StoneX Group Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
SNEX$54.31+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0000913760-24-000094
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000913760-24-000138
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 275 previous paragraphs and 270 current paragraphs.
112 unchanged; 110 reworded; 47 added; 49 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 30 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (47)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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 fundingon the Condensed Consolidated Income Statements.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
During the three months ended June 30, 2024, severance costs were related to the departure of several employees, including the executive officer mentioned above.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(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.
Current report
(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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Fixed compensation and benefits for the three months ended June 30, 2024 included $4.5 million in aggregate related to severance, accelerated long-term incentive and accelerated share-based compensation due to the departure of an executive officer.
Current report
Non-trading technology and support increased $4.6 million, principally due to higher non-trading software maintenance and support costs related to various technologies used throughout our overhead departments, most notably within core-IT and compliance.
Current report
Professional fees increased $2.5 million, principally due to higher audit, consulting and legal fees.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Removed paragraphs (49)
Previous report
In the second quarter of fiscal 2024, the diversification of our product offering and client segments led to improved performance as compared to the prior year. The significant increase in operating revenues in our Retail segment, continued growth in Institutional client volumes and continued growth in interest and fee income earned on client balances, more than offset declines in Commercial segment operating revenues, which were negatively impacted by generally lower agricultural market volatility and unrealized losses on precious metals derivative positions entered into against inventories carried at the lower of cost or net realizable value, which will be offset by realized gains in subsequent quarters when these inventories are sold.
Previous report
Operating revenues derived from listed derivatives increased $1.2 million, or 1%, to $111.7 million in the three months ended March 31, 2024 compared to $110.5 million in the three months ended March 31, 2023, with a $3.1 million increase in our Institutional segment more than offsetting a $1.9 million decline in Commercial segment listed derivative operating revenues as compared to the three months ended March 31, 2023.
Previous report
Operating revenues from payments declined $0.1 million, to $48.4 million in the three months ended March 31, 2024 compared to $48.5 million in the three months ended March 31, 2023, principally driven by a 2% decrease in the ADV, which was partially offset by a 3% increase in the RPM as compared to the three months ended March 31, 2023.
Previous report
Operating revenues from physical contracts declined $16.5 million, or 14%, to $97.3 million in the six months ended March 31, 2024 compared to $113.8 million in the six months ended March 31, 2023, Precious metals related operating revenues were unfavorably impacted during the six months ended March 31, 2024, by unrealized losses on derivative positions of $10.8 million, related to physical inventories held at the lower of cost or net realizable value. Precious metals related operating revenues during the six months ended March 31, 2023 were unfavorably impacted by unrealized losses on derivative positions of $2.1 million, related to physical inventories held at the lower of cost or net realizable value.
Previous report
Non-variable salaries increased principally due to the increase in headcount, as well as the impact of annual merit increases.
Previous report
Employee benefits and other compensation, excluding share-based compensation, decreased principally due to lower severance costs, partially offset by higher payroll taxes, benefits, and retirement costs principally related to the increase in headcount. During the three months ended March 31, 2024, severance costs were $1.1 million compared to $12.1 million during the three months ended March 31, 2023, which were principally related to a reorganization within the Payments business.
Previous report
Trading systems and market information costs increased $1.6 million, principally due to higher costs related to certain operations systems and higher market information costs in the Debt Capital Markets business.
Previous report
Non-trading technology and support increased $1.8 million, principally due to higher non-trading software maintenance and support costs related to various IT systems.
Previous report
Occupancy and equipment rental increased $3.0 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.
Previous report
Selling and marketing costs increased $1.4 million, principally due to costs related to our global sales summit, held in February 2024, which occurs on a once-every-two years rotation, partially offset by a $1.8 million decrease in direct marketing costs in the Retail Forex business.
Previous report
Travel and business development increased $1.3 million, principally due to higher transportation and lodging costs also related to the previously mentioned global sales summit.
