StoneX Group Inc.

For the trailing 12 months, we had segment operating revenue and segment income up double digits except for retail, which was down. We have said repeatedly we take a long-term view in how we manage the company and grow our franchise. And as such, we believe that the best way to gauge our results and progress is to look at longer-term performance, such as trailing 12-month results, rather than specific quarters taken in isolation. Turning to slide 7, which sets out our trailing 12-month financial performance over the last nine quarters. These numbers have been adjusted for the accounting treatment related to the gain in the CDI acquisition as disclosed in our prior filings, and which appear in the reconciliation provided in the appendix of this earnings deck. On the left-hand side, the bars represent trailing 12-month operating revenue over the last nine quarters. As you can see, this has been a smooth and strongly upward trend as we have steadily expanded our footprint and capabilities. Our operating revenues are up 63% over this period for a 28% CAGR. Our adjusted pre-tax income likewise has grown significantly at a 25% CAGR. Our pre-tax earnings dipped this quarter due to the reorganization charges mentioned earlier. On the right-hand side, you can see the adjusted debt income with the bars, which is up 62% over the last two years for a 27% CAGR. The dotted line represents our ROE, which has remained above our 15% target, even though our capital has grown by 45% over this period. With that, I'll hand you over to Bill Dunaway for a discussion of the financial results in more detail. Bill, over to you.

Thank you, Sean. I'll be starting on slide number eight, which shows our consolidated income statement for the second quarter of fiscal 2023. Sean covered many of the consolidated highlights of the quarter, so I'll hide out a few and then move on to a segment discussion. Transaction-based clearing expenses declined 10% to $69.2 million in the current period, principally due to lower fees and equity ADRs, as well as the decline in FX CFD contracts average daily volume and listed derivative contract volumes. Introducing broker commissions declined 2% to $42.2 million in the current period, principally due to declines in our independent wealth management and retail FX CFD businesses. Interest expense increased $164.6 million versus the prior year, primarily as a result of the $117 million increase in interest expense related to our institutional fixed income business and a $36.6 million increase in interest paid to client balances on deposit as a result of a significant increase in short-term interest rates. Interest expense on corporate funding increased $4.3 million versus the prior year, also as a result of the increase in short-term interest rates, as well as an increase in average borrowings. Variable compensation declined $2.3 million versus the prior year due to the decline in net operating revenues, as well as a change in product mix, and represented 30% of net operating revenues in the current period compared to 31% of net operating revenues in the prior year period. Sean covered earlier on this call the fluctuations in fixed compensation, so I'll move on to other fixed expenses, which increased $6.5 million as compared to the prior year to $106.4 million. However, this was a $3.8 million decline versus immediately preceding quarter. As compared to the prior year, non-trading technology and support increased $3.4 million due to software implementations and ongoing support. Travel and business development increased $2.8 million. Depreciation and amortization increased 1.8 million due to incremental depreciation related to internally developed software, as well as higher amortization of leasehold improvements and intangibles acquired. And finally, occupancy and equipment rental increased 1.8 million as compared to the prior year. Offsetting these increases, professional fees declined 2.5 million as compared to the prior year, principally due to lower legal fees. Bad debt expense, net of recoveries declined 9.3 million to 3 million in the current period, versus 12.3 in the prior year period. The prior year comparable period includes a $6.4 million other gain related to a foreign exchange antitrust class action settlement received, while the immediately preceding quarter includes a $23.5 million gain on the acquisition of CDI. Net income for the second quarter of fiscal 2023 was 41.7 million, which represents a 35% decline versus a very strong 64 million in the prior year. and is a 46% decline versus the immediately preceding quarter, which included the gain on the acquisition of CDI I just noted. Moving on to slide number nine, I'll provide some more information on our operating segments. Our commercial segment added $36 million in operating revenues versus the prior year, and $37.7 million compared to the immediately preceding quarter. This increase is driven by a $37.1 million increase in interest earned on client balances as a result of the significant increase in short-term rates. Average client equity declined a modest 2% versus the prior year. In addition, operating revenues from physical transactions increased $14.7 million compared to the prior year as a result of growth in both physical ag and energy and precious metals activities. These increases were partially offset by $12 million and $4.5 million declines in operating revenues derived from listed and OTC derivatives, respectively, with the prior year being a very strong performance, as Sean noted earlier. versus the immediately preceding quarter listed in OTC derivative revenues increased 7.2 and $15.4 million, respectively. Fixed compensation and benefits increased 3.3 million versus the prior year, and other fixed expenses increased 2.6 million, including increases in selling and marketing, travel and business development, and depreciation and amortization. Bad debt expense declined 7.4 million as compared to the prior year. Segment income was 102.9 million for the period, an increase over the prior year period and preceding quarters of 47% and 24% respectively. Moving on to slide number 10, operating revenues in our institutional segment increased $159.7 million versus the prior year, primarily driven by $101.5 million increase in securities operating revenues compared to the prior year as a result of the 65% increase in average daily volume of security transactions, as well as the increase in interest rate. The increase in securities ADV was driven by an increase in volumes in both equity and fixed income markets. As Sean mentioned earlier, the increase in interest rates also led to significant increase in securities related interest expense for the period, which I'll touch on momentarily. Interest and fee income earned on client balances increased 55.2 million versus the prior year as a result of the increase in short-term interest rates, as well as a 61% increase in average client's equity. The rise in short-term rates drove $156 million increase in interest expense versus the prior year. Interest expense related to fixed income trading and securities lending activities increased to $117.5 million and $3.4 million respectively as compared to the prior year and the immediately preceding quarter, while interest paid to clients increased $32.6 million. Segment income increased 12% to $55.8 million in the current period as a result of the $5.1 million increase in net operating revenue. Fixed compensation and benefits increased 2.2 million versus the prior year as we built on our product offering, while other fixed expenses increased 1 million. Bad debt expense declined 2 million as compared to the prior year period. Segment income declined 6.2 million versus the immediately preceding quarter. Moving on to the next slide, operating revenues in our retail segment declined 41.4 million versus the prior year, which was primarily driven by a $37.5 million decrease in FX and CFD revenues as a result of a 26% decline in rate per million, as well as a 22% decline in FX CFD ADV as compared to the prior year. Operating revenues from securities transaction declined 3.6 million. Operating revenues in the retail segment increased 8.1 million versus the immediately preceding quarter. Segment income declined 89% to $4.8 million in the current period, primarily as a result of the decline in operating revenues. We moved retail marketing employees to our central marketing department, which drove the $3.2 million decline in fixed compensation and benefits. These costs were then allocated back to the retail segment through an allocation process, which partially drove the $5.1 million increase in other fixed expenses as compared to the prior year. In addition, we saw a $900,000 increase in depreciation and amortization, a $600,000 increase in non-technology and support, and a half a million dollar increase in travel and business development. Closing out the segment, on the next slide, operating revenues and global payments increased 8.8 million versus the prior year, driven by a 16% increase in the average daily volume and a 2% increase in the rate per million as compared to the prior year. Fixed compensation increased 12.7 million as compared to the prior year, primarily driven by the reorganization cost Shawn noted earlier, as well as incremental hires related to the build out of the payment offerings. Segment income was $15.9 million in the current period and represents a 33% and 51% declines versus the prior year and immediately preceding quarters respectively. Moving on to slide number 13, which represent the bridge between operating revenues to the first quarter of the second quarter of last year to the current period across our operating segments. Overall operating revenues were $704.4 million in the current period, up 159.7 or 29% over the prior year. I've covered the changes in the operating segments for our segment, operating revenues for our segments. However, $3.4 million negative variance in revenues and unallocated overhead is primarily related to the outcome of the elimination of central treasury activities between business segments and corporate. The next slide, number 14, represents a bridge from 2022 second quarter pre-tax income of 87.4 million. to pre-tax income of $57.5 million in the current period. The negative variance in unallocated overhead of $19.8 million was partially driven by the $3.4 million negative variance in revenue, as I just noted, as well as a $2.5 million increase in variable compensation and a $12.4 million increase in fixed compensation and benefits, which was partially due to the movement of the retail marketing team in the central department, as I touched on earlier. In addition, we saw a $4.3 million increase in interest expense on corporate funding, a $1.7 million increase in occupancy and equipment rental, and a $1.8 million increase in non-trading technology and support. These increases were partially offset by a $2.6 million decline in professional fees, as well as an increase in central allocations via operating segments, particularly retail. Finally, moving on to slide number 15, which depicts our interest in fees earned on client balances by quarter. as well as a table which shows the annualized interest rate sensitivity for a change in short-term interest rates. The interest and fee income net of interest paid to clients in the effective interest rate swaps increased $43.2 million to $54.6 million in the current period, as compared to $11.4 million in the prior year. As noted in the table, we estimate 100 basis point change in short-term interest rates, either up or down, would result in a change to net income of $21 million or $1.2 per share on an annualized basis. With that, I would like to turn it back over to Sean.

