. up platform. XX%, income sequential segment, sequential key of demonstrating down revenues was On and Self-directed operating up principally corridors. operational down Payments operating On operating On in operating operating In down had payment and up XX% segment were basis, X% income. spreads a segment leverage XX%

for payment the year roughly income summary significantly. For up up as the retail was and were institutional and revenue segment commercial operating whole, year well a both self-directed as the fiscal segments was was while in flat as

segment from interest offset listed commercial physical flat with derivatives derivatives lower was and commodities. from the results roughly mentioned, revenues OTC stronger and being by As

was XX% revenues improved The but segment conditions the X% shown in most significant income with leverage operational of business. factor platform. clearly spreads the we in Again, the traded. as up from and in the XX%, had XX%, have for grew we've all this capture in operating retail in internalization revenues down and Payments market diversification driving segment has segment here with what exception income. XXX% of standout operating self-directed products Institutional the Our benefited Self-directed many was been we demonstrating better a toughest revenues a segment gains of revenue increase FX. operating up years segment at product with income slightly

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

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

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

period this CAGR. XX% revenues XX% up operating are a for Our over

is income grown XX% likewise adjusted Our an pretax at CAGR.

our the On up net bars, years for side, last the XX-month over see the trailing X you in adjusted CAGR. XX% XX% is which right-hand can income an

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to Bill hand Bill? over Dunaway. With that, I'll you

William Dunaway

Operating covered statement I'll and Sean. in of nature, quarter. you, by the realized the amount the so fluctuations summarizes sale at the revenues of was inventories Slide for quarter gain X many million and consolidated #X, on a inventories related the $X.X costs cover discussion. the record to revenues the then Thank in operating consolidated impacted fiscal related on quarter our expense year were just highlights to mention segment which Similar $XXX,XXX. Sean finish for fourth will in unfavorably quarter, carried with the impacted income I'll item these off unfavorably for the on 'XX. quarter losses upcoming the consolidated then be of prior of current derivative and positions starting unrealized

Moving increased prior year. million clearing securities XX%, in result consolidated current period volumes derivatives Transaction-based of to listed as increases expenses $XX.X the a and on in expenses. compared to the as

versus profile fixed balances paid $X.X year. a as million to secured as to deposit X% principally as million allowed increased X, $XX.X issuance, long-term primarily to which business increased extend million the $XX funding corporate our related compared XXXX. in us senior the million issuance a interest on result well our interest and increase commissions million was due the expense to XXXX. in related our $X capital $XX.X broker on of That versus prior notes prior expense Interest from March which were year, maturity the in of Interest Introducing XXXX income interest to our activities. on secured of institutional notes, due to increased our expense prior declined the refinancing increase debt period. senior current securities $X.X client incremental due as expense a Interest million lending increase year,

deferred prior operating increased Interest expense revenues versus expansion XXXX in expense the in areas as head as among a original and XX% of prior XX%, driven period compared discount the write-off of Variable of versus on current the on operating debt loss growth in lines prior $X.X well increase million notes. principally from Fixed XX% XX% included decreased year count compensation on the period. the merit was and annual the extinguishment year, XX% increasing well quarter, related our the million business revenues versus nonvariable of period which interest which well $XX of as as or unamortized following incremental the the salaries defeasement resulting financing represented from year net or facilitate to in our a due to preceding these as million X.X% as notes our issue by an immediately increased of funding capabilities increases. costs $X.X net business to resulting compensation support corporate

software, the million and Additional or departure related as versus of by a prior $X.X long-term XX% acceleration the the and in preceding $X.X versus employee amortization amortization, $X.X a which by and compared compensation our to year. due incentive depreciation driven million decreased a principally prior and $X.X of information. share capitalized in in India, expenses officer. the included benefits to a base and nontrading and equipment increase Fixed the increase and Principally Other million market year. to in primarily trading develop increased driven of build-out X% rental of $XX.X additional severance million offshore an continued immediately to of increase support fixed systems and London quarter million internally acquisition in compensation $X.X space in technology million increase occupancy increased executive the presence

expenses partially of decreased policy. partially increase fees, million discussed. decrease driven million offset the Compared in as by by were These under quarter, $X the primarily principally in preceding to $X.X legal in amortization decrease $X.X a fees, offset to immediately due by recovery a $XXX,XXX, insurance a previously an professional fixed professional certain other fees million

