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StoneX Group Inc. (SNEX)·Q4 2024 Earnings Summary

Executive Summary

  • Record Q4 results: operating revenues $0.920B (+18% YoY), net operating revenues $454.8M (+13% YoY), net income $76.7M (+51% YoY), diluted EPS $2.32, ROE 18.5% .
  • Strength in Institutional: operating revenues +30% YoY and segment income +41% YoY, driven by securities ADV +34% and higher interest income; listed derivatives volumes +55% with lower RPC from mix shift to larger clients .
  • Headwind: Payments RPM fell 20% YoY (spreads tighter) despite ADV +13%; segment income −23% YoY; FX/CFD revenues +7% with improved capture; listed derivatives RPC down on lower volatility .
  • No formal quantitative guidance; management points to digitization, prime brokerage expansion, and secular share gains as medium-term tailwinds amid benign volatility; precious metals inventory hedges created $4.5M unrealized losses in Q4 to reverse next quarter .

What Went Well and What Went Wrong

  • What Went Well

    • Institutional segment posted record quarter: operating revenues $554.1M (+30% YoY) and segment income $77.3M (+41% YoY), with securities operating revenues +$100.2M on ADV +34% .
    • Self-Directed/Retail leveraged platform economics: operating revenues +13% YoY to $104.3M and segment income +6% YoY; FX/CFD RPM up 8% YoY with ADV +1% .
    • CEO on strategic positioning: “We believe our expanding global footprint and diversified product offering positions us to deliver superior service… and returns” .

  • What Went Wrong

    • Payments RPM fell 20% YoY; segment operating revenues −10% YoY to $48.6M and segment income −23% YoY amid tighter corridor spreads .
    • Listed derivatives RPC down (−15% YoY to $1.99) despite +46% volumes, reflecting lower volatility and mix; OTC RPC down 26% YoY .
    • Q&A clarified Commercial OTC capture was a “low watermark” and Q3 LME-driven spike was an anomaly; normalization hit sequential comparisons in Commercial .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Operating Revenues ($USD Billions)$0.818 $0.914 $0.920
Net Operating Revenues ($USD Millions)$422.3 $468.5 $454.8
Net Income ($USD Millions)$53.1 $61.9 $76.7
Diluted EPS ($USD)$1.63 $1.88 $2.32
ROE (%)14.0% 15.7% 18.5%

YoY comparison (Q4 FY2024 vs Q4 FY2023):

MetricQ4 2023Q4 2024YoY Change
Operating Revenues ($USD Billions)$0.778 $0.920 +18%
Net Operating Revenues ($USD Millions)$403.7 $454.8 +13%
Net Income ($USD Millions)$50.7 $76.7 +51%
Diluted EPS ($USD)$1.57 $2.32 +48%
ROE (%)15.0% 18.5% +350 bps

Segment breakdown (Operating Revenues and Segment Income):

SegmentQ2 2024 Op Rev ($MM)Q3 2024 Op Rev ($MM)Q4 2024 Op Rev ($MM)Q2 2024 Seg Income ($MM)Q3 2024 Seg Income ($MM)Q4 2024 Seg Income ($MM)
Commercial$200.5 $262.2 $210.8 $85.6 $125.7 $89.2
Institutional$463.4 $508.9 $554.1 $61.3 $62.2 $77.3
Self-Directed/Retail$102.0 $96.2 $104.3 $33.2 $27.6 $29.8
Payments$49.3 $51.1 $48.6 $24.6 $28.2 $24.8
Corporate/Elims$14.4 / $(11.4) $8.3 / $(13.0) $15.0 / $(12.7) n/an/an/a

KPIs and capture metrics:

KPIQ2 2024Q3 2024Q4 2024
Listed Derivatives Contracts (000s)53,805 52,736 57,512
Listed Derivatives RPC ($)$1.98 $2.39 $1.99
Securities ADV ($MM)$7,473 $7,358 $7,574
Securities RPM ($)$239 $239 $257
FX/CFD RPM ($)$120 $111 $122
Payments ADV ($MM)$64 $69 $70
Payments RPM ($)$12,327 $11,264 $10,658
Interest/Fees on Client Balances Op Rev ($MM)$104.2 $115.9 $113.6

Guidance Changes

StoneX did not issue formal quantitative guidance for revenue, EPS, margins, OpEx, OI&E, tax rate, segments, or dividends in the Q4 press release or the earnings call.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/QuarterNot provided Not provided Maintained (no formal guidance)
EPSFY/QuarterNot provided Not provided Maintained (no formal guidance)
Margins/ROEFY/QuarterNot provided Target ROE ≥15% reiterated as strategic focus (not formal guidance) Narrative emphasis
OpExFY/QuarterNot provided Expect roughly inflationary fixed cost growth as digitization offsets (qualitative) n/a
Tax RateFY/QuarterNot provided Not provided n/a
Segment-specificFY/QuarterNot provided Not provided n/a
DividendsFY/QuarterNot provided Not provided n/a

