Marex Group plc

Good morning, everyone, and thanks for joining us today for Marek's first quarter 2025 earnings conference call. Speaking today are Ian Lowitz, Group Chief Executive Officer, and Rob Irvin, Group Chief Financial Officer. After Ian and Rob have made their formal remarks, we will open the call to questions. Before we begin, I would like to remind everyone that certain matters discussed in today's conference call are forward-looking statements relating to future events management's plans and objectives for the business, and the future financial performance of the company that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are referred to in Marek's press release issued today. The forward-looking statements made today are as of the date of this call, and Marek does not undertake any obligation to update these forward-looking statements. Finally, the speakers may refer to certain adjusted or non-IFRS financial measures on this call. A reconciliation schedule of the non-IFRS financial measures to the most directly comparable IFRS measures is also available in the press release issued today. A copy of today's press release and investor presentation may be obtained by visiting the investor relations page of the website at marix.com. I'll now hand the call over to Ian.

Good morning and welcome to our first quarter 2025 earnings call. This was a strong first quarter performance with adjusted profit before tax of $96 million at the top end of the preliminary range we published at our investor day and subsequently with our F1 filing. We've had a very busy few weeks since the end of the quarter. We hosted our inaugural investor day on April 2nd, had a highly successful equity offering on April 17th, and a well-received debt offering on May 1st. This has provided us with many opportunities to engage with our investors, both existing and many new ones. We are very appreciative of the engagement we have experienced and would particularly like to thank our major long-term investors, many of whom came to our Invest Today in New York for their ongoing support. Based on our interactions with investors, it does feel as though there is increasing recognition, understanding, and acceptance of the power of the MARIX platform to deliver strong and reliable results through the cycle. So with that, let's turn to the performance highlights on slide four. We delivered a strong first quarter driven by robust client activity in what was a favorable operating environment for our business. Exchange volumes in Q1 were up 15% year-on-year and up 12% versus the fourth quarter. And there was a Goldilocks level of volatility across many asset classes, which we were able to monetize. Adjusted PBT was up 42% with strong revenue growth, as Rob will discuss later, in all of our business segments. Agency execution was a particular standout with continued growth in prime services. And our energy business also performed strongly. At the start of April, there was a period which included some very high volume days, typically two to three times the average level for the first quarter. We were able to process these heightened volumes successfully on our platform, confirming the operational resilience of the firm and the scalability of our platform. We also managed our risk well, remaining in close dialogue with our clients, and added materially to our liquidity position, maintaining record levels of surplus. This liquidity surplus has further increased with the $500 million senior notes issuance that we executed in early May, as we continue to extend and diversify our funding sources. Although there is a funding cost which impacts net interest income, This is very valuable insurance from our perspective in this type of environment, and this is a trade-off that we are willing to make to mitigate our risk. At the end of March, we completed the honor acquisition and expect Hamilton Court to also close later this quarter. We successfully executed on our second equity follow-on transaction since our IPO, and we're extremely pleased with the response, which reflected very strong support from the market. And we have increased our dividend to 15 cents per share for the first quarter of 2025 from 14 cents per quarter in 2024 post our IPO. On page five, we've laid out the key metrics that we use to assess our performance, growth, margins and returns, productivity, and