$X.X million XX% of income Net received represents respectively, quarter close favorable relatively the prior net year prior was to increase we versus $X.X expenses, had with in the and and to quarter. proceeds included Finally, gains for the fourth flat preceding bad bad the Net variance preceding preceding million increased settlements. other an recoveries quarter in the quarter. which immediately with of discussion of of year. out versus 'XX immediately action debts immediately prior being quarter the million, of $XX.X The related million, a year, debts $X.X XX% versus of fiscal class income

Now The on in [indiscernible] $X.X #X. but on versus a I'll revenues segments. Slide provide more some Operating our million year, Commercial our information segment to moving increased operating prior it's segment. declined been driven market. in versus year that LME for in performance operating improved driven an revenues derivatives $XX.X million was increase principally prior and performance quarterly listed the agricultural record by increase by

client to loss balances precious in on inventory from performance described client $X at increased revenues strong a on million [ on rates transactions ] as physical a earned increased $X.X as balance. interest result [indiscernible] in prior realized of despite addition, due carried the positions principally In higher year previously, compared million the to derivative to million costs related $X.X metals. Operating

volatility, modest growth $XX.X offset volumes. declined due decline to was prior partially operating Finally, compared XX% due as OTC per a contract revenues to primarily from diminished rate derivatives OTC million year, in to commodity the OTC which average by in

Sean O'Connor

Bill, is going can just audio out a If bit. and your it's interrupt I Sean. little in you,

So set it's I don't or handset know phone, if the your about for do to that. you sorry want

Okay.

William Dunaway

$X.X due increased $XXX,XXX increased to benefits versus Primarily costs. the down versus quarter. were severance and benefits and [indiscernible] versus year, $X.X decreased the headcount, employee compensation Other prior immediately million versus million year preceding the immediately Fixed quarter. but increased million to the primarily decreased due expenses fixed prior preceding but

period, net in positive year immediately bad professional the recoveries debt of the versus Segment had increase $XX.X the XX% being in year. a versus declining period, With offsetting we decline preceding income compared the increases, of these the to a decline immediately prior preceding million fees. by variance driven $X.X versus quarter Partially X% for quarter. an was the million but prior of

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

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

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

volume interest our is preceding an a interest fixed transactions, income [ the the in rates. to activities million client and result Institutional $XXX.X markets. which these $XXX.X balances clearing million, rates compared declined securities increase in derivatives revenues XX. a versus an XX% earned as sweep fee by realized and Primarily paid the lending as million operating on related equity notably Slide activities year. $XX.X versus increase to listed ] expense client year Average of associated Which interest overall fixed and by balances, revenues versus offset a fixed securities $X.X with a and in million fee activities as versus prior increased income interest securities increase year. in prior of our average interest activities, while dealing prior balances. money to increased the as million. increase our decline result equity immediately result in driven daily the and as increased interest in X%. respectively, related expense was on $X.X income partially to on $X.X prior year Interest our on million income segment Operating the Outside million Interest most a Moving million year $XX.X XX% a of securities income in of average higher earned the income up market FDIC and versus increasing of balances prior increased trading quarter. $X.X with was client well

benefits Segment income a other in of revenues fixed primarily increase million $XX.X the million increase in by current $X.X a a the in net to $X.X in partially increase was offset expenses. million well compensation which as million increased as as fixed period, XX% $XX.X result operating

marketing million costs prior the Segment increases to trade market quarter. income in information increased preceding professional operations selling immediately the year, compared As had systems we fees, versus $XX.X and charges. and and