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Payments spreads/captureQ2: RPM +3% YoY; Q3: RPM −13% YoY; ADV rising RPM −20% YoY; ADV +13%; segment income −23% Worsening capture, higher volumes
Institutional listed derivatives mixQ2/Q3 RPC down (larger clients, lower price points) CEO: shift to large ETF/long-only clients; lower commission rates but larger scale Ongoing mix shift, volumes strong
Securities RPM compression vs ADV growthQ2/Q3 ADV +37%, RPM down; Q4 ADV +34%, RPM −3% Net operating revenues from securities up $21.5M; spreads tightened Continued RPM pressure with scale benefits
FX/CFD captureQ2 RPM +67% YoY; Q3 +4%; Q4 RPM +8% YoY; FX/CFD revenues +7% Improving capture
Precious metals inventory hedgesQ2: $9.1M unrealized losses (≈$0.20 EPS) to reverse Q4: $4.5M unrealized losses to reverse next quarter Transient losses, reversal expected
Digitization/tech initiativesLimited detail in Q2/Q3 press; ongoing investments Extensive roadmap: self-directed expansion, PMX leadership, StoneHedge, data lake, onboarding platform, XPay Accelerating delivery in FY2025
Macro/regulatoryBanks retreat (Basel) creating share gains opportunity (context emerges) CEO emphasizes Basel-driven market structure tailwinds Structural tailwinds intact
Payments M&A (CAB Payments)n/aManagement sees commercial rationale; valuation halted progress amid CAB warning Opportunistic consolidation, TBD

Management Commentary

  • “Net income was $76.7 million… diluted EPS of $2.32, representing an 18.5% return on equity for the quarter… another record annual result… earnings of $260.8 million, or $7.96 per diluted share.”
  • On Institutional listed derivatives: “Business has transitioned into a truly institutional business… serving very large ETFs and institutions… lower commission rate but much bigger scale.”
  • On Payments: “Spreads are about as tight as we’ve ever seen… volumes growing… many levers to expand/diversify client base.”
  • Strategy and digitization: “Our self-directed digital offering allows us the potential to massively expand our addressable market… drive operating margins.”

Q&A Highlights

  • Capture rates normalization: Prior quarter Commercial capture spike was LME-driven anomaly; Q4 capture represents a “low watermark” for OTC due to low volatility .
  • Institutional listed derivatives economics: Shift to larger long-only/ETF clients lowers commission rate but improves scale and risk profile .
  • Payments outlook and M&A: Corridor spreads unusually tight; management remains constructive on expanding payments footprint and reiterated potential strategic fit with CAB Payments subject to value considerations .
  • Expense trajectory: Digitization yielding scalability; aiming for roughly inflationary fixed cost growth over next 1–2 years .
  • Nonrecurring items: D&A run-rate guidance discussed; insurance recovery benefited professional fees; precious metals hedging losses to reverse .

Estimates Context

  • Wall Street consensus EPS and revenue estimates for Q4 FY2024 were not available via S&P Global at the time of this request; therefore, we cannot quantify beats/misses versus consensus. If needed, we can refresh and add consensus comparisons once access is restored.

Key Takeaways for Investors

  • Mix shift drives durable Institutional growth: record institutional revenues and segment income with strong securities ADV; expect continued share gains as banks retrench under Basel capital rules .
  • Payments headwinds are cyclical: RPM compression from tighter spreads weighed on segment results; volumes rising and management pursuing client and product expansion—watch for normalization or strategic actions (e.g., consolidation) .
  • Platform leverage in Retail: FX/CFD capture and internalization support margins; sequential improvement suggests operating leverage of self-directed model .
  • Interest tailwinds moderating but still supportive: client balance interest/fees increased YoY; monitor rate path and sweep balances for 2025 impact .
  • Transient precious metals hedging losses should reverse: $4.5M Q4 unrealized losses to be realized favorably upon inventory sales in Q1; reduce near-term EPS noise .
  • Strategic investments to catalyze margins: digitization (PMX, StoneHedge, data lake, XPay, onboarding platform) and prime brokerage expansion underpin medium-term margin and ROE trajectory .
  • No formal guidance: trade the narrative—record quarter, strong Institutional, payments spread compression, and accelerating platform delivery in FY2025 as potential catalysts .

Appendix: Additional Relevant Q4 Press Releases

  • StoneX completes acquisition of JBR Recovery’s precious metal recycling and refinery business, deepening metals ecosystem and supply chain control .
  • Q4 results press release reiterating record quarterly net income, EPS, ROE and detailed segment/product KPIs .