StoneX Group Q3 2025 Earnings Report

StoneX Group EPS Results

• Actual EPS: $1.22
• Consensus EPS: $1.39
• Beat/Miss: Missed by -$0.17
• One Year Ago EPS: N/A

StoneX Group Revenue Results

• Actual Revenue: $1.02 billion
• Expected Revenue: $923.10 million
• Beat/Miss: Beat by +$101.20 million
• YoY Revenue Growth: N/A

StoneX Group Announcement Details

• Quarter: Q3 2025
• Date: 8/5/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 9:00AM ET

StoneX Group (NASDAQ:SNEX) operates as a global financial services network that connects companies, organizations, traders, and investors to market ecosystem worldwide. The company operates through Commercial, Institutional, Retail, and Global Payments segments. The Commercial segment provides risk management and hedging, exchange-traded and OTC products execution and clearing, voice brokerage, market intelligence, physical trading, and commodity financing and logistics services. The Institutional segment offers equity trading services to institutional clients; clearing and execution services in futures exchanges; brokerage foreign exchange services for the financial institutions and professional traders; and OTC products, as well as originates, structures, and places debt instruments in capital markets. This segment also operates as an institutional dealer in fixed income securities to serve asset managers, commercial bank trust and investment departments, broker-dealers, and insurance companies, as well as engages in asset management business. The Retail segment provides trading services and solutions in the global financial markets, including spot foreign exchange, precious metals trading, and contracts for differences; and wealth management services, as well as offers physical gold and other precious metals in various forms and denominations through Stonexbullion.com. The Global Payments segment provides customized payment, technology, and treasury services to banks and commercial businesses, charities, and non-governmental and government organizations; and pricing and payments services. The company was formerly known as INTL FCStone Inc. and changed its name to StoneX Group Inc. in July 2020. StoneX Group Inc. was founded in 1924 and is headquartered in New York, New York.

StoneX Group Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q3 operating revenues rose 12% year-over-year to $1.024 billion, driving net income up 2% to $63.4 million and delivering a 13.1% ROE despite increased share count.
• Negative Sentiment: Acquisition-related charges of $8.9 million (≈$0.12 per share) in Q3 weighed on EPS, contributing to a 2% year-over-year decline in diluted EPS.
• Neutral Sentiment: The institutional segment achieved record net operating revenues and income (up 27% and 41%, respectively) and retail grew net revenues 18% and income 49%, while the commercial segment saw a 24% decline due to tariff uncertainty and lower volatility.
• Positive Sentiment: Stonex closed the transformational RJO and Benchmark acquisitions, issuing ~3.1 million shares (~6% increase) and adding $6 billion in client float to support accretive EPS and synergy targets.
• Positive Sentiment: The custody and clearing business expanded assets to over $60 billion with FCM client equity balances up 15% and FDIC sweep balances up 25%, and will launch regulated digital asset custody and lending tools in Q4.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Stonex Group Inc. Q3 Fiscal twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

[Operator]

To ask the question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. 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, CFO at StoneX Group]

Good morning, and welcome to our earnings conference call for our quarter ended 06/30/2025, our third fiscal quarter. After the market closed yesterday, we issued a press release reporting our results for the quarter and this release is available on our website at www.stonex.com, as well as a slide presentation which we'll refer to during this call. The presentation and an archive of the webcast will also be available on our website after the call's conclusion. Before getting underway, we're required to advise you and all participants should note that the following discussion should be considered in conjunction with the most recently financial statements filed and notes thereto, as well as the Form 10 Q to be filed with the SEC. This discussion may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

[William Dunaway, CFO at StoneX Group]

These forward looking statements involve known and unknown risks and uncertainties, which are detailed in our filings with the SEC. Although the company believes its forward looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can be no assurances that the company's actual results will not differ materially from any results expressed or implied by the company's forward looking statements. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that any forward looking statements are not guarantees of future performance. I'll begin with the financial overview of the quarter and we'll be starting with slide number four in the slide deck.

[William Dunaway, CFO at StoneX Group]

Third quarter net income came in at $63,400,000 with diluted earnings per share of 1.22 which represents 2% net income growth, but a 2% decline in diluted EPS versus the prior year quarter due to additional shares outstanding. The current quarter includes pre tax acquisition related charges of approximately $8,900,000 including $6,500,000 of bridge loan financing charges and $2,400,000 of professional fees, which equate to approximately $0.12 per diluted earnings per share. These measures were down 1213% versus our immediately preceding second quarter, primarily due to the acquisition related charges I just mentioned. This represented a 13.1% ROE despite a 49% increase in book value over the last two years. We had operating revenues of $1,024,000,000 up 12% versus the prior year and up 7% versus the immediately preceding quarter.

[William Dunaway, CFO at StoneX Group]

As a reminder, our operating revenues include not only interest and fees earned on client balances, but also carried interest that is related to our fixed income trading activities. Net operating revenues, which nets off interest expense, including that which is associated with our fixed income trading activities, as well as introducing broker commissions and clearing fees, were up 4% versus a year ago and flat versus the immediately preceding quarter. Total compensation and other expenses were up 5% versus the prior year quarter and 3% versus the immediately preceding quarter. Fixed compensation and related costs were up 6% versus a year ago and 2% or $3,000,000 versus the immediately preceding quarter. The increase versus the prior year was primarily related to merit increases at the beginning of the calendar year, a 7% increase in headcount, as well as an increase in share based compensation with the increase versus the immediately preceding quarter also primarily related to the increase in share based compensation.

