StoneX Group Inc. - Quarter Report: 2024 June (Form 10-Q)

Deposits with and receivables from broker-dealers, clearing organizations and counterparties, net (including $ million and $ million at fair value at June 30, 2024 and September 30, 2023, respectively)

Receivable from clients, net (including $() million and $() million at fair value at June 30, 2024 and September 30, 2023, respectively)

Notes receivable, net Income taxes receivable

Financial instruments owned, at fair value (includes securities pledged as collateral that can be sold or repledged of $ million and $ million at June 30, 2024 and September 30, 2023, respectively)

Physical commodities inventory, net (including $ million and $ million at fair value at June 30, 2024 and September 30, 2023, respectively)

Deferred tax asset Property and equipment, net Operating right of use assets Goodwill and intangible assets, net Other assets Total assets$ $ LIABILITIES AND STOCKHOLDERS' EQUITYLiabilities:

Accounts payable and other accrued liabilities (including $ million and $ million at fair value at June 30, 2024 and September 30, 2023, respectively)

$ $ Operating lease liabilities Payables to:

Clients (including $ million and $ million at fair value at June 30, 2024 and September 30, 2023, respectively)

Broker-dealers, clearing organizations and counterparties (including $ million and $ million at fair value at June 30, 2024 and September 30, 2023, respectively)

Lenders under loans Senior secured borrowings, net Income taxes payable Deferred tax liability Collateralized transactions: Securities sold under agreements to repurchase Securities loaned Financial instruments sold, not yet purchased, at fair value Total liabilities

Commitments and contingencies (Note 11)

par value. Authorized shares; shares issued or outstanding

Common stock, $ par value. Authorized shares; issued and outstanding at June 30, 2024 and issued and outstanding at September 30, 2023

Common stock in treasury, at cost. shares at June 30, 2024 and September 30, 2023

()()Additional paid-in-capital Retained earnings Accumulated other comprehensive loss, net()()Total equity Total liabilities and stockholders' equity$ $

See accompanying notes to the condensed consolidated financial statements.

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StoneX Group Inc.

Condensed Consolidated Income Statements

(Unaudited)

Three Months Ended June 30,

Nine Months Ended June 30,

(in millions, except share and per share amounts)

2024

2023

2024

2023

Revenues:

Sales of physical commodities

Principal gains, net

Commission and clearing fees

Consulting, management, and account fees

Interest income

Total revenues

Cost of sales of physical commodities

Operating revenues

Transaction-based clearing expenses

Introducing broker commissions

Interest expense

Interest expense on corporate funding

Net operating revenues

Compensation and other expenses:

Compensation and benefits

Trading systems and market information

Professional fees

Non-trading technology and support

Occupancy and equipment rental

Selling and marketing

Travel and business development

Communications

Depreciation and amortization

Bad debts (recoveries), net

()

Other

Total compensation and other expenses

Gain on acquisition and other gains

Income before tax

Income tax expense

Net income

Earnings per share:

Basic

Diluted

Weighted-average number of common shares outstanding:

Basic

Diluted

See accompanying notes to the condensed consolidated financial statements.

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StoneX Group Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,		Nine Months Ended June 30,
(in millions)	2024	2023	2024	2023
Net income	$	$	$	$
Other comprehensive (loss)/gain, net of tax:
Foreign currency translation adjustment	()		()
Cash flow hedges








Total other comprehensive (loss)/gain, net of tax	()
Comprehensive income	$	$	$	$

See accompanying notes to the condensed consolidated financial statements.

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StoneX Group Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended June 30,
(in millions)	2024	2023
Cash flows from operating activities:
Net income	$	$
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization
Amortization of right of use assets
Bad debts (recoveries), net	()
Deferred income taxes	()
Amortization of debt issuance costs
Amortization of share-based compensation
Gain on acquisition		()
Changes in operating assets and liabilities, net:
Securities and other assets segregated under federal and other regulations	()
Securities purchased under agreements to resell	()	()
Securities borrowed	()
Deposits with and receivables from broker-dealers, clearing organizations, and counterparties, net	()	()
Receivables from clients, net	()	()
Notes receivable, net		()
Income taxes receivable	()	()
Financial instruments owned, at fair value	()	()
Physical commodities inventory, net	()
Other assets	()	()
Accounts payable and other accrued liabilities
Operating lease liabilities	()	()
Payables to clients		()
Payables to broker-dealers, clearing organizations, and counterparties	()	()
Income taxes payable	()
Securities sold under agreements to repurchase
Securities loaned		()
Financial instruments sold, not yet purchased, at fair value
Net cash provided by/(used in) operating activities		()
Cash flows from investing activities:
Proceeds from notes receivable
Acquisition of businesses and assets, net of cash received	()	()
Purchase of exchange memberships and common stock	()
Purchases of property and equipment	()	()
Net cash used in investing activities	()	()
Cash flows from financing activities:
Net change in payables to lenders under loans with maturities 90 days or less	()	()
Proceeds from payables to lenders under loans with maturities greater than 90 days
Repayments of payables to lenders under loans with maturities greater than 90 days	()	()
Proceeds from issuance of senior secured notes
Repayment of senior secured notes	()
Deferred payments on acquisitions	()	()
Debt issuance costs	()
Shares withheld to cover taxes on vesting of equity awards	()
Exercise of stock options
Net cash provided by/(used in) financing activities		()
Effect of exchange rates on cash, segregated cash, cash equivalents, and segregated cash equivalents	()
Net increase/(decrease) in cash, segregated cash, cash equivalents, and segregated cash equivalents		()
Cash, segregated cash, cash equivalents, and segregated cash equivalents at beginning of period
Cash, segregated cash, cash equivalents, and segregated cash equivalents at end of period	$	$
Supplemental disclosure of cash flow information:
Cash paid for interest	$	$
Income taxes paid, net of cash refunds	$	$
Supplemental disclosure of non-cash investing and financing activities:
Additional consideration payable related to acquisition of customer list	$	$
Identified intangible assets and goodwill on acquisitions	$	$
Additional consideration payable related to acquisitions, net	$	$
Acquisition of business:
Assets acquired	$	$
Liabilities assumed
Total net assets acquired	$	$

See accompanying notes to the condensed consolidated financial statements.

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StoneX Group Inc.

Condensed Consolidated Statements of Cash Flows - Continued

(Unaudited)

The following table provides a reconciliation of cash, segregated cash, cash equivalents, and segregated cash equivalents reported within the Condensed Consolidated Balance Sheets.


	June 30,
(in millions)	2024	2023
Cash and cash equivalents	$	$
Cash segregated under federal and other regulations(1)
Securities segregated under federal and other regulations(1)
Cash segregated and deposited with or pledged to exchange-clearing organizations and other futures commission merchants (“FCMs”)(2)
Securities segregated and pledged to exchange-clearing organizations(2)
Total cash, segregated cash, cash equivalents, and segregated cash equivalents shown in the condensed consolidated statements of cash flows	$	$

(1) million and $ million as of June 30, 2024 and 2023, respectively, included within

(2) million and $ million as of June 30, 2024 and 2023, respectively, included within Deposits with and receivables from broker-dealers, clearing organizations, and counterparties, net on the Condensed Consolidated Balance Sheets.

See accompanying notes to the condensed consolidated financial statements.

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StoneX Group Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

Three Months Ended June 30, 2023

(in millions)

Common Stock

Treasury Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss, net

Total

Balances as of March 31, 2023

()

Net income

—

Other comprehensive gain, net of tax

—

Exercise of stock options

—

Share-based compensation

—

Balances as of June 30, 2023

()

Three Months Ended June 30, 2024

(in millions)

Common Stock

Treasury Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss, net

Total

Balances as of March 31, 2024

()

Net income

—

Other comprehensive loss, net of tax

—

()

Exercise of stock options

—

Shares withheld to cover taxes on vesting of equity awards

—

()

—

()

Share-based compensation

—

Balances as of June 30, 2024

()

Nine Months Ended June 30, 2023

(in millions)

Common Stock

Treasury Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss, net

Total

Balances as of September 30, 2022

()

Net income

—

Other comprehensive gain, net of tax

—

Exercise of stock options

—

Share-based compensation

—

Balances as of June 30, 2023

()

Nine Months Ended June 30, 2024

(in millions)

Common Stock

Treasury Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss, net

Total

Balances as of September 30, 2023

()

Net income

—

Other comprehensive gain, net of tax

—

Exercise of stock options

—

Shares withheld to cover taxes on vesting of equity awards

—

()

—

()

Share-based compensation

—

Balances as of June 30, 2024

()

See accompanying notes to the condensed consolidated financial statements.

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StoneX Group Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Note 1 –

countries. These clients include more than commercial, institutional, and payments clients and over retail clients. The Company’s clients include commercial entities, asset managers, regional, national and introducing broker-dealers, insurance companies, brokers, institutional investors and professional traders, commercial and investment banks and government and non-governmental organizations (“NGOs”).

The Company’s common stock trades on The NASDAQ Global Select Market under the symbol “SNEX”.

Basis of Presentation and Consolidation

In the Condensed Consolidated Income Statements, the total revenues reported combine gross revenues for the physical commodities business and net revenues for all other businesses. The subtotal Operating revenues in the Condensed

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per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from Additional paid-in-capital to Common stock. million and the purchase price was approximately $ million. The value that the Company acquired in excess of consideration paid resulted in a gain on acquisition of $ million for the nine months ended June 30, 2023.

Note 2 –

$ $ $ Less: Allocation to participating securities()()()()Net income allocated to common stockholders$ $ $ $ Denominator:Weighted average number of:Common shares outstanding Dilutive potential common shares outstanding:Share-based awards Diluted weighted-average common shares

The dilutive effect of share-based awards is reflected in diluted net income per share by applying the treasury stock method, which includes consideration of unamortized share-based compensation expense.

Options to purchase and shares of common stock for the three months ended June 30, 2024 and 2023, respectively, were excluded from the calculation of diluted earnings per share as they would have been anti-dilutive. Options to

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and shares of common stock for the nine months ended June 30, 2024 and 2023, respectively, were excluded from the calculation of diluted earnings per share as they would have been anti-dilutive.

Note 3 –

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$ $ $ $ Money market mutual funds Cash and cash equivalents Commodities warehouse receipts Securities and other assets segregated under federal and other regulations U.S. Treasury obligations To be announced and forward settling securities () Foreign government obligations Derivatives () Deposits with and receivables from broker-dealers, clearing organizations and counterparties, net () Receivables from clients, net - Derivatives ()()Equity securities Corporate and municipal bonds U.S. Treasury obligations U.S. government agency obligations Foreign government obligations Agency mortgage-backed obligations Asset-backed obligations Derivatives () Commodities warehouse receipts Exchange firm common stock Cash flow hedges Mutual funds and other Financial instruments owned () Physical commodities inventory Total assets at fair value$ $ $ $()$ Liabilities: Accounts payable and other accrued liabilities$ $ $ $ $ Payables to clients - Derivatives () TBA and forward settling securities () Derivatives ()()Payable to broker-dealers, clearing organizations and counterparties () Equity securities Foreign government obligations Corporate and municipal bonds U.S. Treasury obligations U.S. government agency obligations Agency mortgage-backed obligations Asset-backed obligations Derivatives () Cash flow hedges Other Financial instruments sold, not yet purchased () Total liabilities at fair value $ $ $ $()$

(1)Represents cash collateral and the impact of netting across at each level of the fair value hierarchy.

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$ $ $ $ Money market mutual funds Cash and cash equivalents Commodities warehouse receipts Securities and other assets segregated under federal and other regulations U.S. Treasury obligations TBA and forward settling securities () Foreign government obligations Derivatives () Deposits with and receivables from broker-dealers, clearing organizations and counterparties, net () Receivables from clients, net - Derivatives )()Equity securities Corporate and municipal bonds U.S. Treasury obligations U.S. government agency obligations Foreign government obligations Agency mortgage-backed obligations Asset-backed obligations Derivatives () Commodities leases Commodities warehouse receipts Exchange firm common stock Cash flow hedges Mutual funds and other Financial instruments owned () Physical commodities inventory Total assets at fair value$ $ $ $()$ Liabilities: Accounts payable and other accrued liabilities - contingent liabilities$ $ $ $ $ Payables to clients - Derivatives ) TBA and forward settling securities () Derivatives ()()Payable to broker-dealers, clearing organizations and counterparties () Equity securities Foreign government obligations Corporate and municipal bonds U.S. Treasury obligations U.S. government agency obligations Agency mortgage-backed obligations Derivatives () Cash flow hedges Other Financial instruments sold, not yet purchased () Total liabilities at fair value $ $ $ $()$

Realized and unrealized gains and losses are included in Principal gains, net, Interest income, and Cost of sales of physical commodities in the Condensed Consolidated Income Statements.

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% Senior Secured Notes due 2031 (the “Notes due 2031”), as further described in Note 9, with a carrying value of $ million as of June 30, 2024. The carrying value of the Notes due 2031 represents their principal amount net of unamortized deferred financing costs and original issue discount. As of June 30, 2024, the Notes due 2031 had a fair value of $ million. They were classified as Level 2 under the fair value hierarchy.

Note 4 –

million and $ million as of June 30, 2024 and September 30, 2023, respectively, includes $ million and $ million for derivative contracts not designated as hedges, respectively, which represented a liability to the Company based on their fair values as of June 30, 2024 and September 30, 2023.