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

X.X% [ our slide. in prior of quarter, increase year. CFD the a increase ADV, and in revenues partially million Operating revenues by Driven self-directed $X.X RPM. increased increase result increase offset as as $XX.X by in next the in a an ] $X to versus a the versus XX% preceding year. million FX to Operating a X% compared revenues increased rate in and million Moving retail per by the million modest decline immediately prior driven ADV a in segment

year. $XX.X current of increases in marketing over as principally the period. to lower capitalized in prior million year of software operating offset the the increased expenses. XX% $X.X the as to costs, respectively, higher of year. was amortization compensation by This due offset fixed increase internally represents revenues developed increase in technology and fixed fixed expenses was selling income million and prior and by expenses, which the other the result Segment and prior other is the X% increase a to The partially $X.X compared nontrading in partially costs million and compared

$X.X increased which million received income gain action of included $X.X Segment in the the settlement. to the compared also preceding quarter, class to immediately proceeds million the related

as For period decline compensation XX% ADV $XX.X segment per corporate to our to our the allocation revenues discussion a increase segment the slide. Despite period, income the in costs revenues next rate was current million retail in Closing in fixed and the the Payments XX% million. XX% segment XX% Segment for Operating compared benefits. the year. declined increase out prior along the as $X.X of declined in operating $XX.X with declined self-directed on prior result as the million of in the million a the year. current versus

our $X.X allocation Segment costs quarter, versus the $X.X of million. for the was income immediately million for current period, preceding decreased the Payments segment corporate

I'd that, over to with it And to Sean. turn like back

Sean O'Connor

immediately. let to audio, switch me up you Bill, headset I apologies, the think your proceed. Anyway, Thanks, need for Bill, everyone, poor

on. approach sets has unchanged has strategy This out us before. presented for XX Slide years are well we and and we it high-level strategic remained XX that the focused served So and objectives

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these initiatives for gathered region, a in one us. we way significant opportunity of All have represents momentum still underrepresented are and the

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so mentioned to initiative initiatives and and bank, but This We mention will but increased digital scalability It's now in not above which accelerating. requires rethink again. our I'll of has for our unless to product our not years client processes offering. digitize technology engagement, from achieve continue the necessary margin. not to some enhanced been them scale Many underway of growth we embrace only nature, a is the front

aggregate they the our to platforms the client, operational spreads, potential a offers margins. advantage provide client, and it can is our of so technology costs. training market your digital and client revenue opportunity, and the We offering leverage side. clients internalize designed price are But so increasingly our use a to dramatically trading expand the we everywhere hedging Many enhance is maximize on addressable to every minimize that better trading of scalability

incremental as higher types the in combining revenue have of part diversification higher solid probability few flows. over In it's the client offsetting on broad years. this we internalization easier self-directed trades. makes much The This a are the process regard, reason we is amongst of we last have retail seeing made capture business

the from equity internalized also better have some capital leading treatment. margins higher hedging arising We our and self-directed flows to of index and

per become achieving the of over day. execution also a #X $X.X are very Our billion of trading for ranked electronic products. metal-related all market-leading trading volume one PMX, metals daily has now Bloomberg overall record active we We're platform, where FXGO, on [indiscernible] notional

to as enterprise stone hedge exposures. now any multijurisdictional to the offering immediately solution critical elevators offering managing Midwest. our chief go-to resulting clients Our and solution hedge real-time deliveries mass in the the for provides This is the large grain and a incoming in with format

on now example business. commercial on to a and straight This doubled the great to For provide volumes a our how platform the the of XXX offering partner long-term third embed have value-add over use XXX locations traders year, to and and as up clients a platform. in set to have we ourselves large their is technology

