StoneX Group Inc
For the period ended Dec 31, 2024. Filed Feb 5, 2025.
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.
Dec 31, 2024 · Filed Feb 5, 2025
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 2024-06-30; filed 2024-08-07.
0000913760-24-000138
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-05.
0000913760-25-000024
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 270 previous paragraphs and 202 current paragraphs.
87 unchanged; 70 reworded; 42 added; 108 removed; 5 previous and 3 current paragraphs rearranged.
Tables are not compared: 30 previous and 23 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 (42)
Current report
Unless noted otherwise, comparisons in the following discussions relate to the three months ended December 31, 2024 as compared to the prior fiscal year.
Current report
We achieved record net operating revenues and net income in the first quarter of fiscal 2025, which represented a strong start to the fiscal year. This was principally driven by continued growth in client engagement as we experienced an increase in transaction volumes across all of our product offerings, as well as very strong growth in operating revenues derived from physical contracts.
Current report
In terms of revenue capture on our transactional volumes as compared to the prior fiscal year, we experienced:
Current report
•Rate per contract (“RPC”) on listed derivatives was flat with the prior year.
Current report
•Lower OTC derivatives RPC due to diminished volatility in the agricultural and energy commodity markets.
Current report
•Lower securities rate per million (“RPM”) due to diminished volatility, as well as continued growth in lower spread products including U.S. Treasuries and U.S. listed equities.
Current report
•Higher FX/CFD RPM due to both improved spread retention and product mix.
Current report
•Lower payments RPM due to generally lower FX spreads in certain markets, most notably in Africa.
Current report
Interest and fee income earned on client balances increased as we experienced increases in both average client equity and money market (“MM”)/FDIC client balances.
Current report
Operating revenues increased $160.1 million, as we experienced growth across all but one of our operating segments, led by our Institutional segment which added $103.9 million, with our Commercial and Self-Directed/Retail also increasing $33.9 million and $31.6 million, respectively. Operating revenues in our Payments segment decreased $2.5 million.
Current report
Income before tax includes gains of $5.7 million related to class action settlements in the three months ended December 31, 2024, which are included in Other gains.
Current report
Net income increased $16.0 million to $85.1 million in the three months ended December 31, 2024. Diluted earnings per share was $2.54 for the three months ended December 31, 2024 compared to $2.13 in the three months ended December 31, 2023.
Current report
Operating revenues derived from listed derivatives increased $2.6 million, with our Commercial segment up $2.8 million, which was partially offset by a $0.2 million decline in our Institutional segment.
Current report
Operating revenues derived from OTC derivatives declined $7.9 million, principally driven by a 22% decline in the average RPC, which was partially offset by a 6% increase in OTC derivative contract volumes.
Current report
Operating revenues derived from securities transactions increased $85.6 million, principally due to a 40% increase in ADV. Carried interest on fixed income securities is a component of operating revenues, however interest expense associated with financing these positions is not. We deduct interest expense associated with our fixed income activities from operating revenues in the calculation of securities RPM in the table above in order to provide a more useful measure of the financial performance of our securities business. Net operating revenues derived from securities transactions increased $5.9 million, principally due to the increase in ADV noted above, which was partially offset by a 20% decline in the RPM resulting from the tightening of spreads and a change in product mix.
Current report
Operating revenues derived from FX/CFD contracts increased $24.0 million, as a result of a $22.4 million increase in our Self-Directed/Retail segment and a $1.6 million increase in Institutional segment FX contracts operating revenues.
Current report
Operating revenues from payments decreased $2.6 million, principally driven by a 17% decline in payments RPM, which was partially offset by a 12% increase in payments ADV.
Current report
Increased interest expense attributable to trading activities principally resulted from an increase in our fixed income, securities borrowing, and physical business activities. The increase in interest expense attributable to securities borrowing was principally due to the growth in the size of the securities lending business. The increase in interest expense attributable to corporate funding was principally due to an increase in the aggregate amount of senior secured notes outstanding, related to the March 1, 2024 issuance of our 7.875% Senior Secured Notes due 2031 (the “Notes due 2031”), effectively replacing our 8.625% Senior Secured Notes due 2025. This increase was partially offset by lower average borrowings on our revolving credit facility.
