StoneX Group NASDAQ: SNEX reported record fiscal second-quarter results, with management citing broad-based strength across its operating segments, heightened market volatility and continued progress integrating R.J. O’Brien.
Chief Executive Officer Philip A. Smith said the quarter ended March 31, 2026, marked a “consecutive record quarter,” including record net operating revenues, net income and earnings per share. He said performance was strong across all four operating segments and reflected the scale added by the R.J. O’Brien acquisition, which he said remains on track to be substantially completed later in the fiscal year.
“Despite the geopolitical uncertainty, nearly all of our products reported a double-digit growth driven by higher volatility and increased demand for our services,” Smith said.
Net Income More Than Doubles
Chief Financial Officer William J. Dunaway said second-quarter net income rose 143% from the prior year to a record $174.3 million. Diluted earnings per share increased 120% to $2.07, with the per-share growth rate affected by additional shares outstanding tied primarily to the R.J. O’Brien acquisition. Dunaway noted that StoneX’s board approved a three-for-two stock split, and shares began trading on a split-adjusted basis on March 23, 2026; all per-share figures discussed on the call were presented on that basis.
Operating revenue totaled approximately $1.6 billion, up 64% year over year and 9% from the immediately preceding quarter. Net operating revenue, which excludes interest expense, introducing broker commissions and clearing fees, rose 70% from the prior-year quarter and 14% sequentially.
The company generated a 26.5% return on equity for the quarter and a 37% return on tangible equity. For the trailing 12 months, net income reached a record $462.4 million, up 57%, with diluted earnings per share of $5.60 and return on equity of 19.8%. Book value per share ended the quarter at $34.16.
Dunaway said total fixed compensation and other expenses rose 44% from the prior year, including $56.9 million attributable to acquisitions made over the past 12 months, most notably R.J. O’Brien and Benchmark. Bad debt expense increased $12.3 million, primarily in the commercial segment, which still delivered a second consecutive record quarter.
Derivatives, Physical Contracts and Securities Drive Growth
StoneX reported growth across major product categories. Smith highlighted record listed derivatives activity, with volumes approaching 100 million contracts and average client equity nearing $14 billion. He also cited record over-the-counter derivatives volume of more than 1.5 million contracts, up 68% year over year.
Dunaway said listed derivatives operating revenue increased $189.4 million, or 148%, from the prior-year quarter, primarily because of R.J. O’Brien, which contributed $151.7 million, along with growth in base metals activity on London Metal Exchange markets. OTC derivatives operating revenue increased 98% from the prior year, driven by client activity and wider spreads in agricultural and energy markets, including renewable fuels, amid volatility associated with the U.S.-Iran conflict.
Physical contracts also set a record. Dunaway said operating revenue from physical contracts increased 162% year over year, driven primarily by a $116.1 million increase in precious metals operating revenue. In response to an analyst question, he said precious metals accounted for about $150 million of the $190 million in physical commodity operating revenue in the quarter, with the remainder from StoneX Supply and Trading, which includes agricultural and energy-related activity.
Securities operating revenue rose 38%, as volumes increased 35%, partially offset by a 3% decline in rate per million captured. Payments revenue increased 14% from the prior-year quarter, supported by a 19% increase in average daily volume, while FX/CFD revenue rose 9% on higher average daily volume and improved rate capture.
Segment Results Show Broad-Based Strength
Dunaway said the commercial segment posted record net operating revenue, up 111%, with segment income increasing 151% from the prior year. Growth reflected gains in listed and OTC derivatives, physical contracts and net interest and fee income.
The institutional segment’s net operating revenue rose 65%, and segment income increased 40%, driven principally by higher securities revenue and contributions from R.J. O’Brien in listed derivatives and interest and fee income.
Self-directed retail net operating revenue increased 15%, while segment income rose 40%. Dunaway said the results demonstrated “strong operating leverage” in that segment, helped by higher FX/CFD rate capture and average daily volumes. Payments segment net operating revenue increased 10%, while segment income rose 30%.
Average client equity and FDIC sweep balances were $15.2 billion, up 91% from the prior year and 4% sequentially. Dunaway said interest and fee income earned on aggregate client float increased $54.8 million, or 54%, from the prior year, with R.J. O’Brien contributing $53.9 million.
R.J. O’Brien Integration Remains on Track
Management said the integration of R.J. O’Brien continues as planned. Smith said the company initially prioritized non-U.S. businesses and has begun a more gradual integration of U.S. futures commission merchant operations, starting with smaller groups of clients before a broader consolidation.
Dunaway said R.J. O’Brien contributed $35 million in pre-tax net income during the quarter, excluding amortization of acquired intangibles and a $7.7 million negative mark-to-market adjustment on its investment portfolio. He said StoneX realized about $6.9 million of synergies in the quarter, with an exit run rate of a little more than $8 million. On an annualized basis, he said the company was at about a $32 million synergy run rate exiting the quarter, with expectations to approach $45 million by the end of fiscal 2026 and reach the $50 million target as the remaining benefits come through in 2027.
During the quarter, StoneX also recorded severance and retention costs tied to the integration, including a formal collective redundancy consolidation process for U.K.-based employees and costs related to certain U.S.-based positions.
Management Highlights AI, Equities Platform and Market Conditions
Smith said StoneX is expanding its use of artificial intelligence from experimental projects to broader operational applications, including client support, internal operations and platform development. He cited AI-assisted automation within the company’s XPay payments platform for settlement instruction repair, validation and reconciliation, as well as AI chatbots for client queries, document translation and compliance-related tasks.
Smith also used the call to highlight StoneX’s global equities business, including agency execution, custody and clearing, market making, prime brokerage, capital markets services and research added through the Benchmark acquisition. He said StoneX ranked No. 1 in over-the-counter American Depositary Receipts and foreign securities in 2025, according to FINRA ORF data, and makes markets in approximately 18,000 equities globally.
In the question-and-answer session, analysts asked about volatility, credit losses, integration synergies and the merger-and-acquisition environment. Smith said heightened volatility supports revenue but also increases the risk of credit losses, though he described the level of credit loss provisions as “somewhat minimal” given recent market conditions. Dunaway said activity moderated somewhat in April from the elevated second-quarter levels, but added that the environment remained favorable, with elevated volatility and supportive interest-rate conditions.
On M&A, Smith said StoneX continues to see steady interest from small and midsize businesses, particularly those seeking an exit or a broader platform. He said the company remains active in evaluating opportunities that can expand its ecosystem by product, geography or client capability.
About StoneX Group NASDAQ: SNEX
StoneX Group Inc NASDAQ: SNEX is a global financial services firm offering execution, risk management, advisory and post-trade solutions across commodities, currencies, securities and digital assets. The company serves commercial businesses, institutional clients and financial intermediaries, providing market access and tailored services designed to help clients manage price risk, optimize working capital and execute complex transactions.
StoneX operates through several core segments.
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