[William Dunaway, CFO at StoneX Group]

Professional fees increased $3,900,000 versus the prior year with $2,400,000 of that increase related to the acquisitions as I noted before. It is of note that the income before tax for the current quarter includes a $2,300,000 loss on the disposal of capitalized hardware, partially offset by a gain of $1,000,000 related to class action settlements received, while the prior year quarter included gains of $1,800,000 related to class action settlements received, all which are included in the other losses and gains on the financial statements. Looking at it from a longer standpoint, our trailing twelve months results show operating revenues up 17%. Net income was $296,900,000 up 26% with earnings per share of $5.87 and a return on equity of 16.6% for the trailing twelve month period well above our target of 15%. We ended the 2025 with a book value per share of $40.36 Turning to slide number five in the earnings deck, which compares quarterly operating revenues by product as well as key operating metrics versus a year ago, we experienced growth in securities, payments and FX CFDs, which were partially offset by declines in listed and OTC derivatives, physical contracts, and interest in fee income on client balances.

[William Dunaway, CFO at StoneX Group]

Transactional volumes were up across all of our product offerings. However, diminished volatility combined with client mix drove a decline in spread and rate capture with the exception of securities, which were up 15% and FX and CFDs, which were flat. Just touching on a few highlights for the third quarter, we saw operating revenues derived from physical contracts were down 17% versus the prior year, primarily related to the effect of tariff related uncertainties on client activity as well as the prior year comparable period, including an $8,400,000 realized gain on physical inventories held at the lower of cost or market. Operating revenues derived from physical contracts were down 23% versus the immediately preceding quarter. Operating revenues derived from lifted derivatives were down 3% versus the prior year and down 2% versus the immediately preceding quarter, primarily driven by our commercial segment.

[William Dunaway, CFO at StoneX Group]

Operating revenues derived from OTC derivatives were down 11% versus the prior year and 2% versus the immediately preceding quarter, primarily as a result of declines in the average rate per contract due to diminished commodity volatility. Securities operating revenues were up 30% as volumes were up 25% and the rate per million increased 15% versus the prior year with the improvement driven by significant improvement in our equity businesses driven by increased volatility and client engagement. Security related operating revenues were up 14% versus the immediately preceding quarter. Payments revenues were up 5% versus the year ago quarter and up 6% versus the immediately preceding quarter. FX CFD revenues were up 14% resulting from an increase of 12% in average daily volume while the RPM was flat.

[William Dunaway, CFO at StoneX Group]

This also represented an increase of 23% versus the immediately preceding quarter. Our interest and fee income earned on our aggregate client float including both listed derivative client equity and the money market and FDIC sweep balances decreased 11% versus the prior year resulting primarily from lower short term interest rates which were partially offset by 10% growth in client balances. However this is modestly higher versus the immediately preceding quarter. Turning to slide six, this depicts a waterfall by product of net operating revenues from both the prior year quarter to the current one, as well as the same for the trailing twelve month period. Just a reminder, operating revenues represent operating revenues less introducing broker commissions, clearing fees and interest expense.

[William Dunaway, CFO at StoneX Group]

For the quarter net operating revenues increased 4% principally coming from securities up $39,300,000 and FX and CFDs which were up 9,800,000.0 partially offset by declines in physical contracts, listed derivatives and OTC derivatives of $22,500,000 $8,400,000 and $7,400,000 respectively. Interest and fee income on client balances decreased $12,500,000 Looking at the bottom graph for the trailing twelve month period it shows a slightly different picture as in addition to very strong growth in securities we saw large increases in interest and fee income, physical contracts, listed derivative and FX and CFD contracts, slightly offset by declines in payments and OTC derivatives. Moving on to slide number seven, I'll do a quick review of our segment performance. Our commercial segment net operating revenues declined 24%, primarily resulting from a 44% decline in physical contracts driven by a decline in client activity and increased interest expense related to our precious metals activities as well as declines of 1811% in listed and OTC derivatives respectively. Segment income was down 36%.

[William Dunaway, CFO at StoneX Group]

On a sequential basis net operating revenues were down 13% and segment income was down 17%. Our institutional segment saw record net operating revenues and segment income with growth of 2741% respectively. The growth in net operating revenues is principally driven by a $38,900,000 increase in securities revenues in particular in equity markets. Partially offsetting the net operating revenue growth, non variable direct expenses increased 10%. On a sequential basis, net operating revenues and segment income were up 51% respectively.

[William Dunaway, CFO at StoneX Group]

In our self directed retail segment, net operating revenues were up 18% and segment income was up 49%, which demonstrates the operating leverage in this business. This was primarily driven by a 34% increase in average daily volume in FXCFD contracts, which was partially offset by a 13% decline in rate per million. On a sequential basis, net operating revenues were up 26% and segment income was up 87% in this segment. In our payments segment, net operating revenues were up 3% and segment income was flat. Rate per million was down 6% versus the prior year, however, was relatively consistent with the immediately preceding quarter.