Current report
Non-trading technology and support increased $2.8 million, principally due to higher non-trading software maintenance and support costs related to various IT systems primarily within our Core IT and other overhead departments.
Current report
Operating revenues increased $33.9 million, or 17%, to $232.3 million in the three months ended December 31, 2024 compared to $198.4 million in the three months ended December 31, 2023. Net operating revenues increased $25.8 million, or 16%, to $189.2 million in the three months ended December 31, 2024 compared to $163.4 million in the three months ended December 31, 2023.
Current report
Operating revenues derived from OTC derivatives declined $7.9 million, principally driven by a 22% decline in the average rate per contract, primarily as a result of a decline in commodity volatility, which was partially offset by a 5% increase in OTC derivative volumes.
Current report
Interest and fee income earned on client balances declined $0.6 million, with average client equity relatively flat with the prior year.
Current report
Variable expenses, excluding interest, expressed as a percentage of operating revenues were 31% and 32% for the three months ended December 31, 2024 and 2023, respectively.
Current report
Segment income increased $15.0 million, principally due to the growth in operating revenues, which was partially offset by a $4.3 million increase in non-variable direct expenses. The increase in non-variable direct expenses was principally driven by a $1.5 million increase in fixed compensation and benefits and a $1.3 million increase in bad debt expense.
Current report
For the three months ended December 31, 2024, we have calculated an allocation for overhead costs of $9.7 million for the Commercial segment as compared to a $8.8 million allocation in the three months ended December 31, 2023.
Current report
Operating revenues increased $103.9 million, or 24%, to $539.6 million in the three months ended December 31, 2024 compared to $435.7 million in the three months ended December 31, 2023. Net operating revenues increased $25.4 million, or 17%, to $174.0 million in the three months ended December 31, 2024 compared to $148.6 million in the three months ended December 31, 2023.
Current report
Operating revenues derived from listed derivatives were relatively flat with the prior year.
Current report
Operating revenues derived from FX contracts increased $1.6 million.
Current report
Segment income increased $12.9 million, principally due to 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 $2.2 million increase in fixed compensation and benefits, a $1.6 million increase in professional fees, and a $0.8 million increase in trade systems and market information. Segment income in the three months ended December 31, 2024, was favorably impacted by a nonrecurring gain related to proceeds received of $1.3 million resulting from a foreign exchange class action settlement.
Current report
For the three months ended December 31, 2024, we have calculated an allocation for overhead costs of $14.8 million for the Institutional segment as compared to a $12.8 million allocation in the three months ended December 31, 2023.
Current report
Self-Directed/Retail
Current report
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 Self-Directed/Retail segment, for the periods indicated.
Current report
Operating revenues increased $31.6 million, or 34%, to $124.1 million in the three months ended December 31, 2024 compared to $92.5 million in the three months ended December 31, 2023. Net operating revenues increased $27.6 million, or 41%, to $94.6 million in the three months ended December 31, 2024 compared to $67.0 million in the three months ended December 31, 2023.
Current report
Operating revenues derived from FX/CFD contracts increased $22.4 million, principally due to an 23% increase in FX/CFD contracts RPM, as well as a 9% increase in FX/CFD contracts ADV.
Current report
Operating revenues derived from physical contracts increased $1.7 million, as revenues were favorably impacted by realized gains of $1.9 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 report
Segment income increased $28.2 million, principally due to the increase in net operating revenues noted above, which was partially offset by a $5.2 million increase in non-variable direct expenses. The increase in non-variable direct expenses was primarily a result of a $2.8 million increase in depreciation and amortization, a $0.4 million increase in professional fees, and a $0.3 million increase in selling and marketing. Segment income in the three months ended December 31, 2024, was favorably impacted by a nonrecurring gain related to proceeds received of $4.4 million resulting from a foreign exchange anti-trust class action settlement.
