Canada markets open in 8 hours 8 minutes
  • S&P/TSX

    20,725.00
    +96.08 (+0.47%)
     
  • S&P 500

    4,164.00
    +52.92 (+1.29%)
     
  • DOW

    34,156.69
    +265.67 (+0.78%)
     
  • CAD/USD

    0.7468
    -0.0000 (-0.01%)
     
  • CRUDE OIL

    77.37
    +0.23 (+0.30%)
     
  • BTC-CAD

    31,109.23
    +228.72 (+0.74%)
     
  • CMC Crypto 200

    536.35
    +10.40 (+1.98%)
     
  • GOLD FUTURES

    1,889.90
    +5.10 (+0.27%)
     
  • RUSSELL 2000

    1,972.61
    +14.89 (+0.76%)
     
  • 10-Yr Bond

    3.6740
    0.0000 (0.00%)
     
  • NASDAQ futures

    12,798.00
    +21.25 (+0.17%)
     
  • VOLATILITY

    18.66
    -0.77 (-3.96%)
     
  • FTSE

    7,864.71
    +28.00 (+0.36%)
     
  • NIKKEI 225

    27,606.46
    -79.01 (-0.29%)
     
  • CAD/EUR

    0.6955
    -0.0002 (-0.03%)
     

StoneX Group Inc. Reports Fiscal 2022 Fourth Quarter Financial Results

StoneX Group Inc.
StoneX Group Inc.

Record Fiscal 2022 Results, with Diluted EPS of $10.01, up 74% and Return on Equity of 21.0%

Quarterly Operating Revenues of $583.4 million, up 50%

Quarterly Net Income of $52.3 million, ROE of 19.8%

Quarterly Diluted EPS of $2.49 per share, up 592%

NEW YORK, Nov. 21, 2022 (GLOBE NEWSWIRE) -- StoneX Group Inc. (the “Company”; NASDAQ: SNEX), a diversified global brokerage and financial services firm providing execution, risk management and advisory services, market intelligence and clearing services across multiple asset classes and markets around the world, today announced its financial results for the fiscal year 2022 fourth quarter ended September 30, 2022.

Sean M. O’Connor, CEO of StoneX Group Inc., stated, “These results demonstrate the resiliency of our company during times of volatile markets and geo-economic uncertainties, and validates the ongoing investments we’ve made in the business. We realized strong growth across our operating segments resulting from increased client engagement as well as growth in our client base. We benefited from favorable market conditions with elevated volatility and increased interest rates on our growing client float but have not yet realized the full impact of rising interest rates on our earnings. We are confident that StoneX is well-positioned in fiscal 2023 to capitalize on the growing value we believe our franchise can deliver to empower our clients across all asset classes.”

StoneX Group Inc. Summary Financials

Consolidated financial statements for the Company will be included in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission (“SEC”) which we expect to file on or about November 29, 2022. Upon filing, the Annual Report on Form 10-K will also be made available on the Company’s website at www.stonex.com.

 

Three Months Ended September 30,

 

Year Ended September 30,

(Unaudited) (in millions, except share and per share amounts)

2022

 

2021

 

%
Change

 

2022

 

2021

 

%
Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Sales of physical commodities

$

15,838.5

 

 

$

11,487.9

 

 

38

%

 

$

64,052.6

 

 

$

40,961.6

 

 

56

%

Principal gains, net

 

275.4

 

 

 

191.3

 

 

44

%

 

 

1,145.2

 

 

 

892.0

 

 

28

%

Commission and clearing fees

 

126.3

 

 

 

114.0

 

 

11

%

 

 

507.9

 

 

 

487.2

 

 

4

%

Consulting, management, and account fees

 

34.1

 

 

 

23.6

 

 

44

%

 

 

111.3

 

 

 

91.0

 

 

22

%

Interest income

 

106.7

 

 

 

30.0

 

 

256

%

 

 

219.0

 

 

 

102.4

 

 

114

%

Total revenues

 

16,381.0

 

 

 

11,846.8

 

 

38

%

 

 

66,036.0

 

 

 

42,534.2

 

 

