StoneX Group Q3 2026 Earnings Call Transcript

StoneX Group (NASDAQ: SNEX ) reported third-quarter financial results on Thursday. The transcript from the company's third-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit The full earnings call is available at Summary StoneX Group Inc.

9 million for Q3 FY26. J. O'Brien and Benchmark acquisitions. The company highlighted a strategic partnership with Shinhan Bank, enhancing its Payments segment, which saw a 12% increase in net operating revenue.

4%, above its 15% target. The firm is optimistic about future growth, focusing on expanding its Global Prime Services and leveraging recent acquisitions for cross-selling opportunities. Full Transcript OPERATOR Good day, and thank you for standing by. Welcome to the StoneX Group Inc.

Q3 FY26 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentations, there will be a question-and-answer session. To ask a question during the session, you need to press star 1-1 on your telephone, and you will hear an automated message advising your hand is raised.

To withdraw your question, please press star 1-1 again. Please be advised 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, Bill.

Bill Dunaway, CFO Good morning, and welcome to our earnings conference call for our quarter ended June 30, 2026, our third quarter of fiscal 2026. After the market closed yesterday, we issued a press release reporting our results for the quarter, and this press release is available on our website at as well as a slide presentation which we will 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 are required to advise you, and all participants should note, that the following discussion should be considered in conjunction with the most recent financial statements and notes thereto, as well as the Form 10-Q 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. These forward-looking statements involve known and unknown risks and uncertainties which are detailed in our filings with the SEC.

Although the company believes that 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.

With that, I'll now turn the call over to Philip Smith, the company's Chief Executive Officer, for a brief introduction. Philip Smith — Chief Executive Thank you, Bill. Good morning, everyone, and thank you for joining our third quarter earnings call for fiscal year 2026. 9 million, up 102% year on year.

49 per share, up 82% against prior year. This quarter was driven by strong performance across our Commercial and Institutional segments which reported a 90% and 56% increase, respectively, in net operating revenue year on year, underscoring our increasing relevance to a diverse set of clients. J. O'Brien and Benchmark acquisitions as well as organic growth.

4 million. S. listed equities. 5 million in net operating revenues for the quarter, their best quarterly performance to date.

In the Payments segment, we reported a 12% increase in net operating revenue and a 20% increase in ADV year on year to a record $96 million. In addition, we recorded the highest number of transactions going through the platform this quarter, validating our continued investment in proprietary technology and reinforcing our belief that the platform can support significantly higher volumes without material increases to our expense base.

This scalability positions us to support large financial institutions like Shinhan Bank, where we recently announced a strategic partnership with one of South Korea's oldest and systemically important banks to leverage our global network for complex cross-border payments. J. O'Brien. S.

FCM consolidation work remains on track to be substantially completed later this fiscal year. J. -based client migration this quarter and, as of the end of the quarter, hold nearly $13 billion in required client assets, further strengthening our position as the number one non-bank FCM in the United States. More broadly, and as anticipated, volatility moderated from the exceptional levels of the second quarter.

Even so, client activity remains strong, supported by continued client engagement and pockets of elevated volatility, resulting in nearly all of our products delivering double-digit growth, reflecting the strength of our diversified business model, the investments we have made across our platform, and the scale of the ecosystem we have built. Now I will turn over to Bill for a more detailed discussion on our financials this quarter. Over to you, Bill. Bill Dunaway, CFO Thank you, Philip.

I'll start with slide number five in the deck. Just a reminder: in July we completed a 3-for-2 split of our common stock and our shares began to trade on a split-adjusted basis at the market open on July 20, 2026. Because the stock split was effective prior to our release of the Q3 financial statements, all per-share metrics on this call will be on a split-adjusted basis. 9 million, an increase of 102% compared with the prior year.

4%, significantly above our 15% ROE target despite a 77% increase in book value over the last two years. On a tangible book value basis, we achieved a return on tangible equity of 25% for the quarter, while third quarter net income was 27% lower than the record earnings reported in the immediately preceding second quarter. Our results continue to reflect the strength, scale, and diversity of our business. 47 billion, up 43% versus the prior year.

As a reminder, our operating revenues include not only interest and fees earned on our client balances, but also carried interest that is related to our fixed income trading activities. 4 million or 47% versus a year ago, while down 13% versus the immediately preceding quarter. J. O'Brien and Benchmark.

