StoneX Group Inc.

Good day and thank you for standing by. Welcome to the StoneX Group, Inc. Q3 fiscal year 23 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Bill Dunaway. Please go ahead.

Good morning. My name is Bill Dunaway. Welcome to the earnings conference call for our third quarter ended June 30th, 2023. After the market closed yesterday, we issued a press release reporting our results for our third fiscal quarter of 2023. This release is available on our website at www.stonex.com, as well as a slide presentation, which we'll refer to on this call in our discussions of our quarterly and our year-to-date results. The presentation and an archive of the webcast will also be available on our website after the call's conclusion. Before getting underway, we're required to advise you, and all participants should note, that the following discussion should be taken in conjunction with the most recent financial statements and notes thereto, as well as the Form 10-Q filed with the SEC. This discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements involve known and unknown risks and uncertainties, which are detailed in our filings with the SEC. All of the company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, There can be no assurances that the company's actual results will not differ materially from any results expressed or implied by the company's forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any forward-looking statements are not guarantees of future performance. With that, I'll now turn it over to Sean O'Connor, the company's CEO.

Thanks, Bill. Good morning, everyone, and thanks for joining our earnings call. In the third quarter of fiscal 2023, we saw solid transactional volumes as well as revenue growth across almost all of our products, despite volatility generally moderating versus the prior period. Interest earnings on our client float increased significantly due to our capturing higher market rates that prevailed during this period. In aggregate, these results produced our strongest financial results ever, with a $3.25 diluted EPS and a 23.1% ROE on tangible equity. We believe that our results for the quarter and indeed for the year to date are significant positive outliers in our industry, as they have been for some years now. Turning to slide three in the earnings deck, which compares quarterly operating revenues by product versus a year ago. Operating revenues were up a strong 47% in aggregate for the quarter and up 40% for the year to date, despite the generally more subdued market conditions. Aggregate revenues were up 10% versus the immediately preceding quarter. Listed derivative revenue was up a slight 1% despite a decrease in volumes of 5%, while revenue capture was up 9%. Revenues were down 3% versus the preceding Q2. OTC derivative revenue was up 43% versus a year ago and up 24% versus the immediately preceding quarter, with volume surging 46% and revenue capture down slightly. Physical commodities revenues were up a strong 59% versus a year ago and up 50% versus the Q2 due to better results in eggs and energy, as well as the addition of CDI, which was acquired in Q1 of this year. Securities revenues were up 76%, although this is inflated due to the gross up of much higher interest revenue in our fixed income business as a result of the Fed rate increases. As was the case last quarter, this was a tough quarter for the equities business with lower volatility. But on the other hand, the fixed income group turned in another strong result. Overall, ADV across the securities business was up 33%. although revenue capture declined 43%, reflecting both tougher market conditions and equities, as well as a continued push into lower margin products. Global payments had another strong quarter, with revenues up 23% versus a year ago and up 9% versus Q2. Volumes were down 2%, but revenue capture was up 21%. Our FX and CFD revenue was down 17%, largely due to tougher market conditions versus the exceptionally positive conditions in the prior year quarter, which resulted in volumes being down 20%. Revenue capture was up 5% versus the prior year and represented a 49% increase over the immediately preceding quarter. This resulted in a 17% increase in FX CFD revenues versus the immediately preceding quarter. Interest and fee income on client balances was $92.2 million, up 329% from a year ago, as we realized the impact of cumulative interest rate increases, although the aggregate client float reduced 3% and now stands at an aggregate $7.7 billion. This reduction in client float was realized on the FDIC suite balances as larger retail securities clients moved into higher yielding deposits. Versus the immediately preceding quarter, our interest earnings on our client float was down 11%, and the aggregate client balances declined 10%. Moving on to slide four, which shows the same data for the trailing 12 months. Over this longer period, and despite more challenging comparisons now coming to bear, we realized strong revenue growth across all products except listed derivatives, which was flat, and FX