StoneX reports “strongest core operating performance in our history”

Rick Steves

StoneX’s effort to build a diversified global franchise with growth in income across all operating segments has proven fruitful. The acquisition of GAIN Capital in 2020 for $236 million in equity value provided the much-needed access to the retail FX/CFD brokerage business.

StoneX Group has reported its financial results for Q2 2021, where it highlighted record quarterly operating revenues of $471.4 million (up 29%), quarterly net income of $55.3 million (up 41%), and quarterly diluted EPS of $2.73 per share (ROE of 26.7%).

Operating revenues from FX/CFD contracts increased $65.8 million, to $74.7 million in the three months ended March 31, 2021, as a result of an incremental $71.2 million in retail FX/CFD contracts operating revenues resulting from the acquisition of Gain Capital which was partially offset by lower FX operating revenues in the firm’s legacy FX prime brokerage business.

Sean M. O’Connor, CEO of StoneX Group Inc., commented: “I believe this quarter represents the strongest core operating performance in our history, with record operating revenues, a 41% increase in net income versus the prior year, and a 26.7% ROE on stated book value.

“This quarter demonstrates our efforts to build a diversified global franchise with growth in operating revenues and income across all of our operating segments. We continue to increase both our number of clients and their underlying volumes, which we feel positions us for success in the future.”

The global brokerage and financial services firm providing execution, risk management, and advisory services, market intelligence, and clearing services is the new parent company of GAIN Capital after having completed the $236 million (in equity value) acquisition in July 2020.

The deal represented a 70% premium to the closing share price of GAIN’s shares on February 26, 2020 and a 60% premium to the volume-weighted average price of GAIN’s stock in the 30 trading days ending on February 26, 2020.

From that moment on, StoneX became a leader in the retail FX brokerage business. All earnings results reported by StoneX have shown a massive jump in revenue when compared to pre-GAIN Capital reports.

Still, there has been revenue growth in between quarters since the retail FX/CFD brokerage business was acquired. The operating revenues in the three months ending on 31 December 2020 were $59.8 million against $74.7 million in the three months ended March 31, 2021. This is a respectable 25% growth.

In order to make the best out of its acquisition, StoneX appointed Nick Saunders from Trading 212, where he was Chief Executive Officer of the UK business for six years. He was responsible for the broker’s launch of deliverable equities with zero commission.

  • Read this next

    Retail FX

    Weekly Roundup: John Oliver rips into MetaTrader, Binance to pay $10 billion

    Welcome to this week’s roundup, where we delve into the latest developments in the Forex, Fintech, and cryptocurrency markets. Stay ahead of the curve with our comprehensive overview of the week’s most impactful events and trends across these dynamic sectors.

    Retail FX

    Lark Funding reopens to US traders, MyFundedFX picks cTrader

    Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

    Institutional FX

    Cboe FX volume falls to lowest level since summer

    Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

    Retail FX

    ThinkMarkets secures lucrative DFSA license in Dubai

    Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

    Digital Assets

    New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

    Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

    Digital Assets

    Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

    Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

    Digital Assets

    Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

    Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

    Institutional FX

    Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

    Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

    Industry News

    Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

    In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.

    <