StoneX Group Inc.: Form 10-Q for the period ended Jun 30, 2025

Throughout this document, unless the context otherwise requires, the terms “Company”, “we”, “us” and “our” refer to StoneX Group Inc. and its consolidated subsidiaries.

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this report. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of the Company, including statements about the benefits of our acquisition of RJO, including expected synergies and future financial and operating results, the plans, objectives, expectations and intentions of StoneX after the acquisition, adverse changes in economic, political and market conditions, including losses from our market-making and trading activities arising from counterparty failures, global trade policies and tariffs, the loss of key personnel, the impact of increasing competition, the impact of changes in government regulation, uncertainty concerning fiscal or monetary policies established by central banks and financial regulators, the possibility of liabilities arising from violations of foreign, United States (“U.S.”) federal and U.S. state securities laws, the impact of changes in technology in the securities and commodities trading industries, and other risks discussed in our filings with the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2024. Although we believe that our forward-looking statements are based upon reasonable assumptions regarding our business and future market conditions, there can be no assurances that our actual results will not differ materially from any results expressed or implied by our forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. We caution readers that any forward-looking statements are not guarantees of future performance.

Overview

We operate a global financial services network that connects companies, organizations, traders and investors to the global market ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services, high touch service and deep expertise. We strive to be the one trusted partner to our clients, providing our network, products and services to allow them to pursue trading opportunities, manage their market risks, make investments and improve their business performance. Our businesses are supported by our global infrastructure of regulated operating subsidiaries, our advanced technology platforms and our team of more than 4,700 employees as of June 30, 2025. We believe our client-first approach differentiates us from large banking institutions, engenders trust and enables us to establish market leading positions in a number of complex fields in financial markets around the world. For additional information, see Overview of Business and Strategy within “Item 1. Business” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

We report three of our operating segments based primarily on the nature of the clients we serve (commercial, institutional, and self-directed/retail), and a fourth operating segment, our payments business. See Segment Information below for a listing of business activities performed within our reportable segments.

Unless noted otherwise, comparisons in the following discussions relate to the three months ended June 30, 2025 as compared to the same quarter in the prior fiscal year.

Recent Events

Closing of the Acquisition of R.J. O’Brien

On July 31, 2025, we closed on our previously announced acquisition of R.J. O’Brien (“RJO”). The purchase price consideration was paid in a combination of cash of approximately $610.6 million and the issuance of 3,085,554 shares of the Company’s common stock. At closing, we assumed approximately $125.7 million of RJO debt. We believe the acquisition significantly strengthens our position as a leading FCM and enhances our role as an essential part of the global financial market structure, offering institutional grade execution, clearing, custody, and prime brokerage across all asset classes. The acquisition is expected to expand our client float and add many introducing brokers to our network, while RJO’s clients benefit from our extensive range of markets, products, and services.

In connection with the acquisition of RJO, on July 8, 2025, we issued $625.0 million in aggregate principal amount of Senior Secured Notes due 2032 (the “Notes due 2032”), which are fully and unconditionally guaranteed, jointly and severally, on a senior secured second lien basis, by certain existing and future subsidiaries that guarantees indebtedness under the Company’s senior secured revolving credit facility and certain other senior indebtedness. The Notes due 2032 will mature on July 15, 2032. Interest on the Notes due 2032 accrues at a rate of 6.875% per annum and is payable semiannually in arrears on January 15 and July 15 of each year, commencing on January 15, 2026. On July 31, 2025, the net proceeds from the issuance of the Notes due 2032 were used to fund the cash portion of the purchase price and to pay related fees and expenses, as described above.

Closing of the Acquisition of Benchmark

On July 31, 2025, we closed on our previously announced acquisition of The Benchmark Company, LLC (“Benchmark”). Benchmark is a full-service investment banking firm offering a robust sales and trading platform, award-winning equity research, and a highly experienced investment banking team. We believe this acquisition will strengthen our offerings in equity and debt capital markets, with significant enhancements in equity research and investment banking. The purchase price consideration includes cash of approximately $57.1 million and four annual contingent payments, each capped at $7.0 million, plus a final contingent payment for any excess above the annual caps over the four year period following the close, aggregating to an estimated undiscounted amount of $35.0 million.

Potential Impacts of New Tariffs or Changes to Existing Tariffs

A number of significant structural, political, and monetary issues, and global conflicts continue to confront the global economy, and instability could continue, resulting in changes to the level of inflation, market volatility, potential recession, supply chain constraints and costs, diminished trading volumes, uncertainty, increased operating expenses, and increased costs due to potential new tariffs or changes to existing tariffs. The impact of these events and other factors on our financial position and results of operations is difficult to predict, could affect the comparability of our results of operations from period to period, and may have an adverse effect on our financial results.

Common Stock Split

On March 21, 2025, we completed a three-for-two split of our common stock, effected as a stock dividend entitling each shareholder of record to receive one additional share of common stock for every two shares owned. Additional shares issued as a result of the stock dividend were distributed after close of trading on March 21, 2025, to stockholders of record at the close of business on March 11, 2025. Cash was distributed in lieu of fractional shares based on the opening price of a share of common stock on March 12, 2025. All share and per share amounts contained herein have been retroactively adjusted for this stock split.

Executive Summary

We achieved modest growth in net operating revenues in the third quarter of fiscal 2025, up 4%, with diminished commodity volatility generally as well as heightened interest expense and logistical charges in our precious metals activities leading to declines in our Commercial segment net operating revenues, partially offsetting growth across all of our other business segments. In addition, the three months ended June 30, 2025 includes $6.5 million of bridge loan financing fees and $2.4 million of professional fees related to merger and acquisition activity.

We experienced an increase in transaction volumes across all of our product offerings, as well as growth in average client equity and average money market/FDIC sweep client balances as compared to the prior year.