Derivatives

The Company utilizes derivative products in its trading capacity as a dealer in order to satisfy client needs and mitigate risk. The Company manages risks from both derivatives and non-derivative cash instruments on a consolidated basis. The risks of derivatives should not be viewed in isolation, but in aggregate with the Company’s other trading activities. The Company’s derivative positions are included in the Condensed Consolidated Balance Sheets in Deposits with and receivables from broker-dealers, clearing organizations and counterparties, Receivables from clients, net, Financial instruments owned and sold, not yet purchased, at fair value, Payable to clients and Payables to broker-dealers, clearing organizations and counterparties.

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$ $ $ OTC commodity derivatives Exchange-traded foreign exchange derivatives OTC foreign exchange derivatives Exchange-traded interest rate derivatives OTC interest rate derivatives Exchange-traded equity index derivatives OTC equity and indices derivatives TBA and forward settling securities Subtotal Derivative contracts designated as hedging instruments:Interest rate contracts Foreign currency forward contracts Subtotal Gross fair value of derivative contracts$ $ $ $ Impact of netting and collateral ()()()()

Total fair value included in Deposits with and receivables from broker-dealers, clearing organizations, and counterparties, net

$ $

Total fair value included in Receivable from clients, net

$()$()

Total fair value included in Financial instruments owned, at fair value

$ $

Total fair value included in Payables to clients

$ $

Total fair value included in Payables to broker-dealers, clearing organizations and counterparties

$ $

Total fair value included in Financial instruments sold, not yet purchased, at fair value

$ $

(1)As of June 30, 2024 and September 30, 2023, the Company’s derivative contract volume for open positions was approximately million and million contracts, respectively.

The Company’s derivative contracts are principally held in its Institutional, Commercial, and Retail segments. The Company provides its Institutional segment clients access to exchanges at which they can carry out their trading strategies. The Company assists its Commercial segment clients in protecting the value of their future production by entering into option or forward agreements with them on an OTC basis. The Company also provides its Commercial segment clients with exchange products, including combinations of buying and selling puts and calls. In its Retail segment, the Company provides its retail clients with access to spot foreign exchange, precious metals trading, as well as contracts for difference (“CFD”) and spread bets, where permitted. The Company mitigates its risk by generally offsetting the client’s transaction simultaneously with one of the Company’s trading counterparties or will offset that transaction with a similar but not identical position on the exchange. The risk mitigation of these offsetting trades is not within the documented hedging designation requirements of the Derivatives and Hedging Topic of the ASC. These derivative contracts are traded along with cash transactions because of the integrated nature of the markets for these products. The Company manages the risks associated with derivatives on an aggregate basis along with the risks associated with its proprietary trading and market-making activities in cash instruments as part of its firm-wide risk management policies. In particular, the risks related to derivative positions may be partially offset by inventory, other derivatives, or cash collateral paid or received.

Hedging Activities

The Company uses interest rate derivatives, in the form of swaps, to hedge risk related to variability in overnight rates. These hedges are designated cash flow hedges, through which the Company mitigates uncertainty in its interest income by converting floating-rate interest income to fixed-rate interest income. While the swaps mitigate interest rate risk, they do introduce credit risk, which is the possibility that the Company’s trading counterparty fails to meet its obligation. The Company minimizes this risk by entering into its swaps with highly-rated, multi-national institutions. In addition to credit risk, there is market risk

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year from the end of the current period.

The Company also uses foreign currency derivatives, in the form of forward contracts, to hedge risk related to the variability in exchange rates relative to certain of the Company’s non-USD expenditures. These hedges are designated cash flow hedges, through which the Company mitigates variability in exchange rates by exchanging foreign currency for USD at fixed exchange rates at a pre-determined future date, or several cash flows at several pre-determined future dates. While the forward contracts mitigate exchange rate variability risk, they do introduce credit risk, which is the possibility that the Company’s trading counterparty fails to meet its obligation. The Company minimizes this risk by entering into its forward contracts with highly-rated, multi-national institutions. These hedges will all mature within years from the end of the current period.

The Company assesses the effectiveness of its hedges at each reporting period to identify any required reclassifications into current earnings. During the three months ended June 30, 2024 and 2023, the Company did not designate any portion of its hedges as ineffective and thus did not have any values in current earnings related to ineffective hedges.

$ Total derivatives designated as hedging instruments$ $

Derivative assets expected to be released from Other comprehensive income into current earnings:

Foreign currency forward contracts$ $

Total expected to be released from Other comprehensive income into earnings

$ $ Liability DerivativesDerivatives designated as hedging instruments:Interest rate contractsFinancial instruments sold, not yet purchased$ $ Foreign currency forward contractsFinancial instruments sold, not yet purchased Total derivatives designated as hedging instruments$ $

Derivative liabilities expected to be released from Other comprehensive income into current earnings:

Interest rate contracts$ $ Foreign currency forward contracts

Total expected to be released from Other comprehensive income into earnings

$ $

$ Foreign currency forward contracts:Foreign currency forward contracts to purchase Polish Zloty:Local currencyzł zł USD$ $ Foreign currency forward contracts to purchase British Pound Sterling:Local currency£ £ USD$ $

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)$()Foreign currency forward contractsCompensation and benefits Total derivatives designated as hedging instruments$()$()Amount of gain reclassified from accumulated other comprehensive income into income as a result of a forecasted transaction that is no longer probable of occurring$ $

Total amounts reclassified from Accumulated Other Comprehensive Income into Income:

Interest rate contracts

Interest Income

()

Foreign currency forward contracts

Compensation and benefits

Total derivatives designated as hedging instruments

()

Amount of gain reclassified from accumulated other comprehensive income into income as a result of a forecasted transaction that is no longer probable of occurring

$()Foreign currency forward contracts() Total$ $


	Amount of Gain Recognized in Other Comprehensive Income on Derivatives, net of tax
(in millions)	Nine Months Ended June 30, 2024	Nine Months Ended June 30, 2023
Derivatives in Cash Flow Hedging Relationships:
Interest rate contracts	$	$
Foreign currency forward contracts
Total	$	$

$ $ $ Foreign exchange () ()Other Balance as of June 30, 2024$ (1) An additional $ million is included in bad debt expense for the nine months ended June 30, 2024 on the consolidated income statement, which is not included in the allowance at the period then ended.

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Note 6 –

$ Precious metals - held by broker-dealer subsidiary Precious metals - held by non-broker-dealer subsidiaries Physical commodities inventory, net$ $

(1) Physical Ag & Energy consists of agricultural commodity inventories, including corn, soybeans, wheat, dried distillers grain, canola, sorghum, coffee, cocoa, cotton, and various energy commodity inventories. Agricultural inventories have reliable, readily determinable and realizable market prices, have relatively insignificant costs of disposal and are available for immediate delivery. The Company records changes to these values in Cost of sales of physical commodities on the Condensed Consolidated Income Statements.

Note 7 –

$ Institutional Retail Payments Total Goodwill$ $

The Company had $ million of foreign exchange translation decline during the current year related to Goodwill.

Note 8 –

$()$ $ $()$ Software programs/platforms () () Client and supplier base () () Total intangible assets subject to amortization () () Intangible assets not subject to amortizationWebsite domains — — Business licenses — — Total intangible assets not subject to amortization — — Total intangible assets$ $()$ $ $()$

Amortization expense related to intangible assets was $ million and $ million for the three months ended June 30, 2024 and 2023, respectively. Amortization expense related to intangible assets was $ million and $ million for the nine months ended June 30, 2024 and 2023, respectively.

The Company wrote off $ million of fully amortized intangible assets during the nine months ended June 30, 2024.

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Fiscal 2025 Fiscal 2026 Fiscal 2027 Fiscal 2028 and thereafter Total intangible assets subject to amortization$

Note 9 –

million, subject to the terms and conditions of these facilities. The amounts outstanding under these credit facilities carry variable rates of interest, thus approximating fair value. The committed credit facilities generally have covenant requirements that relate to various leverage, debt to net worth, fixed charge, tangible net worth, excess net capital, or profitability measures. The Company and its subsidiaries were in compliance with all relevant covenants as of June 30, 2024.

Uncommitted Credit Facilities

The Company has access to certain uncommitted financing agreements that support its ordinary course securities and commodities inventories. The agreements are subject to certain borrowing terms and conditions.

Note Payable to Bank

The Company has a note payable to a commercial bank related to the financing of certain equipment which secures the note.

Senior Secured Notes

On March 1, 2024, the Company issued $ million in aggregate principal amount of its % Notes due 2031 at the offering price of % of the aggregate principal amount. The Notes due 2031 are fully and unconditionally guaranteed, jointly and severally, on a senior secured second lien basis by each of the Company’s existing and future subsidiaries that guarantee indebtedness under the Company’s senior secured revolving credit facility and certain other senior indebtedness. Interest related to these notes is payable twice annually, in arrears. The Company incurred debt issuance costs of $ million, which are being amortized over the term of the Notes due 2031 under the effective interest method.

On June 17, 2024, the Company used part of the proceeds from its Notes due 2031 to extinguish its % Senior Secured Notes due 2025 (the “Notes due 2025”) when $ million that the Company had previously deposited into an irrevocable trust as part of an in-substance defeasance was remitted to the note holders to redeem the notes and pay interest due up to that date.

In accordance with ASC 470-50 “Debt - Modifications and Extinguishments”, the transactions noted above were determined to be an extinguishment of the Notes due 2025 and an issuance of new debt. As a result, the Company recorded a loss on the extinguishment of debt in the amount of $ million included in Interest expense on corporate funding on the Condensed Consolidated Income Statements for the three and nine months ended June 30, 2024, of which $ million represented the write off of deferred financing costs and $ million represented the write off of original issue discount.

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$ (5)$ StoneX Financial Inc. NoneOctober 29, 2024 (5) StoneX Commodity Solutions LLCCertain assetsJuly 29, 2025 (6) (5) StoneX Financial Ltd. NoneOctober 12, 2024 (5) StoneX Financial Pte. Ltd.NoneSeptember 6, 2024 (5) $ $ $ ()

Note 13 –

% % % %

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$ $ $ OTC derivative brokerage Equities and fixed income Mutual funds Insurance and annuity products Other Total sales-based commission Trailing:Mutual funds Insurance and annuity products Total trailing commission Clearing fees Trade conversion fees Other Total commission and clearing fees Consulting, management, and account fees:Underwriting fees Asset management fees Advisory and consulting fees Sweep program fees Client account fees Other Total consulting, management, and account fees Sales of physical commodities:Precious metals sales under ASC Topic 606 Total revenues from contracts with clients$ $ $ $ Method of revenue recognition:Point-in-time$ $ $ $ Time elapsed Total revenues from contracts with clients Other sources of revenues Physical precious metals under ASC Topic 815 Physical agricultural and energy products Principal gains, net Interest income Total revenues $ $ $ $ Total revenues by primary geographic region:United States $ $ $ $ Europe South America Middle East and Asia Other Total revenues $ $ $ $ Operating revenues by primary geographic region:United States$ $ $ $ Europe South America Middle East and Asia Other Total operating revenues$ $ $ $

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$ $ $ Dividend expense on short equity positions Dividend (loss)/income, net reported within Principal Gains, net$()$()$ $()

Remaining Performance Obligations

Remaining performance obligations are services that the Company has committed to perform in the future in connection with its contracts with clients. The Company’s remaining performance obligations are generally related to its risk management consulting and asset management contracts with clients. Revenues associated with remaining performance obligations related to these contracts with clients are not material to the overall consolidated results of the Company. For the Company’s asset management activities, where fees are calculated based on a percentage of the fair value of eligible assets in client’s accounts, future revenue associated with remaining performance obligations cannot be determined as such fees are subject to fluctuations in the fair value of eligible assets in clients’ accounts.

Note 14 –

$ $ $ Insurance Employee related expenses Other direct business expenses Membership fees Director and public company expenses Office expenses Other expenses Total other expenses$ $ $ $

Note 15 –

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Current and Prior Period Tax Expense

Income tax expense, as shown on the Condensed Consolidated Income Statements, reflects estimated federal, foreign, state and local income taxes.

The Company’s effective tax rate was % and % for the three months ended June 30, 2024 and 2023, respectively. The effective tax rate was higher than the U.S. federal statutory rate of 21% for the three months ended June 30, 2024 due to U.S. state and local taxes, GILTI, U.S. and foreign permanent differences, and the amount of foreign earnings taxed at higher rates.

Note 16 –

million along with the actual balance maintained as of that date. $ StoneX Financial Ltd.FCA$ $ Gain Capital Group, LLCCFTC and NFA$ $ StoneX Financial Pte. Ltd.MAS$ $ StoneX Markets LLCCFTC and NFA$ $

Certain other subsidiaries of the Company, typically with a minimum requirement less than $ million, are also subject to net capital requirements promulgated by authorities in the countries in which they operate. As of June 30, 2024, all of the Company’s subsidiaries were in compliance with their local regulatory requirements.

Note 17 –

employees allowing it to serve clients in more than countries.

The Company’s business activities are managed as operating segments, which are our reportable segments for financial statement purposes as shown below.