quality of earnings. Revenues grew 28% to $467 million, while our margin increased to 21%. delivering adjusted PBT of $96 million, up 42%. Reported return on equity was 29%, up six percentage points year over year. Our Sharpe ratio of monthly adjusted profits was five, reflecting the quality and resilience of our earnings and the relatively tight distribution of daily profitability. We also track our performance versus overall exchange volumes, which are publicly available. We recognize this relationship is directional rather than determinative, as volumes are only one driver of revenues, albeit an important one, and it does provide a very useful lens on our business. Volumes on exchange don't capture OTC or other off-exchange activity, such as prime services, which are included in our revenues, and explain, for example, the outperformance in our agency and execution segment in securities this quarter. While we're attentive to the quarterly numbers, we typically focus on the longer term time period, which has less noise in it. On this basis, it's apparent that we continue to gain share and are growing faster than the market, which itself is growing at a healthy rate, as you can see on the next slide. Slide seven shows the growth in exchange volumes in our markets since 2021. This growth accelerated in Q1, reflecting the strong operating environment this quarter. As I said at the investor day, this growth is above what we would have expected at IPO and is underpinned by secular trends. These secular trends include growing demand for listed derivatives due to increased receptivity to this as a hedging tool globally. There is also increasing demand from producers and consumers of energy and commodities to hedge out their exposures on a recurring basis. And the ongoing expansion of the financial product market is presenting us with significant opportunity to grow and diversify our firm. We're also in a world of macroeconomic uncertainty and geopolitical unpredictability that you see playing out every day. This is an attractive market backdrop for us with high exchange volumes, not just in individual asset classes, but across most asset classes simultaneously. In addition to exchange volumes, another important driver of our performance is volatility. What's interesting about the data is that it shows volatility has been declining somewhat over the last three years, during which time period we have grown our profits materially. We have set up the firm to generate reliable earnings growth across the cycle through service inclined flow and gaining share, while also being able to capture upside in periods of unusual volatility. These volatility spikes tend to be quite short-dated, often only a few weeks, before reverting to more normalized levels. Although we might see a 5% to 10% earnings benefit from higher volatility in a particular quarter, as we did, for example, in Q2 last year, over a four-year period, they are less visible. The key point here is we are not reliant on these elevated periods of volatility to deliver profit growth, and we are proud of our track record of delivering sequential growth through a variety of market environments. A quick word on our recent equity and debt issuance activity before I hand over to Rob. The secondary offering in mid-April was a standout success at over eight times over subscription, notwithstanding the tough market backdrop at the time. To be able to accomplish this in such a volatile market environment with a VIX in the mid-30s is something we're extremely proud of. We brought in many new investors and saw continued participation from existing shareholders, further improving the quality of our share register and demonstrating our increased credibility as a public company. Our free flow has increased from 38% at IPO to nearly 70% in a year. Our average daily trading volume has also increased from less than $10 million in the six months post-IPO to mid-teens between the first and second follow-on, and it's now at over $40 million. Support from the market is also reflected in our $500 million U.S. dollar issuance of senior notes that we executed intraday on May 1st. This demonstrated further the market's comfort with Marex as an issuer and our ability to support our growth as a public company. With that, I'll hand over to Rob to take you through the financials in more detail.

