Q3 2026 StoneX Group Inc Earnings Call Transcript
Key Points
- StoneX Group Inc (SNEX) delivered strong financial results with net income of $127.9 million, up 102% year-over-year, and diluted EPS of $1.00, an 85% increase, driven by robust performance across its Commercial and Institutional segments.
- The company's diversified business model proved resilient despite moderated volatility, with nearly all products delivering double-digit revenue growth, including listed derivatives up 62%, OTC derivatives up 73%, and physical contracts up 162%.
- The integration of R.J. O'Brien (RJO) is progressing well, with the US FCM consolidation on track and cost synergies reaching a $37-38 million annualized run rate, on target to hit the $50 million goal.
- The Global Prime Services business is a major growth driver, with client balances growing from under $1 billion in 2019 to over $16 billion, generating nearly $140 million in net operating revenue over the last 12 months.
- The Payments segment achieved record average daily volumes of $96 million, up 20% year-over-year, and the highest number of transactions on the platform, validating the scalability of its proprietary technology and supporting partnerships with major institutions like Shinhan Bank.
- The company's return on equity (ROE) of 18.4% for the quarter and 20.8% on a trailing twelve-month basis significantly exceeded its 15% target, demonstrating strong capital efficiency.
- Net income for the third quarter was 27% lower than the record earnings reported in the immediately preceding second quarter, reflecting a moderation in market volatility.
- The self-directed retail segment experienced a decline, with net operating revenues down 17% and segment income down 36% year-over-year, driven by a 27% decrease in FX CFD average daily volumes.
- FX and CFD revenues decreased 19% year-over-year, with both average daily volumes and rate per million declining, as client activity normalized from the heightened levels seen after tariff announcements.
- The company's interest rate sensitivity has increased, with a 100-basis-point change in short-term rates now estimated to impact net income by $46.9 million annually, exposing earnings to potential rate cuts.
- The Payments segment's rate per million (RPM) continued to decline, down 7% year-over-year, due to a strategic shift towards higher-volume, lower-value payments, which could pressure future revenue growth if volume growth slows.
- The company incurred $4.2 million in severance and retention costs during the quarter, and while professional fees decreased due to insurance recoveries, these one-time items can create volatility in expense comparisons.
Good day, and thank you for standing by. Welcome to the StoneX Group, Inc., Q3 FY 2026 earnings conference call. (Operator Instructions) 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.
Good morning. 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. This press release is available on our website at www.stonex.com, 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
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