[William Dunaway, CFO at StoneX Group]

Average daily volume was up 16% versus the prior year and up 4% versus the immediately preceding quarter. Moving on to slide number eight, looking at segment performance for the trailing twelve months, we saw strong growth in institutional segment with net operating revenues up 26% and segment income increasing 35%. In addition, our self directed retail segment increased net operating revenues and segment income 1428% respectively. Our commercial segment net operating revenues increased modestly while segment income declined 5%. Payments decreased net operating revenues and segment income 37% respectively.

[William Dunaway, CFO at StoneX Group]

Finally, moving on to slide number nine, which depicts our interest and fees earned on client balances by quarter as well as a table which shows the annualized interest rate sensitivity for a change in short term interest rate. The interest and fee income net of interest paid to clients and the effective interest rate swaps declined $12,500,000 to $73,900,000 in the current period. This represents a $600,000 decline from the immediately preceding quarter. As noted in the table, we estimated 100 basis point change in short term interest rates either up or down could result in a change in net income by roughly $27,000,000 or $0.54 per share on an annualized basis. With that, I will hand you over to Sean O'Connor, our Vice Chairman for a strategy discussion.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Thanks Bill. Good morning everyone. So I'm starting here on slide 11. As you no doubt saw, we closed the RJO and the Benchmark acquisition after the close of business last Thursday, July 31. We've covered a lot of the background of this transaction in both a separate call and during last quarter's earnings call, but perhaps just a quick refresh on both given that we are now fully in execution mode.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

RJO is the largest and most consequential transaction we have ever undertaken. We believe that this is transformational transaction that positions Stonix as a market leader in global derivatives and reinforces our position as an integral part of the global financial market infrastructure. With institutional grade global market access, end to end clearing and execution capabilities, high enough service and deep expertise, this acquisition is on-site on franchise. It supports our goal of becoming the counterparty of choice for clients across all asset classes, embedding our integrated offering into long term trusted relationships. RJ O'Brien has been a leading FCM in the industry with a stellar reputation and culture matching our own.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

And while we are active in the same derivative markets, we have a limited amount of customer overlap. RJO segments its business into commercial, introducing brokers, institutional and retail. The commercial segment consists of large commodity clients, similar in nature to those in our own commercial segment, and this accounted for approximately 11% of RGO revenues in 2024. We believe that Sonix has the best in class toolkit to provide additional services to these clients, including our extensive OTC and structured product capabilities, as well as our physical and logistics servicing capabilities, allowing us to provide additional value added services. RJO is the best in class service provider to introducing brokers in the listed derivative industry, providing these IVs with execution and clearing they need to service their clients.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

RJO has over two fifty IB relationships and we have just over 100. This dramatically expands our overall market footprint as these firms aggregate assets and interest. RGO is also a market leader in providing interest rate hedging products to institutional clients, mainly banks looking to manage the interest rate risk, an area that has not been a core focus for Sphonix to date. This aligns directly with our own fixed income business. Combining these complementary capabilities will provide us with a compelling ability to service the needs of these banks around the world.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

As we continue to spend time with the RGIO folks over the last couple of months, we have become even enthusiastic about this transaction. As the transaction has now closed, we'll start to see the financial impact on our results starting with Q4. As we have said from the outset, this transaction will be materially accretive to earnings and to EPS as well as enhancing our margins fully integrated. Unfortunately, RJR has not reported its 2025 financials, but they are roughly in line with our expectations at the time of the transaction and in line with the 2024 results. Looking at the pro form a 2024 metrics we disclosed when we announced the transaction, RJO generated $766,000,000 in revenue and approximately $170,000,000 in EBITDA during calendar twenty twenty four.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

We issued around 3,100,000.0 shares as part of the purchase price, which increases our share count by approximately 6%. This transaction is expected to immediately enhance EPS and return on equity with the addition of nearly $6,000,000,000 in client float as well as enhancing our margins over time. We are now able to refine our synergy analysis specifically around execution timelines. Broadly speaking, we believe that the integration and related synergies of the international components of RJO could be completed in the next three to six months, with a balance related to The US, which is larger and more complex, likely to take nine to twelve months to realize. But more to come on this once we have finalized our detailed work.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