Thanks, Ian, and good morning, everyone. As Ian said, we had another strong quarter in line with our published preliminary range. Q1 revenue grew 28% to $467 million, with strong growth across all business segments. Total costs increased 26% to $365 million. Front office costs were up 23%, predominantly reflecting higher compensation costs on strong revenue performance across the group. Control and support costs were up 33%, primarily driven by investments in technology to support automation and business growth. We also continue to make investments in our finance, risk and compliance functions to support our controlled growth and development as a public company. This included specific investments relating to recent acquisitions and our compliance with Sarbanes-Oxley. Adjusted profit before tax grew 42% to $96 million, while margins expanded 200 basis points to 21%, reflecting margin improvement in agency and execution. Non-operating adjustments were a gain of $1.7 million this quarter, due to an arguing purchase gain of $3.4 million on Dalton Group Limited. Adjusted return on equity rose to 30%, while adjusted diluted EPS was $0.91 per share, up 32% year over year. Now looking at our first quarter performance by business compared to Q1 2024. Clearing revenue grew 18% to $119 million, driven by growth in net interest income, as higher average balances more than offset lower average fed fund rates. Net commission income was $1.7 million lower, as positive performance in energy and metals was offset by lower plant activity in agricultural, which experienced higher volatility in Q1 2024 compared to this quarter. Agency and execution revenue grew 42% to $240 million, driven by growth in all asset classes. Securities revenue grew 59% to $151 million. The most significant contribution came from the continued build-out of our prime services offering, including growth in security-based swaps. Energy revenue grew 20% to $88 million, reflecting the combination of record volumes strong demand for our environmental offering and the benefit of acquisitions. Adjusted profit before tax more than doubled in this segment as margins improved from 13% to 24%. This was driven by the benefit from restructuring as well as growth in higher margin activity, particularly in prime services. Market making revenue grew 27% to $53 million with growth in all asset classes. Security revenues doubled, while metals revenue growth was more muted at 6% due to the uncertainty arising from the potential implementation of global tariffs on base metals. Average daily VAR, or value at risk, remained low at $3.4 million as we continued to manage our market risk well with 92% of trading days and 100% of weeks positive in the quarter. Solutions revenue grew 9% to $45 million against a very tough first quarter comparative, as the business continued to benefit from the expanding sales team and onboarding of new clients. Financial products grew 41% to $31 million, driven by structured notes balance growth. Hedging solutions decreased 27% to $14 million, also reflecting higher volatility in parts of the ag markets in Q1 2024. Average balances in the first quarter increased to $17.1 billion, up from $11.3 billion a year ago, driven by growth in client balances and our increased liquidity position. As Ian said, we intentionally hold high levels of liquidity to support our businesses and clients through volatile markets, even if this costs us more from a funding perspective, as was the case this quarter. Net interest income was $53.4 million compared to $35.6 million in Q1 last year. reflecting the significant step up in average balances, including growth in prime services, despite a lower average Fed fund rate. NII reduced by $9 million versus the fourth quarter, driven by several items. First, higher interest expense, reflecting the full quarter's impact of the $600 million US dollar notes issued in late October 2024, and increased structured notes issuance. This meant our liquidity position was very strong at the start of April. Second, the impact of average Fed funds decreasing by 35 basis points. And third, the repricing of fixed-term investments at lower rates. These factors were partially offset by $1.6 billion growth in average balances. The Fed funds forward curve is currently implying two to three rate cuts by year end. And as before, we have given you our illustrative rate sensitivity. This indicates that 100 basis points decrease in rates across a full year would reduce adjusted profit before tax by around $20 million. This is, of course, assuming a static balance sheet and ignoring any future growth or actions we might take. We have a rolling hedge program in place, which causes a modest drag to NOI today and offers us protection if rates were to fall below the current Fed funds curve. Turning now to our balance sheet and strong capital and liquidity position on the next two slides before I hand back to Ian to conclude. As a reminder, on this slide you can see that 80% of our balance sheet consists of high quality liquid assets which support client activity. Once we net off assets and liabilities by client activity, we are left with a corporate balance sheet that carries corporate cash and other assets against group liabilities, including our structured notes portfolio and senior note issuance. Total assets remain broadly stable at $24.4 billion as at the end of March, as did our residual assets of $5.1 billion. We manage our capital and liquidity risk very prudently, as reflected in the headroom that we maintain above minimum requirements to ensure we're well positioned in periods of market stress. During the first quarter in particular, we held very high levels of liquidity, which, as I mentioned before, had an impact on NII. At the end of Q1 2025, total funding was $4.3 billion, up from $3.8 billion at year end, with $1.2 billion of surplus to support our day-to-day operations. Our structured note program remains a core source of funding for us, and we further extended our funding maturity profile with our $500 million senior debt issuance earlier this month. Taking this into account, our liquidity surplus over our regulatory minimum as of last week stood at $1.6 billion. This also supports our investment grade credit ratings from S&P and Fitch. Last month, Fitch updated its rating outlook for Marex from stable to positive to reflect our strong earnings and diversification of our franchise. Our strong capital generation meant we were able to announce an increased quarterly dividend of 15 cents per share for the first quarter of 2025, payable to shareholders on the 10th of June. And now I'll hand back to Ian.