Previous report
Trading systems and market information costs increased $2.6 million, principally due to higher costs related to certain operations systems and higher market information costs in the Financial Ag & Energy and Debt Capital Markets businesses.
Previous report
Non-trading technology and support increased $3.9 million, principally due to higher non-trading software maintenance and support costs related to various IT systems.
Previous report
Selling and marketing costs increased $0.2 million, principally due to costs related to our global sales summit, held in February 2024, which occurs on a once-every-two years rotation, partially offset by a $4.1 million decrease in direct marketing costs in the Retail Forex business.
Previous report
Depreciation and amortization decreased $2.3 million, principally due to lower amortization, as certain intangibles, recognized as part the acquisition of Gain Capital Holdings, Inc. in fiscal 2020, became fully amortized during fiscal 2023, partially offset by incremental depreciation expense from internally developed software placed into service.
Previous report
(1) Includes an allocation of certain overhead costs to our operating segments as noted above for the three months ended March 31, 2024 and six months ended March 31, 2024. These allocations will be provided on an ongoing basis but have not been calculated for comparable periods.
Previous report
Net contribution for all of our business segments increased $12.3 million, or 4%, to $329.0 million in the three months ended March 31, 2024 compared to $316.7 million in the three months ended March 31, 2023. Segment income increased $25.3 million, or 14%, to $204.7 million in the three months ended March 31, 2024 compared to $179.4 million in the three months ended March 31, 2023.
Previous report
Net contribution for all of our business segments increased $57.5 million, or 9%, to $665.8 million in the six months ended March 31, 2024 compared to $608.3 million in the six months ended March 31, 2023. Segment income increased $68.5 million, or 19%, to $420.8 million inthe six months ended March 31, 2024 compared to $352.3 million in the six months ended March 31, 2023.
Previous report
(1) Includes an allocation of certain overhead costs to our operating segments as noted above for the three and six months ended March 31, 2024. These allocations will be provided on an ongoing basis but have not been calculated for comparable periods.
Previous report
Operating revenues decreased $19.6 million, or 9%, to $200.5 million in the three months ended March 31, 2024 compared to $220.1 million in the three months ended March 31, 2023. Net operating revenues decreased $20.9 million, or 11%, to $164.2 million in the three months ended March 31, 2024 compared to $185.1 million in the three months ended March 31, 2023.
Previous report
Operating revenues derived from listed derivatives declined $1.9 million, or 3%, to $59.1 million in the three months ended March 31, 2024 compared to $61.0 million in the three months ended March 31, 2023. This decline was principally due to a 15% decline in the average rate per contract, primarily as a result of a narrowing of spreads in LME base metals markets. This decline was partially offset by a 12% increase in overall listed derivatives contract volumes, primarily in agricultural and LME base metal commodity markets, compared to the three months ended March 31, 2023.
Previous report
Interest and fee income earned on client balances decreased $5.3 million, or 12%, to $38.1 million in the three months ended March 31, 2024 compared to $43.4 million in the three months ended March 31, 2023, primarily as a result of a 15% decline in average client equity to $1,684 million in the three months ended March 31, 2024.
Previous report
Segment income decreased $17.3 million, or 17%, to $85.6 million in the three months ended March 31, 2024 compared to $102.9 million in the three months ended March 31, 2023, principally due to the decline in operating revenues and to a lesser extent a $2.6 million increase in non-variable direct expenses. These declines were partially offset by a nonrecurring gain of $6.9 million related to proceeds from a settlement in the Commodity Exchange Gold Futures and Options Trading matter.
Previous report
Operating revenues decreased $3.6 million, or 1%, to $398.9 million in the six months ended March 31, 2024 compared to $402.5 million in the six months ended March 31, 2023. Net operating revenues decreased $10.2 million, or 3%, to $327.6 million in the six months ended March 31, 2024 compared to $337.8 million in the six months ended March 31, 2023.