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and pre-agreed by then are transaction During open loan with institutional Loan the entering launched up together platform costs. platform just that participate liquidity matched market. the we year, This Match, which costs increased and basis, transparency, product clients orders to matching and in executed a allows innovative lower bank an confidential brings on

our that products needs and OTC structured their enhance to commercial to clients continue best for digital run hedging determine the interpret institute. our platform our commercial quote and We to get all product scenarios for to -- client

data management team made and significant enhance Our easily monitoring more has able organization. strides is monitoring risk entire aggregate across to real-time with analyze to risk and the

underway -- number infrastructure, leverage. a should our operational better of which our in number have drive to many support technology projects we We time and areas to utilize of scalability a underway of create over have projects throughout efficiency

the grown onboarding all different maintenance in ongoing first an our requirements XXXX. self-service seeing we're to and solution enormous also simplify different looking underway, required different This process of to early most an well complicated and of clients lot be types to has is includes our globally organization-wide periodic This in will a clients jurisdictions. overly monitoring KYC for significantly our onboarding, of all and better the harmonize and various well project options. and data. as regulations effectively clients. is the The solution And these more This delivered reviews more different types by of significant technology modules of forward efficient and be approach and with client technology will Probably manual of jurisdictions. of in all as client manage

our which complete significantly later the have to architecture, cloud-based payment our rework higher offers clients system XX% in global of rates system, over new on resulting We of stages payments. of STP our a migrated

vendor deliver internally our simplify an XPay stack Clearly and ability and will solutions. systems. number continue have technology vendor-based retired scale of a to system large will costly Our built we payments eliminate speaking, for at

had continue years teams cost cost locations. ago, Several decision by accounting resiliency, and technology significant were well a improve operational impact cost key reflect time. as base our to IT This to to locations latency already utilizing likely Our structure has best other applies continue as costs our to This of function. both support a our security. we took grow strategic as metrics to these on such and use and over

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which of allows part architecture data to data systems mentioned record be previous is accessed from a As our books one core to lake, all normalize in place. our in calls, systems the us and

make this. We progress excellent with continue to

individual costs more also decrease globally, easily our which all us which to associated and the data to introduced we as with data looking We're client data continue now allowing to should a for have match each we centralize know, clients surprise globally. spiral. into all StoneX data, ID addition, market dramatically transaction our In hub, of

expanded growth. internally do capital. shareholders' focus supported we've more as And The on we now. of we Over power runway continue why and for things markets continued businesses ago, retained and compounding outstanding this when to compounding. capital, years tripled period, that is stockholders' unbelievable business XX number XX-year to million our our manner. create approach in need do important footprint, and and It's we significantly with thing note the a can interesting is than up a organically our from client of slightly $XXX acquired we only little ROE of own generated acquisitions one is had underpin and shares growth finally, to capital capital a This capital we by a and XX our is earnings in over access most our financed all to equity disciplined lower funds, appropriate

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of as $XXX $XXX significantly the that the spread and yield capital from During to million the our our year, notes long-term than generation stack lower a of X we the We and senior ago. part issuance. upsized original of years secured gain initial million our issued transaction we acquisition successfully extended refinanced

client wrap XX.X%. more We up, strong move ROE results $X.XX final another earnings EPS and a to the to $XX.X conditions market despite book quarter segments. with This diluted of finally, across products So nearly stated all slide let's solid XX. achieved number on an difficult million, of was of and

an and year fiscal EPS ROE This best a history $X.XX quarter diluted XX.X%. with in StoneX the capped earnings million $XXX.X of of of

is value from book per stated now Our $XX.XX, year. last up share XX%

This of strong the QX client client effect see been onboarding in higher players being years regime under 'XX at driven with for applied record to now. Basel as sustained growth being in well the stats in onboarding increasing regulatory has squeezed out the continue activities larger requirements by a our and base We level several capital as banks by trading costs. smaller part high to of

for it delivery tailwind our we the our we and rates, for -- ecosystem. prospect more to believe integrate fiscal are market with our make a or by of XXXX, despite year clients believe and business so. generally improved interest engaging more type environment accelerated of with outlook believe puts next tightly We that volatility offering unique we for see of our financial market declining the cadence interact the will ecosystem, increasingly constructive recognized behind combined will client In platforms which this