Current report
For the three months ended December 31, 2024, we have calculated an allocation for overhead costs of $12.6 million for the Self-Directed/Retail segment as compared to a $11.5 million allocation in the three months ended December 31, 2023.
Current report
Operating revenues decreased $2.5 million, or 4%, to $58.1 million in the three months ended December 31, 2024 compared to $60.6 million in the three months ended December 31, 2023. Net operating revenues decreased $2.8 million, or 5%, to $55.4 million in the three months ended December 31, 2024 compared to $58.2 million in the three months ended December 31, 2023.
Current report
Segment income decreased $0.9 million, principally driven by the increase in operating revenues noted above as well as a $0.4 million decline in non-variable direct expenses.
Current report
For the three months ended December 31, 2024, we have calculated an allocation for overhead costs of $5.6 million for the Payments segment as compared to a $5.1 million allocation in the three months ended December 31, 2023.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (108)
Previous report
Common Stock Split
Previous report
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.
Previous report
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.
Previous 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.
Previous report
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 report
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 report
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 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.
Previous report
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 report
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 report
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 report
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 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.
Previous report
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 report
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 report
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 report
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 report
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 report
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 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.
Previous report
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 report
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 report
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.
Previous 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.
Previous report
Transaction-based clearing expenses
Previous report
Introducing broker commissions
Previous report
Interest expense
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
Compensation and Benefits:
Previous 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.
Previous report
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 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.
Previous report
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 report
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.
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Reworded paragraphs (70)
Previous wording
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.
Current wording
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 the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,”, “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. 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, including losses from our market-making and trading activities arising from counterparty failures, 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, 2024. 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.
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 4,400 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.
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 platforms and our team of more than 4,600 employees as of December 31, 2024. We believe our client-first approach differentiates us from large banking institutions, engenders trust and has enabled us to establish market leading 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, 2024.
Previous wording
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.
Current wording
We report three of our operating segments based primarily on the nature of the clients we serve (commercial, institutional, and self-directed/retail), and a fourth operating segment, our payments business. See Segment Information, below, for a listing of business activities performed within our reportable segments
Previous 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.
Current wording
Overall segment income increased $55.2 million with all but one of our segments experiencing growth versus the prior year led by our Self-Directed/Retail segment which added $28.2 million, while our Commercial and Institutional segments increased $15.0 million and $12.9 million, respectively. Payments segment income decreased $0.9 million.
Previous wording
On the expense side, we continue to focus on maintaining our variable cost model and limiting the growth of our non-variable
Current wording
On the expense side, we continued to focus on maintaining our variable cost model and limiting the growth of our non-variable
Previous 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.
Current wording
expenses. Variable expenses were 52% of total expenses in the three months ended December 31, 2024 as compared to 54% in the three months ended December 31, 2023. Non-variable expenses, excluding bad debts, increased $41.5 million, principally due to higher fixed compensation and benefits, occupancy and equipment rental, depreciation and amortization, professional fees, and non-trading technology and support, with these increases related to the continuing build out and expansion of our product offering and geographic reach of our operating segments as well as overhead departments to support this growth. The increase in fixed compensation and benefits includes $5.8 million in severance and accelerated share-based compensation related to the departure of an executive officer.
Previous 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.
Current wording
Operating revenues increased $160.1 million, or 20%, to $944.3 million in the three months ended December 31, 2024 compared to $784.2 million in the three months ended December 31, 2023. The table above displays operating revenues disaggregated across the key products we provide to our clients.
Previous 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.
Current wording
Operating revenues derived from physical contracts increased $41.2 million, as a result of a $16.1 million increase in precious metals operating revenues, as well as a $23.3 million increase in physical agricultural and energy operating revenues. Precious metals related operating revenues during the three months ended December 31, 2024 were favorably impacted by realized gains of $4.7 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. Precious metals related operating revenues were unfavorably impacted during the three months ended December 31, 2023, by unrealized losses on derivative positions of $1.7 million, related to physical inventories held at the lower of cost or net realizable value.