Previous report
Operating revenues derived from physical transactions declined $11.1 million, or 11%, to $94.5 million in the six months ended March 31, 2024 compared to $105.6 million in the six months ended March 31, 2023. Operating revenues derived from physical transactions during the six months ended March 31, 2024 were unfavorably impacted by unrealized losses on precious metals related derivative positions of $10.0 million, related to physical inventories held at the lower of cost or net realizable value. Operating revenues during the six months ended March 31, 2023 were unfavorably impacted by unrealized losses on derivative positions of $1.8 million, related to physical inventories held at the lower of cost or net realizable value.
Previous report
(1) Includes an allocation of certain overhead costs to our operating segments as noted above for the three and six months ended March 31, 2024. These allocations will be provided on an ongoing basis but have not been calculated for comparable periods.
Previous report
Operating revenues increased $100.9 million, or 28%, to $463.4 million in the three months ended March 31, 2024 compared to $362.5 million in the three months ended March 31, 2023. Net operating revenues increased $11.9 million, or 9%, to $149.8 million in the three months ended March 31, 2024 compared to $137.9 million in the three months ended March 31, 2023.
Previous report
Operating revenues derived from listed derivatives increased $3.1 million, or 6%, to $52.6 million in the three months ended March 31, 2024 compared to $49.5 million in the three months ended March 31, 2023, principally due to an 34% increase in listed derivative contract volumes, which was partially offset by a 19% decline in the average rate per contract.
Previous report
Operating revenues increased $193.1 million, or 27%, to $899.1 million in the six months ended March 31, 2024 compared to $706.0 million in the six months ended March 31, 2023. Net operating revenues increased $17.3 million, or 6%, to $298.4 million in the six months ended March 31, 2024 compared to $281.1 million in the six months ended March 31, 2023.
Previous report
Operating revenues increased $23.4 million, or 30%, to $102.0 million in the three months ended March 31, 2024 compared to $78.6 million in the three months ended March 31, 2023. Net operating revenues increased $23.5 million, or 46%, to $74.3 million in the three months ended March 31, 2024 compared to $50.8 million in the three months ended March 31, 2023.
Previous report
Operating revenues derived from physical contracts declined $0.2 million, or 9% to $2.0 million in the three months ended March 31, 2024 compared to $2.2 million in the three months ended March 31, 2023. Operating revenues derived from physical contracts were unfavorably impacted during the three months ended March 31, 2024, by losses on derivative positions of $0.6 million, related to physical inventories held at the lower of cost or net realizable value.
Previous report
Operating revenues increased $45.4 million, or 30%, to $194.5 million in the six months ended March 31, 2024 compared to $149.1 million in the six months ended March 31, 2023. Net operating revenues increased $46.6 million, or 49%, to $141.3 million in the six months ended March 31, 2024 compared to $94.7 million in the six months ended March 31, 2023.
Previous report
Operating revenues derived from physical contracts declined $5.4 million, or 66%, to $2.8 million in the six months ended March 31, 2024 compared to $8.2 million in the six months ended March 31, 2023. Operating revenues derived from physical transactions during the six months ended March 31, 2024 were unfavorably impacted by losses on precious metals related derivative positions of $0.8 million, related to physical inventories held at the lower of cost or net realizable value. Operating revenues during the six months ended March 31, 2023 were unfavorably impacted by losses on derivative positions of $0.3 million, related to physical inventories held at the lower of cost or net realizable value.
Previous report
Interest and fee income earned on client balances was $1.4 million in the six months ended March 31, 2024 as compared to $1.6 million in the six months ended March 31, 2023.
Previous report
Operating revenues decreased $0.5 million, or 1%, to $49.3 million in the three months ended March 31, 2024 compared to $49.8 million in the three months ended March 31, 2023. Net operating revenues decreased $0.6 million, or 1%, to $46.8 million in the three months ended March 31, 2024 compared to $47.4 million in the three months ended March 31, 2023.
Previous report
Segment income increased $8.7 million, or 55%, to $24.6 million in the three months ended March 31, 2024 compared to $15.9 million in the three months ended March 31, 2023. This was principally driven by a $9.5 million decline in non-variable direct expenses, primarily as a result of a $10.3 million decline in fixed compensation and benefits, as the three months ended March 31, 2023 included a $10.0 million severance charge related to a reorganization of the business.