Our current result both addressable self-directed small expand allows which We the to or of margins offering as digital platform clients this our has approach. digital leverage drive to our revenue for targeting the market and our potential that growth accelerate affords. too geographically remote operating potential our us high-touch are believe massively a the globally,

capabilities in by products We and continue our our talent. ecosystem invest financial and to expanding

a unique of the self-directed have front market of comprehensive should very We offering. only a financial addressable increase ecosystem Which our with us. expansion in large and

relationships. talented We'll new them The segments best share now ourselves wide markets. executive remains we the team lot to better capabilities While and financial serve to these will of we continue our And always market, the own monetize client space confident print access to around dedicate financial in us One world and the StoneX and to heights. of service client best propel to I proud team the in team. have good certain continue we by thing ecosystem be the niche providing market opportunities. areas the with client demonstrable already to are where a global StoneX have need and extremely for of the

On Operator? that final questions. note, we can open for

Operator

with question Fannon first [Operator will from come Instructions] Jefferies. our Dan And

Daniel Fannon

of outlook in I really segments to questions quarter and maybe got the start, the terms several the Bill, just centered capture guess but I've Sean around rates. on and

upon the take happened with kind segment. the million per of what in the OTC fee well as starting Can lower segment in the listed the expand commercial to So as you quarter?

Sean O'Connor

want the That that? think you the quarter. driven in this was industry business we more a some good quarter our And you Bill, pop Yes, bit tremendous LME. quarter. bit was the had commercial guess Dan a volatility That obviously on of saw LME. that muted with We a so competitors. had I was to do I last take a story by with little

had particularly impact side. revenue an capture some that OTC So rates, the certainly on our of on

underlying derivative market So of about feel sort good the and OTC the continued growth. market us side but was very for a solid tougher on

you're that sort noise maybe So of LME conditions primarily the then of of a seeing sort market quarter-to-quarter to conditions, is and returning I sort of reflection the normal. think elevated

William Dunaway

Sorry, guys. Can you hear me?

Sean O'Connor

happened, what Bill? Yes,

William Dunaway

I you work, didn't tried other perfectly. the but and question push covered to

Sean O'Connor

that answer question, Does your Dan?

Daniel Fannon

Yes.

level of this an guess more call we more normalized? look quarter should is I abnormal So don't of quarter as what know I last you a and -- at

William Dunaway

Yes. it I we'd that highest that -- on. came of would say business, derivatives, right? was LME out It the was Dan. which touched Sean seen, And the

expect and anomaly. last So lower quarter a is that that. June just the say low to more I the to [ that OTC, we I an And difficult X.X% X% we've segment, And the was I over the Xs, up low be XX XX market would this would probably quarters. trailing it and than little on was probably it watermark environment touch lower bit volatility. a over seen you with you in think look but quarter, had at commercial if Xs, [ high in ], ] spiked historically were

Daniel Fannon

Okay.

similarly, that then helpful. is the That's there? And of seeing the rate happened in? what institutional the coming derivatives talk segment, Or mix? you Okay. Just on listed per just what contract kind can also about

Sean O'Connor

Yes.

look mean, clear I go was longer-term institutional what floor to listed we're of derivative FC think the was many think they Stone at excited of business business that side. transformed nature of it they you longer, traders. the I business really traditional Basically, ways. That was the I through about locals. kind it back sort really if you the And actually even sort says our And on the very business if a the of call of in lens, had.