•Commercial

•Institutional

•Retail

•Payments (previously disclosed as Global Payments)

Commercial

The Company offers commercial clients a comprehensive array of products and services, including risk management and hedging services, execution and clearing of exchange-traded and OTC products, voice brokerage, market intelligence and physical trading, as well as commodity financing and logistics services. The ability to provide these high-value-added products and services differentiates the Company from its competitors and maximizes the opportunity to retain clients.

Institutional

The Company provides institutional clients with a complete suite of equity trading services to help them find liquidity with best execution, consistent liquidity across a robust array of fixed income products, competitive and efficient clearing and execution in all major futures and securities exchanges globally, as well as prime brokerage in equities and major foreign currency pairs and swap transactions. In addition, the Company originates, structures and places debt instruments in the international and domestic capital markets. These instruments include asset-backed securities (primarily in Argentina) and domestic municipal securities.

Retail

The Company provides retail clients around the world access to over global financial markets, including spot foreign exchange ("forex"), both financial trading and physical investment in precious metals, as well as contracts for difference

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countries and currencies, which it believes is more than any other payments solution provider.

********

The total revenues reported combine gross revenues from physical contracts for subsidiaries that are not broker-dealers and net revenues for all other businesses. In order to reflect the way that the Company’s management views the results, the table below also reflects the segment contribution to ‘operating revenues’, which is shown on the face of the consolidated income statements and which is calculated by deducting physical commodities cost of sales from total revenues.

Segment data includes the profitability measure of net contribution by segment. Net contribution is one of the key measures used by management to assess the performance of each segment and for decisions regarding the allocation of the Company’s resources. Net contribution is calculated as revenue less direct cost of sales, transaction-based clearing expenses, variable compensation, introducing broker commissions, and interest expense. Variable compensation paid to risk management consultants/traders generally represents a fixed percentage of revenues generated, and in some cases, revenues generated less transaction-based clearing expenses, base salaries and an overhead allocation.

Segment data also includes segment income which is calculated as net contribution less non-variable direct expenses of the segment. These non-variable direct expenses include trader base compensation and benefits, operational employee compensation and benefits, communication and data services, business development, professional fees, bad debt expense and other direct expenses.

Inter-segment revenues, expenses, receivables and payables are eliminated upon consolidation.

Total revenues, operating revenues and net operating revenues shown in the table below as “Corporate” primarily consist of interest income from the Company’s centralized corporate treasury function. In the normal course of operations, the Company operates a centralized corporate treasury function in which it may sweep excess cash from certain subsidiaries, where permitted within regulatory limitations, in exchange for a short-term interest bearing intercompany payable, or provide excess cash to subsidiaries in exchange for a short-term interest bearing intercompany receivable in lieu of the subsidiary borrowing on external credit facilities. The intercompany receivables and payables are eliminated during consolidation.

“Overhead costs and expenses” include costs and expenses of certain shared services such as information technology, accounting and treasury, credit and risk, legal and compliance, and human resources and other activities. These amount represent the gross overhead costs and expenses, before any allocation of overhead costs to operating segments.

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$ $ $ Institutional Retail Payments Corporate Eliminations()()()()Total$ $ $ $ Operating revenues:Commercial$ $ $ $ Institutional Retail Payments Corporate Eliminations()()()()Total$ $ $ $ Net operating revenues (loss):Commercial$ $ $ $ Institutional Retail Payments Corporate()()()()Total$ $ $ $ Net contribution:(Revenues less cost of sales of physical commodities, transaction-based clearing expenses, variable compensation, introducing broker commissions and interest expense)Commercial$ $ $ $ Institutional Retail Payments Total$ $ $ $ Segment income:(Net contribution less non-variable direct segment costs)Commercial$ $ $ $ Institutional Retail Payments Total$ $ $ $ Reconciliation of segment income to income before tax:Segment income$ $ $ $ Net operating revenue (loss) with Corporate()()()()Overhead costs and expenses()()()()Gain on acquisition Income before tax$ $ $ $ (in millions)As of June 30, 2024As of September 30, 2023Total assets:Commercial$ $ Institutional Retail Payments Corporate Total$ $

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Throughout this document, unless the context otherwise requires, the terms “Company”, “we”, “us” and “our” refer to StoneX Group Inc. and its consolidated subsidiaries.

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this report. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of the Company, including adverse changes in economic, political and market conditions, losses from our market-making and trading activities arising from counterparty failures and changes in market conditions, the loss of key personnel, the impact of increasing competition, the impact of changes in government regulation, the possibility of liabilities arising from violations of foreign, United States (“U.S.”) federal and U.S. state securities laws, the impact of changes in technology in the securities and commodities trading industries, and other risks discussed in our filings with the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2023. Although we believe that our forward-looking statements are based upon reasonable assumptions regarding our business and future market conditions, there can be no assurances that our actual results will not differ materially from any results expressed or implied by our forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. We caution readers that any forward-looking statements are not guarantees of future performance.

Overview

We operate a global financial services network that connects companies, organizations, traders and investors to the global market ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services, high touch service and deep expertise. We strive to be the one trusted partner to our clients, providing our network, product and services to allow them to pursue trading opportunities, manage their market risks, make investments and improve their business performance. Our businesses are supported by our global infrastructure of regulated operating subsidiaries, our advanced technology platform and our team of approximately 4,400 employees as of June 30, 2024. We believe our client-first approach differentiates us from large banking institutions, engenders trust and has enabled us to establish leadership positions in a number of complex fields in financial markets around the world. For additional information, see Overview of Business and Strategy within “Item 1. Business” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

We report our operating segments based primarily on the nature of the clients we serve (commercial, institutional, and retail), and a fourth operating segment, our payments business. See Segment Information below for a listing of business activities performed within our reportable segments.

Common Stock Split

On November 7, 2023, our Board of Directors approved a three-for-two split of its common stock, to be effected as a stock dividend. The stock split was effective on November 24, 2023, and entitled each shareholder of record as of November 17, 2023 to receive one additional share of common stock for every two shares owned and cash in lieu of fractional shares.

The stock split increased the number of shares of common stock outstanding. All share and per share amounts contained herein have been retroactively adjusted for the stock split.

Executive Summary

In the third quarter of fiscal 2024, we experienced strong client engagement resulting in increased volumes across nearly all of our operating segments and products. However, with the exception of base metals commodity markets in our Commercial segment, diminished volatility persisted during the quarter, generally leading to lower rate per million (“RPM”) realized on client activity. Despite a decline in average client equity and money market/FDIC client balances, driven by lower margin requirements, interest and fee income earned on client balances increased compared to the three months ended June 30, 2023, as we achieved an increase in the interest rate realized on these client balances. As noted in Results of Operations below, operating revenues were favorably impacted by realized gains on the sale of physical inventories carried at the lower of cost or net realizable value, for which losses on related derivative positions were recognized in prior periods.

Operating revenues increased $136.8 million, or 18%, to $913.7 million in the three months ended June 30, 2024 compared to $776.9 million in the three months ended June 30, 2023, led by our Institutional and Commercial segments which added $127.8 million and $9.5 million, respectively, compared to the three months ended June 30, 2023. Operating revenues in our Retail segment added $4.7 million, while our Payments segment declined $2.1 million, compared to the three months ended June 30, 2023.

Overall segment income increased $35.8 million, or 17%, compared to the three months ended June 30, 2023, with all of our segments experiencing growth versus the prior year, with the exception of our Payments segment. The growth was led by our Institutional segment which added $17.1 million compared to the three months ended June 30, 2023. In addition, our Retail and Commercial segments increased $10.4 million and $8.7 million, respectively, compared to the three months ended June 30, 2023, while our Payments segment income declined $0.4 million.

Interest expense related to corporate funding purposes increased $9.2 million to $24.1 million in the three months ended June 30, 2024 compared to $14.9 million in the three months ended June 30, 2023. The increase in interest expense attributable to corporate funding was principally due to incremental interest from the March 1, 2024 issuance of our 7.875% Senior Secured Notes due 2031 (the “Notes due 2031”), partially offset by lower average borrowings on our revolving credit facility. While funds from the issuance of the Notes due 2031 were used to redeem the 8.625% Senior Secured Notes due 2025 (the “Notes due 2025”), the redemption did not occur until June 17, 2024, in order to redeem those notes at par. Upon completion of the redemption of the Notes due 2025, we recognized a $3.7 million loss on the extinguishment of debt related to the write-off of unamortized original issue discount and deferred financing costs, which we have classified as a component of Interest expense on corporate funding in the Condensed Consolidated Income Statements.

On the expense side, we continue to focus on maintaining our variable cost model and limiting the growth of our non-variable

expenses. Variable expenses were 52% of total expenses in the three months ended June 30, 2024 as compared to 54% in the three months ended June 30, 2023. Non-variable expenses, excluding bad debts, increased $36.6 million compared to the three months ended June 30, 2023, principally due to higher fixed compensation and benefits, professional fees, non-trading technology and support and occupancy and equipment rental. The increase in fixed compensation and benefits includes $4.5 million in severance and accelerated share-based compensation related to the departure of an executive officer in the three months ended June 30, 2024.

Net income decreased $7.6 million to $61.9 million in the three months ended June 30, 2024 compared to $69.5 million in the three months ended June 30, 2023. Net income in the three months ended June 30, 2024 includes a nonrecurring gain related to proceeds of $1.8 million resulting from a settlement in a gold fix class action settlement recovery matter, which is included in Gain on acquisition and other gains in the Condensed Consolidated Income Statement. Diluted earnings per share were $1.88 for the three months ended June 30, 2024 compared to $2.17 in the three months ended June 30, 2023.

Selected Summary Financial Information

Results of Operations

Our total revenues, as reported, combine gross revenues for the physical commodities business and net revenues for all other businesses. Management believes that operating revenues, which deduct the cost of sales of physical commodities from total revenues, is a more useful financial measure with which to assess our results of operations. The table below sets forth our operating revenues, as well as other key financial measures, for the periods indicated.

Financial Information (Unaudited)


	Three Months Ended June 30,							Nine Months Ended June 30,
(in millions)	2024			2023			% Change	2024			2023			% Change
Revenues:
Sales of physical commodities	$	26,196.2		$	14,319.2		83%	$	66,339.0		$	42,228.8		57%
Principal gains, net	305.6			300.0			2%	881.2			810.8			9%
Commission and clearing fees	143.0			126.8			13%	408.9			375.5			9%
Consulting, management, and account fees	45.3			39.2			16%	124.0			119.7			4%
Interest income	379.6			262.7			44%	995.7			685.7			45%
Total revenues	27,069.7			15,047.9			80%	68,748.8			44,220.5			55%
Cost of sales of physical commodities	26,156.0			14,271.0			83%	66,232.7			42,084.4			57%
Operating revenues	913.7			776.9			18%	2,516.1			2,136.1			18%
Transaction-based clearing expenses	81.0			66.7			21%	233.8			203.2			15%
Introducing broker commissions	43.1			43.4			(1)%	124.2			122.4			1%
Interest expense	297.0			216.0			38%	792.2			549.0			44%
Interest expense on corporate funding	24.1			14.9			62%	53.5			44.2			21%
Net operating revenues	468.5			435.9			7%	1,312.4			1,217.3			8%
Compensation and benefits	257.5			226.6			14%	710.0			658.1			8%
Bad debts (recoveries), net	0.5			6.3			(92)%	(0.2)			10.0			n/m
Other expenses	124.3			108.5			15%	355.3			325.1			9%
Total compensation and other expenses	382.3			341.4			12%	1,065.1			993.2			7%
Gain on acquisition and other gains	1.8			—			n/m	8.7			23.5			(63)%
Income before tax	88.0			94.5			(7)%	256.0			247.6			3%
Income tax expense	26.1			25.0			4%	71.9			59.8			20%
Net income	$	61.9		$	69.5		(11)%	$	184.1		$	187.8		(2)%

Return on average stockholders’ equity	15.7		%	21.6		%		16.4		%	20.9		%

Balance Sheet information:								June 30, 2024			June 30, 2023			% Change
Total assets								$	25,930.8		$	21,933.1		18%
Payables to lenders under loans								$	227.8		$	422.6		(46)%
Senior secured borrowings, net								$	542.8		$	341.3		59%
Stockholders’ equity								$	1,607.8		$	1,329.9		21%
n/m = not meaningful to present as a percentage

The tables below present 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.


