StoneX's Q4 2025: Contradictions Emerge on Retail Revenue Capture, Interest Rate Symmetry, and Precious Metals Recovery

Date of Call: November 25, 2025

Financials Results

• Revenue: $1.2B (Q4), up 31% YOY and up 17% sequentially
• EPS: $1.57 per diluted share (Q4), up 1% YOY; net income $85.7M, up 12% YOY

Guidance:

• Expect $50M annual run-rate cost synergies from the RJO integration, targeted within 24 months; ~$20M annualized realized so far.
• Capital synergies expected of at least ~$50M (initial $20–30M in Q2 FY26; remaining >$30M after U.S. FCM merger in ~Q4 2026).
• RJO expected to be accretive to EPS and ROE in near and long term.
• No formal revenue-synergy target will be provided (management cites tracking/audit difficulties) but revenue uplift anticipated.
• 100bp change in short-term rates would change net income by ~$53.8M (~$1.02/sh annualized).

Business Commentary:

* Revenue Growth and Strategic Acquisitions: - StoneX Group reported operating revenues of over $1.2 billion for Q4, up 31% from the previous year and 17% from the prior quarter. - The growth was driven by strategic acquisitions, with the acquisition of R.J. O'Brien contributing $89.5 million to the revenue increase.

• Product Revenue Diversification:
• Revenue from listed contracts increased by 76% year-on-year, contributing $89.4 million, while OTC derivatives increased 27%.

• This revenue diversification was driven by the integration of R.J. O'Brien's operations and increased transaction volumes across various product offerings.

• Fixed Compensation and Expense Impact:

• Fixed compensation and related costs increased by 24% year-on-year and 14% quarter-on-quarter, reflecting the integration of R.J. O'Brien and Benchmark.

• The increase was primarily due to the inclusion of acquisition-related costs and higher professional fees.

• Strong Institutional Segment Performance:

• The institutional segment saw record net operating revenues and segment income with 67% and 73% growth, respectively, driven by R.J. O'Brien's contribution.
• The growth was attributed to increased revenues from securities, listed derivatives, and interest and fee income resulting from the acquisition.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted record Q4 net income of $85.7M and FY net income $305.9M; stated RJO "will be accretive to both EPS and ROE"; reported ~$20M annualized cost savings realized already and described the RJO deal as "transformational" and management is "very excited about what's coming in 2026."

Q&A:

• Question from Jeffrey Schmitt (William Blair & Company L.L.C., Research Division): How are early cross-selling efforts with RJO clients going? I know it's pretty early innings, but anything that's kind of standing out there -- and then when can we expect your estimate, I guess, on -- for revenue synergies overall.
  Response: Cross-selling is progressing with early client sign-ups and some trades; tangible revenue uptick expected but no hard revenue-synergy estimate will be provided because it's difficult to track and audit.

• Question from Jeffrey Schmitt (William Blair & Company L.L.C., Research Division): It looks like there was still some weakness in precious metals trading in the quarter. Did that improve after gold was officially exempted from tariffs in September? And maybe how did you see that trend in October and November?
  Response: Metals weakness was driven by tariff-induced hedging dislocation and extra holding/shipping costs; Q4 improved versus Q3 and management expects metals to be a positive in Q1 as dislocations resolve.

• Question from Jeffrey Schmitt (William Blair & Company L.L.C., Research Division): On the institutional side the RPC for listed derivatives jumped quite a bit. I'm just curious what drove that or how sustainable that is.
  Response: The increase was driven by the addition of RJO, whose institutional rate per contract is roughly $1 higher than legacy StoneX; the uplift reflects business mix from the acquisition.

• Question from Daniel Fannon (Jefferies LLC, Research Division): On the security side the rate per million also went up pretty significantly quarter-over-quarter. Just curious about the sustainability of that.
  Response: Rate-per-million gains reflect improved market conditions, higher volatility in fixed income/equities and contribution from prime brokerage plus mix changes from RJO; sustainability depends on market conditions and business mix.