Previous report
Variable expenses, excluding interest, expressed as a percentage of operating revenues were 23% in the six months ended March 31, 2024 as compared to 24% in the six months ended March 31, 2023.
Previous report
Professional fees increased $3.6 million, principally due to higher legal and consulting fees in our IT Development department.
Previous report
Travel and business development increased $1.1 million, principally due to higher transportation and lodging costs also related to the previously mentioned global sales summit.
Previous report
On a gross basis, overhead costs and other expenses increased $34.6 million, or 18%, to $224.4 million in the six months ended March 31, 2024 compared to $189.8 million in the six months ended March 31, 2023. Compensation and benefits increased $20.0 million, or 19%, to $125.1 million in the six months ended March 31, 2024 compared to $105.1 million in the six months ended March 31, 2023.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (110)
Previous wording
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 4,300 employees as of March 31, 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.
Current wording
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.
Previous wording
Operating revenues increased $113.8 million, or 16%, to $818.2 million in the three months ended March 31, 2024 compared to $704.4 million in the three months ended March 31, 2023, led by our Institutional and Retail segments which added $100.9 million and $23.4 million, respectively, compared to the three months ended March 31, 2023. Operating revenues in our Commercial and Payments segments declined $19.6 million and $0.5 million, respectively, compared to the three months ended March 31, 2023.
Current wording
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.
Previous wording
Overall segment income increased $25.3 million, or 14%, compared to the three months ended March 31, 2023, with all of our segments experiencing growth versus the prior year, with the exception of our Commercial segment. The growth was led by our Retail segment which added $28.4 million compared to the three months ended March 31, 2023. In addition, our Institutional and Payments segments increased $5.5 million and $8.7 million, respectively, compared to the three months ended March 31, 2023, while our Commercial segment income declined $17.3 million compared to the three months ended March 31, 2023.
Current wording
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.
Previous wording
Interest expense related to corporate funding purposes increased $1.3 million to $16.2 million in the three months ended March 31, 2024 compared to $14.9 million in the three months ended March 31, 2023, principally due to incremental interest from our March 1, 2024 issuance of senior secured notes due 2031, partially offset by lower average borrowings on our revolving credit facility.
Current wording
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 fundingin the Condensed Consolidated Income Statements.
Previous wording
expenses. Variable expenses were 51% of total expenses in the three months ended March 31, 2024 as compared to 51% in the three months ended March 31, 2023. Non-variable expenses, excluding bad debts, increased $16.5 million compared to the three months ended March 31, 2023, principally due to higher professional fees, occupancy and equipment rental, non-trading technology and support, travel and business development and trading system and market information.
Current wording
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.
Previous wording
Net income increased $11.4 million to $53.1 million in the three months ended March 31, 2024 compared to $41.7 million in the three months ended March 31, 2023. Net income in the three months ended March 31, 2024 was negatively impacted by the aforementioned unrealized losses on precious metals derivative positions entered into against inventories carried at the lower of cost or net realizable value. Net income in the three months ended March 31, 2024 includes a nonrecurring gain related to proceeds of $6.9 million resulting from a settlement in the Commodity Exchange Gold Futures and Options Trading matter, which is included in Gain on acquisition and other gain in the Condensed Consolidated Income Statement. Diluted earnings per share were $1.63 for the three months ended March 31, 2024 compared to $1.30 in the three months ended March 31, 2023.
Current wording
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.
Previous wording
Operating revenues increased $113.8 million, or 16%, to $818.2 million in the three months ended March 31, 2024 compared to $704.4 million in the three months ended March 31, 2023. The table above displays operating revenues disaggregated across the key products we provide to our clients.
Current wording
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.
Previous wording
Operating revenues derived from OTC derivatives declined $4.9 million, or 8%, to $53.0 million in the three months ended March 31, 2024 compared to $57.9 million in the three months ended March 31, 2023, principally driven by lower client activity in Brazilian agricultural markets.