55

%

Cost of sales of physical commodities

 

15,797.6

 

 

 

11,456.7

 

 

38

%

 

 

63,928.6

 

 

 

40,861.1

 

 

56

%

Operating revenues

 

583.4

 

 

 

390.1

 

 

50

%

 

 

2,107.4

 

 

 

1,673.1

 

 

26

%

Transaction-based clearing expenses

 

69.1

 

 

 

64.4

 

 

7

%

 

 

291.2

 

 

 

271.7

 

 

7

%

Introducing broker commissions

 

37.4

 

 

 

39.7

 

 

(6

)%

 

 

160.1

 

 

 

160.5

 

 

%

Interest expense

 

77.6

 

 

 

14.1

 

 

450

%

 

 

135.5

 

 

 

49.6

 

 

173

%

Interest expense on corporate funding

 

11.6

 

 

 

10.2

 

 

14

%

 

 

44.7

 

 

 

41.3

 

 

8

%

Net operating revenues

 

387.7

 

 

 

261.7

 

 

48

%

 

 

1,475.9

 

 

 

1,150.0

 

 

28

%

Compensation and other expenses:

 

 

 

 

 

 

 

 

 

 

 

Variable compensation and benefits

 

129.7

 

 

 

85.0

 

 

53

%

 

 

478.1

 

 

 

377.7

 

 

27

%

Fixed compensation and benefits

 

80.8

 

 

 

78.2

 

 

3

%

 

 

316.7

 

 

 

301.4

 

 

5

%

Trading systems and market information

 

17.2

 

 

 

15.9

 

 

8

%

 

 

66.2

 

 

 

58.8

 

 

13

%

Professional fees

 

15.4

 

 

 

13.1

 

 

18

%

 

 

54.3

 

 

 

40.9

 

 

33

%

Non-trading technology and support

 

13.7

 

 

 

13.2

 

 

4

%

 

 

52.4

 

 

 

46.0

 

 

14

%

Occupancy and equipment rental

 

9.4

 

 

 

8.4

 

 

12

%

 

 

36.1

 

 

 

34.2

 

 

6

%

Selling and marketing

 

14.0

 

 

 

9.9

 

 

41

%

 

 

55.3

 

 

 

33.3

 

 

66

%

Travel and business development

 

6.1

 

 

 

1.7

 

 

259

%

 

 

16.9

 

 

 

4.5

 

 

276

%

Communications

 

2.3

 

 

 

2.3

 

 

%

 

 

8.3

 

 

 

9.3

 

 

(11

)%

Depreciation and amortization

 

12.3

 

 

 

9.8

 

 

26

%

 

 

44.4

 

 

 

36.5

 

 

22

%

Bad debts, net of recoveries

 

4.4

 

 

 

6.7

 

 

(34

)%

 

 

15.8

 

 

 

10.4

 

 

52

%

Other

 

16.0

 

 

 

12.4

 

 

29

%

 

 

60.6

 

 

 

46.3

 

 

31

%

Total compensation and other expenses

 

321.3

 

 

 

256.6

 

 

25

%

 

 

1,205.1

 

 

 

999.3

 

 

21

%

Gain on acquisition and other (losses) gains, net

 

 

 

 

(0.2

)

 

n/m

 

 

6.4

 

 

 

3.4

 

 

88

%

Income before tax

 

66.4

 

 

 

4.9

 

 

1,255

%

 

 

277.2

 

 

 

154.1

 

 

80

%

Income tax expense (benefit)

 

14.1

 

 

 

(2.4

)

 

n/m

 

 

70.1

 

 

 

37.8

 

 

85

%

Net income

$

52.3

 

 

$

7.3

 

 

616

%

 

$

207.1

 

 

$

116.3

 

 

78

%

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.58

 

 

$

0.37

 

 

597

%

 

$

10.27

 

 

$

5.90

 

 

74

%

Diluted

$

2.49

 

 

$

0.36

 

 

592

%

 

$

10.01

 

 

$

5.74

 

 

74

%

Weighted-average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

19,690,761

 

 

 

19,214,912

 

 

2

%

 

 

19,570,403

 

 

 

19,130,643

 

 

2

%

Diluted

 

20,352,682

 

 

 

19,759,984

 

 

3

%

 

 

20,067,540

 

 

 

19,678,168

 

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

Return on equity (“ROE”)

 

19.8

%

 

 

3.2

%

 

 

 

 

21.0

%

 

 

13.9

%

 

 

ROE on tangible book value

 

21.6

%

 

 

3.6

%

 

 

 

 

23.2

%

 

 

15.9

%

 

 

n/m = not meaningful to present as a percentage

        

The following table presents our consolidated operating revenues by segment for the periods indicated.