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Operating Revenues (in millions):
Listed derivatives	$	130.5	$	107.6	21%	$	351.4	$	317.9	11%
Over-the-counter (“OTC”) derivatives	66.2		71.9		(8)%	163.7		172.3		(5)%
Securities	374.0		272.4		37%	1,030.9		755.7		36%
FX / Contracts For Difference (“CFD”) contracts	76.5		72.1		6%	231.4		182.7		27%
Payments	50.0		52.7		(5)%	157.8		155.4		2%
Physical contracts	67.3		81.0		(17)%	164.6		194.8		(16)%
Interest / fees earned on client balances	115.9		92.2		26%	318.5		281.8		13%
Other	38.0		28.6		33%	102.5		80.7		27%
Corporate	8.3		8.6		(3)%	31.9		23.9		33%
Eliminations	(13.0)		(10.2)		27%	(36.6)		(29.1)		26%
	$	913.7	$	776.9	18%	$	2,516.1	$	2,136.1	18%

Volumes and Other Select Data:
Listed derivatives (contracts, 000’s)	52,736		39,044		35%	157,299		120,831		30%
Listed derivatives, average rate per contract (1)	$	2.39	$	2.62	(9)%	$	2.13	$	2.47	(14)%
Average client equity - listed derivatives (millions)	$	5,957	$	6,459	(8)%	$	6,063	$	7,301	(17)%
OTC derivatives (contracts, 000’s)	959		1,063		(10)%	2,584		2,638		(2)%
OTC derivatives, average rate per contract	$	69.03	$	67.75	2%	$	63.53	$	65.73	(3)%
Securities average daily volume (“ADV”) (millions)	$	7,358	$	5,378	37%	$	7,013	$	5,121	37%
Securities rate per million (“RPM”) (2)	$	239	$	262	(9)%	$	256	$	314	(18)%
Average money market / FDIC sweep client balances (millions)	$	968	$	1,269	(24)%	$	1,025	$	1,393	(26)%
FX / CFD contracts ADV (millions)	$	10,861	$	10,513	3%	$	10,744	$	12,278	(12)%
FX / CFD contracts RPM	$	111	$	107	4%	$	113	$	79	43%
Payments ADV (millions)	$	69	$	65	6%	$	69	$	68	1%
Payments RPM	$	11,264	$	12,907	(13)%	$	12,053	$	12,049	—%


(1)			Give-up fee revenues, related to contract execution for clients of other FCMs, as well as cash and voice brokerage revenues are excluded from the calculation of listed derivatives, average rate per contract.
(2)			Interest expense associated with our fixed income activities is deducted from operating revenues in the calculation of Securities RPM, while interest income related to securities lending is excluded.

Operating Revenues

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Operating revenues increased $136.8 million, or 18%, to $913.7 million in the three months ended June 30, 2024 compared to $776.9 million in the three months ended June 30, 2023. The table above displays operating revenues disaggregated across the key products we provide to our clients.

Operating revenues derived from listed derivatives increased $22.9 million, or 21%, to $130.5 million in the three months ended June 30, 2024 compared to $107.6 million in the three months ended June 30, 2023, driven by increases of $16.4 million and $6.5 million in our Commercial and Institutional segments, respectively, as compared to the three months ended June 30, 2023.

Operating revenues derived from securities transactions increased $101.6 million, or 37%, to $374.0 million in the three months ended June 30, 2024 compared to $272.4 million in the three months ended June 30, 2023. This increase was principally due to a 37% increase in ADV, as well as an increase in short-term interest rates. Carried interest on fixed income securities is a component of operating revenues, however interest expense associated with financing these positions is not. Our calculation of the securities RPM, in the table above, presents the RPM after deducting from operating revenues the interest expense associated with our fixed income activities. Net operating revenues derived from securities transactions increased $16.1 million, or 23%, to $86.2 million in the three months ended June 30, 2024 compared to $70.1 million in the three months ended June 30, 2023. This increase was principally driven by the increase in ADV noted above, which more than offset the 9% decline in the RPM resulting from a tightening of spreads and a change in product mix.

Operating revenues derived from FX/CFD contracts increased $4.4 million, or 6%, to $76.5 million in the three months ended June 30, 2024 compared to $72.1 million in the three months ended June 30, 2023, with a $4.8 million increase in our Retail segment more than offsetting a $0.4 million decline in Institutional segment FX/CFD contracts operating revenues as compared to the three months ended June 30, 2023.

Operating revenues from payments declined $2.7 million, to $50.0 million in the three months ended June 30, 2024 compared to $52.7 million in the three months ended June 30, 2023, principally driven by a 13% decline in the payments RPM, which was partially offset by a 6% increase in the ADV as compared to the three months ended June 30, 2023.

Operating revenues derived from physical contracts declined $13.7 million, or 17%, to $67.3 million in the three months ended June 30, 2024 compared to $81.0 million in the three months ended June 30, 2023. Precious metals related operating revenues were favorably impacted by realized gains of $8.5 million and $3.6 million on the sale of physical inventories carried at the lower of cost or net realizable value, for which losses on related derivative positions were recognized in prior periods in the three months ended June 30, 2024 and the three months ended June 30, 2023, respectively.

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 $23.7 million, or 26%, to $115.9 million in the three months ended June 30, 2024 compared to $92.2 million in the three months ended June 30, 2023. This was principally driven by an increase in the short-term interest rate realized, which was partially offset by declines in average client equity and average money-market/FDIC sweep client balances of 8% and 24%, respectively, as compared to the three months ended June 30, 2023.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Operating revenues increased $380.0 million, or 18%, to $2,516.1 million in the nine months ended June 30, 2024 compared to $2,136.1 million in the nine months ended June 30, 2023. The table above displays operating revenues disaggregated across the key products we provide to our clients.

Operating revenues from listed derivatives increased $33.5 million, or 11%, to $351.4 million in the nine months ended June 30, 2024 compared to $317.9 million in the nine months ended June 30, 2023, with Institutional and Commercial segment listed derivative operating revenues increasing $13.4 million and $20.1 million, respectively, as compared to the nine months ended June 30, 2023.

Operating revenues in OTC derivatives declined $8.6 million, or 5%, to $163.7 million in the nine months ended June 30, 2024 compared to $172.3 million in the nine months ended June 30, 2023. This decrease was principally driven by declines in OTC average rate per contract and contract volumes of 3% and 2%, respectively, as compared to the nine months ended June 30, 2023.

Operating revenue from securities transactions increased $275.2 million, or 36%, to $1,030.9 million in the nine months ended June 30, 2024 compared to $755.7 million in the nine months ended June 30, 2023. This increase was principally due to a 37% increase in securities ADV, as well as a significant increase in interest rates. Carried interest on fixed income securities is a component of operating revenues, however interest expense associated with financing these positions is not. Our calculation of securities RPM, in the table above, presents the RPM after deducting from operating revenues the interest expense associated with our fixed income activities. Net operating revenues derived from securities transactions increased $23.0 million, or 9%, to $270.7 million in the nine months ended June 30, 2024 compared to $247.7 million in the three months ended June 30, 2023. This increase was principally driven by the increase in ADV noted above, which more than offset the 18% decline in RPM resulting from a tightening of spreads and a change in product mix.

Operating revenues from FX/CFD contracts increased $48.7 million, or 27%, to $231.4 million in the nine months ended June 30, 2024 compared to $182.7 million in the nine months ended June 30, 2023, with a $52.0 million increase in our Retail segment more than offsetting a $3.3 million decline in Institutional segment FX contracts operating revenues as compared to the nine months ended June 30, 2023.

Operating revenues from payments increased by $2.4 million, or 2%, to $157.8 million in the nine months ended June 30, 2024 compared to $155.4 million in the nine months ended June 30, 2023, principally as a result of a 1% increase in ADV as the RPM traded was relatively flat as compared to the nine months ended June 30, 2023.

Operating revenues from physical contracts declined $30.2 million, or 16%, to $164.6 million in the nine months ended June 30, 2024 compared to $194.8 million in the nine months ended June 30, 2023, Precious metals related operating revenues were unfavorably impacted during the nine months ended June 30, 2024, by unrealized losses on derivative positions of $2.3 million, related to physical inventories held at the lower of cost or net realizable value. Precious metals related operating revenues during the nine months ended June 30, 2023 were favorably impacted by realized gains of $1.5 million on the sale of physical inventories carried at the lower of cost or net realizable value, for which losses on related derivative positions were recognized in prior periods.

Interest and fee income earned on client balances, which is associated with our listed and OTC derivative businesses, as well as our correspondent clearing and independent wealth management businesses, increased $36.7 million, or 13%, to $318.5 million in the nine months ended June 30, 2024 compared to $281.8 million in the nine months ended June 30, 2023, principally as a result of the impact of the increase in the short-term interest rates realized, which was partially offset by declines in average client equity and average money-market/FDIC sweep client balances of 17% and 26%, respectively, as compared to the nine months ended June 30, 2023.

Interest and Transactional Expenses

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Transaction-based clearing expenses


	Three Months Ended June 30,
	2024		2023		$ Change		% Change
Transaction-based clearing expenses	$	81.0	$	66.7	$	14.3	21%
Percentage of operating revenues	9%		9%

Expenses were higher in our Equity Capital Markets business, principally related to an increase in ADV and higher ADR conversion fees, and in our Exchange-Traded Futures & Options and LME businesses, principally related to the increase in contracts traded.

Introducing broker commissions


	Three Months Ended June 30,
	2024		2023		$ Change		% Change
Introducing broker commissions	$	43.1	$	43.4	$	(0.3)	(1)%
Percentage of operating revenues	5%		6%

Expenses were relatively unchanged with lower payouts within our Retail Forex, Correspondent Clearing, and Financial Ag and Energy businesses nearly offset by higher expenses in our Independent Wealth Management business, principally due to increased revenues.

Interest expense


	Three Months Ended June 30,
	2024		2023		$ Change		% Change
Interest expense attributable to:
Trading activities:
Institutional dealer in fixed income securities	$	229.1	$	156.4	$	72.7	46	%
Securities borrowing	16.6		11.4		5.2		46	%
Client balances on deposit	31.7		34.0		(2.3)		(7)	%
Short-term financing facilities of subsidiaries and other direct interest of operating segments	19.6		14.2		5.4		38	%
	297.0		216.0		81.0		38	%
Corporate funding	24.1		14.9		9.2		62	%
Total interest expense	$	321.1	$	230.9	$	90.2	39	%

Increased interest expense attributable to trading activities principally resulted from an increase in our fixed income and securities borrowing activities, along with the effect of the increase in short-term interest rates, partially offset by a decrease in interest expense attributable to client balances, principally resulting from the decline in average client equity. Interest expense attributable to short-term financing facilities of subsidiaries and other direct interest of operating segments increased principally within our Equity Capital Markets business.

The increase in interest expense attributable to corporate funding was principally due to incremental interest from our March 1, 2024 issuance of the Notes due 2031, partially offset by lower average borrowings on our revolving credit facility. While funds from the issuance of the Notes due 2031 were used to redeem the Notes due 2025, the redemption did not occur until June 17, 2024, in order to redeem those notes at par. Upon completion of the redemption of the Notes due 2025, we recognized a $3.7 million loss on the extinguishment of debt related to the write-off of unamortized original issue discount and deferred financing costs, which we have classified as a component of Interest expense on corporate funding on the Condensed Consolidated Income Statements.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Transaction-based clearing expenses


	Nine Months Ended June 30,
	2024			2023			$ Change		% Change
Transaction-based clearing expenses	$	233.8		$	203.2		$	30.6	15	%
Percentage of operating revenues	9		%	10		%

Expenses were higher in our Exchange-Traded Futures & Options, Financial Ag and Energy and LME businesses, principally related to the increase in contracts traded. Expenses were also higher in our Equity Capital Markets business, principally related to an increase in ADV and higher ADR conversion fees. Partially offsetting these increases were lower expenses in the Retail Forex business, principally related to reducing costs through successful renegotiation of certain vendor contracts.

Introducing broker commissions


	Nine Months Ended June 30,
	2024			2023			$ Change		% Change
Introducing broker commissions	$	124.2		$	122.4		$	1.8	1	%
Percentage of operating revenues	5		%	6		%

Expenses were higher in our Independent Wealth Management business, principally driven by increased revenues, higher in our Financial Ag and Energy business, principally due to increased volume and client mix traded, and higher in our Physical Ag and Energy business, principally due to the growth in our physical cotton business following the acquisition of CDI. These increases were partially offset by lower payouts within our Retail Forex, Exchange-Traded Futures & Options, and Correspondent Clearing businesses.

Interest expense


	Nine Months Ended June 30,
	2024		2023		$ Change		% Change
Interest expense attributable to:
Trading activities:
Institutional dealer in fixed income securities	$	599.2	$	372.1	$	227.1	61	%
Securities borrowing	45.2		27.6		17.6		64	%
Client balances on deposit	99.4		107.7		(8.3)		(8)	%
Short-term financing facilities of subsidiaries and other direct interest of operating segments	48.4		41.6		6.8		16	%
	792.2		549.0		243.2		44	%
Corporate funding	53.5		44.2		9.3		21	%
Total interest expense	$	845.7	$	593.2	$	252.5	43	%

Increased interest expense attributable to trading activities principally resulted from an increase in our fixed income and securities borrowing activities, as well as the effect of the increase in short-term interest rates, partially offset by a decrease in interest expense attributable to client balances, principally resulting from the decline in average client equity within our Exchange-Traded Futures & Options business. Interest expense attributable to short-term financing facilities of subsidiaries and other direct interest of operating segments increased principally within our Equity Capital Markets business, partially offset by lower average borrowings on our revolving credit facility within our Physical Ag and Energy business.

Net Operating Revenues

Net operating revenues is one of the key measures used by management to assess operating segment performance. Net operating revenue is calculated as operating revenue less transaction-based clearing expenses, introducing broker commissions and interest expense. Transaction-based clearing expenses represent variable expenses paid to executing brokers, exchanges, clearing organizations and banks in relation to our transactional volumes. Introducing broker commissions include commission paid to non-employee third parties that have introduced clients to us. Net operating revenues represent revenues available to pay variable compensation to risk management consultants and traders and direct non-variable expenses, as well as variable and non-variable expenses of operational and administrative employees, including our executive management team.