is institutions markets. a bunch to trading derivative about business good we But institutional We're business. of and the was the different. funds looking transitioned to that completely business well. And very proprietary ETFs the it large in. the scale very pleased was a we That's and has that. truly that dealing very it did the we're want large are direction with move access of like. now a So business, And small And very shops into

interested I the is section, that accessing I business in banks big the the that mentioned the we're market for strategic that And all anymore. think, aren't reasons reason in

us. the our players ecosystem, relatively they service. coming love are like to They So large our

that has changed. So business

Now very a and customers, when there's you're big risk different dealing different of obviously with sort these economics.

you. long a because of demanding of side, just sort firms. they risk the of of of are risk But cash lot businesses side. these they very pretty are trading tend a the they On They're be lot low sort and commission only not with to sort leave on proprietary

a lower you much sort of rate. bigger. commission obviously, except to have So business probably so the is But

both in risk sort a but So sort we're seeing point. I positive base it's of price at want, we really profile, a bit change profile more to sort of larger a much think little lower of a a risk customer of

I So that's I say do agree summary. the with would mean... Bill, that? you

William Dunaway

Yes. right. Yes. Yes. Exactly

Daniel Fannon

quarter. just That's market the business, payments on the the you Okay. dynamics just talked helpful. then And about in

of some a activity in potential segment of those So what terms within inorganic little longer-term tie the you maybe terms you're a igniting growth X bit payments continuing to segment. also of that together cab in softness outlook with see in There transaction. of is? Payments the Can was

Sean O'Connor

Yes, sure.

people percentage we leading market the went very help of the to non-GXX. of and into I right? there, it was banks a it And super were get to money that and markets. been have to best gave provider a of execution. find -- points I we handle We they NGOs we transparency lot and think we we know in that can paying could XXX sometimes come or shilling charged at payments to even business. could hard didn't a being I it it became We were lower. Because because do very spread could market I That easy was the disruptor times, payments think X do part people one spreads to acquire whatever in much a So professionalized place sort rates. where at and it was. mean opaque And they clients were in Kenyan

traditional banking of we're ourselves got spreads sort So disrupted think, dramatically way process to we meaningful sort I in I that sort established I the correspondent lowered the still in the in And addressable market, we've go participant of totally and business. in market. as of the market. well known terms think think a but long of a

in. those. care payments we're have tried in been follow And I business one have other our that's is some So think sort footsteps. there people who of to Certainly, the of

we could. looked business previously. think someone of lot As commercial cap still for And It's real well at they've like as some what We a with the rationale as the recently we discussion complicated had kind if there was value to around could folks. payments others. at earnings matter. those we And us was we do saw, which guys, an really sort The issue something the of like to know they see And process, with a we've would you just payments. [ of still during if a announced there's But love done. we real we ] price. issue combine warning

just relatively benign where macro have to also I our result, a the a of think it environment there business. rest businesses, like very lot of But as and an our of sort additive spreads would contracted. seeing be there's conditions, we're

lasts really that's more in And certainly, long, transparent, seen of never other of key there and across in professionalize the the somewhat spreads corridors certain of it -- have. the that market. sort market. but extent, all to We've never we And tighter sort made board, a for it we've players are we

job best of way. clients influence execution. funny market. sort always We margins problem can't in our we provide that is our to But created the in a So really with

we say if grow like. we is We clients can a our can sort we of price can do service our and control. them for takers, what our Those that of can grow can and a of results. common are better would build can more ecosystem lot things clients, we and the we theme our are through footprint you we a And their business. as But I attracts

doing what seeing that you're because is think well are we're volumes growing. I our

is onboarding high. Our

product it environment pretty You show where can in just of more you're of deal is on quite think we we in per with stats. It right? strength with I capture, lower revenue And that. market. to is are every [indiscernible]. seeing can us What's don't in than see the that has up much influence there's market much volatility one And that benign do to much the some is for tougher been. the

Daniel Fannon

That's helpful.