 

Three Months Ended September 30,

 

Year Ended September 30,

(in millions)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Segment operating revenues represented by:

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

185.2

 

 

$

132.7

 

 

40

%

 

$

692.1

 

 

$

534.8

 

 

29

%

Institutional

 

258.6

 

 

 

138.3

 

 

87

%

 

 

831.8

 

 

 

668.4

 

 

24

%

Retail

 

101.8

 

 

 

86.4

 

 

18

%

 

 

426.7

 

 

 

348.0

 

 

23

%

Global Payments

 

44.3

 

 

 

34.4

 

 

29

%

 

 

172.0

 

 

 

137.3

 

 

25

%

Corporate Unallocated

 

0.9

 

 

 

3.0

 

 

(70

)%

 

 

7.8

 

 

 

1.7

 

 

359

%

Eliminations

 

(7.4

)

 

 

(4.7

)

 

57

%

 

 

(23.0

)

 

 

(17.1

)

 

35

%

Operating revenues

$

583.4

 

 

$

390.1

 

 

50

%

 

$

2,107.4

 

 

$

1,673.1

 

 

26

%

The following table presents our consolidated income by segment for the periods indicated.

 

Three Months Ended September 30,

 

Year Ended September 30,

(in millions)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Segment income represented by:

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

80.2

 

 

$

44.1

 

 

82

%

 

$

288.3

 

 

$

192.2

 

 

50

%

Institutional

 

45.0

 

 

 

24.4

 

 

84

%

 

 

174.6

 

 

 

167.7

 

 

4

%

Retail

 

20.2

 

 

 

11.9

 

 

70

%

 

 

115.4

 

 

 

67.8

 

 

70

%

Global Payments

 

24.4

 

 

 

18.4

 

 

33

%

 

 

97.4

 

 

 

78.5

 

 

24

%

Total segment income

$

169.8

 

 

$

98.8

 

 

72

%

 

$

675.7

 

 

$

506.2

 

 

33

%

Reconciliation of segment income to income before tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income

$

169.8

 

 

$

98.8

 

 

72

%

 

$

675.7

 

 

$

506.2

 

 

33

%

Net costs not allocated to operating segments

 

(103.4

)

 

 

(93.7

)

 

10

%

 

 

(398.5

)

 

 

(355.5

)

 

12

%

Gain on acquisition and other (losses) gains, net

 

 

 

 

(0.2

)

 

(100

)%

 

 

 

 

 

3.4

 

 

(100

)%

Income before tax

$

66.4

 

 

$

4.9

 

 

1,255

%

 

$

277.2

 

 

$

154.1

 

 

80

%

Key Operating Metrics

The tables below display operating revenues disaggregated across the key products we provide to our clients and select operating data and metrics used by management in evaluating our performance, for the periods indicated.

All $ amounts are U.S. dollar or U.S. dollar equivalents

Three Months Ended September 30,

 

Year Ended September 30,

 

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Operating Revenues (in millions):

 

 

 

 

 

 

 

 

 

 

 

Listed derivatives

$

100.8

 

 

$

89.7

 

 

12

%

 

$

430.5

 

 

$

387.6

 

 

11

%

Over-the-counter (“OTC”) derivatives

 

49.0

 

 

 

34.4

 

 

42

%

 

 

208.3

 

 

 

143.4

 

 

45

%

Securities

 

181.8

 

 

 

112.1

 

 

62

%

 

 

610.4

 

 

 

533.6

 

 

14

%

FX / Contracts for difference (“CFD”) contracts

 