The table below presents a disaggregation of consolidated net operating revenues used by management in evaluating our performance, for the periods indicated:


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Net Operating Revenues (in millions):
Listed derivatives	$	65.3	$	49.8	31%	$	163.9	$	152.0	8%
OTC derivatives	66.2		71.9		(8)%	163.6		172.2		(5)%
Securities	86.2		70.1		23%	270.7		247.7		9%
FX / CFD contracts	67.6		64.3		5%	205.6		153.2		34%
Payments	47.5		50.6		(6)%	150.4		148.8		1%
Physical contracts	55.8		69.3		(19)%	134.6		164.0		(18)%
Interest, net / fees earned on client balances	86.4		57.9		49%	223.4		175.6		27%
Other	20.4		16.1		27%	55.5		50.8		9%
Corporate	(26.9)		(14.1)		91%	(55.3)		(47.0)		18%
	$	468.5	$	435.9	7%	$	1,312.4	$	1,217.3	8%

Compensation and Other Expenses

The following table presents a summary of expenses, other than interest and transactional expenses.


	Three Months Ended June 30,					Nine Months Ended June 30,
(in millions)	2024		2023		% Change	2024		2023		% Change
Compensation and benefits:
Variable compensation and benefits	$	140.6	$	130.5	8%	$	386.2	$	370.8	4%
Fixed compensation and benefits	116.9		96.1		22%	323.8		287.3		13%
	257.5		226.6		14%	710.0		658.1		8%
Other expenses:
Trading systems and market information	20.1		19.4		4%	58.2		54.9		6%
Professional fees	20.0		13.9		44%	55.0		41.1		34%
Non-trading technology and support	18.7		13.7		36%	53.6		44.7		20%
Occupancy and equipment rental	13.5		10.0		35%	34.8		29.5		18%
Selling and marketing	12.8		13.7		(7)%	40.1		40.8		(2)%
Travel and business development	6.9		6.2		11%	21.1		17.7		19%
Communications	1.9		2.4		(21)%	6.4		6.7		(4)%
Depreciation and amortization	12.3		13.8		(11)%	35.8		39.6		(10)%
Bad debts, net of recoveries	0.5		6.3		(92)%	(0.2)		10.0		n/m
Other	18.1		15.4		18%	50.3		50.1		—%
	124.8		114.8		9%	355.1		335.1		6%
Total compensation and other expenses	$	382.3	$	341.4	12%	$	1,065.1	$	993.2	7%

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Compensation and Other Expenses: Compensation and other expenses increased $40.9 million, or 12%, to $382.3 million in the three months ended June 30, 2024 compared to $341.4 million in the three months ended June 30, 2023.

Compensation and Benefits:


	Three Months Ended June 30,
(in millions)	2024		2023		$ Change		% Change
Compensation and benefits:
Variable compensation and benefits
Front office	$	117.0	$	108.6	$	8.4	8%
Administrative, executive, and centralized and local operations	23.6		21.9		1.7		8%
Total variable compensation and benefits	140.6		130.5		10.1		8%
Variable compensation and benefits as a percentage of net operating revenues	30%		30%

Fixed compensation and benefits:
Non-variable salaries	77.5		68.7		8.8		13%
Employee benefits and other compensation	24.6		20.3		4.3		21%
Share-based compensation	10.7		6.4		4.3		67%
Severance	4.1		0.7		3.4		486%
Total fixed compensation and benefits	116.9		96.1		20.8		22%
Total compensation and benefits	257.5		226.6		30.9		14%
Total compensation and benefits as a percentage of operating revenues	28%		29%
Number of employees, end of period	4,458		3,972		486		12%

Non-variable salaries increased within the Commercial and Institutional segments, as well as within our overhead departments, principally due to the increase in headcount, as well as the impact of annual merit increases.

Employee benefits and other compensation increased principally due to higher retirement and benefits costs principally related to the increase in headcount, and a decrease in employee-elected deferred incentive. The three months ended June 30, 2024 also included $0.9 million in accelerated long-term incentive due to the departure of an executive officer.

Share-based compensation, which contains stock option and restricted stock expense, increased principally due to the issuance of additional stock option awards during the first quarter of 2024, as well as from the increase in the value of previously granted restricted stock awards related to employee-elected and statutorily-required deferred incentive, which is exchanged for restricted stock that is amortized over a thirty-six month period following the grant date. The three months ended June 30, 2024 also included $0.9 million in accelerated share-based compensation due to the departure of the executive officer.

During the three months ended June 30, 2024, severance costs were related to the departure of several employees, including the executive officer mentioned above.

Other Expenses: Other non-compensation expenses increased $10.0 million, or 9%, to $124.8 million in the three months ended June 30, 2024 compared to $114.8 million in the three months ended June 30, 2023.

Professional fees increased $6.1 million, principally due to higher legal fees related to matters in which we are defendants, as well as related to advisory matters in the normal course of business. Additionally, the increase is related to higher consulting fees, principally within our Physical Ag & Energy business and IT Development, as well as from higher accounting-related fees due to the timing and scope of various services provided.

Non-trading technology and support increased $5.0 million, principally due to higher non-trading software maintenance and support costs related to various technologies used throughout core-IT, compliance and Retail Forex.

Occupancy and equipment rental increased $3.5 million, principally due to additional office space acquired in London, as we consolidate office space in order to support our current and anticipated future growth. Additionally, we experienced higher costs in India, the U.S., and Singapore.

During the three months ended June 30, 2024, we recorded bad debts, net of recoveries of $0.5 million, principally related to client trading account deficits in our Retail Forex business. During the three months ended June 30, 2023, bad debts, net of recoveries were $6.3 million, principally related to bad debt expense of $4.5 million of client receivable in the Physical Ag & Energy business, $1.5 million of client trading account deficits in our Retail Forex business, and $0.4 million in client trading account deficits in our Financial Ag & Energy business.

Other expenses increased $2.7 million, principally due to an accrual of $3.5 million related to our proposed settlement offer of a post-acquisition commitment contingency, partially offset by a decrease in other non-income taxes.

Other Gain: The results of the three months ended June 30, 2024 include a nonrecurring gain related to proceeds of $1.8 million resulting from settlement of a gold fix class action settlement recovery matter, reported within our Retail segment.

Provision for Taxes: The effective income tax rate was 30% and 26% in the three months ended June 30, 2024 and 2023, respectively. The effective tax rate was higher than the U.S. federal statutory rate of 21% due to U.S. state and local taxes, GILTI, U.S. and foreign permanent differences, and the amount of foreign earnings taxed at higher rates.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Compensation and Other Expenses: Compensation and other expenses increased $71.9 million, or 7%, to $1,065.1 million in the nine months ended June 30, 2024 compared to $993.2 million in the nine months ended June 30, 2023.

Compensation and Benefits:


	Nine Months Ended June 30,
(in millions)	2024			2023			$ Change		% Change
Compensation and benefits:
Variable compensation and benefits
Front office	$	321.3		$	313.0		$	8.3	3	%
Administrative, executive, and centralized and local operations	64.9			57.8			7.1		12	%
Total variable compensation and benefits	386.2			370.8			15.4		4	%
Variable compensation and benefits as a percentage of net operating revenues	29		%	30		%

Fixed compensation and benefits:
Non-variable salaries	224.1			196.6			27.5		14	%
Employee benefits and other compensation	65.5			56.0			9.5		17	%
Share-based compensation	27.7			21.3			6.4		30	%
Severance	6.5			13.4			(6.9)		(51)	%
Total fixed compensation and benefits	323.8			287.3			36.5		13	%
Total compensation and benefits	$	710.0		$	658.1		$	51.9	8	%
Total compensation and benefits as a percentage of operating revenues	28		%	31		%
Number of employees, end of period	4,458			3,972			486		12	%

Non-variable salaries increased within the Commercial and Institutional segments, as well as within our overhead departments, principally due to the increase in headcount resulting from expanding capabilities among our business lines, as well as the growth in our operational and overhead departments supporting our business initiatives, as well as the impact of annual merit increases.

Employee benefits and other compensation, increased principally due to higher payroll taxes, benefits, and retirement costs principally related to the increase in headcount, and a decrease in employee-elected deferred incentive, which is exchanged for restricted stock that will be amortized over a thirty-six month period following the grant date. The nine months ended June 30, 2024 also included $0.9 million in accelerated long-term incentive due to the departure of an executive officer.

Share-based compensation increased principally due to the issuance of additional stock option awards during the nine months ended June 30, 2024, as well as from the increase in the value of previously granted restricted stock awards related to employee-elected and statutorily-required deferred incentive, which is exchanged for restricted stock that is amortized over a thirty-six month period following the grant date. The nine months ended June 30, 2024 also included $0.9 million in accelerated share-based compensation due to the departure of the executive officer.

During the nine months ended June 30, 2024, severance costs were $6.5 million, relating to the departure of several employees, including the executive officer mentioned above. During the nine months ended June 30, 2023, severance costs were $13.4 million, principally related to a reorganization within the Payments business.

Other Expenses: Other non-compensation expenses increased $20.0 million, or 6%, to $355.1 million in the nine months ended June 30, 2024 compared to $335.1 million in the nine months ended June 30, 2023.

Professional fees increased $13.9 million, principally due to higher legal fees related to matters in which we are defendants, as well as related to advisory matters in the normal course of business. Additionally, the increase is related to higher consulting fees, principally within our Physical Ag & Energy business and IT Development, as well as from higher accounting-related fees due to the timing and scope of various services provided.

Non-trading technology and support increased $8.9 million, principally due to higher non-trading software maintenance and support costs related to various technology used throughout core-IT, compliance and Retail Forex.

Occupancy and equipment rental increased $5.3 million, principally due to additional office space acquired in London and India, as well as certain accelerated charges incurred as we consolidate office space in London to support our current and anticipated future growth, partially offset by a partial refund of property tax and related expenses covering prior years in London. Additionally, we experienced higher costs in the U.S. and Singapore.

Travel and business development increased $3.4 million, principally due to higher transportation and lodging costs across our Commercial and Institutional segments and support departments, as well as transportation and lodging costs related to our global sales summit, held in February 2024, which occurs on a once-every-two years rotation.

During the nine months ended June 30, 2024, we recorded net recoveries of bad debts of $0.2 million, principally related to recoveries within our Institutional segment of $1.8 million, which were partially offset by bad debt expense of $1.0 million of client receivables in our Payments segment and $0.6 million within our Retail segment. During the nine months ended June 30, 2023, bad debts, net of recoveries was $10.0 million, principally related to bad debt expense of $7.6 million of client receivables in the Physical Ag & Energy business, $2.3 million of client trading account deficits in our Retail Forex business, and $0.4 million in client trading account deficits in our Financial Ag & Energy business

Gain on Acquisition and Other Gains: The results of the nine months ended June 30, 2024 include nonrecurring gains of $1.8 million resulting from settlement of a gold fix class action settlement recovery matter, reported within our Retail segment, and $6.9 million resulting from the settlement of a commodity exchange gold futures and options trading matter, reported within our Commercial segment. The results of the nine months ended June 30, 2023 included a nonrecurring gain of $23.5 million related to the acquisition of CDI.

Provision for Taxes: Our effective income tax rate was 28% and 24% for nine months ended June 30, 2024 and 2023, respectively. The gain on acquisition of $23.5 million in the nine months ended June 30, 2023 was not taxable and reduced the effective income tax rate 3.2%.

The effective income tax rate for the nine months ended June 30, 2024 and 2023 was higher than the U.S. federal statutory rate of 21% due to U.S. state and local taxes, changes in valuation allowances, U.K. bank tax, U.S. permanent differences, and the amount of foreign earnings taxed at higher tax rates.

Variable vs. Fixed Expenses

The table below presents our variable expenses and non-variable expenses as a percentage of total non-interest expenses for the periods indicated.


	Three Months Ended June 30,						Nine Months Ended June 30,
(in millions)	2024		% of Total	2023		% of Total	2024		% of Total	2023		% of Total
Variable compensation and benefits	$	140.6	28%	$	130.5	29%	$	386.2	27%	$	370.8	28%
Transaction-based clearing expenses	81.0		16%	66.7		15%	233.8		16%	203.2		15%
Introducing broker commissions	43.1		8%	43.4		10%	124.2		9%	122.4		9%
Total variable expenses	264.7		52%	240.6		54%	744.2		52%	696.4		52%
Fixed compensation and benefits	116.9		23%	96.1		21%	323.8		23%	287.3		22%
Other fixed expenses	124.3		25%	108.5		24%	355.3		25%	325.1		25%
Bad debts (recoveries), net	0.5		—%	6.3		1%	(0.2)		—%	10.0		1%
Total non-variable expenses	241.7		48%	210.9		46%	678.9		48%	622.4		48%
Total non-interest expenses	$	506.4	100%	$	451.5	100%	$	1,423.1	100%	$	1,318.8	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 our non-interest expenses variable to the greatest extent possible, and to keep our fixed costs as low as possible.

Segment Information

Our operating segments are based principally on the nature of the clients we serve (commercial, institutional, and retail), and a fourth operating segment, our payments business. We manage our business in this manner due to our large global footprint, in which we have more than 4,400 employees allowing us to serve clients in more than 180 countries.