In terms of revenue capture on our transactional volumes as compared to the prior fiscal year quarter, we experienced:

• Rate per contract (“RPC”) on listed derivatives decreased 11%, due to client mix and decline from heightened spreads in the prior year in LME base metal markets.
• OTC derivatives RPC declined 16%, with diminished commodity volatility leading to lower spreads captured.
• 15% growth in securities rate per million (“RPM”), primarily due to improved performance in global equity markets.
• Flat FX/CFD RPM.
• 6% decline in payments RPM due to generally lower FX spreads in certain markets, most notably in Africa.

Interest and fee income earned on client balances decreased $13.0 million due to declines in short term interest rates, which was partially offset by increases in both average client equity and money market/FDIC client balances.

Overall segment income decreased $6.8 million, as our Commercial segment decreased $45.5 million, partially offset by increases in our Institutional and Self-Directed/Retail segments of $25.2 million and $13.6 million, respectively. Segment income in our Payments segment decreased $0.1 million.

On the expense side, we continued to focus on maintaining our variable cost model and limiting the growth of our non-variable

expenses. Variable expenses were 53% of total expenses in the three months ended June 30, 2025 as compared to 52% in the three months ended June 30, 2024. Non-variable expenses, excluding bad debts, increased $15.9 million, principally due to higher fixed compensation and benefits, professional fees, depreciation and amortization, and non-trading technology.

The three months ended June 30, 2025 include a $2.3 million loss on the disposal of certain capitalized hardware expenditures, partially offset by a gain of $1.0 million related to a class action settlement. The results of the three months ended June 30, 2024 included a gain of $1.8 million related to a class action settlement received.

Net income increased $1.5 million to $63.4 million in the three months ended June 30, 2025. Diluted earnings per share was $1.22 for the three months ended June 30, 2025 compared to $1.25 in the three months ended June 30, 2024.

Selected Summary Financial Information

Results of Operations

Our total revenues, as reported, combine gross revenues for the physical commodities business and net revenues for all other businesses. Management believes that operating revenues, which deduct the cost of sales of physical commodities from total revenues, is a more useful financial measure with which to assess our results of operations. The table below sets forth our operating revenues, as well as other key financial measures, for the periods indicated.

Financial Information (Unaudited)

(in millions)

32

The tables below present operating revenues disaggregated across the key products we provide to our clients and select operating data and metrics used by management in evaluating our performance, for the periods indicated.

(1) Give-up fee revenues, related to contract execution for clients of other FCMs, as well as cash and voice brokerage revenues are excluded from the calculation of listed derivatives, average rate per contract.

(2) Interest expense associated with our fixed income activities is deducted from operating revenues in the calculation of Securities RPM, while interest income related to securities lending is excluded.

Operating Revenues

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Operating revenues increased $110.6 million, or 12%, to $1,024.3 million in the three months ended June 30, 2025 compared to $913.7 million in the three months ended June 30, 2024. The table above displays operating revenues disaggregated across the key products we provide to our clients.

Operating revenues derived from listed derivatives decreased $4.1 million, with our Commercial segment down $5.9 million, partially offset by a $1.8 million increase in our Institutional segment.

Operating revenues derived from OTC derivatives decreased $7.3 million, principally resulting from a 16% decrease in OTC average rate per contract, partially offset by a 6% increase in OTC derivative volumes.

Operating revenues derived from securities transactions increased $111.7 million, principally due to a 25% increase in ADV. Carried interest income on fixed income securities is a component of operating revenues, however, interest expense associated with financing these positions is not. In the calculation of securities RPM in the table above, we deduct interest expense associated with our fixed income activities from operating revenues, as well as exclude interest income related to securities lending, in order to provide a more useful measure of the financial performance of our securities business. Net operating revenues derived from securities transactions increased $39.3 million, principally due to the increase in ADV noted above as well as a 15% increase in the securities RPM primarily as a result of improved performance in equity capital markets.

Operating revenues derived from FX/CFD contracts increased $10.9 million, as a result of a $12.2 million increase in our Self-Directed/Retail segment, which was partially offset by a $1.3 million decrease in Institutional segment FX contracts operating revenues.

Operating revenues from payments increased $2.3 million, principally driven by a 16% increase in payments ADV, which was partially offset by a 6% decline in payments RPM.

Operating revenues derived from physical contracts decreased $11.4 million, primarily as a result of a $12.9 million decline in physical agricultural and energy operating revenues, which was partially offset by a $1.5 million increase in precious metals operating revenues. Precious metals related operating revenues were unfavorably impacted by unrealized losses on derivative positions of $0.9 million in the three months ended June 30, 2025, related to physical inventories held at the lower of cost or net realizable value. Precious metals operating revenues in the three months ended June 30, 2024, were favorably impacted by realized gains of $8.5 million on the sale of physical inventories carried at the lower of costs or net realizable value, for which losses on related derivative positions were recognized in prior periods.

Interest and fee income earned on client balances, which is associated with our listed and OTC derivative businesses, as well as our Correspondent Clearing and Independent Wealth Management businesses, declined $13.0 million, principally as a result of a decline in short term interest rates, which was partially offset by increases in average client equity and average money-market/FDIC sweep client balances of 10% and 25%, respectively.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Operating revenues increased $408.5 million, or 16%, to $2,924.6 million in the nine months ended June 30, 2025 compared to $2,516.1 million in the nine months ended June 30, 2024.

Operating revenues from listed derivatives increased $15.2 million, with our Commercial and Institutional segments up $13.3 million and $1.9 million, respectively.

Operating revenues in OTC derivatives declined $7.9 million, principally driven by a 11% decline in the average rate per contract, which was partially offset by a 7% increase in OTC contract volumes.

