0000913760-25-000147
SEC filingStoneX Group Inc. posted modest 4% net operating revenue growth to $488.3 million in Q3 FY25, with Institutional and Self-Directed/Retail gains offsetting a sharp decline in the Commercial segment due to lower commodity volatility and higher interest costs.
StoneX Group Inc. reported financial results for the third quarter of fiscal 2025 (ended June 30, 2025). Total revenues reached $34.83 billion, up 29% from $27.07 billion in the same quarter last year, largely driven by a 29% increase in sales of physical commodities. Operating revenues (total revenues less cost of sales) rose 12% to $1.024 billion, reflecting a mixed performance across segments. Net operating revenues, a key measure of profitability after transaction-based expenses and interest, increased 4% to $488.3 million. Net income improved 2% to $63.4 million, while diluted earnings per share declined 2% to $1.22, primarily due to a higher weighted-average diluted share count from stock options and restricted stock issuance.
The Commercial segment faced headwinds with operating revenues down 14% to $225.8 million, as lower average rate per contract (RPC) in listed derivatives (-26%) and OTC derivatives (-16%) more than offset volume growth. Elevated interest expense on precious metals inventory held to mitigate tariff risks added $12.2 million to costs. Segment income dropped 36% to $80.2 million. In contrast, the Institutional segment delivered strong results with operating revenues up 23% to $626.0 million, driven by a 25% increase in securities average daily volume (ADV) and a 15% rise in securities rate per million (RPM). Segment income surged 41% to $87.4 million. The Self-Directed/Retail segment also performed well, with operating revenues up 19% to $114.2 million, led by a 34% jump in FX/CFD ADV. Segment income increased 49% to $41.2 million. The Payments segment saw modest growth of 4% in operating revenues to $53.3 million, with ADV up 16% offset by a 6% decline in RPM; segment income was flat at $28.1 million.
The overall effective tax rate decreased to 26% from 30% in the prior year quarter, due to changes in the mix of foreign earnings and lower discrete items.
Total assets increased 25% from September 30, 2024 to $34.3 billion, driven by growth in securities purchased under agreements to resell ($8.2 billion vs $5.2 billion) and financial instruments owned at fair value ($9.0 billion vs $6.8 billion). Stockholders' equity rose 16% to $1.98 billion, supported by retained earnings growth of $220 million year-to-date. The company maintained strong liquidity, with cash and cash equivalents of $1.31 billion and total cash, segregated cash, equivalents of $7.47 billion. Total debt (lenders under loans plus senior secured borrowings) stood at $896.6 million. The debt-to-equity ratio was approximately 0.45x. All subsidiaries remained in compliance with regulatory capital requirements.
For the nine months ended June 30, 2025, cash flow from operations was $858.9 million, compared to $314.3 million in the prior year, reflecting higher net income and favorable working capital changes, particularly from securities sold under repurchase agreements. Capital expenditures totaled $44.9 million, resulting in free cash flow of $814.0 million. The company used cash for acquisitions ($13.8 million net) and deferred payments on acquisitions ($21.1 million). Share buybacks were minimal; the company withheld shares valued at $6.4 million for tax withholding on equity awards. Financing activities used $3.9 million, primarily for debt repayments and acquisition-related payments.
Management attributed the Commercial segment weakness to lower commodity volatility and heightened interest expense on precious metals inventories held in the U.S. to mitigate potential tariffs. The Institutional and Self-Directed/Retail segments benefited from increased client activity and market share gains. Interest expense rose 25% to $371.3 million, mainly from fixed income trading activities, while corporate funding costs decreased 17% to $20.1 million due to lower interest rates.
The company completed a 3-for-2 stock split in March 2025 and subsequently closed the acquisitions of R.J. O'Brien and Benchmark in July 2025. These acquisitions are expected to strengthen the firm's FCM, investment banking, and equity research capabilities. The company used $625 million in new senior secured notes to fund the R.J. O'Brien acquisition. No specific forward revenue or earnings guidance was provided. Management noted the potential impacts of new tariffs, the OECD Pillar Two tax rules, and the One Big Beautiful Bill Act, but did not quantify them.
Derivative fair values were presented with netting adjustments: total derivative assets (gross) were $6.73 billion, netted to $185.2 million within financial instruments owned. The gross notional of derivative contracts outstanding was approximately 12.7 million contracts at June 30, 2025. Hedging activities involved foreign currency forward contracts designated as cash flow hedges to manage non-USD expenditure exposure. The company’s effective tax rate for the nine months was 27%, higher than the U.S. statutory rate due to state taxes and GILTI.
Goodwill increased from $61.0 million to $67.8 million, primarily from the JBR Recovery and Octo Finances acquisitions. Intangible assets net of amortization were $21.1 million. The allowance for doubtful accounts on client receivables was $54.0 million. Subsequent events included the closings of R.J. O'Brien and Benchmark acquisitions in July 2025, with purchase price allocations pending.