Thanks, Rob. So in conclusion, this was a strong quarter. It was an above-normal operating environment with higher levels of activity and volumes that we were able to convert into revenue and profit growth. The second quarter has started well. We saw higher volumes in early April, which tested the operational resilience of our infrastructure before they reverted to more normalized levels in the second half of the month. As far as the rest of the year is concerned, we see a lot of momentum and are excited about our future, but remain sanguine about the risks and how the environment might change. We've laid on a lot of extra liquidity to protect the firm at a cost, obviously, but that is one that we believe is well worth paying. Rates are expected to continue to fall, which will impact net interest income. But as we saw in the first quarter, we're able to deliver very strong results notwithstanding this impact. We continue to evaluate many M&A opportunities and are maintaining our strict discipline as you would expect us to. We have passed on select deals where we felt we were unable or unlikely to meet our return hurdles. but are confident that there will be many transactions which will, in fact, meet our return targets. Through a combination of organic and inorganic initiatives, we expect to be able to deliver continued structural growth, which offsets macro headwinds. We've had a great start to the year, are aware of the challenges, and are very confident about the position of the franchise and our opportunity set. With that, I'll ask the operator to open the call for your questions.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster.

Thank you. We will now go to our first question.

And the first question comes from the line of Benjamin Budish from Barclays. Please go ahead.

Hi. Good morning, and thank you for taking my questions. Ian, I was wondering if perhaps to start, we could come back to the prime business. Just trying to think through – I mean, can you unpack in a little bit more detail what is going on there that's changed? Just kind of looking at the last five, six quarters of revenues, it looks like there's been a step function higher in both the last couple of quarters. So just trying to think through, like, are we at a new run rate? Is there more upside? Like, how much is sort of environmentally – benefiting you right now, and it looks like your profit margin in the agency and execution segment also stepped up quite a bit. Is that something we should see more of, or are we kind of at the right level in the low to mid-20s?

Well, thanks, Ben. I'll give you sort of my perspective, and then Paolo runs the businesses with us, and I think he can sort of add additional sort of points there. I think with regard to sort of prime services, there are a couple of things that are sort of worth noting. One is As we described previously, we always felt that this was going to be a hugely important part of the strategic plan of the firm and that it represented a really important level of growth for us. I think as we also shared, it was a little bit slower than we expected in the sense that integrating it and making it part of Marex and reversing some of the sort of issues that had arisen while it was sort of for sale as part of TD just took a little bit longer than we thought. And so it was sort of a bit slower in 2024 than we would have expected, but we've definitely seen, you know, a really nice pickup in the fourth quarter, and that's extended to the first quarter. In terms of the expectation with regard to the run rate, I think there was a certain amount of unmet demand, which we have now captured. And I think that that has elevated the level. I don't think that it represents a peak. But I do think that the growth rate will probably slow from what we've experienced over the last two quarters. But I certainly have an expectation that over the long term, this will continue to represent you know, a really important opportunity for us. Then I would say similarly with regard to securities, the agency and execution segment, which you asked about, you know, we have been sort of flagging for a while that, you know, we did believe that it was a real opportunity, you know, to, you know, raise margins in that segment, you know, as a result of the restructuring of an integration of sort of the acquisitions that we've done in that place, in that space. You know, I think Paolo is going to be sort of too modest to sort of claim all the credit there, but, you know, he really does deserve, and the team, you know, a lot of credit for the work that they've done, you know, to improve the margins and the profitability of, you know, that particular business. And again, I think that there's been a, left, which, you know, it's not going to maintain at the same pace, but I don't believe we're absolutely at sort of the limit, but the amount of margin expansion we would expect there will be less than the expansion we've seen today. Do you want to add?

Yeah, I mean, thanks, Ben. Only to add a couple of points. You know, on the first question around sort of prime brokerages. As Ian said, it took some time to sort of reverse the sort of negative momentum, but we have consciously added product capability. And, you know, that takes a little bit of time. And I think that, you know, some important extensions to products, particularly some of the synthetic offerings that we now have really only came online late in the third quarter and into the fourth quarter. And that sort of allowed us to increase the volume of activity across a very large number of clients. It now feels as though that's quite stable. I think that it will grow from here, but at a much more modest rate. So somewhere in the sort of high single digits, maybe sort of low double digits, as opposed to the very sort of rapid growth that we saw between the third quarter, the fourth quarter, and into the first quarter. And then as we talked about consistently, our margin target for agency and execution was in the mid-20s, and we didn't really expect to get there as quickly as we have, but we always expected that we would be able to get there through some combination of capabilities and, you know, restructuring some of our businesses. So, you know, we're close to our target levels. You know, we might see some improvement. We certainly hope to have some improvement, but we're not going to see these sort of large percentage increases again. It will be much more modest.