Operating revenue from securities transactions increased $283.3 million, principally due to a 28% increase in securities ADV. Carried interest on fixed income securities is a component of operating revenues, however, interest expense associated with financing these positions is not. In the calculation of securities RPM in the table above, we deduct interest expense associated with our fixed income activities from operating revenues, as well as exclude interest income related to securities lending, in order to provide a more useful measure of the financial performance of our securities business. Net operating revenues derived from securities transactions increased $77.4 million, principally driven by the increase in ADV noted above, as well as a 3% increase in RPM.

Operating revenues from FX/CFD contracts increased $25.5 million, with increases of $24.9 million and $0.6 million in our Self-Directed/Retail and Institutional segments, respectively.

Operating revenues from payments increased by $0.5 million, principally driven by a 17% increase in the ADV, which was partially offset by a 13% decline in payments RPM.

Operating revenues from physical contracts increased $56.5 million, driven by increases of $21.7 million and $34.8 million in our physical agricultural and energy and precious metals businesses, respectively. Precious metals related operating revenues were unfavorably impacted by $0.2 million and $2.3 million in the nine months ended June 30, 2025 and 2024, respectively, by unrealized losses on derivative positions related to physical inventories carried at the lower of cost or net realizable value.

Interest and fee income earned on client balances, which is associated with our listed and OTC derivative businesses, as well as our Correspondent Clearing and Independent Wealth Management businesses, declined $6.3 million, principally as a result of lower short term interest rates which were partially offset by increases of 9% and 20% in average client equity and average money-market/FDIC sweep client balances, respectively.

Interest and Transactional Expenses

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Transaction-based clearing expenses

Expenses were higher in the Equity and Debt Capital Markets businesses, principally related to the increased ADV, along with an increase in ADR conversion fees. Additionally, expenses were higher in our Financial Ag and Energy and Exchange-Traded Futures & Options businesses, principally related to the increase in contracts traded.

Introducing broker commissions

Expenses were higher in our Independent Wealth Management and Self-Directed/Retail Forex businesses, principally due to increased revenues and higher payouts, as well as in our Financial Ag and Energy and LME businesses, principally due to increased volume and client mix traded. These increases were partially offset by lower introducing broker commissions in our Exchange-Traded Futures & Options business.

Interest expense

The increase in interest expense attributable to fixed income securities and securities borrowing was principally due to the growth in the size of the security repo and securities lending businesses. The increase in other direct interest expense attributable to operating segments principally resulted from an increase in the activities of our physical precious metals and commodities businesses.

During the three months ended June 30, 2025, interest expense attributable to corporate funding included $3.1 million of bridge loan financing fees related to the amendment of our corporate revolving credit facility, with the entirety of the estimated term of the bridge financing contained within the quarter. In addition, the quarter included interest expense attributable to corporate funding of $3.4 million, related to bridge loan financing fees for the issuance of the Notes due 2032, which closed on July 8, 2025. In addition to the $3.4 million in the current quarter, $1.3 million of unamortized bridge loan financing fees will be amortized in the three months ended September 30, 2025.

During the three months ended June 30, 2024, interest expense attributable to corporate funding included incremental interest from our March 1, 2024 issuance of the Senior Secured Notes due 2031 (the “Notes due 2031”). While funds from the issuance of the Notes due 2031 were used to redeem the Senior Secured Notes due 2025 (the “Notes due 2025”), the redemption did not occur until June 17, 2024, in order to allow us to redeem those notes at par. At the redemption of the Notes due 2025, we recognized a $3.7 million loss on the extinguishment of debt related to the write-off of unamortized original issue discount and deferred financing costs.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Transaction-based clearing expenses

Expenses were higher in the Equity and Debt Capital Markets businesses, principally related to the increased ADV, along with an increase in ADR conversion fees. Additionally, expenses were higher in our Financial Ag and Energy and Exchange-Traded Futures & Options businesses, principally related to the increase in contracts traded, and within our Correspondent Clearing business.

Introducing broker commissions

Expenses were higher in our Independent Wealth Management and Self-Directed/Retail Forex businesses, principally due to increased revenues and higher payouts, as well as in our Financial Ag and Energy and LME businesses, principally due to increased volume and client mix traded. These increases were partially offset by lower introducing broker commissions in our Exchange-Traded Futures & Options business.

Interest expense

The increase in interest expense attributable to fixed income securities and securities borrowing was principally due to the growth in the size of the security repo and securities lending businesses. The increase in other direct interest expense attributable to operating segments principally resulted from an increase in our physical precious metals business activities and our equity securities trading activities.

During the nine months ended June 30, 2025, interest expense attributable to corporate funding included $3.1 million of bridge loan financing fees related to the amendment of our revolving credit facility. In addition, the period included interest expense attributable to corporate funding of $3.4 million, related to bridge loan financing fees for the issuance of the Notes due 2032, which closed on July 8, 2025. In addition to the $3.4 million in the current quarter, $1.3 million of unamortized bridge loan financing fees will be amortized in the three months ended September 30, 2025.

During the nine months ended June 30, 2024, interest expense attributable to corporate funding included incremental interest from our March 1, 2024 issuance of the Notes due 2031. While funds from the issuance of the Notes due 2031 were used to redeem the Notes due 2025, the redemption did not occur until June 17, 2024, in order to allow us to redeem those notes at par. At the redemption of the Notes due 2025, we recognized a $3.7 million loss on the extinguishment of debt related to the write-off of unamortized original issue discount and deferred financing costs.

Net Operating Revenues

Net operating revenues is one of the key measures used by management to assess operating segment performance. Net operating revenue is calculated as operating revenue less transaction-based clearing expenses, introducing broker commissions and interest expense. Transaction-based clearing expenses represent variable expenses paid to executing brokers, exchanges, clearing organizations and banks in relation to our transactional volumes. Introducing broker commissions include commission paid to non-employee third parties that have introduced clients to us. Net operating revenues represent revenues available to pay variable compensation to risk management consultants and traders and direct non-variable expenses, as well as variable and non-variable expenses of operational and administrative employees, including our executive management team.