Sean O'Connor

dramatically ecosystem. exciting lots looking can't for we On going with on and with The I our other our new I of a into a question, have folks. see in diversify market lot segments. of To second business. way We've certainly new payments. proven point I get answer think, client have, certainly after this but stuff, We're of people a your we the -- at We payments ideas us pipeline. -- own base. mean, to bunch collaborations recruited detail expand we're a

lot -- them. We in the from We banks a the there's all us. major business can world with we get have more dealing

So as there lots the kind we from some of little help of ahead we They're opportunities. a market hopefully, all seen of work to of bit. bit ever get those of right them little as a at we've can are now. and and about spreads point, a hard of levers on tight normalize lot And pull us to execute

Daniel Fannon

the expenses come about and gave around business with and commentary efficiencies Understood. And digitizing you lot that then of a the -- it. we on as just the think

-- year should cost [indiscernible] the the do thinking about to some growth the next of you fixed we about kind you of how growth cost that investment of What your balance look think how think the As base? versus longer-term the of and about fixed of and and budget, ? kind

Sean O'Connor

you back-end you to Dan, So to can infrastructure have the start you is digitize, before money spend and stack some of you save before to technology the as the have see savings. build the know, it, if right? stuff to can want the you you Unfortunately,

Now way of the through we're part that.

continue some starting So I now to think invest, we are are -- even we though real we to savings. see

incremental seeing able in without Now reductions, some show costs. don't but up is them of any maybe handle we're we're absolute to growth -- what

wrong, to come or for correct for and So some say of next starting we're flat growth year operational sort I'm expense I the seeing me we're scalability point, X. pretty a Bill, some if leverage and mean scenarios I in. general as looking would

investments growing to you're think I down, else mean that. type when We're efficiency those I I inflationary to to business. make but think because and you continue having sort realize hard to to And to at it's increases. that's be for business you're working very come is expand, right, or pay don't we'll do of your your in going certainly around trying hard to somewhere do

It So there. I think that's be work we the would have. get goal to hard

your got sort more difficult the You've for you. and make also business to regulators costs increase in things of

we in But our to cost push invest a push the to got So We which fundamental think regulators. our want we a ecosystem, expand our from the business. cost place leverage already. is to some in start should offset we've got efficiencies we've success. because long-term see -- And spend from we operational and be should put some of the that to technology some

pretty that, Bill, a So of to with you our agree that number. hope sort -- up would small is nets that?

William Dunaway

exactly Yes, point. on Yes.

Daniel Fannon

earlier -- but or line of the like of G&A the a of stuff -- there are just understanding terms In jumping fourth a high, the one growth. quarter, onetime in expense the looks the number, like be of of know those good I little But that's context if or was bit bit just marginal of terms then just the And other saw just to don't some service low. basis, nonrecurring is the points any in you the... items aware kind off severance what just item onetime on -- any said Professional

William Dunaway

around say the in quarterly fees. were And insurance on, world around service million around a little D&A, kind and as was of on rate But you on there of would up that. the touch recovery we bit that's say high. the in put touched on, policies QX marrying I a maybe professional as asset additional touched high it's [ XX% some forward, a a is the probably software on $XX There basis. more going Yes. I probably ] in run would

million in $XX came So the least I probably million million, think we [ ]. at probably in immediate It's more $XX.X $XX number. future, at

Operator

remarks. Sean now the for closing I to Okay. would turn like back call to O'Connor

Sean O'Connor

work all everyone. as the business. overall Thanks said, week, it's StoneX thanks, else. next joining long a And of pleased for a takes with note, team final our U.S. us customers the and their to of for stayed trusting results. all. us. I those hard the I Thanksgiving your thrilled Thanks like for and holidays wish a bit us hopefully Happy with Very everyone to with all And happy then again. I all with know in little call, just Well,

Operator

This you participating. concludes call. conference Thank today's for

now You disconnect. may

StoneX (SNEX) 20 Nov 242024 Q4 Earnings call transcript