Our business activities are managed as operating segments, which are our reportable segments for financial reporting purposes, as shown below.

StoneX Group Inc.

Commercial

Institutional

Retail

Payments

Primary Activities:

Financial Ag
& Energy

Equity Capital
Markets

Retail Forex

Payments

LME Metals

Debt Capital
Markets

Retail Precious Metals

Payment Technology
Services

Physical Ag
& Energy

FX Prime Brokerage

Independent
Wealth Management

Precious Metals

Exchange-Traded
Futures & Options

Correspondent
Clearing

Operating revenues, net operating revenues, net contribution and segment income are some of the key measures used by management to assess the performance of each segment and for decisions regarding the allocation of our resources. Operating revenues are calculated as total revenues less cost of sales of physical commodities.

Net operating revenues are calculated as operating revenues less transaction-based clearing expenses, introducing broker commissions and interest expense.

Net contribution is calculated as net operating revenues less variable compensation. Variable compensation paid to risk management consultants and traders generally represents a fixed percentage that can vary by revenue type. This fixed percentage is applied to revenues generated, and in some cases, revenues generated less transaction-based clearing expenses, base salaries and other expenses/allocations.

Segment income is calculated as net contribution less non-variable direct segment costs. These non-variable direct expenses include trader base compensation and benefits, operational charges, trading systems and market information, professional fees, travel and business development, communications, bad debts, trade errors and direct marketing expenses.

Segment income is used by our chief operating decision maker (“CODM”) as the primary measure of segment profit or loss in the evaluation for each of our operating segments. During the three months ended December 31, 2023, we revised our method of allocating certain overhead costs to our operating segments, and, beginning in the three months ended December 31, 2023, the CODM also uses ‘Segment income, less allocation of overhead costs’ as an additional segment measure of our segments’ financial performance. The allocation of overhead costs to operating segments includes costs associated with compliance, technology, and credit and risk costs. The share of allocated costs is based on resources consumed by the relevant businesses. In addition, the allocation of human resources and occupancy costs is principally based on employee costs within the relevant businesses. The measure of segment profit or loss most consistent with the corresponding amounts in the consolidated financial statements is segment income.

In the accompanying segment tables, ‘Allocation of overhead costs’ has been added beneath ‘Segment income’, which reconciles the segment income measure to the segment income, less allocation of overhead costs measure for the three and nine months ended June 30, 2024.

Total Segment Results

The following table shows summary information concerning all of our business segments combined.


	Three Months Ended June 30,						Nine Months Ended June 30,
(in millions)	2024		% of Operating Revenues	2023		% of Operating Revenues	2024		% of Operating Revenues	2023		% of Operating Revenues
Revenues:
Sales of physical commodities	$	26,196.2		$	14,319.2		$	66,339.0		$	42,228.8
Principal gains, net	307.3			302.6			880.3			811.9
Commission and clearing fees	143.6			127.2			410.8			376.9
Consulting, management, and account fees	44.7			39.1			122.3			117.0
Interest income	382.6			261.4			1,001.1			691.1
Total revenues	27,074.4			15,049.5			68,753.5			44,225.7
Cost of sales of physical commodities	26,156.0			14,271.0			66,232.7			42,084.4
Operating revenues	918.4		100%	778.5		100%	2,520.8		100%	2,141.3		100%
Transaction-based clearing expenses	81.1		9%	66.7		9%	233.2		9%	203.2		9%
Introducing broker commissions	43.1		5%	43.4		6%	124.2		5%	122.4		6%
Interest expense	298.8		33%	218.4		28%	795.7		32%	551.4		26%
Net operating revenues	495.4			450.0			1,367.7			1,264.3
Variable direct compensation and benefits	118.1		13%	109.2		14%	324.6		13%	315.2		15%
Net contribution	377.3			340.8			1,043.1			949.1
Fixed compensation and benefits	57.5			52.6			162.5			158.7
Other fixed expenses	77.4			74.0			225.0			220.2
Bad debts (recoveries), net	0.5			6.3			(0.2)			10.0
Total non-variable direct expenses	135.4		15%	132.9		17%	387.3		15%	388.9		18%
Other gains	1.8			—			8.7			—
Segment income	243.7			207.9			664.5			560.2
Allocation of overhead costs (1)	39.2			—			116.8			—
Segment income, less allocation of overhead costs	$	204.5		$	207.9		$	547.7		$	560.2

(1) Includes an allocation of certain overhead costs to our operating segments as noted above for the three months ended June 30, 2024 and nine months ended June 30, 2024. These allocations will be provided on an ongoing basis but have not been calculated for comparable periods.

Commercial

We offer our commercial clients a comprehensive array of products and services, including risk management and hedging services, execution and clearing of exchange-traded and OTC products, voice brokerage, market intelligence and physical trading, as well as commodity financing and logistics services. We believe providing these high-value-added products and services differentiates us from our competitors and maximizes our opportunity to retain our clients.

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 the Commercial segment, for the periods indicated.


	Three Months Ended June 30,					Nine Months Ended June 30,
(in millions)	2024		2023		% Change	2024		2023		% Change
Revenues:
Sales of physical commodities	$	26,186.1	$	14,240.1	84%	$	66,305.6	$	41,668.8	59%
Principal gains, net	113.7		109.5		4%	264.5		254.1		4%
Commission and clearing fees	52.3		50.0		5%	143.6		133.3		8%
Consulting, management and account fees	7.1		6.9		3%	20.0		19.8		1%
Interest income	51.1		38.0		34%	133.7		112.7		19%
Total revenues	26,410.3		14,444.5		83%	66,867.4		42,188.7		58%
Cost of sales of physical commodities	26,148.1		14,191.8		84%	66,206.3		41,533.5		59%
Operating revenues	262.2		252.7		4%	661.1		655.2		1%
Transaction-based clearing expenses	19.0		16.3		17%	51.7		44.1		17%
Introducing broker commissions	11.7		12.0		(3)%	33.0		29.4		12%
Interest expense	11.0		10.8		2%	28.3		30.3		(7)%
Net operating revenues	220.5		213.6		3%	548.1		551.4		(1)%
Variable direct compensation and benefits	51.8		56.7		(9)%	133.7		137.9		(3)%
Net contribution	168.7		156.9		8%	414.4		413.5		—%
Fixed compensation and benefits	19.5		16.0		22%	51.5		46.0		12%
Other fixed expenses	23.5		18.9		24%	71.3		56.9		25%
Bad debts (recoveries), net	—		5.0		(100)%	—		7.9		(100)%
Non-variable direct expenses	43.0		39.9		8%	122.8		110.8		11%
Other gains	—		—		n/m	6.9		—		n/m
Segment income	125.7		117.0		7%	298.5		302.7		(1)%
Allocation of overhead costs (1)	8.9		—		—	26.6		—		—
Segment income, less allocation of overhead costs	$	116.8	$	117.0	n/m	$	271.9	$	302.7	n/m

(1) Includes an allocation of certain overhead costs to our operating segments as noted above for the three and nine months ended June 30, 2024. These allocations will be provided on an ongoing basis but have not been calculated for comparable periods.


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Operating Revenues (in millions):
Listed derivatives	$	78.6	$	62.2	26%	$	197.1	$	177.0	11%
OTC derivatives	66.2		71.9		(8)%	163.7		172.3		(5)%
Physical contracts	65.3		77.0		(15)%	159.8		182.6		(12)%
Interest / fees earned on client balances	45.2		35.0		29%	120.5		104.5		15%
Other	6.9		6.6		5%	20.0		18.8		6%
	$	262.2	$	252.7	4%	$	661.1	$	655.2	1%

Volumes and Other Select Data:
Listed derivatives (contracts, 000’s)	10,547		9,021		17%	29,704		25,532		16%
Listed derivatives, average rate per contract (1)	$	7.21	$	6.58	10%	$	6.39	$	6.62	(3)%
Average client equity - listed derivatives (millions)	$	1,751	$	1,815	(4)%	$	1,712	$	1,974	(13)%
OTC derivatives (contracts, 000’s)	959		1,063		(10)%	2,584		2,638		(2)%
OTC derivatives, average rate per contract	$	69.03	$	67.75	2%	$	63.53	$	65.73	(3)%

(1)

Give-up fee revenues, related to contract execution for clients of other FCMs, as well as cash and voice brokerage revenues are excluded from the calculation of listed derivatives, average rate per contract.

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Operating revenues increased $9.5 million, or 4%, to $262.2 million in the three months ended June 30, 2024 compared to $252.7 million in the three months ended June 30, 2023. Net operating revenues increased $6.9 million, or 3%, to $220.5 million in the three months ended June 30, 2024 compared to $213.6 million in the three months ended June 30, 2023.

Operating revenues derived from listed derivatives increased $16.4 million, or 26%, to $78.6 million in the three months ended June 30, 2024 compared to $62.2 million in the three months ended June 30, 2023. This increase was principally due to 17%

and 10% increases in listed derivatives contract volumes and average rate per contract, respectively, compared to the three months ended June 30, 2023. These increases were primarily driven by an increase in client activity and widening of spreads in in LME base metals markets, following U.S. and U.K. imposed sanctions on Russian base metals exports.

Operating revenues derived from OTC derivatives declined $5.7 million, or 8%, to $66.2 million in the three months ended June 30, 2024 compared to $71.9 million in the three months ended June 30, 2023. This decline was principally due to a 10% decrease in OTC derivative volumes, most notably in Brazilian markets, which was partially offset by 2% increase in the average rate per contract as compared to the three months ended June 30, 2023.

Operating revenues derived from physical contracts declined $11.7 million, or 15%, to $65.3 million in the three months ended June 30, 2024 compared to $77.0 million in the three months ended June 30, 2023. This was principally driven by a $13.8 million decline in operating revenues in our physical agricultural and energy business, which was partially offset by a $1.9 million increase in operating revenues in our precious metals businesses, as compared to the three months ended June 30, 2023. Precious metals operating revenues were favorably impacted by realized gains of $8.4 million and $3.3 million on the sale of physical inventories carried at the lower of cost or net realizable value, for which losses on related derivative positions were recognized in prior periods, during the three months ended June 30, 2024 and 2023, respectively.

Interest and fee income earned on client balances increased $10.2 million, or 29%, to $45.2 million in the three months ended June 30, 2024 compared to $35.0 million in the three months ended June 30, 2023, primarily as a result of an increase in the short term interest rates realized, which was partially offset by a 4% decline in average client equity to $1,751 million in the three months ended June 30, 2024.

Variable expenses, excluding interest, expressed as a percentage of operating revenues declined to 31% in the three months ended June 30, 2024 compared to 34% in the three months ended June 30, 2023, primarily as a result of the impact of the realized gains on precious metals inventories, discussed above, which are not correlated to variable expenses.

Segment income increased $8.7 million, or 7%, to $125.7 million in the three months ended June 30, 2024 compared to $117.0 million in the three months ended June 30, 2023, principally due to the increase in operating revenues, which was partially offset by a $3.1 million increase in non-variable direct expenses. The increase in non-variable direct expenses was driven by a $3.5 million increase in fixed compensation and benefits and a $4.6 million increase in other fixed expenses, including a $0.9 million increase in selling and marketing and a $1.2 million increase in professional fees as compared to the three months ended June 30, 2023. These increases were partially offset by a $5.0 million decline in bad debt expense as compared to the three months ended June 30, 2023.

For the three months ended June 30, 2024, we have calculated an allocation for overhead costs of $8.9 million for the Commercial segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Operating revenues increased $5.9 million, or 1%, to $661.1 million in the nine months ended June 30, 2024 compared to $655.2 million in the nine months ended June 30, 2023. Net operating revenues decreased $3.3 million, or 1%, to $548.1 million in the nine months ended June 30, 2024 compared to $551.4 million in the nine months ended June 30, 2023.

Operating revenues derived from listed derivatives increased $20.1 million, or 11%, to $197.1 million in the nine months ended June 30, 2024 compared to $177.0 million in the nine months ended June 30, 2023. This was principally driven by a 16% increase in listed derivative contract volumes, primarily in agricultural and LME base metal commodity markets. This was partially offset by a 3% decline in the average rate per contract.

Operating revenues derived from OTC transactions declined $8.6 million, or 5%, to $163.7 million in the nine months ended June 30, 2024 compared to $172.3 million in the nine months ended June 30, 2023. This decrease principally resulted from a 3% decline in the average rate per contract as well as a 2% decrease in OTC volumes as compared to the nine months ended June 30, 2023.

Operating revenues derived from physical transactions declined $22.8 million, or 12%, to $159.8 million in the nine months ended June 30, 2024 compared to $182.6 million in the nine months ended June 30, 2023. This was principally driven by a $19.0 million decline in operating revenues in our physical agricultural and energy business and to a lesser extent a $3.9 million decline in operating revenues in our precious metals businesses, as compared to the nine months ended June 30, 2023.

Interest and fee income earned on client balances increased $16.0 million, or 15%, to $120.5 million in the nine months ended June 30, 2024 compared to $104.5 million in the nine months ended June 30, 2023, as a result of an increase in the short-term interest rates realized, which was partially offset by a 13% decrease in average client equity to $1,712 million in the nine months ended June 30, 2024.