The table below presents a disaggregation of consolidated net operating revenues used by management in evaluating our performance, for the periods indicated:

Compensation and Other Expenses

The following table presents a summary of expenses, other than interest and transactional expenses.

(in millions)

37

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Compensation and Other Expenses: Compensation and other expenses increased $19.1 million, or 5%, to $401.4 million in the three months ended June 30, 2025 compared to $382.3 million in the three months ended June 30, 2024.

Compensation and Benefits:

(in millions)

Non-variable salaries increased within the Commercial and Institutional segments, as well as within our overhead departments, principally due to the increase in headcount, as well as the impact of annual merit increases.

Employee benefits and other compensation during the three months ended June 30, 2024 included $0.9 million in accelerated long-term incentive due to the departure of an executive officer.

Share-based compensation, which contains stock option and restricted stock expense, increased principally due to additional restricted stock grants and the increase in the value of previously granted restricted stock awards related to employee-elected and statutorily-required deferred incentive, which is exchanged for restricted stock that is amortized over a thirty-six month period following the grant date. The three months ended June 30, 2024 also included $0.9 million in accelerated share-based compensation due to the departure of the executive officer.

Severance during the three months ended June 30, 2024 included an amount related to the departure of an executive officer.

Other Expenses: Other non-compensation expenses increased $9.3 million, or 7%, to $134.1 million in the three months ended June 30, 2025 compared to $124.8 million in the three months ended June 30, 2024.

Professional fees increased $3.9 million, principally due to higher legal fees related to acquisitions and matters in which we are defendants.

Depreciation and amortization increased $2.6 million, principally due to incremental depreciation expense from internally developed software placed into service, partially offset by lower amortization, as certain intangibles, recognized as part the acquisition of Gain Capital Holdings, Inc. in fiscal 2020, became fully amortized during fiscal 2024.

Other expenses during the three months ended June 30, 2024 included an accrual of $3.5 million related to the settlement of a post-acquisition commitment contingency.

Other (Loss) Gains, net: The results of the three months ended June 30, 2025 included a $2.3 million loss on the disposal of certain capitalized hardware expenditures, partially offset by a gain of $1.0 million related to a class action settlement. The results of the three months ended June 30, 2024 included a gain of $1.8 million related to a class action settlement.

Provision for Taxes: The effective income tax rate was 26% and 30% in the three months ended June 30, 2025 and 2024, respectively. The effective tax rate for the three months ended June 30, 2025 and 2024 was higher than the U.S. federal statutory rate of 21% due to U.S. state and local taxes, global intangible low taxed income (“GILTI”), U.S. and foreign permanent differences, and the amount of foreign earnings taxed at higher rates.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Compensation and Other Expenses: Compensation and other expenses increased $107.4 million, or 10%, to $1,172.5 million in the nine months ended June 30, 2025 compared to $1,065.1 million in the nine months ended June 30, 2024.

Compensation and Benefits:

(in millions)

Non-variable salaries increased within the Commercial and Institutional segments, as well as within our overhead departments, principally due to the increase in headcount, as well as the impact of annual merit increases.

Employee benefits and other compensation increased principally due to higher payroll taxes, retirement costs, and healthcare benefits principally related to the increase in headcount, as well as a decrease in employee-elected deferred incentive, which is exchanged for restricted stock that is amortized over a thirty-six month period following the grant date. The nine months ended June 30, 2025 and 2024 included $0.9 million in accelerated long-term incentive due to the departures of executive officers.

Share-based compensation, which contains stock option and restricted stock expense, increased principally due to the issuance of additional stock option awards during the first quarter of 2024 and additional restricted stock grants, as well as from increased restricted stock amortization related to employee-elected and statutorily-required deferred incentive, which results in cash exchanged for restricted stock that is amortized over a thirty-six month period following the grant date. The nine months ended June 30, 2025 and 2024 also included $1.1 million and $0.9 million, respectively, in accelerated share-based compensation due to the departure of executive officers.

During the nine months ended June 30, 2025 and 2024, severance costs included amounts related to the departure of executive officers.

Other Expenses: Other non-compensation expenses increased $30.5 million, or 9%, to $385.6 million in the nine months ended June 30, 2025 compared to $355.1 million in the nine months ended June 30, 2024.

Non-trading technology and support costs increased $8.1 million, principally due to an increase in headcount driven technology costs and compliance costs.

Occupancy and equipment rental costs increased $5.6 million, principally due to the nine months ended June 30, 2024 including a partial refund of property rates covering prior years in London. The increase is also due to additional office space acquired in London, as we consolidate office space in order to support our current and anticipated future growth, as well as higher costs in India and the U.S.

Depreciation and amortization increased $10.4 million, principally due to incremental depreciation expense from internally developed software placed into service, partially offset by lower amortization, as certain intangibles, recognized as part the acquisition of Gain Capital Holdings, Inc. in fiscal 2020, became fully amortized during fiscal 2024.

During the nine months ended June 30, 2025, we recorded bad debts, net of recoveries of $2.3 million, principally related to bad debt expense from client trading deficits in our Self-Directed/Retail segment and Financial Ag & Energy business of our Commercial segment of $1.5 million and $1.1 million, respectively, which were partially offset by $0.3 million of recoveries within the LME business of our Commercial segment and our Institutional segment. During the nine months ended June 30, 2024, we recorded net recoveries of bad debts of $0.2 million, principally related to recoveries within our Institutional segment of $1.8 million, which were partially offset by bad debt expense of $1.0 million of client receivables in the Payments segment and $0.6 million within the Self-Directed/Retail segment.