In late June, we went ahead and raised the debt portion of just the purchase consideration. So despite the market to facilitate the time, was responding to tariff uncertainty and the geopolitical effects of The US strike against Iran. The issue was very well received and we priced inside of one day, were multiple times oversubscribed and more importantly priced significantly tighter than our recent refinancing one year ago. The notes have also traded very well since we settled the issue in early July. Now moving to slide 12, we also closed the Benchmark acquisition on July 31.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Benchmark is a full service investment banking firm offering robust sales and trading platform, award winning research and a highly experienced investment banking team. Benchmark provides research coverage on over 400 companies, brings broad relationships with over 800 institutional accounts to Stonix, which we believe we can leverage across Stonix's broader product offering and the new investment banking capabilities, which we believe we can leverage into our client base, both for equity and debt capital markets. We believe this is an important transaction that will be accretive to both our ecosystem as well as our bottom line earnings. So a very eventful and consequential July 31 for us here at Stonex and the beginning of a very exciting new chapter. I would now like to introduce Charles Lyon, our President, who together with Philip has taken over the day to day running of Stonex.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Charles technically has been at Stonex longer than I have. He was already working at the company when I took a position in it twenty three years ago. Charles is especially focused on the trading and technology parts of our business. I've asked Charles to give you all an update on the clearing and custody side of our business, which is in many ways at the heart of our business. When we decided to start Stonax twenty three years ago, we decided early on that we didn't just want to be an Executing Broker, but wanted a deeper, more meaningful and integrated relationship with our clients, which comes from clearing and holding client assets.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

In most instances, opening a new brokerage arrangement is a decision made by our clients on the trading desk. A clearing or custody arrangement is a C level decision. However, becoming a clearer and a custodian requires a pretty heavy lift in terms of regulation, capital and infrastructure, but does put a very attractive moat around your business. So Charles, over to you.

[Charles Lyon, Group President at StoneX Group]

Thank you, Sean. Today, are pleased to highlight another cornerstone of our global infrastructure, custody and clearing. This business is a critical enabler for our clients' trading, financing and investment strategies, delivering secure, scalable and integrated post trade solutions across our global footprint. With the breadth of capabilities and the scale of our offering, we believe it is important to dedicate time today to highlight the strengths, performance and strategy of this business area. Please refer to slide 14 in the deck.

[Charles Lyon, Group President at StoneX Group]

Custody and clearing is core to the Stonix ecosystem. Stonix custody and clearing platform delivers a comprehensive suite of services to institutional clients across The Americas, EMEA and APAC regions, anchored by our self clearing capabilities, enhanced through strategic custodian partnerships and powered by advanced infrastructure, we are trusted by a wide spectrum of market participants from hedge funds, mutual funds and proprietary trading firms to ETF issuers, family offices, introducing brokers and corporate clients. Our global team operates from key centers, including Birmingham, New York, Chicago, London, Dublin, Sao Paulo, Buenos Aires, Singapore, and Hong Kong, ensuring continuous coverage and access across time zones and asset classes. Let me summarize the key services we deliver across our platform. In The US, we provide fully self cleared equities, options, and fixed income alongside futures and commodities clearing across all major exchanges.

[Charles Lyon, Group President at StoneX Group]

We support nineteen forty Act funds through the trading and custody of derivatives for actively managed ETFs and mutual funds. Our securities lending and margin financing programs enable clients to realize enhanced income opportunities and optimize capital efficiency. Internationally, in EMEA and APAC, we provide cross border clearing and settlement, multi currency collateral management, and segregated custody for institutional managers. In Q4, we will broaden our digital asset custody capabilities to include regulated custody for cryptocurrencies, tokenized securities, stable coins, and real world assets. Our integrated platform allows clients to consolidate post trade workflows across asset classes and jurisdictions, supporting efficient capital deployment and risk control.

[Charles Lyon, Group President at StoneX Group]

Our custody and clearing platform serves a broad and growing global client base, a diverse mix that ensures resiliency and balance across our franchise, spanning institutional, wealth, and digital clients. Our client segments include registered investment advisors and broker dealers, leveraging custody and execution through integrated solutions, Stonex's self clearing infrastructure, and external custodians. Hedge funds and proprietary trading firms utilizing cross asset analytics, capital efficiency, and margin solutions. 1940 Act funds, actively managed ETFs and mutual funds. Family offices and private wealth channels accessing multi custody architecture, performance reporting, and Sonix's global reach for diversified portfolios.

[Charles Lyon, Group President at StoneX Group]

Fintechs and API native platforms, embedded custody as a service with real time clearing data, compliance automation, and scalability for retail flow. Digital asset managers and tokenized funds benefiting from our expanding secure and compliant custody solutions that are designed for institutional clients. What distinguishes Stonex is that we meet clients wherever they are in their growth cycle, from emerging managers seeking turnkey digital custody solutions to large institutional clients requiring global multi asset clearing capabilities. This flexibility positions us uniquely to capture flows across the evolving marketplace. What have been some of our areas of expansion?

[Charles Lyon, Group President at StoneX Group]

The past twelve months, we have seen expansion across all major business lines. Correspondent Clearing balances surpassed $24,000,000,000 a 27% year over year increase driven by regional broker dealers, RIAs, and a broader geographical focus. Key enhancements moving forward will include API driven onboarding and customizable plug and play integration for our introducing firms. FCM servicing. Average client equity balances increased 15% year over year to $6,800,000,000 This increase was fueled by interest rate futures, energy derivatives, and FX markets supported by enhanced cross margin programs for capital efficiency.

[Charles Lyon, Group President at StoneX Group]

Mutual funds and ETFs. Since 2018, we've made substantial investments in automation and infrastructure to support 1940 Act regulated funds. These efforts have positioned us to capitalize on the rapid expansion of the ETF space and we are now strong seeing strong growth across the client segment. Digital custody. This year, we were approved to operate as a virtual asset service provider of VaaS by the Central Bank of Ireland and began offering regulated custody for digital assets.