Variable expenses, excluding interest, expressed as a percentage of operating revenues, were 33% in the nine months ended June 30, 2024 compared to 32% in the nine months ended June 30, 2023.

Segment income decreased $4.2 million, or 1%, to $298.5 million in the nine months ended June 30, 2024 compared to $302.7 million in the nine months ended June 30, 2023, partially due to the decline in net operating revenues, as well as a $12.0 million increase in non-variable direct expenses. The increase in non-variable direct expenses was primarily due to a $5.5 million increase in fixed compensation and benefits, a $3.1 million increase in professional fees, a $1.6 million increase in depreciation and amortization, a $1.1 million increase in selling and marketing, and a $1.0 million increase in travel and business development. The increase in non-variable direct expenses were partially offset by a $7.9 million decline in bad debts, net of recoveries. Also, the decline in segment income was partially offset by a nonrecurring gain of $6.9 million related to proceeds from a settlement in a commodity exchange gold futures and options trading matter.

For the nine months ended June 30, 2024, we have calculated an allocation for overhead costs of $26.6 million for the Commercial segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Institutional

We provide institutional clients with a complete suite of equity trading services to help them find liquidity with best execution, consistent liquidity across a robust array of fixed income products, competitive and efficient clearing and execution in all major futures and securities exchanges globally as well as prime brokerage in equities and major foreign currency pairs and swap transactions. In addition, we originate, structure and place debt instruments in the international and domestic capital markets. These instruments include asset-backed securities (primarily in Argentina) and domestic municipal securities.


	Three Months Ended June 30,					Nine Months Ended June 30,
(in millions)	2024		2023		% Change	2024		2023		% Change
Revenues:
Sales of physical commodities	$	—	$	—	—%	$	—	$	—	—%
Principal gains, net	89.2		82.8		8%	290.0		273.1		6%
Commission and clearing fees	77.6		63.6		22%	225.7		204.0		11%
Consulting, management and account fees	21.0		18.4		14%	56.0		54.0		4%
Interest income	321.1		216.3		48%	836.3		556.0		50%
Total revenues	508.9		381.1		34%	1,408.0		1,087.1		30%
Cost of sales of physical commodities	—		—		—%	—		—		—%
Operating revenues	508.9		381.1		34%	1,408.0		1,087.1		30%
Transaction-based clearing expenses	57.3		45.8		25%	166.2		141.1		18%
Introducing broker commissions	8.6		9.1		(5)%	24.3		27.8		(13)%
Interest expense	285.3		205.9		39%	761.4		516.8		47%
Net operating revenues	157.7		120.3		31%	456.1		401.4		14%
Variable direct compensation and benefits	52.9		38.6		37%	148.6		135.8		9%
Net contribution	104.8		81.7		28%	307.5		265.6		16%
Fixed compensation and benefits	19.6		15.4		27%	56.4		44.2		28%
Other fixed expenses	23.0		21.4		7%	64.2		58.7		9%
Bad debts (recoveries), net	—		(0.2)		(100)%	(1.8)		(0.2)		n/m
Non-variable direct expenses	42.6		36.6		16%	118.8		102.7		16%

Segment income	62.2		45.1		38%	188.7		162.9		16%
Allocation of overhead costs (1)	13.1		—		—	39.2		—		—
Segment income, less allocation of overhead costs	$	49.1	$	45.1	n/m	$	149.5	$	162.9	n/m


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Operating Revenues (in millions):
Listed derivatives	$	51.9	$	45.4	14%	$	154.3	$	140.9	10%

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Operating revenues increased $127.8 million, or 34%, to $508.9 million in the three months ended June 30, 2024 compared to $381.1 million in the three months ended June 30, 2023. Net operating revenues increased $37.4 million, or 31%, to $157.7 million in the three months ended June 30, 2024 compared to $120.3 million in the three months ended June 30, 2023.

Operating revenues derived from listed derivatives increased $6.5 million, or 14%, to $51.9 million in the three months ended June 30, 2024 compared to $45.4 million in the three months ended June 30, 2023, principally due to an 41% increase in listed derivative contract volumes, which was partially offset by a 17% decline in the average rate per contract.

Operating revenues derived from securities transactions increased $99.6 million, or 40%, to $348.6 million in the three months ended June 30, 2024 compared to $249.0 million in the three months ended June 30, 2023. The ADV of securities traded increased 37%, principally driven by increased client activity in both equity and fixed income markets. Carried interest on fixed income securities is a component of operating revenues, however interest expense associated with financing these positions is not. Our calculation of Securities RPM, in the table above, presents the RPM after deducting from operating revenues the interest expense associated with our fixed income activities. The securities RPM decreased 9% in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, principally due to a tightening of spreads and a change in product mix.

Operating revenues derived from FX contracts declined $0.4 million, or 4%, to $9.1 million in the three months ended June 30, 2024 compared to $9.5 million in the three months ended June 30, 2023, principally driven by a 5% decline in the FX contracts RPM, which was partially offset by a 10% increase in the ADV of FX contracts.

Interest and fee income earned on client balances, which is associated with our listed derivative and correspondent clearing businesses increased $13.6 million, to $70.1 million in the three months ended June 30, 2024, principally driven by an increase in the short-term interest rates realized, which was partially offset by declines of 9% and 24% in average client equity and average money market/FDIC sweep client balances, respectively, as compared to the three months ended June 30, 2023.

As a result of the increase in short-term interest rates and the increase in ADV, interest expense increased $79.4 million, to $285.3 million in the three months ended June 30, 2024 compared to $205.9 million in the three months ended June 30, 2023, with interest expense directly associated with serving as an institutional dealer in fixed income securities increasing $72.7 million and interest expense directly attributable to securities lending activities increasing $5.2 million as compared to the three months ended June 30, 2023. Partially offsetting these increases, interest paid to clients declined $3.8 million as compared to the three months ended June 30, 2023.

Variable expenses, excluding interest, expressed as a percentage of operating revenues declined to 23% in the three months ended June 30, 2024 compared to 25% in the three months ended June 30, 2023, primarily as the result of the increase in interest/fees earned on client balances, which is generally not a component of variable compensation.

Segment income increased $17.1 million, or 38%, to $62.2 million in the three months ended June 30, 2024 compared to $45.1 million in the three months ended June 30, 2023, as a result of the increase in net operating revenues noted above, which was partially offset by a $6.0 million increase in non-variable direct expenses, including a $4.2 million increase in fixed compensation and a $2.6 million increase in professional fees as compared to the three months ended June 30, 2023.

For the three months ended June 30, 2024, we have calculated an allocation for overhead costs of $13.1 million for the Institutional segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Operating revenues increased $320.9 million, or 30%, to $1,408.0 million in the nine months ended June 30, 2024 compared to $1,087.1 million in the nine months ended June 30, 2023. Net operating revenues increased $54.7 million, or 14%, to $456.1 million in the nine months ended June 30, 2024 compared to $401.4 million in the nine months ended June 30, 2023.

Operating revenues derived from listed derivatives increased $13.4 million, or 10%, to $154.3 million in the nine months ended June 30, 2024 compared to $140.9 million in the nine months ended June 30, 2023, principally driven by a 34% increase in listed derivative contract volumes, which was partially offset by a 16% decline in the average rate per contract compared to the nine months ended June 30, 2023.

Operating revenues derived from securities transactions increased $268.3 million, or 39%, to $957.1 million in the nine months ended June 30, 2024 compared to $688.8 million in the nine months ended June 30, 2023. The ADV of securities traded increased 37%, principally driven by increased client activity in both equity and fixed income markets. Carried interest on fixed income securities is a component of operating revenues, however interest expense associated with financing these positions is not. Our calculation of the securities RPM, in the table above, presents the RPM after deducting from operating revenues the interest expense associated with our fixed income activities. The securities RPM decreased 18% in the nine months ended June 30, 2024 compared to the nine months ended June 30, 2023, principally due to a tightening of spreads and a change in product mix.

Operating revenues derived from FX contracts declined $3.3 million, or 12%, to $24.7 million in the nine months ended June 30, 2024 compared to $28.0 million in the nine months ended June 30, 2023, principally driven by a 12% decline in the ADV of FX contracts traded, which was partially offset by a 6% increase in the average rate per contract.

Finally, interest and fee income earned on client balances, which is associated with our listed derivative business, as well as our correspondent clearing businesses, increased $21.0 million, to $196.0 million in the nine months ended June 30, 2024 compared to $175.0 million in the nine months ended June 30, 2023, principally driven by an increase in the short-term interest rates realized, which was partially offset by declines of 18% and 26% in average client equity and average money market/FDIC sweep client balances, respectively, as compared to the nine months ended June 30, 2023.

As a result of the increase in short-term interest rates and the increase in the ADV, interest expense increased $244.6 million, to $761.4 million in the nine months ended June 30, 2024 compared to $516.8 million the nine months ended June 30, 2023, with interest expense directly associated with serving as an institutional dealer in fixed income securities increasing $227.1 million and interest expense directly attributable to securities lending activities increasing $17.6 million compared to the nine months ended June 30, 2023. Partially offsetting these increases, interest paid to clients decreased $11.1 million as compared to the nine months ended June 30, 2023.

Variable expenses, excluding interest, expressed as a percentage of operating revenues declined to 24% in the nine months ended June 30, 2024 compared to 28% in the nine months ended June 30, 2023, principally as the result of the increase in interest/fees earned on client balances, which is generally not a component of variable compensation.

Segment income increased $25.8 million, or 16%, to $188.7 million in the nine months ended June 30, 2024 compared to $162.9 million in the nine months ended June 30, 2023, primarily as a result of the increase in net operating revenues noted above, which was partially offset by a $16.1 million, or 16% increase in non-variable direct expenses versus the nine months ended June 30, 2023. The increase in non-variable direct expenses was primarily related to an $12.2 million increase in fixed compensation and benefits, a $1.7 million increase in trade systems and market information, a $5.6 million increase in professional fees and a $0.9 million increase in travel and business development. These increases were partially offset by a $1.6 million positive variance in bad debts, net of recoveries and a $1.5 million decline in non-trading technology and support as compared to the nine months ended June 30, 2023.

For the nine months ended June 30, 2024, we have calculated an allocation for overhead costs of $39.2 million for the Institutional segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Retail

We provide our retail clients around the world access to over 18,000 global financial markets, including spot foreign exchange ("forex"), both financial trading and physical investment in precious metals, as well as contracts for difference (“CFDs”), which are investment products with returns linked to the performance of underlying assets. In addition, our independent wealth management business offers a comprehensive product suite to retail investors in the U.S.


	Three Months Ended June 30,					Nine Months Ended June 30,
(in millions)	2024		2023		% Change	2024		2023		% Change
Revenues:
Sales of physical commodities	$	10.1	$	79.1	(87)%	$	33.4	$	560.0	(94)%
Principal gains, net	56.9		59.8		(5)%	174.3		134.9		29%
Commission and clearing fees	12.2		12.0		2%	37.1		34.6		7%
Consulting, management and account fees	14.9		13.1		14%	42.9		40.7		5%
Interest income	10.0		6.7		49%	29.4		21.3		38%
Total revenues	104.1		170.7		(39)%	317.1		791.5		(60)%
Cost of sales of physical commodities	7.9		79.2		(90)%	26.4		550.9		(95)%
Operating revenues	96.2		91.5		5%	290.7		240.6		21%
Transaction-based clearing expenses	3.2		3.1		3%	10.2		13.1		(22)%
Introducing broker commissions	22.0		21.7		1%	64.8		63.6		2%
Interest expense	2.5		1.6		56%	5.9		4.1		44%
Net operating revenues	68.5		65.1		5%	209.8		159.8		31%
Variable direct compensation and benefits	4.8		4.8		—%	13.6		11.9		14%
Net contribution	63.7		60.3		6%	196.2		147.9		33%
Fixed compensation and benefits	11.4		13.1		(13)%	33.0		37.3		(12)%
Other fixed expenses	26.0		28.5		(9)%	74.9		90.5		(17)%
Bad debts, net of recoveries	0.5		1.5		(67)%	0.6		2.3		(74)%
Non-variable direct expenses	37.9		43.1		(12)%	108.5		130.1		(17)%
Other gain	1.8		—		n/m	1.8		—		n/m
Segment income	27.6		17.2		60%	89.5		17.8		403%
Allocation of overhead costs (1)	11.9		—		—	35.4		—		—
Segment income, less allocation of overhead costs	$	15.7	$	17.2	n/m	$	54.1	$	17.8	n/m

(1)

Includes an allocation of certain overhead costs to our operating segments as noted above for the three and nine months ended June 30, 2024. These allocations will be provided on an ongoing basis, but they have not been calculated for previously reported periods.


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Operating Revenues (in millions):
Securities	$	25.4	$	23.4	9%	$	73.8	$	66.9	10%
FX / CFD contracts	67.4		62.6		8%	206.7		154.7		34%
Physical contracts	2.0		4.0		(50)%	4.8		12.2		(61)%
Interest / fees earned on client balances	0.6		0.7		(14)%	2.0		2.3		(13)%
Other	0.8		0.8		—%	3.4		4.5		(24)%
	$	96.2	$	91.5	5%	$	290.7	$	240.6	21%

Volumes and Other Select Data:
FX / CFD contracts ADV (millions)	$	6,904	$	6,901	—%	$	6,746	$	7,758	(13)%
FX / CFD contracts RPM	$	152	$	141	8%	$	160	$	105	52%

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Operating revenues increased $4.7 million, or 5%, to $96.2 million in the three months ended June 30, 2024 compared to $91.5 million in the three months ended June 30, 2023. Net operating revenues increased $3.4 million, or 5%, to $68.5 million in the three months ended June 30, 2024 compared to $65.1 million in the three months ended June 30, 2023.