81.4

 

 

 

55.7

 

 

46

%

 

 

339.3

 

 

 

242.0

 

 

40

%

Global payments

 

43.6

 

 

 

33.3

 

 

31

%

 

 

167.8

 

 

 

133.8

 

 

25

%

Physical contracts

 

61.9

 

 

 

42.1

 

 

47

%

 

 

194.3

 

 

 

152.6

 

 

27

%

Interest / fees earned on client balances

 

49.1

 

 

 

7.9

 

 

522

%

 

 

89.3

 

 

 

26.0

 

 

243

%

Other

 

22.3

 

 

 

16.6

 

 

34

%

 

 

82.7

 

 

 

69.5

 

 

19

%

Corporate Unallocated

 

0.9

 

 

 

3.0

 

 

(70

)%

 

 

7.8

 

 

 

1.7

 

 

359

%

Eliminations

 

(7.4

)

 

 

(4.7

)

 

57

%

 

 

(23.0

)

 

 

(17.1

)

 

35

%

 

$

583.4

 

 

$

390.1

 

 

50

%

 

$

2,107.4

 

 

$

1,673.1

 

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

Volumes and Other Select Data (all $ amounts are U.S. dollar or U.S. dollar equivalents):

 

 

 

 

 

 

Listed derivatives (contracts, 000’s)

 

40,813

 

 

 

36,004

 

 

13

%

 

 

160,609

 

 

 

146,101

 

 

10

%

Listed derivatives, average rate per contract (1)

$

2.31

 

 

$

2.41

 

 

(4

)%

 

$

2.53

 

 

$

2.55

 

 

(1

)%

Average client equity - listed derivatives (millions)

$

6,697

 

 

$

4,164

 

 

61

%

 

$

5,696

 

 

$

3,842

 

 

48

%

OTC derivatives (contracts, 000’s)

 

737

 

 

 

667

 

 

10

%

 

 

2,968

 

 

 

2,557

 

 

16

%

OTC derivatives, average rate per contract

$

67.02

 

 

$

51.25

 

 

31

%

 

$

70.49

 

 

$

55.70

 

 

27

%

Securities average daily volume (“ADV”) (millions)

$

3,599

 

 

$

3,040

 

 

18

%

 

$

3,459

 

 

$

2,776

 

 

25

%

Securities rate per million (“RPM”) (2)

$

684

 

 

$

427

 

 

60

%

 

$

579

 

 

$

610

 

 

(5

)%

Average money market / FDIC sweep client balances (millions)

$

1,946

 

 

$

1,592

 

 

22

%

 

$

1,784

 

 

$

1,471

 

 

21

%

FX / CFD contracts ADV (millions)

$

12,263

 

 

$

11,063

 

 

11

%

 

$

13,273

 

 

$

10,636

 

 

25

%

FX / CFD contracts RPM

$

103

 

 

$

77

 

 

34

%

 

$

99

 

 

$

89

 

 

11

%

Global Payments ADV (millions)

$

64

 

 

$

54

 

 

19

%

 

$

62

 

 

$

54

 

 

15

%

Global Payments RPM

$

10,680

 

 

$

9,573

 

 

12

%

 

$

10,880

 

 

$

9,921

 

 

10

%


(1)

Give-up fees as well as cash and voice brokerage revenues are excluded from the calculation of listed derivatives, average rate per contract.

(2)

Interest income related to securities lending is excluded from the calculation of Securities RPM.

Operating Revenues

Operating revenues increased $193.3 million, or 50%, to $583.4 million in the three months ended September 30, 2022 compared to $390.1 million in the three months ended September 30, 2021.

Operating revenues derived from listed derivatives increased $11.1 million, or 12%, to $100.8 million in the three months ended September 30, 2022 compared to $89.7 million in the three months ended September 30, 2021. This increase was principally due to a 13% increase in listed derivative contract volumes, which was partially offset by a 4% decline in the average rate per contract compared to the three months ended September 30, 2021.