[Charles Lyon, Group President at StoneX Group]

In Q4 twenty twenty five, we will launch lending and collateral management tools for digital assets addressing a growing institutional demand. Together, these expansions reflect Stonex's ability to adapt to evolving client needs, regulatory change, and the accelerating pace of digitization. How did custody and clearing perform Q3 twenty twenty five? The '25 saw heightened demand for integrated custody and clearing solutions and our business delivered outstanding results. In addition to the 15% growth in FCM average client equity balances noted earlier, we grew FDIC sweep balances by 25 versus the prior year further reinforcing our position as a leading global provider.

[Charles Lyon, Group President at StoneX Group]

We onboarded a record number of new institutional clients, including hedge funds, ETFs and proprietary trading firms. Our EMEA and APAC custody businesses achieved a 66% increase and net operating revenue in Q3 with balanced growth of 51% Q over Q with momentum coming predominantly from fixed income managers and cross border funds. These results highlight both the resiliency of our platform and the trust we've earned as partners capable of delivering scale, security, and transparency in a rapidly evolving market landscape. How do we protect our client assets? Protecting client assets is a cornerstone of our offering.

[Charles Lyon, Group President at StoneX Group]

We have built a layered protection framework designed to deliver both security and transparency. FDIC insured suite programs designed to provide U. S. Dollar cash coverage, SIPC coverage ensuring robust protection for cash and securities, complemented by an additional excess insurance through Lloyd's of London, segregation of client assets from firm assets to mitigate counterparty risk, custody relationships with DTC, Euroclear, and BNY Pershing among the most trusted global depositories. Clients place greater emphasis on regulatory controls with digital assets.

[Charles Lyon, Group President at StoneX Group]

Accordingly, this business now operates as a vast under the Central Bank of Ireland. By the end of Q1 twenty twenty six, we expect it to be regulated under the European Securities and Markets Authority as a crypto asset service provider, and we will continue to expand our regulatory footprint globally thereafter. This robust set of protections gives our clients the confidence that our assets are safeguarded when remaining accessible to meet trading and investment needs. What differentiates Stonex in the space? Turning now to slide 15.

[Charles Lyon, Group President at StoneX Group]

Stonex is positioned as one of the leading non bank financial services firms serving mid tier institutions, delivering a powerful combination of global scale, flexibility, and technology. Our differentiators include self clearing infrastructure across multiple asset classes, including equities, fixed income, futures, options, FX, and digital assets. Global multi custody reach with operational hubs in North America, Latin America, EMEA, and APAC. Institutional approach to risk management supported by cross product margin and collateral optimization. Flexible API workflow solutions tailored to support the evolving needs of broker dealers, fintechs, and financial institutions.

[Charles Lyon, Group President at StoneX Group]

Our approach is client centric, aligning solutions and pricing with each client's growth stage and workflow needs rather than applying rigid thresholds. By integrating these capabilities within a single platform, Stonex provides clients with a seamless post trade solution that stands apart in today's market. As the clearing market consolidates and traditional providers retrench, we continue to invest in the operational infrastructure that supports client execution, financing, and asset servicing, ensuring we remain a long term trusted partner to our clients. Our strategic priorities going forward. Turning to slide 16, looking ahead, we remain focused on three strategic priorities that will drive the continued growth and success of this business.

[Charles Lyon, Group President at StoneX Group]

Building our ecosystem, implementing a multi currency margin engine, scaling digital custody for tokenized funds and stablecoins and piloting embedded clearing APIs with select fintech partners, growing and diversifying our client base, expanding correspondent clearing with regional broker dealers and RIAs, capturing flows from clients that are leaving bank affiliated SCMs and deepening our presence with family offices and sovereign wealth funds, digitizing our business, advancing toward a singular custody and clearing access point for clients as part of our long term vision, while automating our onboarding experience and building out our real time dashboards for intraday stress testing and scenario modeling. These initiatives underscore our commitment to continuous innovation, operational excellence, and strengthening our role as a trusted partner across markets. In summary, custody and clearing continues to be a high growth, high impact business line that strengthens our global franchise and positions us for the future post trade infrastructure. With a substantial and growing base of client assets exceeding $60,000,000,000 this last quarter, industry leading protections, innovative services, and a fast growing digital custody suite, we are now setting a new standard for institutional grade custody and clearing. We are very proud of the exceptional work our teams deliver every day and remain excited about the opportunities ahead. Back to you, Sean, for the wrap up.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Okay, so moving on to slide 17. This quarter continued a series of quarters exhibiting year on year growth and was one that showcased the diversity and resilience of our business, where significant growth in our Institutional segment and especially in Equity Trading offset weakness in our Commercial business due to diminished volatility and tariff related uncertainties. This resulted in modest growth in net income versus the prior year despite $8,900,000 acquisition related charges in the current quarter, which related to roughly $0.12 in EPS. We achieved earnings of $63,400,000 and diluted EPS of 1.22 down very slightly versus the prior year due to additional shares outstanding. We were down versus our strong immediately preceding second quarter, although excluding the acquisition related charges, the results were roughly comparable.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