Operating revenues derived from FX/CFD contracts increased $4.8 million, or 8%, to $67.4 million in the three months ended June 30, 2024 compared to $62.6 million in the three months ended June 30, 2023 principally driven by an 8% increase in FX/CFD contracts RPM, while FX/CFD contracts ADV was relatively flat, compared to the three months ended June 30, 2023.

Operating revenues derived from securities transactions, which relate to our independent wealth management activities, increased $2.0 million to $25.4 million in the three months ended June 30, 2024 compared to $23.4 million in the three months ended June 30, 2023.

Operating revenues derived from physical contracts declined $2.0 million, or 50% to $2.0 million in the three months ended June 30, 2024 compared to $4.0 million in the three months ended June 30, 2023.

Interest and fee income earned on client balances was $0.6 million in the three months ended June 30, 2024 as compared to $0.7 million in the three months ended June 30, 2023.

Variable expenses, excluding interest, as a percentage of operating revenues were 31% in the three months ended June 30, 2024 compared to 32% in the three months ended June 30, 2023, principally due to the increase in operating revenues derived from FX / CFD contracts which typically incur a lower relative percentage of variable expenses than do our other revenue streams within this segment.

Segment income increased $10.4 million to $27.6 million in the three months ended June 30, 2024 compared to $17.2 million in the three months ended June 30, 2023, principally due to the increase in net operating revenues noted above, as well as a $5.2 million decline in non-variable direct expenses compared to the three months ended June 30, 2023. The decline in non-variable direct expenses was primarily a result of a $3.1 million decrease in amortization, as certain intangibles, recognized as part the acquisition of Gain Capital Holdings, Inc. in fiscal 2020, became fully amortized during fiscal 2023, a $1.7 million decline in fixed compensation and benefits, a $0.8 million decline in selling and marketing, and a $1.0 million decrease in bad debts as compared to the three months ended June 30, 2023. In addition, the three months ended June 30, 2024 includes a nonrecurring gain of $1.8 million related to proceeds from a settlement in a commodity exchange gold futures and options trading matter.

For the three months ended June 30, 2024, we have calculated an allocation for overhead costs of $11.9 million for the Retail segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Operating revenues increased $50.1 million, or 21%, to $290.7 million in the nine months ended June 30, 2024 compared to $240.6 million in the nine months ended June 30, 2023. Net operating revenues increased $50.0 million, or 31%, to $209.8 million in the nine months ended June 30, 2024 compared to $159.8 million in the nine months ended June 30, 2023.

Operating revenues derived from FX/CFD contracts increased $52.0 million, or 34%, to $206.7 million, primarily as a result of a 52% increase in FX/CFD contracts RPM, which was partially offset by a 13% decline in FX/CFD contracts ADV compared to the nine months ended June 30, 2023.

Operating revenues derived from securities transactions, which are related to our independent wealth management activities, increased $6.9 million, or 10%, to $73.8 million in the nine months ended June 30, 2024 compared to $66.9 million in the nine months ended June 30, 2023.

Operating revenues derived from physical contracts declined $7.4 million, or 61%, to $4.8 million in the nine months ended June 30, 2024 compared to $12.2 million in the nine months ended June 30, 2023.

Interest and fee income earned on client balances was $2.0 million in the nine months ended June 30, 2024 as compared to $2.3 million in the nine months ended June 30, 2023.

Variable expenses, excluding interest, as a percentage of operating revenues were 30% in the nine months ended June 30, 2024 compared to 37% in the nine months ended June 30, 2023, principally due to the increase in operating revenues derived from FX / CFD contracts which typically incur a lower relative percentage of variable expenses than do our other revenue streams within this segment.

Segment income increased $71.7 million, to $89.5 million in the nine months ended June 30, 2024 compared to $17.8 million in the nine months ended June 30, 2023, principally due to the increase in net operating revenues noted above as well as a $21.6 million, or 17%, decline in non-variable direct expenses, compared to the nine months ended June 30, 2023. The decline in non-variable direct expenses was principally the result of a $8.4 million decline in depreciation and amortization, as certain intangibles, recognized as part the acquisition of Gain Capital Holdings, Inc. in fiscal 2020, became fully amortized during fiscal 2023, a $4.9 million decline in direct selling and marketing costs, a $4.3 million decline in fixed compensation and benefits and a $1.7 million decrease in bad debts as compared to the nine months ended June 30, 2023.

For the nine months ended June 30, 2024, we have calculated an allocation for overhead costs of $35.4 million for the Retail segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Payments

We provide customized foreign exchange and treasury services to banks and commercial businesses, charities, non-governmental organizations, as well as government organizations. We provide transparent pricing and offer payments services in more than 180 countries and 140 currencies, which we believe is more than any other payments solutions provider.


	Three Months Ended June 30,					Nine Months Ended June 30,
(in millions)	2024		2023		% Change	2024		2023		% Change
Revenues:
Sales of physical commodities	$	—	$	—	—%	$	—	$	—	—%
Principal gains, net	47.5		50.5		(6)%	151.5		149.8		1%
Commission and clearing fees	1.5		1.6		(6)%	4.4		5.0		(12)%
Consulting, management, account fees	1.7		0.7		143%	3.4		2.5		36%
Interest income	0.4		0.4		—%	1.7		1.1		55%
Total revenues	51.1		53.2		(4)%	161.0		158.4		2%
Cost of sales of physical commodities	—		—		—%	—		—		—%
Operating revenues	51.1		53.2		(4)%	161.0		158.4		2%
Transaction-based clearing expenses	1.6		1.5		7%	5.1		4.9		4%
Introducing broker commissions	0.8		0.6		33%	2.1		1.6		31%
Interest expense	—		0.1		(100)%	0.1		0.2		(50)%
Net operating revenues	48.7		51.0		(5)%	153.7		151.7		1%
Variable compensation and benefits	8.6		9.1		(5)%	28.7		29.6		(3)%
Net contribution	40.1		41.9		(4)%	125.0		122.1		2%
Fixed compensation and benefits	7.0		8.1		(14)%	21.6		31.2		(31)%
Other fixed expenses	4.9		5.2		(6)%	14.6		14.1		4%
Bad debts	—		—		—%	1.0		—		n/m
Total non-variable direct expenses	11.9		13.3		(11)%	37.2		45.3		(18)%
Segment income	28.2		28.6		(1)%	87.8		76.8		14%
Allocation of overhead costs (1)	5.3		—		—	15.6		—		—
Segment income, less allocation of overhead costs	$	22.9	$	28.6	n/m	$	72.2	$	76.8	n/m

(1)

Includes an allocation of certain overhead costs to our operating segments as noted above for the three and nine months ended June 30, 2024. These allocations will be provided on an ongoing basis but have not been calculated for comparable periods.


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023		% Change	2024		2023		% Change
Operating Revenues (in millions):
Payments	$	50.0	$	52.7	(5)%	$	157.8	$	155.4	2%
Other	1.1		0.5		120%	3.2		3.0		7%
	$	51.1	$	53.2	(4)%	$	161.0	$	158.4	2%

Volumes and Other Select Data:
Payments ADV (millions)	$	69	$	65	6%	$	69	$	68	1%
Payments RPM	$	11,264	$	12,907	(13)%	$	12,053	$	12,049	—%

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Operating revenues decreased $2.1 million, or 4%, to $51.1 million in the three months ended June 30, 2024 compared to $53.2 million in the three months ended June 30, 2023. Net operating revenues decreased $2.3 million, or 5%, to $48.7 million in the three months ended June 30, 2024 compared to $51.0 million in the three months ended June 30, 2023.

The decline in operating revenues was principally due to a 13% decrease in the RPM traded, which was partially offset by a 6% increase in the average daily notional payment volume as compared to the three months ended June 30, 2023.

Variable expenses, excluding interest, expressed as a percentage of operating revenues were 22% in the three months ended June 30, 2024 compared to 21% in the three months ended June 30, 2023.

Segment income decreased $0.4 million, or 1%, to $28.2 million in the three months ended June 30, 2024 compared to $28.6 million in the three months ended June 30, 2023, principally driven by the decline in net operating revenues noted above, which was partially offset by a $1.4 million decline in non-variable direct expenses, including a $1.1 million decline in fixed compensation and benefits and a $0.5 million decline in selling and marketing as compared to the three months ended June 30, 2023.

For the three months ended June 30, 2024, we have calculated an allocation for overhead costs of $5.3 million for the Payments segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Nine Months Ended June 30, 2024 Compared to Nine Months Ended June 30, 2023

Operating revenues increased $2.6 million, or 2%, to $161.0 million in the nine months ended June 30, 2024 compared to $158.4 million in the nine months ended June 30, 2023. Net operating revenues increased $2.0 million, or 1%, to $153.7 million in the nine months ended June 30, 2024 compared to $151.7 million in the nine months ended June 30, 2023.

The increase in operating revenues was primarily driven by a 1% increase in the average daily volume, as the RPM traded was relatively flat compared to the nine months ended June 30, 2023.

Variable expenses, excluding interest, expressed as a percentage of operating revenues were 22% in the nine months ended June 30, 2024 as compared to 23% in the nine months ended June 30, 2023.

Segment income increased $11.0 million, or 14%, to $87.8 million in the nine months ended June 30, 2024 compared to $76.8 million in the nine months ended June 30, 2023. This was driven by the increase in net operating revenues noted above as well as an $8.1 million decline in non-variable direct expenses. The decline in non-variable direct expenses was primarily driven by a $9.6 million decrease in fixed compensation and benefits as the nine months ended June 30, 2023 included $10.0 million in severance related to a reorganization of the business.

For the nine months ended June 30, 2024, we have calculated an allocation for overhead costs of $15.6 million for the Payments segment as described in the introduction to Total Segment Results above. An allocation of overhead costs will be provided on an ongoing basis, but we have not calculated historical comparable information.

Overhead Costs and Expenses

We incur overhead costs and expenses, including certain shared services such as information technology, accounting and treasury, credit and risk, legal and compliance, and human resources and other activities. The following table provides information regarding our overhead costs and expenses.

In addition, for the three and nine months ended June 30, 2024, the table provides information regarding the allocation of a portion of these costs to the aforementioned operating segments. The allocation of overhead costs to operating segments includes costs associated with compliance, technology, and credit and risk costs. The share of allocated costs is based on resources consumed by the relevant businesses. In addition, the allocation of human resources and occupancy costs is principally based on employee costs within the relevant businesses.


	Three Months Ended June 30,					Nine Months Ended June 30,
(in millions)	2024		2023		% Change	2024		2023		% Change
Compensation and benefits:
Variable compensation and benefits	$	21.1	$	19.9	6%	$	56.9	$	51.4	11%
Fixed compensation and benefits	52.5		37.1		42%	141.8		110.7		28%
	73.6		57.0		29%	198.7		162.1		23%
Other expenses:
Occupancy and equipment rental	13.1		9.8		34%	33.5		29.0		16%
Non-trading technology and support	14.3		9.7		47%	40.9		30.6		34%
Professional fees	8.1		5.6		45%	23.9		18.1		32%
Depreciation and amortization	6.1		5.7		7%	17.7		17.1		4%
Communications	1.3		1.8		(28)%	4.5		4.9		(8)%
Selling and marketing	0.4		0.8		(50)%	6.0		2.8		114%
Trading systems and market information	2.5		1.9		32%	5.7		5.6		2%
Travel and business development	2.5		1.4		79%	6.3		4.0		58%

Other	6.9		5.6		23%	16.0		14.9		7%
	55.2		42.3		30%	154.5		127.0		22%
Overhead costs and expenses	128.8		99.3		30%	353.2		289.1		22%
Allocation of overhead costs (1)	(39.2)		—		—	(116.8)		—		—
Overhead costs and expense, net of allocation to operating segments	$	89.6	$	99.3	n/m	$	236.4	$	289.1	n/m

(1)

Includes an allocation of certain overhead costs to our operating segments as noted above for the three and nine months ended June 30, 2024. The allocations will be provided on an ongoing basis but have not been calculated for comparable periods.

31.1

Certification of Chief Executive Officer, pursuant to Rule 13a—14(a).*

31.2

Certification of Chief Financial Officer, pursuant to Rule 13a—14(a).*

32.1

Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

32.2

Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

101.INSInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)101.SCHInline XBRL Taxonomy Extension Schema Document101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document101.LABInline XBRL Taxonomy Extension Label Linkbase Document101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)*Filed as part of this report.**Furnished as part of this report.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

StoneX Group Inc.

Date:

August 6, 2024

/s/ Sean M. O’Connor

Sean M. O’Connor

Chief Executive Officer

Date:

August 6, 2024

/s/ William J. Dunaway

William J. Dunaway

Chief Financial Officer

StoneX Group Inc. - Quarter Report: 2024 June (Form 10-Q)

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