This increase was partially offset by an 18 million decrease in professional fees, largely due to the recovery of legal fees through insurance and reduced legal defense costs related to the BTIG matter. 2 million versus the immediately preceding quarter. 2 million in severance and retention costs. 9 million decline in severance and retention costs, a decrease in back-office and administrative salaries, along with a decrease in payroll taxes.

J. O'Brien and Benchmark. J. 5 million for the third quarter.

As Philip noted, their best performance to date. 7 billion. 8% for the trailing twelve month period. 2 billion, up 108% versus the prior year and up 7% versus the immediately preceding quarter.

70. Turning to slide number six in the earnings deck, which compares quarterly operating revenues by product as well as key operating metrics versus a year ago, we experienced operating revenue growth across all products versus the prior year with the exception of FX and CFDs, down 19%. Transactional volumes were up across all of our product offerings with the exception of FX CFDs, down 12%, and the spread and rate capture increased in listed derivatives and securities while OTC derivatives, payments, and FX CFDs declined. J.

4 million increase in base metals listed derivative revenues on LME markets versus the prior year. Listed derivative operating revenues decreased 11% versus the immediately preceding quarter. Operating revenues derived from OTC derivatives increased 73% versus the prior year, driven by an 89% increase in OTC derivative contract volumes. This significant increase in client activity was most prevalent in agricultural, renewable fuel, and soft commodity markets, as well as continued increasing volumes associated with our automated trading platforms which have allowed for more efficient processing and hedging of OTC transactions.

—Iran conflict. 7 million increase in physical supply and trading operating revenues. Operating revenues derived from physical contracts declined 39% versus an immediately preceding record second quarter, which was highlighted by extremely strong performance in precious metals. Securities operating revenues were up 24% as average daily volumes increased 33% versus the prior year and the average rate per million increased 9%.

-listed markets, while the increase in rate per million was driven by improved spread capture in fixed income markets. Securities operating revenues were up 3% versus the immediately preceding quarter. Payment revenues increased 13% versus the prior year quarter due to a strong 20% increase in ADV, partially offset by lower RPM. Payments revenues were up 6% versus the immediately preceding quarter.

FX CFD revenues were down 19% versus a strong prior year quarter, which had benefited from heightened client activity, most notably in FX markets following Liberation Day tariff announcements, with ADV and rate per million declining 12% and 8% respectively. FX CFD revenues declined 9% versus the immediately preceding quarter. J. 9 million.

J. 6 billion in average client equity for the quarter, and the average money market and FDIC sweep client balances declined 2%. Moving on to slide number seven, I'll do a quick review of our segment performance. 1 million.

J. 7 million respectively versus the prior year. Segment income increased 119% versus the prior year, while on a sequential basis net operating revenues were down 20% and segment income was down 26% off the record second quarter performance. Our Institutional segment also saw strong growth in net operating revenues and segment income, up 56% and 49% respectively.

The growth in net operating revenues was principally driven by a 45 million increase in securities revenues. J. O'Brien. 5 million, which was partially offset by declines in legacy activities.

On a sequential basis, net operating revenues declined 1%. However, segment income increased 7%. In our Self-Directed Retail segment, net operating revenues decreased 17% and segment income was down 36%. These decreases were driven by a 27% decrease in average daily volumes in FX CFD contracts, which was partially offset by an 11% increase in rate per million captured.

On a sequential basis, net operating revenues declined 11% and segment income decreased 18%. In this segment, our Payments segment net operating revenues were up 12% and segment income increased 22%. Average daily volume was up 20% versus the prior year while rate per million was down 7%. Versus the immediately preceding quarter, Payments net operating revenues increased 7% and segment income increased 8%.

Moving on to slide number eight, looking at segment performance for the trailing 12 months, we saw strong growth in our Commercial and Institutional segments, with net operating revenues up 74% and 68% respectively and segment income increasing 92% and 59% respectively. Our Payments segment added 6% in net operating revenues and 17% in segment income. Our Self-Directed Retail segment reported a 20% decline in net operating revenues and a 39% decline in segment income.

Finally, moving on to slide number nine, which depicts our interest and fee 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 rates. J. O'Brien contributing 30 million in net interest in the current quarter. 2 million as the average client equity and FDIC sweep client balances increased 7% during the third quarter of fiscal '26.

51%. These swaps are reflected in the interest rate sensitivity table on this slide.