Operating revenues derived from OTC derivatives increased $14.6 million, or 42%, to $49.0 million in the three months ended September 30, 2022 compared to $34.4 million in the three months ended September 30, 2021. This increase was principally due to a 31% increase in the OTC derivative average rate per contract as well as a 10% increase in OTC derivative contract volumes compared to the three months ended September 30, 2021.

Operating revenues derived from securities transactions increased $69.7 million, or 62%, to $181.8 million in the three months ended September 30, 2022 compared to $112.1 million in the three months ended September 30, 2021. This increase was principally due to a 60% increase in RPM as well as an 18% increase in ADV compared to the three months ended September 30, 2021.

Operating revenues derived from FX/CFD contracts increased $25.7 million, or 46%, to $81.4 million in the three months ended September 30, 2022 compared to $55.7 million in the three months ended September 30, 2021, principally due to a 34% increase in FX/CFD contracts RPM as well as an 11% increase in FX/CFD contracts ADV.

Operating revenues from global payments increased $10.3 million, or 31%, to $43.6 million in the three months ended September 30, 2022 compared to $33.3 million in the three months ended September 30, 2021, principally driven by a 19% increase in ADV and a 12% increase in global payments RPM.

Operating revenues derived from physical contracts increased $19.8 million, or 47%, to $61.9 million in the three months ended September 30, 2022 compared to $42.1 million in the three months ended September 30, 2021. This increase was principally due to increased client activity in both our physical precious metals and physical agricultural and energy businesses compared to the three months ended September 30, 2021.

Interest and fee income earned on client balances, which is associated with our listed and OTC derivatives, correspondent clearing, and independent wealth management product offerings, increased $41.2 million, or 522%, to $49.1 million in the three months ended September 30, 2022 compared to $7.9 million in the three months ended September 30, 2021. This was principally driven by an increase in short-term interest rates as well as increases in average client equity and average money-market/FDIC sweep client balances of 61% and 22%, respectively.

Interest expense

 

Three Months Ended September 30,

 

Year Ended September 30,

(in millions)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Interest expense attributable to:

 

 

 

 

 

 

 

 

 

 

 

Trading activities:

 

 

 

 

 

 

 

 

 

 

 

Institutional dealer in fixed income securities

$

45.9

 

$

3.4

 

n/m

 

 

$

62.3

 

$

9.6

 

549

%

Securities borrowing

 

6.7

 

 

4.7

 

43

%

 

 

23.0

 

 

17.6

 

31

%

Client balances on deposit

 

14.0

 

 

0.3

 

n/m

 

 

 

17.4

 

 

1.5

 

n/m

 

Short-term financing facilities of subsidiaries and other direct interest of operating segments

 

11.0

 

 

5.7

 

93

%

 

 

32.8

 

 

20.9

 

57

%

 

 

77.6

 

 

14.1

 

450

%

 

 

135.5

 

 

49.6

 

173

%

Corporate funding

 

11.6

 

 

10.2

 

14

%

 

 

44.7

 

 

41.3

 

8

%

Total interest expense

$

89.2

 

$

24.3

 

267

%

 

$

180.2

 

$

90.9

 

98

%

During the three months ended September 30, 2022, the increase in interest expense attributable to trading activities is principally due to the increase in fixed income business activities within our Institutional segment, an increase in interest expense on client balances principally due to higher average client equity, and increase in average borrowings within our Commercial segment, along with the impact of the increases in short-term interest rates during the year ended September 30, 2022.

Gain on Acquisition and Other (Losses) Gains, net

The results of the year ended September 30, 2022 include a nonrecurring gain of $6.4 million related to a foreign exchange antitrust class action settlement received in March 2022.

The results of the year ended September 30, 2021 included a gain of $3.3 million related to the acquisition of Gain Capital Holdings, Inc. (“Gain”) in the fourth quarter of fiscal 2020, due to an adjustment to the final liabilities assumed, resulting in an adjustment from the initially determined values as of August 1, 2020.

Variable vs. Fixed Expenses
The table below sets forth our variable expenses and non-variable expenses as a percentage of total non-interest expenses for the periods indicated.