Current wording
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, principally driven by lower client activity in Brazilian agricultural markets.
Previous wording
Operating revenues derived from securities transactions increased $91.5 million, or 37%, to $340.7 million in the three months ended March 31, 2024 compared to $249.2 million in the three months ended March 31, 2023. This increase was principally due to a 30% 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 $4.4 million, or 5%, to $88.6 million in the three months ended March 31, 2024 compared to $84.2 million in the three months ended March 31, 2023. This increase was principally driven by the increase in ADV noted above, which more than offset the 15% decline in the RPM resulting from a tightening of spreads and a change in product mix.
Current wording
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.
Previous wording
Operating revenues derived from FX/CFD contracts increased $18.5 million, or 30%, to $80.3 million in the three months ended March 31, 2024 compared to $61.8 million in the three months ended March 31, 2023, with a $20.2 million increase in our Retail segment more than offsetting a $1.7 million decline in Institutional segment FX/CFD contracts operating revenues as compared to the three months ended March 31, 2023.
Current wording
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.
Previous wording
Operating revenues from payments increased by $5.1 million, or 5%, to $107.8 million in the six months ended March 31, 2024 compared to $102.7 million in the six months ended March 31, 2023, principally as a result of a 7% increase in payments RPM, which was partially offset by a 1% decline in ADV, as compared to the six months ended March 31, 2023.
Current wording
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.
Previous wording
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 $0.8 million, or 1%, to $104.2 million in the three months ended March 31, 2024 compared to $103.4 million in the three months ended March 31, 2023. This was principally driven by an increase in short-term interest rates, which was partially offset by declines in average client equity and average money-market/FDIC sweep client balances of 16% and 24%, respectively, as compared to the three months ended March 31, 2023.
Current wording
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.
Previous wording
Operating revenues increased $243.2 million, or 18%, to $1,602.4 million in the six months ended March 31, 2024 compared to $1,359.2 million in the six months ended March 31, 2023. The table above displays operating revenues disaggregated across the key products we provide to our clients.
Current wording
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.
Previous wording
Operating revenues from listed derivatives increased $10.6 million, or 5%, to $220.9 million in the six months ended March 31, 2024 compared to $210.3 million in the six months ended March 31, 2023, with Institutional and Commercial segment listed derivative operating revenues increasing $6.9 million and $3.7 million, respectively, as compared to the six months ended March 31, 2023.
Current wording
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.
Previous wording
Operating revenues in OTC derivatives declined $2.9 million, or 3%, to $97.5 million in the six months ended March 31, 2024 compared to $100.4 million in the six months ended March 31, 2023. This decline was principally driven by declines in OTC contract volumes and average rate per contract of 6% and 3%, respectively, as compared to the six months ended March 31, 2023.
Current wording
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.
Previous wording
Operating revenue from securities transactions increased $173.6 million, or 36%, to $656.9 million in the six months ended March 31, 2024 compared to $483.3 million in the six months ended March 31, 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 $6.9 million, or 4%, to $184.5 million in the six months ended March 31, 2024 compared to $177.6 million in the three months ended March 31, 2023. This increase was principally driven by the increase in ADV noted above, which more than offset the 22% decline in RPM resulting from a tightening of spreads and a change in product mix.
Current wording
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.
Previous wording
Operating revenues from FX/CFD contracts increased $44.3 million, or 40%, to $154.9 million in the six months ended March 31, 2024 compared to $110.6 million in the six months ended March 31, 2023, with a $47.2 million increase in our Retail segment more than offsetting a $2.9 million decline in Institutional segment FX/CFD contracts operating revenues as compared to the six months ended March 31, 2023.
Current wording
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.