Other (Loss) Gains, net: The results of the nine months ended June 30, 2025 include gains of $6.7 million, resulting from proceeds received from class action settlements, partially offset by a $2.3 million loss on the disposal of certain capitalized hardware expenditures. The results of the nine months ended June 30, 2024 included gains of $8.7 million resulting from proceeds received from class action settlements.

Provision for Taxes: Our effective income tax rate was 27% and 28% for nine months ended June 30, 2025 and 2024, respectively. The effective income tax rate was higher than the U.S. federal statutory rate of 21% due to U.S. state and local taxes, changes in valuation allowances, U.K. bank tax, U.S. permanent differences, GILTI, and the amount of foreign earnings taxed at higher tax rates.

Variable vs. Fixed Expenses

The table below presents our variable expenses and non-variable expenses as a percentage of total non-interest expenses for the periods indicated.

(in millions)

Our variable expenses include variable compensation paid to traders and risk management consultants, bonuses paid to operational, administrative, and executive employees, transaction-based clearing expenses and introducing broker commissions. We seek to make our non-interest expenses variable to the greatest extent possible, and to keep our fixed costs as low as possible.

Segment Information

Our operating segments are based principally on the nature of the clients we serve (commercial, institutional, and self-directed/retail), and a fourth operating segment, our payments business. We manage our business in this manner due to our large global footprint, in which we have more than 4,700 employees allowing us to serve clients in more than 180 countries.

Our business activities are managed as operating segments, which are our reportable segments for financial reporting purposes, as shown below.

StoneX Group Inc.

Operating revenues, net operating revenues, net contribution and segment income are some of the key measures used by management to assess the performance of each segment and for decisions regarding the allocation of our resources. Operating revenues are calculated as total revenues less cost of sales of physical commodities.

Net operating revenues are calculated as operating revenues less transaction-based clearing expenses, introducing broker commissions and interest expense.

Net contribution is calculated as net operating revenues less variable compensation. Variable compensation paid to risk management consultants and traders generally represents a fixed percentage that can vary by revenue type. This fixed percentage is applied to revenues generated, and in some cases, revenues generated less transaction-based clearing expenses, base salaries and other expenses/allocations.

Segment income is calculated as net contribution less non-variable direct segment costs. These non-variable direct expenses include trader base compensation and benefits, operational charges, trading systems and market information, professional fees, travel and business development, communications, bad debts, trade errors and direct marketing expenses.

Segment income is used by our chief operating decision maker (“CODM”) as the primary measure of segment profit or loss in the evaluation for each of our operating segments. In addition, the CODM also uses ‘Segment income, less allocation of overhead costs’ as an additional segment measure of our segments’ financial performance. The allocation of overhead costs to operating segments includes costs associated with compliance, technology, and credit and risk costs. The share of allocated costs is based on resources consumed by the relevant businesses. In addition, the allocation of human resources and occupancy costs is principally based on employee costs within the relevant businesses. The measure of segment profit or loss most consistent with the corresponding amounts in the condensed consolidated financial statements is segment income.

Total Segment Results

The following table shows summary information concerning all of our business segments combined.

(in millions)

Commercial

We offer our commercial clients a comprehensive array of products and services, including risk management and hedging services, execution and clearing of exchange-traded and OTC products, voice brokerage, market intelligence and physical trading, as well as commodity marketing, procurement, logistics and price management services. We believe providing these high-value-added products and services differentiates us from our competitors and maximizes our opportunity to retain our clients.

The tables below present the financial performance, a disaggregation of operating revenues, and select operating data and metrics used by management in evaluating the performance of the Commercial segment, for the periods indicated.

(in millions)

(1) Give-up fee revenues, related to contract execution for clients of other FCMs, as well as cash and voice brokerage revenues are excluded from the calculation of listed derivatives, average rate per contract.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Operating revenues decreased $36.4 million, or 14%, to $225.8 million in the three months ended June 30, 2025 compared to $262.2 million in the three months ended June 30, 2024. Net operating revenues decreased $52.2 million, or 24%, to $168.3 million in the three months ended June 30, 2025 compared to $220.5 million in the three months ended June 30, 2024.

Operating revenues derived from listed derivatives decreased $5.9 million, principally resulting from the 26% decrease in the average rate per contract, partially offset by a 24% increase in listed derivatives contract volumes. The decline in the average rate per contract was primarily related to activity in LME base metals markets as compared to the prior year, as the prior year benefited from a widening of spreads related to U.S. and U.K. imposed sanctions on Russian base metals exports.

Operating revenues derived from OTC derivatives decreased $7.3 million, principally resulting from a 16% decrease in the average rate per contract, which was partially offset by a 6% increase in OTC derivative volumes.

Operating revenues derived from physical contracts decreased $12.9 million, as a result of a $0.3 million decrease in precious metals operating revenues, and a $12.9 million decrease in physical agricultural and energy operating revenues. Precious metals related operating revenues were unfavorably impacted by unrealized losses on derivative positions of $0.7 million in the three months ended June 30, 2025, related to physical inventories held at the lower of cost or net realizable value. Precious metals operating revenues in the three months ended June 30, 2024, were favorably impacted by realized gains of $8.4 million on the sale of physical inventories carried at the lower of costs or net realizable value, for which losses on related derivative positions were recognized in prior periods. These effects, were partially offset by increased client activity related to market volatility driven by concerns surrounding potential tariffs to be imposed by the U.S. government on imported precious metals. The decline in physical agricultural and energy operating revenues were primarily driven by diminished performance in global cotton, coffee and cocoa markets.

Interest and fee income earned on client balances declined $9.8 million, with a 1% decrease in average client equity combined with a decline in short term interest rates.

Interest expense increased $12.2 million, primarily related to heightened interest expense in our precious metals business related to carrying costs on inventory being held in the U.S. to mitigate against possible U.S. government tariffs on imported precious metals.

Variable expenses, excluding interest, expressed as a percentage of operating revenues were 35% and 31% for the three months ended June 30, 2025 and 2024, respectively.

