StoneX Group Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter full year 2024 StoneX Group 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Bill Dunaway, Chief Financial Officer. Sir, please go ahead.

Good morning. Welcome to our earnings conference call for our fourth quarter ended September 30th, 2024. After the market closed yesterday, we issued a press release reporting our results for the fourth fiscal quarter of 2024. This release is available on our website at www.stonex.com, as well as a slide presentation which we will refer to on this call in our discussion of our quarterly and full fiscal year 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 are 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-K to be 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. Although 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 the call over to Sean O'Connor, the company's CEO.

Thanks, Bill. Good morning, everyone, and thanks for joining our fiscal 2024 fourth quarter earnings call. Starting on slide three of the earnings deck, the fourth quarter of fiscal 2024 was a record result for us, with net income of $76.7 million and alluded earnings per share of 2.3%. versus the comparative period a year ago, we were up 51 percent in net income and 48 percent in EPS. And as compared to the immediately preceding quarter, these measures were up 24 percent and 23 percent respectively. This represented an 18.5 percent ROE on stated book and a 19.4 percent ROE on tangible book value, despite a 21 percent increase in book value over the last year and a 60 percent increase over the last two years. We had record operating revenues of $920.1 million, up 18% versus the prior year. Just a reminder, operating revenues include not only interest earned on our client float, but also carried interest that is related to our fixed income trading activities. Net operating revenues, which nets off interest expense as well as introducing broker commissions and clearing costs, were up 13% versus a year ago, but down 3% versus the record achieved in the immediately preceding quarter. Total compensation and other expenses were up 8% for the quarter, with variable compensation up 7%, in line with net operating revenue growth rate. Fixed compensation and related costs were up 14% versus a year ago, but were down 4% compared to the immediately preceding quarter. This strong finish to our fiscal years resulted in record full-year operating results for the third year in a row, which we believe validates our strategy and underscores the robust earnings potential of our franchise. Our full-year operating revenues were $3.4 billion, up 18% versus the prior year. Net income was a record $260.8 million, up 9%, with adjusted net income of $264.2 million, up 18%. EPS was $7.96 per share, up 7%. The return on equity for the year was 16.9% on stated book and 17.8% on tangible book value. We ended the 2024 fiscal year with book value per share of $53.62, up 21% versus a year ago. Turning to slide four in the earnings deck, which compares quarterly operating revenues by product versus a year ago. Generally speaking, the market environment in the fourth quarter was similar to what it has been for most of the fiscal year, with generally low volatility, some exceptions periodically in some of our products, which negatively impacted revenue capture in most of our product areas, except for foreign exchange and CFDs. As we all know, volatility can change quickly, and indeed recent events have proved this out, and we are hopeful that we may see better market conditions ahead. However, we continue to see good client engagement and market share capture as evidenced by increased volumes across all of our products. The earnings power from our enhanced client footprint should be even more evident with improved trading conditions. For the fourth quarter, we saw solid revenue gains of 20% in listed derivatives with strong volume growth of 46%, offset by a 15% reduction in contract rates. Both factors were driven by institutional segment, which continued to make gains with large institutional clients. In addition, the commercial segment increased both volumes and rate per contract as compared to the prior year. OTC derivatives revenue was down 23%, largely due to revenue capture being down 26%, offset by slightly higher volumes, which were up 4%. Securities revenue was up 34%, with volumes up 34%, and partially offset by 3% decline in rate per million. Over the last few years, we have seen the business mix switch to higher volume, lower margin products, although the impact of this on revenue capture has now flattened out. Payments revenue was down 11%, a theme we have seen over the last couple of quarters due to much tighter spreads in several of our key payments corridors, with rate per million down 20%. However, on a positive note, volumes were up 13%, which was the third consecutive quarter year-over-year of volume growth. FX and CFD's revenues were up 7% due to gains in both volumes and spread capture. Our interest and fee income earned on our aggregate client floats, including both listed derivative client equity and our money market FDIC suite balances, increased 10% versus the prior year as we achieved higher interest rates on those balances, but was partially offset by 2% decline in these balances versus the prior year. Turning to slide five and looking at the same data over the full fiscal year for 2024, we again see good revenue growth in listed derivatives, securities, FX, and CFDs, while revenue was down for OTC derivatives, payments, and physical commodities. Volumes were up across the board for all products, with the exception of FX and CFDs. On a long-term basis, this is an important indicator for us when it comes to measuring client engagement and market penetration. However, revenue capture is largely a function of market conditions, and we can again see a mixed picture as market volatility generally retraced to lower levels compared to the prior year, with the exception of FX and CFDs, which experienced a significant increase in rate per million, up 32% versus the prior year. In addition, we continue to see the effect of a change in product mix on the securities rate per million with increased volumes in lower margin products. Turning out slide six, our segment summary, just to touch on the highlights before Bill gets into more details. For the quarter, segment operating revenues were up 18% and segment income was up 9% versus the prior year. All segments were up in both revenue and income except for payments, with institutional being the positive outlier. Our commercial segment had a relatively flat quarter in both operating revenues and segment income. Stronger listed revenue, listed derivative revenue was largely offset by lower OTC derivative revenue. Operating revenues and segment income were down 20 and 29% respectively versus the immediately prior record quarter. As I noted earlier, institutional segment had a record quarter in both operating revenues and segment income, with increases over the prior year of 30% and 41% respectively, in particular driven by increases in equity market making, derivative, and interest income. On a sequential basis, operating revenues were up 9%, and segment income was up 24%. Self-directed retail had operating revenues up 13%, and a 6% increase in segment income. On a sequential basis, both operating revenues and segment income were up 8% and segment income up 8% again, demonstrating operational leverage inherent in the self-directed platform. In our payment segments, operating revenues down 10% and segment income was down 23%, principally due to the tighter FX spreads in several of our key payment corridors. On a sequential basis, operating revenues were down 5% and segment income was down 12%. For the fiscal year as a whole, the summary was commercial and payment segments were roughly flat for the year in both operating revenue as well as segment income, while institutional was up and self-directed retail was up significantly. As mentioned, the commercial segment was roughly flat with stronger results from listed derivatives and interest being offset by lower revenues from OTC derivatives and physical commodities. Our institutional segment grew operating revenues at 30% and segment income 22%, with all products showing gains, with the exception of FX. Self-directed retail was a standout, with operating revenues up 19%, driving 160% increase in segment income. Again, clearly demonstrating the operational leverage we have in a self-directed platform. The most significant factor here was better revenue capture as we benefited from improved internalization of spreads and a diversification of products traded. Payment segment operating revenues down 1%, but up slightly in segment income in what has been the toughest market conditions we've had in many years for this business. Turning to slide seven, which sets out at the top of the page, our trailing 12-month financial performance over the last nine quarters. These numbers have been adjusted for accounting treatment related to the gain and CDI acquisitions, as discussed in our prior filing, and which appear in the reconciliation provided in the appendix of the earnings deck. On the left-hand side, the bars represent our trailing 12-month operating revenues 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 is likewise grown at an 11% CAGR. On the right-hand side, you can see our trailing 12-month adjusted net income in the bars, which is up 23% over the last two years for an 11% CAGR. The dotted line represents our ROE, which has remained constantly above our 15% target, even though our capital has grown by 60% over this period. The bottom half of the slide sets out our long-term performance, both measured in terms of shareholders' return, the bottom left-hand graph, which shows we have significantly outperformed both indices shown, as well as our financial performance on the bottom right-hand graph, which shows we have grown our stockholders' equity, operating revenue, and market capitalization at nearly 30% CAGR for the last 21 years. With that, I'll hand you over to Bill Dunaway. Bill.