CFDs, which were down 16%. We have generally seen increase in volumes across the board while revenue capture has been more challenging generally with lower volatility. Turning to slide five and the summary of our third quarter and trailing 12 month results. We recorded operating revenues of $776.9 million, up 47% versus the prior year and up 10% from the preceding quarter. Our operating revenues were boosted by interest both on our client floats and also interest that is embedded in our fixed income trading, as I mentioned earlier. Net operating revenue, which nets off interest expense as well as introducing broking commission and clearing costs, was up 17% versus a year ago. Total compensation and other expenses were up 13% for the quarter, with variable compensation up 5% and fixed compensation up 23%. versus the immediately preceding quarter, fixed compensation, excluding the retirement and reorganization charges recognized in the immediately preceding quarter, was unchanged at 96.1 million. We reported 69.5 million in net income and $3.25 in diluted EPS for the quarter, while adjusted net income, which excludes acquisition-related items, was a record 71.8 million for the quarter. Our ROE is 21.6% on stated book value and 23.1% on tangible book value. Our average gross yield on our client float was 397 basis points for the quarter versus 379 basis points for the immediately prior quarter. Book value per share closed the quarter at $64.09, up 24% versus a year ago, and increased $3.77 during the quarter. Again, this quarter larger than our EPS due to positive changes in other comprehensive income. Looking at the summary for the trailing 12 months, our operating revenues were a record $2.7 billion, up 42% over the prior trailing 12-month period. Our net income was $240.1 million, up 48%. Our diluted EPS was $11.31 for the trailing 12 months, up 44%. ROE was 20.2%, despite our equity increasing 48% over the last two years. Turning now to slide six, our segment summary, just to touch on the highlights before Bill gets into more detail. For the quarter, segment operating revenue was up 46%, and segment income was up 22%. Our commercial segment was up 61% in segment income, off the back of a 48% increase in operating revenues, with strong performance on the OTC products and physical commodity side. Versus the immediately preceding quarter, segment revenues were up 15%, and segment income was up 14%. It is interesting to note that in the commercial segment, OTC derivative and physical revenues both now exceed listed derivatives, which was by far the primary revenue drive in this segment 10 years ago. Our institutional segment saw an 82% increase in revenues, but a 5% reduction in segment income. The disparity between these two numbers is caused by the revenue increase being driven by the interest carry on to the fixed income side, as well as higher interest paid on the client float. As mentioned earlier, the equities business had a tough quarter, while fixed income had another good result, as did our institutional FX. The listed derivative business and securities clearing were boosted by interest and fee income. Versus the preceding quarter, segment revenue was up 5% and segment income was down 19%. Retail was much improved from Q2, but with continued challenge market conditions, especially when compared to the exceptional results a year ago. Operating revenue was down 16% versus a year ago, but up 16% versus the preceding quarter. Segment income was down 35% from a year ago, but up 258% from Q2. Global payments revenue was up 20%, and segment income was up 16% versus the prior quarter. Versus the preceding quarter, revenue was up 7%, and segment income was up 80%, largely due to the reorganization charges recorded in that prior quarter. For the trailing 12 months, we had double-digit growth in segment operating revenue and segment income, with the exception of retail, which was down. As we have said repeatedly, we take a long-term view in how we manage the company and how we grow our franchise. 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 months, rather than specific quarters taken in isolation. Turning now to slide seven, which sets out our trailing 12-month performance over the last nine quarters. These numbers have been adjusted for the accounting treatment related to the gain and 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 our 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 the footprint and capabilities. Our trailing 12-month operating revenues are up $1.1 billion over this period for a 29% CAGR. Our adjusted pre-tax income likewise has grown significantly at a 33% compound annual growth rate. On the right-hand side, you can see our adjusted net income in the bars, which is up $104 million over the two years for a 37% CAGR. And the dotted line on the right-hand side represents our ROE, which has remained above our 15% target, even though our capital has grown by 48% over this period. With that, I'll hand you over to Bill Dunaway for a more detailed discussion of the financial results. Over to you, Bill.