Segment income decreased $45.5 million, as compared to a record $125.7 million in the three months ended June 30, 2024, principally due to the decline in operating revenues combined with the increase in interest expense, as well as a $2.1 million increase in non-variable direct expenses. Segment income for the three months ended June 30, 2025 includes a gain of $1.0 million related to proceeds received from a class action settlement.

For the three months ended June 30, 2025, we calculated an allocation for overhead costs of $9.8 million for the Commercial segment compared to an $8.9 million allocation in the three months ended June 30, 2024.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Operating revenues increased $45.6 million, or 7%, to $706.7 million in the nine months ended June 30, 2025 compared to $661.1 million in the nine months ended June 30, 2024. Net operating revenues increased $2.7 million, or 0.5%, to $550.8 million in the nine months ended June 30, 2025 compared to $548.1 million in the nine months ended June 30, 2024.

Operating revenues derived from listed derivatives increased $13.3 million, principally driven by an 18% increase in listed derivative contract volumes, partially offset by a 10% decrease in the average rate per contract. The decline in the average rate per contract was primarily related to activity in LME base metals markets as compared to the prior year, as the prior year benefited from a widening of spreads related to U.S. and U.K. imposed sanctions on Russian base metals exports.

Operating revenues derived from OTC transactions declined $7.9 million, principally resulting from an 11% decline in the average rate per contract, which more than offset a 7% increase in OTC derivative contract volumes.

Operating revenues derived from physical transactions increased $54.1 million, principally driven by $21.7 million and $32.2 million increases in operating revenues in our physical agricultural and energy and precious metals businesses, respectively. The increase in physical agricultural and energy operating revenues were primarily driven by strong performance in global cocoa and coffee markets.

Interest and fee income earned on client balances declined $13.8 million, with a 1% increase in average client equity more than offset by a decline in short term interest rates.

Interest expense increased $32.2 million, primarily related to heightened interest expense in our precious metals business related to carrying costs on inventory being held in the U.S. to mitigate against possible U.S. government tariffs on imported precious metals.

Variable expenses, excluding interest, expressed as a percentage of operating revenues, were 33% in both the nine months ended June 30, 2025 and 2024.

Segment income decreased $19.4 million, principally due to a $32.2 million increase in interest expense, primarily related to our precious metals activities, as well as a $9.0 million increase in non-variable direct expenses, which was partially offset by the growth in operating revenues. The increase in non-variable direct expenses was primarily due to a $5.1 million increase in fixed compensation and benefits, a $1.9 million increase in trade systems and market information, a $1.4 million increase in depreciation and amortization and a $0.9 million increase in bad debts, net of recoveries. Segment income for the nine months ended June 30, 2025 and 2024 include gains of $1.0 million and $6.9 million, respectively, related to proceeds received from class action settlements.

For the nine months ended June 30, 2025, we calculated an allocation for overhead costs of $29.4 million for the Commercial segment compared to a $26.6 million allocation in the nine months ended June 30, 2024.

Institutional

We provide institutional clients with a suite of equity trading services to help them find liquidity with best execution, consistent liquidity across a robust array of fixed income products, competitive and efficient clearing and execution in all major futures and securities exchanges globally as well as prime brokerage in equities and major foreign currency pairs and swap transactions. In addition, we originate, structure and place debt instruments in the international and domestic capital markets. These instruments include asset-backed securities (primarily in Argentina) and domestic municipal securities.

The tables below present the financial performance, a disaggregation of operating revenues, and select operating data and metrics used by management in evaluating the performance of the Institutional segment, for the periods indicated.

(in millions)

(1) Give-up fee revenues, related to contract execution for clients of other FCMs, are excluded from the calculation of listed derivatives, average rate per contract.

(2) Interest expense associated with our fixed income activities is deducted from operating revenues in the calculation of Securities RPM, while interest income related to securities lending is excluded.

46

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Operating revenues increased $117.1 million, or 23%, to $626.0 million in the three months ended June 30, 2025 compared to $508.9 million in the three months ended June 30, 2024. Net operating revenues increased $42.4 million, or 27%, to $200.1 million in the three months ended June 30, 2025 compared to $157.7 million in the three months ended June 30, 2024.

Operating revenues derived from listed derivatives increased $1.8 million compared to the prior year quarter, principally due to a 4% increase in contract volumes, despite a modest decrease in the average RPC.

Operating revenues derived from securities transactions increased $107.5 million, principally driven by 25% and 15% increases in the ADV of securities traded and securities RPM, respectively, primarily as a result of increased client activity in both equity and debt capital markets.

Interest and fee income earned on client balances, which is associated with our listed derivative and correspondent clearing businesses decreased $3.1 million, principally driven by a decline in short term interest rates, which was partially offset by 15% and 25% increases in average client equity and average money market / FDIC sweep client balances, respectively.

Primarily as a result of the increase in securities ADV, interest expense increased $65.3 million, with interest expense directly associated with serving as an institutional dealer in fixed income securities increasing $66.4 million, to $295.5 million and interest expense directly attributable to securities lending activities increasing $8.4 million, to $25.0 million. Partially offsetting these increases, interest from short-term financing facilities and other counterparties decreased $7.3 million and interest paid to clients decreased $2.2 million to $23.8 million.

Variable expenses, excluding interest, expressed as a percentage of operating revenues were 22% in the three months ended June 30, 2025 compared to 23% in the three months ended June 30, 2024.

Segment income increased $25.2 million, principally due to the increase in net operating revenues noted above, which was partially offset by a $10.8 million increase in variable direct compensation and benefits as well as a $4.1 million increase in non-variable direct expenses. The increase in segment income was partially offset by a $2.3 million loss on the disposal of certain capitalized hardware expenditures.