Previous wording
Operating revenues derived from physical contracts declined $8.2 million, or 15%, to $45.9 million in the three months ended March 31, 2024 compared to $54.1 million in the three months ended March 31, 2023. Precious metals related operating revenues during the three months ended March 31, 2024 were unfavorably impacted by unrealized losses on derivative positions of $9.1 million, related to physical inventories held at the lower of cost or net realizable value. Precious metals related operating revenues during the three months ended March 31, 2023 were favorably impacted by realized gains of $1.8 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.
Current wording
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.
Previous wording
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 $13.0 million, or 7%, to $202.6 million in the six months ended March 31, 2024 compared to $189.6 million in the six months ended March 31, 2023, principally as a result of the impact of the increase in short-term interest rates, which was partially offset by declines in average client equity and average money-market/FDIC sweep client balances of 21% and 28%, respectively, as compared to the six months ended March 31, 2023.
Current wording
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.
Previous wording
Expenses were higher in our Equity Capital Markets business, principally related to an increase in ADV, and in our Exchange-Traded Futures & Options, Financial Ag and Energy and LME businesses, principally related to the increase in contracts traded. Partially offsetting these increases were lower expenses in the Retail Forex business, principally related to reducing costs through successful renegotiation of certain vendor contracts.
Current wording
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.
Previous wording
Expenses were relatively unchanged with lower payouts within our Retail Forex, Correspondent Clearing, and Exchange-Traded Futures & Options businesses nearly offset by higher expenses in our Independent Wealth Management business, principally due to increased revenues, and in our Financial Ag and Energy business, principally due to increased volume and client mix traded.
Current wording
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.
Previous wording
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. Partially offsetting these increases were lower expenses in the Retail Forex business, principally related to reducing costs through successful renegotiation of certain vendor contracts.
Current wording
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.
Previous wording
Expenses were higher in our Financial Ag and Energy business, principally due to increased volume and client mix traded, and in our Independent Wealth Management business, principally due to increased revenues. Expenses were also higher in our Physical Ag and Energy business, principally due to the growth in the physical cotton business following the acquisition of CDI, effective October 31, 2022. These increases were partially offset by lower payouts within our Retail Forex, Exchange-Traded Futures & Options, and Correspondent Clearing businesses.
Current wording
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.
Previous wording
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. The increase in interest expense attributable to corporate funding was principally due to incremental interest from our March 1, 2024 issuance of senior secured notes due 2031, partially offset by lower average borrowings on our revolving credit facility.
Current wording
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.
Previous wording
Compensation and Other Expenses: Compensation and other expenses increased $15.0 million, or 4%, to $356.9 million in the three months ended March 31, 2024 compared to $341.9 million in the three months ended March 31, 2023.
Current wording
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.
Previous wording
Other Expenses: Other non-compensation expenses increased $13.1 million, or 12%, to $122.5 million in the three months ended March 31, 2024 compared to $109.4 million in the three months ended March 31, 2023.
Current wording
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.
Previous wording
Professional fees increased $7.8 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. To a lesser extent, consulting fees were higher, principally within our Physical Ag & Energy business, as well as overhead, primarily within IT Development.
Current wording
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.
Previous wording
During the three months ended March 31, 2024, we recorded net recoveries of bad debts of $0.4 million, principally related to recoveries within our Institutional segment of $1.4 million, which were partially offset by bad debt expense of $0.9 million of client receivables in our Payments segment. During the three months ended March 31, 2023, bad debts, net of recoveries were $3.0 million, principally related to a client receivable in the Physical Ag & Energy business.
Current wording
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.
Previous wording
Other Gains: The results of the three months ended March 31, 2024 include a nonrecurring gain related to proceeds of $6.9 million resulting from settlement of the Commodity Exchange Gold Futures and Options Trading matter, reported within our Commercial segment.
Current wording
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.
Previous wording
Provision for Taxes: The effective income tax rate was 26% and 27% in the three months ended March 31, 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.
Current wording
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.
Previous wording
Compensation and Other Expenses: Compensation and other expenses increased $31.0 million, or 5%, to $682.8 million in the six months ended March 31, 2024 compared to $651.8 million in the six months ended March 31, 2023.
