Marex Group plc

Thank you for joining us and welcome to the Merrick's second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Adam Strachan, Head of Investor Relations. Please go ahead.

Good morning everyone and thanks for joining us today for Marex's 2Q2026 earnings call. Speaking today are Ian Lowitt, Group CEO, and Rob Irvin, Group CFO. After their formal remarks, as usual, we will open the call to questions. Before we begin, I would like to remind everyone that certain matters discussed in today's 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 Marex's press release issued today. The forward-looking statements made today are as of the date of this call and Marex does not undertake any obligation to update them. 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 today's earnings release. A copy of the release and investor presentation are available on the investor relations page of the Marex website at Marex.com.

Good morning, everyone, and thank you for joining us. Q2 2026 was another record profit quarter for Marex, our sixth record quarter since we went public just two years ago in April 2024. Second quarter revenues increased 39% year on year to $696 million. And adjusted profit before tax increased 56% to $166 million. Adjusted profit before tax margin expanded to 24%, reflecting the increasing contribution from our higher margin infrastructure intensive businesses. Basics earnings per share increased to $2.09 and return on equity was 37.5%. Excluding non-operating items such as the $35 million gain on the sale of the Winter Flood custody business, as well as some costs relating to our Bermuda re-domicile in the second quarter, adjusted earnings per share was $1.72. Looking at the first half as a whole, adjusted profit before tax was $319 million, equivalent to the Group's total annual profit in 2024. Adjusted EPS for the first half was $3.29, while reported EPS was $3.61. On a trailing 12-month basis, reported EPS was $5.72. We believe these results demonstrate the increased earnings power of Marex franchise and validate the strategy we've been executing. We've worked hard to build a business that is diversified across products, business lines, and geographies to support sustainable growth. While market conditions remain important to individual businesses, at the group level, our portfolio of businesses has increasing earnings resilience. This is evident in the second quarter. volumes on our key exchanges reduced meaningfully, down 17% compared with the first quarter, while market volatility also declined and interest rates were flat, although commodity prices remained elevated. Notwithstanding that market backdrop, second quarter adjusted profit before tax increased 9% versus the first quarter. Since the IPO, we have clearly diversified in ways which make our earnings less dependent on exchange volumes. One of the questions we get asked repeatedly is how much of our performance is driven by the operating environment and how much by structural growth. When we came to market at IPO, we described our objective to invest in sufficient structural growth to offset the inevitable cyclical impact of our markets on our results. As we talked about on the previous slide, that doesn't mean the operating environment no longer matters. Of course it does. But we have now built a platform where the combination of diversified earnings streams and structural growth outweighs the cyclical elements over time. The evidence of this is apparent in our track record. We've increased profitability sequentially every year over the past 12 years. Looking at performance at the quarterly rather than annual level, Over the past five years, we've delivered year over year adjusted profit growth in 19 of the past 20 quarters. This is a remarkable record of sustainable growth. This includes periods of elevated volatility, lower volatility, increasing and decreasing interest rates, and varying levels of exchange activity. Since our IPO in the second quarter of 2024, quarterly adjusted PBT has grown at an average rate of 48% year on year, with the upper quintile averaging 72% and the lower quintile averaging 21%. While this is obviously a wide range, it gives us a high degree of confidence in our ability to grow at least in line with the top end of our 10 to 20% growth target range. On the previous slide, we showed how our business has grown on a quarterly basis. On the left of the slide, you can see the steady increase in monthly profitability over time. The lowest Sharpe ratio for 2026 reflects the exceptional volatility and unusually strong profit month we experienced in Q1. On the right-hand side, you can see the distribution of daily profitability. Over time, that distribution has continued to shift to the right as profitability has increased. During the first half of 2026, the right-hand tail has materially thicker, reflecting the exceptional market conditions, particularly in March. Importantly, those right tail returns weren't driven by taking more risk or by a single business. They reflected the breadth of the platform with a growing number of businesses, all capable of generating significant returns on any given day when the market opportunity arose. You can see that in the increasing number of $3 million plus profit days, which increased to 58 over the last 12 months, representing 25% of trading days. At the same time, the number of loss making days remained relatively low at just 11 or 4% of trading days, consistent with what we have seen historically. So the left tail is consistent and skinny, and the right tail is now quite thick. I expect that as we move past the exceptional conditions of Q1, the distribution will become more typically bell-shaped, with the center of the distribution further to the right reflecting our growth. We're already seeing that in June and July. An alternative lens on our growth and the increasing breadth and strength of our platform is the evolution of our client relationships. As the platform has expanded, we've been able to deepen relationships with larger and more sophisticated clients. In 2026, we have 77 clients generating more than $5 million of annual revenue on a run rate basis, up from 49 in 2025 and 36 in 2024. Revenue from this cohort of clients has increased 59% since 2025, reflecting