All right. All very helpful. Maybe just a quick follow-up on ARNA, which closed at the end of March. I'm assuming there was very little contribution, if any, in the quarter. So any just kind of modeling help you could provide? Where do the revenues show up? What's the P&L profile look like? And in terms of kind of cross-sell in the Middle East, what's sort of the timeline for when you think you can start to execute on some of those opportunities? Thank you.

So with regard to ARNA, it closed absolutely at the end of the quarter. So you've seen almost no contribution in the quarter from ARNA. I think that it's performed in April at the levels that we'd anticipated. So we've seen some of the sort of day one synergies we anticipated sort of coming through. And it's certainly performing consistently with all of those expectations. You know, what has been heartening with regard to that is we have now had, you know, a couple of the sort of marquee accounts, you know, in Abu Dhabi reach out to become clients of the firm, which, you know, previously we'd been in discussions with them, but not having an Abu Dhabi, you know, entity had prevented us from, you know, being able to onboard those. So it's still very, very early days with regard to, you know, the cross-sell and the addition of new clients because of the Abu Dhabi presence. But certainly, you know, for the first month, it's going extremely well. Rob, do you want to just talk about where it's going to turn up?

Yeah, it's going to turn up in our clearing segment, Ben, going forward. All right. Thank you very much. Thanks. Thanks, Ben.

Thank you. Your next question comes from the line of Kyle Voigt from KBW. Please go ahead.

Hey, good morning, everyone. Maybe if I could just start on the clearing commissions. I hear your point about ag volatility kind of pulling back a bit on a year-over-year basis. But even so, at CME, we saw over 20% growth in ag volumes in 1Q. And I think even you disclosed 27% growth in total cleared futures volumes in the quarter. So I was just wondering if you could provide a bit more color on the divergence between your cleared volume growth and the commission revenue growth. Was there anything to note from a pricing perspective that you were seeing in the quarter, whether that's competition related or product mix? And then if you could just provide a bit more color on what we're seeing in the market on the ag side versus what you're seeing and what you're telling us in terms of your ags business on the clearing front, I'm assuming it's product mix related as well.

Yeah, there are a number of things you're asking about. I think around ag, you'll recall that the first quarter of last year was a sort of unusually sort of positive environment, particularly around cocoa, but also with a bunch of, you know, the other sort of agricultural products. So I think that, you know, a big... That was sort of genuinely an unusual environment that I think we were able to do particularly well with. What we're seeing at the moment is not sort of pricing pressure or anything of that kind. We are seeing, as we saw in metals, some amount of people sitting on the sidelines around some of the agricultural products, as well as some of the metals products where people are just sort of unsure of how the tariffs are going to play out. It's actually been evident in market making, in the agricultural products where the open interest has been defining some of those products. you know broadly i the reason that you want to have a diversified business is because there will be periods where you know individual asset classes perform well and other asset classes are you know seeing less activity and you know that's the that's the the power of you know sort of broadening out so i think that's that's really the the story as i see it and if there's something you want to add on

So the one thing I would say that within the press release, the contracts cleared is the trailing 12 months, if not the quarter only. So if you actually look in on the slide, slide six, you'll see that our volumes are up 17%, which is very much in line with our revenues.

Understood. Thank you for clarifying. Just a follow-up on the 500 million notes issuance in May. Do you feel comfortable with where you're at now from a funding perspective as we think about the remainder of this year? And how should we think about the need for additional funding as we're modeling out into 2026?

Yeah, look, I think that we feel very comfortable with sort of our liquidity position. As Rob was indicating, I think that When you're in these periods of heightened uncertainty, and this week may feel like it's all dampening down and everything's fine. I mean, that's not in the way it's felt at various points in the course of April, and I suspect there will be other weeks where it'll feel different. sort of less than nine. So given that as a basic backdrop, it seemed to us that it's sensible to increase the amount of liquidity you hold. We were, as you'll be aware, able to issue under our F1 because we had statutory account information and that had not yet gone stale. And so we were able to sort of issue in a format that is typically the one that the market is looking for. And that was a driver of the timing and why we wanted to do it in early May. But when you have an opportunity to raise liquidity in a business like ours, it just seems sensible to do. And it does provide us with sort of two things. One is sort of insurance in the event that the markets sort of behave in a much, much more volatile way and we have to support our clients with additional liquidity, particularly around clearing. But what it also does is it supports the ongoing growth of the franchise and our ability to add clients and to continue to support them. So whether it's on defense because you know the world is just a sort of more volatile place and we need more liquidity to support the existing clearing or it turns out to be you know offense where it gives us an ability to add new clients or increase the amount of business we do with clients we feel that that added liquidity is um you know, is very valuable. We don't currently have plans to sort of issue again, but I don't want to say definitively that we won't, because if you have opportunities to grow the firm and add liquidity, I think you typically do take that.