• Question from Daniel Fannon (Jefferies LLC, Research Division): On the integration road map: you said roughly $20M achieved; what's the next wave and how much remains toward the $50M synergies?
  Response: About $20M annualized synergies are realized; next incremental savings come from U.K./non-U.S. entity consolidations in ~Q2 FY26 and the largest wave from merging the two U.S. FCMs targeted around Q4 2026.

• Question from Daniel Fannon (Jefferies LLC, Research Division): Do you view the $50M synergy target as conservative or could it be higher as you progress?
  Response: Management is comfortable with the $50M target and is not raising it, prioritizing client support and careful execution.

• Question from Daniel Fannon (Jefferies LLC, Research Division): With higher balances and expected rate cuts next year, what's the hedging strategy to limit downside from rate moves?
  Response: The company will selectively hedge via swaps (targeting 2–3 year horizon) as an insurance policy, has begun modest hedging post-integration, and will leverage RJO's active cash management to earn incremental spread.

• Question from Daniel Fannon (Jefferies LLC, Research Division): Are you currently implementing those hedges?
  Response: Yes — modest amounts have been put on since the integration; management continues to add opportunistically to establish floors.

• Question from Daniel Fannon (Jefferies LLC, Research Division): On the retail/self-directed segment, fee per million fell materially — anything else to note beyond subdued volatility?
  Response: Decline is mainly due to lower volatility and normalizing from exceptional prior quarters; current levels are near the long-term average and not viewed as structural underperformance.

Contradiction Point 1

Retail Business Revenue Capture Rate

It involves differing expectations for the long-term average revenue capture rate for the Retail business, affecting financial forecasting and investor expectations.

Are there other factors beyond volatility in the retail segment to consider moving forward, given the significant increase in the rate per million? - Daniel Fannon (Jefferies LLC)

2025Q4: The retail business has a long-term average revenue capture in the $80 million range, with recent peaks but overall consistent performance. - Sean O'Connor(CEO)

What is the normalized revenue capture rate for the Retail business? - Unidentified Participant

2023Q1: Long-term average revenue capture is about $90-$95, but we have seen exceptional conditions with higher capture rates in the past. - Sean O'Connor(CEO)

Contradiction Point 2

Interest Rate Impact on Market Earnings Sensitivity

It pertains to the symmetry of market condition and earnings sensitivity related to interest rate changes, which is crucial for financial forecasting and investor understanding.

Are market conditions and earnings sensitivity similar when interest rates rise or fall? - Unidentified Participant

2025Q4: The dynamics are symmetrical regarding interest rate changes. - Sean O'Connor(CEO)

Are market conditions and earnings sensitivity symmetrical in response to rising and falling interest rates? - Unidentified Participant

2023Q1: The dynamic is symmetrical regarding interest rate changes. Assets might reprice slightly quicker on the way down, but the effect on earnings is expected to be the same. - Sean O'Connor(CEO)

Contradiction Point 3

Precious Metals Trading Performance

It highlights differing perspectives on the impact of tariffs on precious metals trading and the expected recovery based on the exemption from tariffs.

Did the weakness in precious metals trading improve after gold was exempted from tariffs in September, and how did the trend evolve in October and November? - Jeffrey Schmitt(William Blair & Company L.L.C.)

2025Q4: The precious metals business was affected by the dislocation in CME metals prices due to tariffs, causing additional costs. Although it improved from Q3, it is still not back to its normal profitability. The exemption of tariffs has now allowed for flexibility, potentially turning the situation positive for StoneX as they can take advantage of market dislocations. - Sean O'Connor(Executive Vice-Chairman)

What caused the weakness in the commercial segment's trading volumes? Were you surprised by the decline in hedging activity? - Jeffrey Paul Schmitt(William Blair & Company L.L.C.)

2025Q3: The precious metals business was also hit by the dislocation in CME metals prices due to tariffs, which caused additional costs. It was weaker than we had anticipated. - Sean O'Connor(Executive Vice-Chairman)