continued expansion of our largest client relationships. This growth isn't being driven by onboarding new $5 million clients. It's being driven by existing clients expanding the breadth of their relationship with Marex and doing more business with the firm as we continue to broaden our products, capabilities, and geographic reach. and the effect is not just with our largest clients. We are seeing clients expand their relationships with us across the board with average revenue per client up by 34%, demonstrating that clients are making broader use of the Marex platform. That's exactly the outcome we've been trying to achieve. As clients deepen their relationships with Marex and use more of the platform over time, they become an increasingly important driver of our structural growth. This is a steady, ongoing and reliable source of growth, which also demonstrates our underlying competitiveness. Disciplined M&A is a core part of our growth strategy, helping us broaden our capabilities, extend our geographic reach and accelerate growth. That said, most of our growth remains organic. Around 80% of our year-on-year profit growth in the second quarter, for example, was organic. That's because our approach is not about buying earnings. The initial contribution from acquisitions is typically modest. The real value comes from integration, capturing synergies and leveraging the power of the broader Marex platform for growth. Our recent acquisitions demonstrate this clearly. If we look at our larger 2025 acquisitions, we paid a premium of around $16 million for a combination of Arna, Hamilton Court and Winter Flood. At acquisition, based on their prior year's earnings, they generated around $16 million of profit after tax. In Q2, the three acquisitions generated an annualized run rate of around $60 million of PAT, around three and a half times the pre acquisition earnings. So the annualized returns from these businesses are already equivalent to the premium we paid to acquire them. That demonstrates our ability to integrate acquisition successfully and deliver revenue and cost synergies and grow earnings materially over time. Importantly, we see further upside, particularly at winter flood, where a number of the integration benefits and synergies have yet to be fully realized. We focus on the premium paid and return of premium because much of the book equity we acquire in the transaction consists of cash or cash equivalents or very liquid assets. So while we're attentive to total consideration, our focus is on the recovery of premium. Turning to 2026, we expect Brightpoint, which we announced last month, to follow a similar pattern. Strategically, it significantly strengthens our global clearing franchise through a larger presence in Asia, adds high quality infrastructure intensive earnings, and enhances our access to China through an experienced local management team and longstanding institutional client relationships that would be difficult to replicate organically. Importantly, we also see opportunities to create additional value once the business is integrated into Marex, including internalizing clearing activity, increasing client balances, and cross-selling our broader product offering across the combined client base. We expect the transaction to complete in late 2026 or early next year. While BrightPoint is a somewhat larger acquisition, it remains consistent with our financial discipline at an attractive low single digit multiple of premium paid, reducing further once identified synergies are taken into account. LevMet and WebTraders are further examples of our approach. LevMet enhances our market making capabilities while adding physical commodities and a strong experience management team that we know well. WebTraders similarly adds capabilities in equity derivatives market making and will allow us to internalize hedging activity within our structured products business which we expect to support further margin expansion. As I said at Investor Day, we're increasingly the acquirer of choice based on the successful acquisitions we have enjoyed as part of Marex. Our M&A pipeline remains strong, allowing us to be highly selective and to focus on opportunities where we have a high degree of confidence in the outcome. It's a disciplined and repeatable playbook. Acquire strategically relevant businesses at attractive valuations, integrate them onto the Marex platform, and grow their earnings over time. Finally, turning now to the role we are playing in the evolution of financial market infrastructure. These are exciting times with innovation proceeding at pace. This is a great time for us as it plays to our strengths as an adaptable and nimble market participant with ability to get things done effectively for clients. On this slide, there are four examples which demonstrate how clients are increasingly looking to Marex to help them engage with these market changes. We are the first and thus far only firm to have solved the operational complexity of offering cross-margining on U.S. Treasury futures cleared on CME and cash U.S. Treasuries clearing via FIC with DTC. This helps clients improve capital efficiency across their cash and futures positions. We are live with three clients and have more than 10 in the pipeline. In the quarter, we enabled clients to use USDC stablecoins as initial margin under a CFTC pilot program. This assists clients with collateral flexibility. We also set up and executed an on-chain repo transaction for a key client utilizing tokenized US treasuries over the Canton network. This capability facilitates the tokenization of a broad range of securities, not just US treasuries. These are essential building blocks for a robust digital asset prime offering, which we are developing. We are also working to support clients looking for access via an FCM to prediction markets and expect to be clearing on Kalshi in the third quarter. We already have a strong pipeline of clients for the service. These initiatives demonstrate the trust clients place in us and our ability to solve problems to support real world demand. These investments are also opening doors to new client relationships and ensure Marex remains at the forefront of market structure innovation. I'll now hand over to Rob to go through the financials.