Thank you.

Thank you.

Your next question comes from the line of Patrick Moley from Piper Sandler. Please go ahead.

Good morning. I have a question on client clearing balances. You've now grown those average balances by over 10% sequentially in each of the last two quarters. Can you speak to what drove the growth there in the first quarter? And then from a modeling perspective, can you give us an idea of maybe where those balances ended the quarter and how they've trended in the second quarter, given some of the volatility we've seen and how that might have impacted it? Okay.

Yeah, so I'll start Ian and then why don't you add. So the total balances that we disclose is made up of three things. First of all, it includes house cash. Secondly, it would include clearing balances. And thirdly, it would include balances related with our prime services business. What we saw in the first quarter is obviously, as you saw, there has been an increase in the house liquidity, but we also did see some reasonable growth within clearing and within our prime business. in in terms of the second quarter um balances have held up well um in april obviously it's still very early days um we're only six weeks into the quarter but so far balances are holding up and you know as we've shown here we do have experience of of growing our franchise growing our customer balances and we would expect that to continue throughout the rest of this year

yeah i mean i think the thing i did is you know you we do have a very um sort of robust pipeline of clients that we're uh sort of bringing on uh to be clearing clients at the firm so you know as i think we've discussed with you you know that tends to have quite a long lead time uh you know you need to do a lot of work to get uh you know clients integrated onto your platform. And once somebody is a clearing client, it's a very sticky relationship, but it does involve a lot of work to get them onto the platform. And the relevant point here is it means that we actually do have quite good visibility onto new clients coming onto the platform. And that remains extremely robust and consistent with historic trends. I think that, you know, you never know how much activity your existing clients are going to do with you, not because it's sort of going anywhere else, but it's just because you don't quite know, you know, what the market opportunity is going to be for them. But, again, we have no reason to believe that, you know, that's not going to continue at at least the current levels. And certainly, you know, into April we've seen, you know, some increases. So both of the drivers of that, you know, seem to be consistent with history.

Okay, great. And then just a follow-up on M&A, an update just on the appetite, overall appetite, what conversations have been like with potential targets. And it's been a few months now since you've announced a deal, just wondering how we should think about M&A throughout the rest of the year.

Yeah, I think that – You know, we continue to be very active looking at, you know, potential acquisitions. We're in conversation with, you know, a number of potential acquisitions. You know, as we indicated in the commentary, you know, we also are very disciplined, and if we can't, you know, sort of generate our target of 20% ROE at the end of, you know, the first year, then, you know, something has to be sort of super strategic for us to sort of proceed with it. And so, You know, I think what you're seeing is, you know, the impact of our discipline, but it's not really slowing down, and it's not a case that our appetite has declined. If anything, I think it's probably gone up for acquisitions. And I would also say that, you know, we're pretty excited about, you know, the set of things, you know, that we're looking at, but that, you know, one thing that is important to us and we believe important to our investors is that we remain disciplined.

I know what you're doing. Yeah. I mean, just to say that, I mean, by that nature, the sort of timing of signing and closing is not going to be completely smooth. And we would never expect to have a sort of an announcement every quarter, even if over the course of we would hope to have four or five acquisitions. So I know we've not announced anything. It doesn't mean that we've not been working on quite a few opportunities. And I would hope that we'll be at the point where we can have some agreed transactions in the next few weeks or months.

Okay. I appreciate the call. That's it for me.

Thank you. As a reminder, if you wish to ask a question, please press star one and one on your telephone keypad. That is star one and one to ask a question. We will now go to the next question. And your next question comes from the line of Alex Kamm from UBS. Please go ahead.