 

Three Months Ended September 30,

 

Year Ended September 30,

(in millions)

2022

 

% of
Total

 

2021

 

% of
Total

 

2022

 

% of
Total

 

2021

 

% of
Total

Variable compensation and benefits

$

129.7

 

30

%

 

$

85.0

 

23

%

 

$

478.1

 

29

%

 

$

377.7

 

26

%

Transaction-based clearing expenses

 

69.1

 

16

%

 

 

64.4

 

18

%

 

 

291.2

 

17

%

 

 

271.7

 

19

%

Introducing broker commissions

 

37.4

 

9

%

 

 

39.7

 

11

%

 

 

160.1

 

10

%

 

 

160.5

 

11

%

Total variable expenses

 

236.2

 

55

%

 

 

189.1

 

52

%

 

 

929.4

 

56

%

 

 

809.9

 

56

%

Fixed compensation and benefits

 

80.8

 

19

%

 

 

78.2

 

22

%

 

 

316.7

 

19

%

 

 

301.4

 

21

%

Other fixed expenses

 

106.4

 

25

%

 

 

86.7

 

24

%

 

 

394.5

 

24

%

 

 

309.8

 

22

%

Bad debts, net of recoveries

 

4.4

 

1

%

 

 

6.7

 

2

%

 

 

15.8

 

1

%

 

 

10.4

 

1

%

Total non-variable expenses

 

191.6

 

45

%

 

 

171.6

 

48

%

 

 

727.0

 

44

%

 

 

621.6

 

44

%

Total non-interest expenses

$

427.8

 

100

%

 

$

360.7

 

100

%

 

$

1,656.4

 

100

%

 

$

1,431.5

 

100

%

Our variable expenses include variable compensation paid to traders and risk management consultants, bonuses paid to operational, administrative and executive employees, transaction-based clearing expenses and introducing broker commissions. We seek to make non-interest expenses variable to the greatest extent possible, and to keep our fixed costs as low as possible.

Segment Results

Our business activities are managed as operating segments and organized into reportable segments consisting of Commercial, Institutional, Retail and Global Payments.

The tables below present the financial performance, a disaggregation of operating revenues, and select operating data and metrics used by management in evaluating the performance of our segments, for the periods indicated. Additional information on the performance of our segments will be included in our Annual Report on Form 10-K to be filed with the SEC.

Commercial

 

Three Months Ended September 30,

 

Year Ended September 30,

(in millions)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Sales of physical commodities

$

15,610.8

 

$

10,940.9

 

43

%

 

$

63,162.7

 

$

39,420.3

 

60

%

Principal gains, net

 

82.8

 

 

58.5

 

42

%

 

 

343.0

 

 

245.5

 

40

%

Commission and clearing fees

 

38.9

 

 

42.1

 

(8

)%

 

 

168.8

 

 

178.3

 

(5

)%

Consulting, management and account fees

 

5.7

 

 

4.9

 

16

%

 

 

21.9

 

 

19.7

 

11

%

Interest income

 

20.2

 

 

6.4

 

216

%

 

 

46.8

 

 

20.2

 

132

%

Total revenues

 

15,758.4

 

 

11,052.8

 

43

%

 

 

63,743.2

 

 

39,884.0

 

60

%

Cost of sales of physical commodities

 

15,573.2

 

 

10,920.1

 

43

%

 

 

63,051.1

 

 

39,349.2

 

60

%

Operating revenues

 

185.2

 

 

132.7

 

40

%

 

 

692.1

 

 

534.8

 

29

%

Transaction-based clearing expenses

 

13.6

 

 

13.7

 

(1

)%

 

 

55.9

 

 

54.0

 

4

%

Introducing broker commissions

 

7.3

 

 

8.5

 

(14

)%

 

 

31.5

 

 

34.7

 

(9

)%

Interest expense

 

5.2

 

 

3.2

 

63

%

 

 

18.2

 

 

13.0

 

40

%

Net operating revenues

 

159.1

 

 

107.3

 

48

%

 

 

586.5

 

 

433.1

 

35

%

Variable direct compensation and benefits

 

46.0

 

 

33.1

 

39

%

 

 

171.2

 

 

133.4

 

28

%

Net contribution