Current wording
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.
Previous wording
Non-variable salaries increased 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 growth, as well as the impact of annual merit increases.
Current wording
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.
Previous wording
Employee benefits and other compensation, excluding share-based compensation, decreased principally due to lower severance costs, partially offset by higher payroll taxes, benefits, and retirement costs principally related to the increase in headcount. During the six months ended March 31, 2024, severance costs were $2.4 million compared to $12.7 million during the six months ended March 31, 2023, which were principally related to a reorganization within the Payments business. Also partially offsetting the decrease, was 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. Share-based compensation, which comprises stock option and restricted stock expense, increased principally due to the issuance of additional stock option awards during the six months ended March 31, 2024.
Current wording
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.
Previous wording
Other Expenses: Other non-compensation expenses increased $10.0 million, or 5%, to $230.3 million in the six months ended March 31, 2024 compared to $220.3 million in the six months ended March 31, 2023.
Current wording
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.
Previous wording
Professional fees increased $8.0 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. To a lesser extent, consulting fees were higher, principally within our Physical Ag & Energy business and IT Development.
Current wording
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.
Previous wording
Occupancy and equipment rental increased $1.8 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.
Current wording
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.
Previous wording
Travel and business development increased $2.7 million, principally due to higher transportation and lodging costs across all business lines and support departments, as well as transportation and lodging costs related to the previously mentioned global sales summit.
Current wording
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.
Previous wording
During the six months ended March 31, 2024, we recorded net recoveries of bad debts of $0.7 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 $0.1 million within our Retail segment. During the six months ended March 31, 2023, bad debt expense, net of recovery was $3.7 million, principally related to client receivables in the Physical Ag & Energy business and client trading account deficits in our Retail segment of $2.9 million and $0.8 million, respectively.
Current wording
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
Previous wording
Gain on Acquisition and Other Gains: The results of the six months ended March 31, 2024 include a nonrecurring gain of $6.9 million resulting from settlement of the Commodity Exchange Gold Futures and Options Trading matter. The results of the six months ended March 31, 2023 included a nonrecurring gain of $23.5 million related to the acquisition of CDI.
Current wording
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.
Previous wording
Provision for Taxes: Our effective income tax rate was 27% and 23% for six months ended March 31, 2024 and 2023, respectively. The gain on acquisition of $23.5 million in the six months ended March 31, 2023 was not taxable and reduced the effective income tax rate 3.2%.
Current wording
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%.
Showing the first 40 of 110 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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. Interest expense attributable to corporate funding was relatively unchanged, as the incremental interest from our March 1, 2024 issuance of senior secured notes due 2031, was nearly offset by lower average borrowings on our revolving credit facility.
Previous report — wording carried elsewhere
Variable expenses, excluding interest, expressed as a percentage of operating revenues declined to 34% in the six months ended March 31, 2024 compared to 31% in the six months ended March 31, 2023, primarily as a result of the impact of the unrealized losses on precious metals derivative positions, discussed above, which are not correlated to variable expenses.
Previous report — wording carried elsewhere
In June 2020, we issued $350 million in aggregate principal amount of our 8.625% Senior Secured Notes due 2025 (the “Notes due 2025”) at the offering price of 98.5% of the aggregate principal amount. The Notes due 2025 are fully and unconditionally guaranteed, jointly and severally, on a senior secured second lien basis, by certain subsidiaries of the Company that guarantee the Company’s senior committed credit facility and certain of its domestic subsidiaries.
Previous report — wording carried elsewhere
The Notes due 2025 are scheduled to mature on June 15, 2025. Interest on the Notes accrues at a rate of 8.625% per annum and is payable semiannually in arrears on June 15 and December 15 of each year. We incurred debt issuance costs of $9.5 million in connection with the issuance of the Notes due 2025, which are being amortized over the term of the Notes under the effective interest method. We have had the right, since June 15, 2022, to redeem the Notes due 2025, in whole or in part, at the redemption prices set forth in the indenture governing the Notes due 2025.