Thanks, Bill. Let's move to the final slide, slide number 16. We achieved another set of very good cooperating results with moderating market conditions offset by higher interest earnings on our client float. This quarter, we are comparing against a very strong quarter a year ago and also had significant reorganization charges, which should be recovered with lower variable compensation over time. For the quarter, we recorded EPS of $1.95 and an ROE of 13.8%. Adjusting for the reorganization charges, results would have been in line with the first quarter results, excluding the gain on the CDI acquisition. For the trailing 12 months, we recorded net income of $219.7 million, or $10.43 in EPS, equating to a 19.5% ROE on stated book. Book value is now $60.32 per share, up 21% versus a year ago. When our performance is viewed through a slightly longer-term lens, such as trailing 12 months over the last two years, which evens out quarterly anomalies, our results continue to show a strong upward trajectory, growing revenues at a 28% CAGR and adjusted earnings at a 27% CAGR. While trading conditions moderated towards the end of the quarter, We believe that our growing and diverse business and multiple earning drivers will continue to drive growth and deliver shareholder value. We continue to see strong growth in client trading volumes across asset classes and products as well as segments, which speaks to growth in our underlying client base and client engagement. We continue to invest in our financial ecosystem, expanding our products, capabilities, and talent. We have a unique and broad financial ecosystem with a very large addressable market in front of us. Operator, let's see if we have any questions. I'm sure Dan is onto the line.