For the three months ended June 30, 2025, we calculated an allocation for overhead costs of $14.9 million for the Institutional segment compared to a $13.1 million allocation in the three months ended June 30, 2024.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Operating revenues increased $318.8 million, or 23%, to $1,726.8 million in the nine months ended June 30, 2025 compared to $1,408.0 million in the nine months ended June 30, 2024. Net operating revenues increased $109.0 million, or 24%, to $565.1 million in the nine months ended June 30, 2025 compared to $456.1 million in the nine months ended June 30, 2024.

Operating revenues derived from listed derivatives increased modestly compared with the prior year.

Operating revenues derived from securities transactions increased $271.3 million, principally driven by a 28% increase in the ADV of securities traded, primarily as a result of increased client activity in both equity and fixed income markets, as well as a 3% increase in securities RPM.

Operating revenues derived from FX contracts increased $0.6 million, principally driven by an 11% increase in the average rate per contract, which was partially offset by a 17% decline in the ADV of FX contracts traded.

Finally, interest and fee income earned on client balances, which is associated with our listed derivative business, as well as our correspondent clearing businesses, increased $7.7 million, principally driven by increases of 12% and 20% in average client equity and average money market / FDIC sweep client balances, respectively, which was partially offset by a decline in short term interest rates.

Primarily as a result of the increase in Securities ADV, interest expense increased $179.6 million, with interest expense directly associated with serving as an institutional dealer in fixed income securities increasing $152.5 million, to $751.7 million and interest expense directly attributable to securities lending activities increasing $23.2 million to $68.4 million. Partially offsetting these increases, interest paid to clients decreased $9.8 million to $75.0 million.

Variable expenses, excluding interest, expressed as a percentage of operating revenues declined to 23% in the nine months ended June 30, 2025 compared to 24% in the nine months ended June 30, 2024.

Segment income increased $63.3 million, principally driven by the increase in net operating revenues noted above, which was partially offset by a $10.9 million increase in non-variable direct expenses. The increase in non-variable direct expenses was primarily related to a $5.6 million increase in fixed compensation and benefits, a $1.5 million increase in trade systems and market information, a $1.7 million unfavorable variance in bad debts, net of recoveries, a $0.6 million increase in travel and business development and a $0.5 million increase in non-trading technology and support. These increases were partially offset by a $2.9 million decrease in professional fees. Segment income in the nine months ended June 30, 2025 included a $2.3 million loss on the disposal of certain capitalized hardware expenditures, partially offset by a gain of $1.3 million related to proceeds received from class action settlements.

For the nine months ended June 30, 2025, we calculated an allocation for overhead costs of $44.8 million for the Institutional segment compared to a $39.2 million allocation in the nine months ended June 30, 2024.

Self-Directed/Retail

We provide our Self-Directed/Retail clients around the world access to over 18,000 global financial markets, including spot foreign exchange ("forex"), both financial trading and physical investment in precious metals, as well as contracts for difference (“CFDs”), which are investment products with returns linked to the performance of underlying assets. In addition, our independent wealth management business offers a comprehensive product suite to retail investors in the U.S.

The tables below present the financial performance, a disaggregation of operating revenues, and select operating data and metrics used by management in evaluating the performance of the Self-Directed/Retail segment, for the periods indicated.

(in millions)

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Operating revenues increased $18.0 million, or 19%, to $114.2 million in the three months ended June 30, 2025 compared to $96.2 million in the three months ended June 30, 2024. Net operating revenues increased $12.1 million, or 18%, to $80.6 million in the three months ended June 30, 2025 compared to $68.5 million in the three months ended June 30, 2024.

Operating revenues derived from FX/CFD contracts increased $12.2 million, principally due to a 34% increase in ADV, which was partially offset by a 13% decrease in RPM.

Operating revenues derived from securities transactions, which relate to our independent wealth management activities, increased $4.2 million, principally due to increased management fees, while operating revenues derived from physical contracts increased $1.5 million.

Interest and fee income earned on client balances were relatively flat with the prior year.

Variable expenses, excluding interest, as a percentage of operating revenues were 31% in both the three months ended June 30, 2025 and 2024.

Segment income increased $13.6 million, principally due to the increase in net operating revenues noted above, as well as a $2.7 million decrease in non-variable expenses. The decrease in non-variable direct expenses was primarily a result of a $3.4 million decline in fixed compensation and benefits and a $0.6 million decrease in selling and marketing. These decreases were partially offset by a $1.3 million increase in professional fees and a $0.3 million increase in depreciation and amortization.

For the three months ended June 30, 2025, we calculated an allocation for overhead costs of $12.7 million for the Self-Directed/Retail segment compared to an $11.9 million allocation in the three months ended June 30, 2024.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Operating revenues increased $41.0 million, or 14%, to $331.7 million in the nine months ended June 30, 2025 compared to $290.7 million in the nine months ended June 30, 2024. Net operating revenues increased $29.4 million, or 14%, to $239.2 million in the nine months ended June 30, 2025 compared to $209.8 million in the nine months ended June 30, 2024.

Operating revenues derived from FX/CFD contracts increased $24.9 million, principally due to a 26% increase in FX/CFD contracts ADV, which was partially offset by an 11% decline in FX/CFD contracts RPM.

Operating revenues derived from securities transactions, which are related to our independent wealth management activities, increased $12.0 million, principally due to increased management fees. Operating revenues derived from physical contracts increased $2.4 million, as revenues were favorably impacted by realized gains of $1.2 million in the nine months ended June 30, 2025 on the sale of physical inventories carried at the lower of cost or net realizable value, for which losses on related derivative positions were recognized in prior periods. Operating revenues derived from physical contracts were unfavorably impacted by unrealized losses on derivative positions of $0.6 million in the nine months ended June 30, 2024 related to physical inventories held at the lower of cost or net realizable value.

Interest and fee income earned on client balances were relatively flat with the prior year.