The addition of RGO and Benchmark, we believe, will be significantly accretive to our earnings and our franchise generally, and we believe these acquisitions will further accelerate our current growth trajectory. This is a very exciting time for us as we now move forward with what are significant and transformational acquisitions for Stonix. We are now positioned as the global counterparty of choice for clients looking to execute clear and custody financial assets across the spectrum. We are now even better positioned to capitalize on the ongoing industry transformation, driven by regulatory changes and market consolidation, which will continue to create significant opportunities for Stonix to expand its market share and will provide a substantial runway for growth. Our ecosystem, which is unparalleled, is underpinned by a fortress balance sheet, broad capabilities and diverse offerings, enables us to deliver innovative solutions that provide clients with access to markets, expands their market reach and creates long term value.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

One thing will always be constant for the Stonix team. We will continue to dedicate ourselves to better serve our growing client footprint around the world by providing them with the best financial ecosystem and the best client service to access the global financial markets. The executive team and I are extremely proud of the talented Sonix team who continue to propel us to new heights. Operator, time for questions. Let's open the line.

[Operator]

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Jeff Schmitt with William Blair. Your line is now open.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Hi, good morning. Could you maybe go into more detail on the weakness in the commercial segment, just in terms of trading volumes? Were you surprised to see hedging activity down? Mean, I think volatility was still up more than you typically see in a quarter. So just curious what your thoughts were.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Well, obviously, the segment you're talking about just to be clear is the commercial segment, which are sort of real companies looking to hedge their risk, primarily commodity risk. So when one is talking about volatility, you sort of have to pass it out to the underlying sort of verticals. Metals volatility is sometimes different from grains volatility and so on. The real reason, if you just look at the analysis in the slides there where we set out our ADVs and the revenue sort of by product type. Physical business was really hurt and that was largely driven by the sort of tariff uncertainty.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

So that's the lion's share of it. The second part of it was the OTC business. And while the OTC business was strong, our revenue capture was down largely due to lack of volatility. And that business is primarily focused on the ag sector. So I would say the two things that drove that weakness were lack of volatility in the ag space, which hurt us on the OTC side with rate capture.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

And then on the physical side, it was a difficult quarter for us, just given all the uncertainty. Here you're talking about people moving commodities across borders and so tariffs becomes very important in that role. So, do Bill, you want to add anything? I think that covers it. But anything else, Bill? Bill, you're on mute.

[William Dunaway, CFO at StoneX Group]

My apologies. Yeah, I know. I think that was well said, Sean. I think that the tariff uncertainty, just the lack of transparency as to what will eventually happen kind of drove that. It also, we had some additional interest expense moving metals around the globe that dampened the performance in the quarter.

[William Dunaway, CFO at StoneX Group]

And I think you touched on it. Think while there was a lot of volatility in certain markets, the key agricultural and soft markets that we do a lot of OTC and a lot of listed derivatives, particularly in The Americas remained kind of dampened during that quarter. So it kind of drove down that overall spread captures.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

I would say the one other factor to mention as well Jeff was there are a couple of mandates relating to sort of renewable fuels and things like that that have sort of elapsed or close to elapsing. And I think there's a lot of uncertainty as to what the new administration's gonna do. So that was also a complicated factor for us there.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Okay. That's helpful. And then any updates you could provide on revenue synergies for RJO now that it's closed? And maybe if you could refresh us on what you see as the biggest opportunities there in terms of cross selling now that you've had more time with the company?

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Yes. So as we said previously, it was difficult for us to, with a high degree of certainty, quantify the revenue synergies because up until closing we just weren't able to get access to sort of clients and client revenues and who the clients were, which obviously we need to make that assessment. We only got a hold of that information yesterday. So we, as of yet, aren't any smarter than we were when we last spoke. But I think we continue to believe and I certainly personally believe based on the sort of high level conversations we've had with the team, understand with the RGO team, understanding the RGO capabilities, looking at sort of how we interface with similar type customers and the revenue we can generate from our expanded toolkit.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

You know, my sort of starting point is, I think the revenue synergies over time will be multiples of the cost synergies. I continue to believe that. I think the synergies really start on the commercial segments. Now, even though the RJO commercial segment is only 11% of revenues, in their IB segment, they have a lot of IBs that have commercial clients. So within the IB segment, there is a big pool of commercial clients And those are the clients where we know we have the best toolkit in the business.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Not only can we do futures, which is all that RGO does, but we can do OTC, we can do structured products, we can help people with margin relief, we can help them with physical, we can help them on logistics. So, we have very good empirical evidence that our commercial clients use us for a lot of those services and that expands both our touch points with the clients and the revenue. So that's kind of one big chunk of the revenue synergies and probably the biggest piece of it. And then secondly, they have a very strong interest rate franchise where they are dealing with institutional clients, mainly banks, them hedge their interest rate exposure. And in our fixed income business, we are actually trading with some of those same counterparties actually executing the trades on the underlying cash instruments.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

By bringing both of those two things together, I think we'll have a much more powerful offering. And of course, we'll be able to offer those services you know, mutually to the clients that we don't both cover. So I think that's the sort of second big piece of revenue synergies. So between those two, I think that's gonna add up to a fairly material number. But, you know, we we will update you as we start to do more work on that.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

But, I I guess our working assumption we highlighted sort of three months ago hasn't changed, and I think if anything has been validated through the conversations we've had. But we now need to put more work into that.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Okay. Great. That's helpful. Thank you.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Anything else?

