Release Date: June 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CMC Markets PLC (STU:T8Q, Financial) introduced a third vertical focused on DeFi and Web 3.0, enhancing their existing two-vertical model and positioning the company at the forefront of financial innovation.
- The company reported a robust net operating income of GBP340 million, marking a 2% increase, driven by growth in the PTAS and B2B segments.
- Operating expenses were reduced by 2%, demonstrating effective cost control and contributing to a 12% increase in EBITDA.
- CMC Markets PLC (STU:T8Q) proposed a 37% increase in dividend per share, reflecting strong financial performance and commitment to shareholder returns.
- The acquisition of StrikeX enhances CMC Markets PLC (STU:T8Q)'s capabilities in tokenization and digital asset execution, positioning the company to lead in the emerging digital asset space.
Negative Points
- Trading net revenue was impacted by subdued market conditions in 2025, although there are signs of improvement entering the new financial year.
- IT costs rose by 17% due to investments in automation and platform resilience, which could pressure future profitability if not managed effectively.
- A one-off charge of GBP4.3 million was incurred due to a customer remediation in Australia, impacting the financial results for FY 2025.
- The shift to Web 3.0 and DeFi requires significant infrastructure upgrades, which may involve substantial investment and operational changes.
- There is uncertainty around the integration and realization of revenues from new partnerships, such as the ASB partnership in New Zealand, which may affect short-term financial performance.
Q & A Highlights
Q: What has happened to CMC Connect, and where does it now sit across the three pillars? Will the reporting segments be adjusted to reflect the three new pillars going forward?
A: Laurence Booth, Head of Capital Markets, explained that CMC Connect is now part of the platform technology-as-a-service (PTAS) vertical. It forms the architecture of the group both internally and externally. Peter Cruddas, CEO, added that they might have to report the business separately in the future due to the potential impact of tokenization on financial markets.
Q: How should we start modeling the business with the new DeFi and Web 3.0 capabilities? Also, can you provide more details about the Australia provision and cost expectations?
A: David Fineberg, Deputy CEO, stated that the revenue from crypto and Web 3.0 will be included in existing lines, but they may change reporting as the business evolves. Regarding the Australia provision, Matthew Lewis, Head of ANZ, clarified it relates to a sector-wide issue in Australia. On costs, Fineberg mentioned that most heavy lifting is done, and future investments will be aligned with strategic priorities.
Q: How many new clients were signed during the year, and what is the number of active clients within the D2C retail offering?
A: David Fineberg reported that there are over 52,000 active clients on the trading side and 238,000 active clients on the invest side. These numbers do not include substantial figures from their PTAS business.
Q: Can you provide more color on the change in hedging policy and marketing strategies for the retail side?
A: David Fineberg explained that the hedging policy change is about continuous refinement and efficiency, not a fundamental change. On the retail side, the focus is on technology and partnerships to grow the retail position and increase volumes.
Q: What are the plans for 24/7 trading, and what challenges does it present? Also, what is the M&A strategy and update on the ASB partnership in New Zealand?
A: Matthew Lewis stated that they aim to offer 24/7 trading across major asset classes, leveraging their tech and global reach. On M&A, Peter Cruddas mentioned they are interested in acquisitions that align with their Web 3.0 strategy. The ASB partnership is progressing well, with first revenues expected in May or June next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