Yes, hey, good morning, everyone. I wanted to ask about the environment so far this quarter. This is a topic that's been coming up, obviously, on some of the other calls this quarter, but it's really this, this, this question of what has happened to client health, um, et cetera. So obviously a lot of good volatility and good for you, but also there's always the worry that things turn bad and it sounds like your business has held up pretty well, but just wondering if there's anything underneath that you can point to where, you know, there were certain client segments with outsized losses or anything as we wake up in a, in a month or two and see, Hey, something, uh, there was something that could hurt us in the future, or do you think everything was pretty normal?

Yeah, I mean, I was extremely pleased with how the recent bout of volatility was sort of absorbed within our particular client set. As I sort of reflect on why that is, I think that although we had quite a lot of volatility, what you didn't have was very substantial increase in prices in specific commodities, which is what you'd seen, for example, of the Ukraine invasion, or in some of the metals markets. And it's those marketplaces where you have very sizable movements in, you know, the price of a commodity typically up that creates liquidity pressure, you know, for our particular client set because they own the physical, the physical is worth more, but they're hedging it with a financial instrument and the amount of margin they have to post on the financial instrument goes up and that creates, you know, some amount of liquidity pressure for them. And interestingly, this bout of sort of volatility didn't have that. So we had an experience of almost no missed margin calls. or late margin calls. And so it was sort of unusual in the sense that there was a lot of sort of volatility, but the clients all appeared to be well able to meet whatever sort of the requirements were. I mean, I do share your question of where are the losses? You know, do they just sort of sit in retail balance sheets or are they actually, you know, going to get manifested in some financial institution? I mean, all I can say is that we're not seeing it in any of our clients at all and that the performance of the client set has been sort of terrific. I mean, we have hardly, you know, used margin multipliers at all. I mean, there was sort of one client set that, you know, we weren't that familiar with and we added some margin multipliers for a couple of weeks and then took them all. So there's really been surprisingly little sort of client stress that has manifested itself, you know, through our franchise. So, you know, we're pleased to see that and, you know, long may it continue.

All right. Very good. And then just quick follow-up on the clearing segment. I heard the answer obviously earlier on a year-over-year basis, but even on a quarter-over-quarter basis, the business on a commission side seems to have lagged some of the expectations we had given what's going on in the market. But maybe related to that, if my numbers are right, I think the front office headcount was down as well and maybe even down the last couple of quarters. So Just wondering, are there any teams that have left, or are you de-emphasizing certain markets? I thought you were in growth mode, so just surprised to see that the front office personnel number came down. Thank you.

So there's been a little bit of remapping of headcount, particularly in our ags business, which straddles both clearing and market making. So I think that's what you're seeing, Alex.

Yeah, I mean, what I can say is there's no change in our outlook with regard to the opportunity in clearing or our interest in investing in it, and there's been no loss of sort of teams or producers over this period. So I think what you're just seeing is the – You know, there's some unusual numbers in underlying the overall number when you sort of dig down, you know, a level inevitably in any opposite type business. But, you know, the overall business is performing extremely well. You know, its margins are extremely strong. You know, its level of growth is one that – we're very pleased with and one which we continue to invest in and have um you know high confidence we'll be able to continue to grow it has a great pipeline we're you know again seeing sort of top clients looking to come onto the you know onto the platform and so in terms of all the the real things that sort of you know drive the health of your franchise all of those um you know are showing a very healthy franchise that is, you know, continuing to grow and gain share.

All right. Very good. Thanks, guys.

Thanks, Alex.

Thank you. There are currently no further questions. I will hand the call back for closing remarks.

Well, thanks, everybody, for joining us. You know, as said, it was a strong quarter. We've had a strong start to our second quarter. You know, we're very pleased with the reaction to our, uh, our equity offering and our debt offering. Uh, we're very pleased with, you know, where the franchise is, how it's performing, you know, the ability that we have to convert, uh, the capabilities and clients that we acquire like the, the Cowan acquisition and, uh, and show how much more profitable that can become as part of the Mares platform. And so, you know, we are, uh, extremely confident you know over the long term and uh you know very pleased with what uh we've accomplished you know year to date which has been um you know very strong start so thank you for your questions and you know we look forward to updating you with the half year