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Well, I I had one on your longer term plans Yeah. Of the retail segment. And sort of where where are you at in that process of building that out, adding additional products, kind of transforming that beyond an FX broker?

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Okay. Well, I'm going to I'll give you a quick overview here and then I'm going to pass off to Charles because this is near and dear to his heart. But I think as we said a couple times, we acquired Gain, which gave us this tremendous platform, which was really trading cash settled derivatives, right? They're called sort of CFDs everywhere. But they really just mimic derivative contracts and they're all sort of cash settled.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

So you don't have to deal with exchanges and clearing houses. So, you know, the platform is pretty simple. And the offering was pretty simple. Right? It, you know, those derivatives cover lots of different asset classes, but never got involved beyond that.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

And one of the opportunities we saw when we acquired Gain was we're very active in trading all of those underlying asset classes and we have all the infrastructure to handle that which Gain didn't have. We can clear those asset classes, can custody those assets. So the idea was always to change that to a multi asset class offering to look something a little more like, say, an Interactive Brokers. And it's been a challenge because we sort of went straight into COVID. The business did extremely well.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

But I'll hand off to Charles, and maybe he can give you some thoughts on sort of where we stand. Charles, do you want to take that?

[Charles Lyon, Group President at StoneX Group]

Sure. And I think it's a fair point around the COVID times where certainly had some challenges on just making sure that we were able to keep the business operating at a very high level through an integration. So, I think that was sort of four years ago was our main focus. And since then, we've laid out a roadmap for not only a technology, but also for laying the groundwork for product expansion. And part of the reason why we had been so methodical about it is it's incredibly important as you build out listed derivatives as well as securities, cash securities, funds, and our full securities offering that we make sure that it's scalable and it's appropriate for the user base.

[Charles Lyon, Group President at StoneX Group]

So, we are undergoing a infrastructural rebuilding that is going to be completed sort of towards the end of the year in our fiscal Q2 that will enable us to bring on the retail clients into the security spectrum over time, starting at that point. So that's going to be the timeline. We are already offering some derivatives products on the future side, which we see as a really growing space, and we'll continue to grow that out next quarter. And so, you'll see that happening over the next fiscal year through fiscal twenty six, which starts in a month. You'll start seeing that happen in stages, and we'll keep you updated and informed as those products roll out.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Okay. Thank you for the answers.

[Charles Lyon, Group President at StoneX Group]

All right. Thank you.

[William Dunaway, CFO at StoneX Group]

Thank you, Jeff.

[Operator]

Thank you. As a reminder, everyone, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. One moment for our next question, please. Our next question comes from the line of Dan Fannon with Jefferies LLC. Line is now open.

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Thanks. Good morning, gentlemen. Wanted to follow-up on RJ O'Brien and just, you know, the if we think about obviously, you've only closed it for a week here, but just the priorities over the first three, six, you know, kinda nine months in terms of what we should be expecting from an update as this integration unfolds?

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Well, we'll certainly be updating you with a sort of a more detailed synergy timetable. You know, had done a lot of work on that previously, but obviously needed to fine tune that once we could access sort of the information we didn't have originally. So we'll be able to provide that to you and I think we'll also start giving you some better indications perhaps of revenue synergies. So that's the plan. So I think when we next talk, we might have some more information for you on that.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

But we still feel pretty good about our aggregate revenue sorry, our aggregate cost synergy number. As I said in my part of the call, what we have agreed is the focus initially is gonna be on the international side of RJ O'Brien. We tend to have larger entities than they do. And I think we can quickly absorb that business and realize those synergies. That's about 40% to 45% of the total synergies, and we think we can achieve that pretty quickly.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

So I think we're gonna have some nice quick wins there. We'll then move our attention. Well, we'll do both of these at the same time. But The US integration is gonna take longer. It's a much bigger business, many more clients.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

We gotta make sure that this is a seamless process for clients. We gotta make sure all those touch points that their systems have with their books and record system, we deal with appropriately. So when we combine the businesses onto one system, we don't have any fallout. So that's more like a nine to twelve month process. So what I'm anticipating is, you know, we'll see something like 40 to 50 of these synergies pretty quickly, and then the rest will come kind of in the back end of 2026 is is sort of how we're thinking about it now.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

But we'll give you a clearer update in due course.

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Okay. That's helpful. And then just following up on your previous comments just around the commercial segment and the environment and lingering impacts from tariffs. I guess, as we start to get more clarity around the macro, are you seeing behavior change? Are you seeing clients being more active here as we've kind of gotten, I don't know, more clarity around certain things here as the quarter progressed and into July?

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Or is this something when we think about the overall backdrop, one that could continue to be more on the slower side?