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 $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.
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 $9.2 million, principally as a result of an increase in average client equity and average money-market/FDIC sweep client balances of 7% and 13%, respectively.
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 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.
Current wording
Expenses were higher in the Equity and Debt Capital Markets businesses, principally related to the increased ADV, and to a lesser extent higher expenses 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 modestly lower expenses in the Self-Directed/Retail Forex business.
Previous 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.
Current wording
Introducing broker commissions were higher in our Independent Wealth Management business, principally due to increased revenues, and also higher in our Financial Ag and Energy business, principally due to increased volume and client mix traded. These increases were partially offset by lower introducing broker commissions in our Physical Ag and Energy business and lower payouts within our Self-Directed/Retail Forex business.
Previous 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.
Current wording
Compensation and Other Expenses: Compensation and other expenses increased $55.0 million, or 17%, to $380.9 million in the three months ended December 31, 2024 compared to $325.9 million in the three months ended December 31, 2023.
Previous 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.
Current wording
Non-variable salaries increased principally due to the increase in headcount resulting from business growth across our business lines, the growth in our operational and overhead support departments, and the impact of annual merit increases.
Previous wording
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 wording
Employee benefits and other compensation increased principally due to higher healthcare benefits, payroll taxes, and retirement costs driven by the increased headcount, and a decrease in employee-elected deferred incentive. The three months ended December 31, 2024 also included $0.9 million in accelerated long-term incentive due to the departure of an executive officer.
Previous wording
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 wording
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 December 31, 2024 also included $1.1 million in accelerated share-based compensation due to the departure of the executive officer.
Previous 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.
Current wording
Other Expenses: Other non-compensation expenses increased $20.6 million, or 19%, to $128.4 million in the three months ended December 31, 2024 compared to $107.8 million in the three months ended December 31, 2023.
Previous 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.
Current wording
Professional fees increased $3.3 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 across various overhead departments.
Previous 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.
Current wording
Occupancy and equipment rental costs increased $5.3 million, principally due to the three months ended December 31, 2023 including a partial refund of property rates covering prior years in London. The increase is also due to additional office space acquired in London, as we consolidate office space in order to support our current and anticipated future growth, as well as higher costs in India and the U.S.
Previous wording
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.
Current wording
Depreciation and amortization increased $4.5 million, principally due to incremental depreciation expense from internally developed software placed into service, partially offset by lower amortization, as certain intangibles, recognized as part the acquisition of Gain Capital Holdings, Inc. in fiscal 2020, became fully amortized during fiscal 2024.
Previous 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.
Current wording
During the three months ended December 31, 2024, we recorded bad debts, net of recoveries of $1.8 million, principally related to bad debt expense of $0.8 million of client receivables in the Physical Ag & Energy business of our Commercial segment, and client trading deficits in our Self-Directed/Retail segment and Financial Ag & Energy business of our Commercial segment of
Previous 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
Current wording
$0.5 million and $0.4 million, respectively. During the three months ended December 31, 2023, we recorded net recoveries of bad debts of $0.3 million, principally related to recoveries within our Institutional segment.
Previous 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.
Current wording
Other Gains: The results of the three months ended December 31, 2024 include nonrecurring gains of $5.7 million, resulting from proceeds received from class action settlements, reported within the Self-Directed/Retail and Institutional segments.
Previous 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.
Current wording
Provision for Taxes: The effective income tax rate was 27% and 28% in the three months ended December 31, 2024 and 2023, respectively. The effective tax rate for the three months ended December 31, 2024 and 2023 was higher than the U.S. federal statutory rate of 21% due to U.S. state and local taxes, global intangible low taxed income (“GILTI”), U.S. and foreign permanent differences, and the amount of foreign earnings taxed at higher rates.
Previous wording
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.
Current wording
Our operating segments are based principally on the nature of the clients we serve (commercial, institutional, and self-directed/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 4,600 employees allowing us to serve clients in more than 180 countries.