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Well, Dan, can you tell me what you think the administration's gonna do in the next, like, two years? Know, I think we're living in a very volatile environment from the administration's point of view and that's where a lot of this uncertainty starts, right? And you know, obviously they're attempting to rework a lot of the sort of global trade arrangements and this stuff is bumpy when it happens. So I think our clients are much like everyone else. They're trying to deal and react as things happen, but it's really hard to predict on a go forward basis when this is going to happen or when it's going to stop happening.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

So I think it's just a moment of uncertainty and I think it's going to continue for some time. That uncertainty is generally good for most of our businesses because it creates volatility. It's not so great in the physical business because as I said in my remarks is, people are trying to move commodities cross border. They're trying to figure out, you know, what are the costs and what are the tariff implications. So that part of our business is going to be a little bit challenged in that environment.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

But the rest of the trading business, uncertainty, I think, is generally a good thing. Anyway, I'll stop there and see if Charles and Bill have anything to add.

[Charles Lyon, Group President at StoneX Group]

No, I agree. I think, Sean, part of there's a lot of different complexes and for some, it's there's positive knock on impacts and for others that creates sort of challenges around folks thinking about their logistics and so forth, because we are dealing with end users often. And so uncertainty, while volatility is one thing, but really you want to see folks be able to make assertive future decisions around pricing. And when folks are reluctant to do that, you can see front end volatility. But our clients really were very client driven, client centric and end user centric in this space.

[Charles Lyon, Group President at StoneX Group]

So, it's much more difficult environment when they don't know what to do. We're starting to see a little more clarity coming through and kind of getting some deals done. But to Sean's point, it's very hard. The crystal ball doesn't really work in this type of environment.

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Understood. That's helpful. And then just more broadly on the FCM business, banks have for years been pulling back and diverting resources elsewhere. But now, obviously, environment seems to be changing for them with excess capital and more to come. Are you seeing any behavior changes by the largest financial institutions and looking to invest in this business more or allocate more capital or bring up risk profiles?

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Anything on the margin that's different than say, a year ago?

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Certainly, my conversations with clients and our guys, I don't think we've noticed any particular change, to be honest with you. And I think the banks, to a large extent, have sort of moved on and are doing different things now. I just don't think this is a strategic imperative for them. I mean, they'll obviously welcome the regulatory sort of posture being more positive, but haven't yet seen them sort of rededicate themselves to these sort of activities. So Yeah.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

It may happen. I I kinda doubt it, but that's certainly the information I have, sort of no real change. But I don't know, Charles, you think any different?

[Charles Lyon, Group President at StoneX Group]

No. I mean, just like you, I've seen no evidence of any posture change at all around space.

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Okay.

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Helpful. And then I guess, Bill, from a modeling perspective, the benchmark business, where where is that gonna show up? And I I think I wanna make sure you you guys think that business is accretive as well just on a on a upon close in the first year. And any sense around numbers for that business would be helpful.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Yeah. It's accretive.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

It's a lot smaller business, obviously, than RJO. Right? So it's sort of a much lower threshold. But anyway, Bill, why don't you go ahead?

[William Dunaway, CFO at StoneX Group]

Yeah, sure. Thanks. Thanks, Sean. So I mean, the benchmark business, obviously exciting. And certainly, Charles, once again, can chime in here.

[William Dunaway, CFO at StoneX Group]

He was integral in the business acquisition and the promise behind it. I think that is a business we'll be reporting fits in nicely in our institutional segment. So we'll slot that in there. As far as size, this is like Charles or Sean noted, this is more of a single digit millions type of business, but I think something that we from a bottom line, but something that we're excited to grow and add to our capabilities.

[Charles Lyon, Group President at StoneX Group]

Yeah, Bill, think that's fair. You'll see it in the securities segment of institutional. And we really think this is an opportunity for us to expand, having coverage of strategic clients and really growing. The team here really led this initiative with Mr. Messina to bring this business in and did a terrific job.

[Charles Lyon, Group President at StoneX Group]

Rarely do you see the type of excitement and alignment. And once again, it's under 100 people, so it's not quite as large and complicated per se to move as RJO is, but you rarely see the type of alignment and excitement around a deal as I've seen here. Real kudos to the team at Benchmark and our internal team for bringing that together. They've done a really nice job at the early stage here getting prepared.

[Dan Fannon, MD - Research Analyst at Jefferies & Company Inc]

Great. Alright. Well, thanks for taking my questions.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Thank you, Dan.

[Operator]

Thank you so much.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Operator, anything else? Operator?

[Operator]

Thank you so much. I am showing no further questions at this time. I would like to turn it back to Sean O'Connor for closing remarks.

[Sean O'Connor, Executive Vice Chairman of the Board at StoneX Group]

Well, thanks everyone for taking the time to listen to our call. As you can tell, this is a really exciting stage for us. We have a busy rest of summer ahead of us and we look forward to speaking to you again for our year end results in early December. Thank you.

[Operator]

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

Participants

Executives

• William Dunaway, CFO
• Sean O'Connor, Executive Vice Chairman of the Board

Analysts

• Charles Lyon, Group President at StoneX Group
• Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C
• Dan Fannon, MD - Research Analyst at Jefferies & Company Inc