Previous wording
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.
Current wording
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. In addition, 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 condensed consolidated financial statements is segment income.
Previous wording
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.
Current wording
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 marketing, procurement, logistics and price management services. We believe providing these high-value-added products and services differentiates us from our competitors and maximizes our opportunity to retain our clients.
Previous wording
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.
Current wording
Operating revenues derived from listed derivatives increased $2.8 million, principally driven by a 11% increase in listed derivatives contract volumes, primarily in agricultural, energy and base metal commodity markets, which was partially offset by a 5% decline in the average rate per contract.
Previous wording
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.
Current wording
We provide institutional clients with a 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.
Previous wording
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.
Current wording
Operating revenues derived from securities transactions increased $79.9 million, principally driven by a 40% increase in the ADV of securities traded, primarily as a result of increased client activity in both equity and fixed income markets. The securities RPM decreased 20%, principally due to a tightening of spreads and a change in product mix.
Previous wording
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.
Current wording
Interest and fee income earned on client balances, which is associated with our listed derivative and correspondent clearing businesses increased $9.8 million, principally driven by 9% and 13% increases in average client equity and average money market / FDIC sweep client balances, respectively.
Previous wording
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.
Current wording
Primarily as a result of the increase in securities ADV, interest expense increased $68.0 million, with interest expense directly associated with serving as an institutional dealer in fixed income securities increasing $51.5 million and interest expense directly attributable to securities lending activities increasing $7.4 million. Partially offsetting these increases, interest paid to clients decreased $5.1 million.
Previous wording
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.
Current wording
Variable expenses, excluding interest, expressed as a percentage of operating revenues declined to 24% in the three months ended December 31, 2024 compared to 25% in the three months ended December 31, 2023, primarily as the result of the increase in interest income.
Previous wording
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.
Current wording
We provide our Self-Directed/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.
Previous wording
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.
Current wording
Operating revenues derived from securities transactions, which relate to our independent wealth management activities, increased $5.7 million.
Previous wording
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.
Current wording
Interest and fee income earned on client balances was $0.7 million in both the three months ended December 31, 2024 and 2023.
Previous wording
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.
Current wording
Variable expenses, excluding interest, as a percentage of operating revenues were 24% in the three months ended December 31, 2024 compared to 31% in the three months ended December 31, 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 business lines.
Previous wording
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.
Current wording
We provide customized foreign exchange and treasury services to banks and commercial businesses, charities, non-governmental organizations, as well as governmental 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.
Previous wording
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.
Current wording
The decrease in operating revenues was principally due to a 17% decline in the RPM traded, which was partially offset by a 12% increase in ADV.
Previous wording
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 wording
Variable expenses, excluding interest, expressed as a percentage of operating revenues were 20% in the three months ended December 31, 2024 compared to 21% in the three months ended December 31, 2023, principally driven by a decline in variable compensation and benefits.
Previous wording
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.
Current wording
In addition, 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.
Showing the first 40 of 70 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Operating revenues derived from physical contracts increased $39.5 million, as a result of a $16.1 million increase in precious metals operating revenues, as well as a $23.3 million increase in physical agricultural and energy operating revenues. Precious metals related operating revenues during the three months ended December 31, 2024 were favorably impacted by realized gains of $2.8 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. Precious metals related operating revenues were unfavorably impacted during the three months ended December 31, 2023, by unrealized losses on derivative positions of $1.4 million, related to physical inventories held at the lower of cost or net realizable value.
Current report — wording carried from elsewhere
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance primarily will require enhanced disclosures about certain types of expenses. ASU 2024-03 is effective for the Company’s fiscal year ending September 30, 2027. Early adoption is permitted. The guidance allows for adoption using either a prospective or retrospective transition method. We are currently evaluating the impact that adopting this guidance will have on our disclosures.
Current report — wording carried from elsewhere
30, 2026. Early adoption is permitted. The guidance should be applied retrospectively unless impracticable. We are currently evaluating the impact that adopting this guidance will have on our disclosures.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.