Variable expenses, excluding interest, as a percentage of operating revenues were 30% in both the nine months ended June 30, 2025 and 2024.

Segment income increased $30.6 million, principally due to the increase in net operating revenues noted above, which was partially offset by a $3.2 million increase in non-variable direct expenses. The increase in non-variable direct expenses was partially driven by a $4.7 million increase in depreciation and amortization, a $0.9 million increase in bad debts, net of recoveries, and a $2.0 million increase in professional fees. These increases were partially offset by a $6.7 million decline in fixed compensation and benefits. Segment income was favorably impacted by a class action settlements received of $4.4 million and $1.8 million in the nine months ended June 30, 2025 and 2024, respectively.

For the nine months ended June 30, 2025, we calculated an allocation for overhead costs of $38.0 million for the Self-Directed/Retail segment compared to a $35.4 million allocation in the nine months ended June 30, 2024.

Payments

We provide customized foreign exchange and treasury services to banks and commercial businesses, charities, non-governmental organizations, as well as governmental organizations. We provide transparent pricing and offer payments services in more than 180 countries and 140 currencies, which we believe is more than any other payments solutions provider.

The tables below present the financial performance, a disaggregation of operating revenues, and select operating data and metrics used by management in evaluating the performance of the Payments segment for the periods indicated.

(in millions)

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Operating revenues increased $2.2 million, or 4%, to $53.3 million in the three months ended June 30, 2025 compared to $51.1 million in the three months ended June 30, 2024. Net operating revenues increased $1.5 million, or 3%, to $50.2 million in the three months ended June 30, 2025 compared to $48.7 million in the three months ended June 30, 2024.

The increase in operating revenues was principally due to a 16% increase in ADV, which was partially offset by a 6% decline in the RPM traded.

Variable expenses, excluding interest, expressed as a percentage of operating revenues were 23% in the three months ended June 30, 2025 compared to 22% in the three months ended June 30, 2024, principally driven by a decline in variable compensation and benefits.

Segment income decreased $0.1 million, as the increase in operating revenues noted above, were more than offset by an increase in transaction-based clearing expenses and introducing broker commissions, as well as a $0.3 million increase in variable compensation and a $1.3 million increase in non-variable direct expenses.

For the three months ended June 30, 2025, we calculated an allocation for overhead costs of $5.6 million for the Payments segment compared to a $5.3 million allocation in the three months ended June 30, 2024

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

Operating revenues increased $0.7 million, to $161.7 million in the nine months ended June 30, 2025 compared to $161.0 million in the nine months ended June 30, 2024. Net operating revenues decreased $0.5 million, or 0%, to $153.2 million in the nine months ended June 30, 2025 compared to $153.7 million in the nine months ended June 30, 2024.

The increase in operating revenues was principally driven by a 17% increase in the ADV, which was partially offset by a 13% decline in RPM traded.

Variable expenses, excluding interest, expressed as a percentage of operating revenues were 22% in both the nine months ended June 30, 2025 and 2024.

Segment income decreased $1.1 million, as the increase in operating revenues noted above, was more than offset by a $2.5 million increase in non-variable expenses, including a $1.9 million increase in professional fees.

For the nine months ended June 30, 2025, we calculated an allocation for overhead costs of $16.9 million for the Payments segment compared to a $15.6 million allocation in the nine months ended June 30, 2024.

Overhead Costs and Expenses

We incur overhead costs and expenses, including certain shared services such as information technology, accounting and treasury, credit and risk, legal and compliance, and human resources and other activities. The following table provides information regarding our overhead costs and expenses.

In addition, the table provides information regarding the allocation of a portion of these costs to the aforementioned operating segments. The allocation of overhead costs to operating segments includes costs associated with compliance, technology, and credit and risk costs. The share of allocated costs is based on resources consumed by the relevant businesses. In addition, the allocation of human resources and occupancy costs is principally based on employee costs within the relevant businesses.

(in millions)

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The increase in non-variable compensation was partially related to a reorganization of certain IT personnel, including the move of certain development teams out of discrete business lines and into centralized shared services, resulting in increased compensation expense in overhead, and lower compensation expense in the discrete business lines, which were partially offset with non-variable charges to the business lines based on use of IT resources. Additionally, the increase in non-variable compensation was partially a result of hiring among our support departments, principally due to company growth. Average administrative headcount increased 25%.

Non-trading technology and support increased $2.7 million, principally due to higher non-trading software maintenance and support costs related to various IT systems technologies, driven by increased headcount.

Professional fees increased $3.1 million, principally due to corporate merger and acquisition activity.

Selling and marketing costs increased $1.5 million, principally due to an increase in corporate branding initiatives.

The decrease in Other is principally due to the increase in cost offset from the centralized shared services movement discussed above.

Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024

The increase in non-variable compensation was partially related to a reorganization of our IT personnel, including the move of certain development teams out of discrete business lines and into centralized shared services, resulting in increased compensation expense in overhead, and lower compensation expense in the discrete business lines, which were partially offset with non-variable charges to the business lines based on use of IT resources. Additionally, the increase in non-variable compensation was impacted by an increase in headcount, as well as the impact of annual merit increases. Share-based compensation expense increased principally due to the issuance of additional stock option awards during December 2024.

Fixed compensation and benefits for the nine months ended June 30, 2025 and 2024 included, in aggregate, $6.6 million and $4.5 million, respectively, related to severance, accelerated long-term incentive and accelerated share-based compensation due to the departure of two executive officers.

Occupancy and equipment rental increased $3.4 million, principally due to the prior year including a partial refund of property rates covering prior year in London, as well as higher utility costs.

Non-trading technology and support increased $7.5 million, principally due to higher non-trading software maintenance and support costs related to various IT systems technologies, driven by increased headcount.

Selling and marketing costs decreased $0.9 million, principally due to costs related to our global sales summit, held in February 2024, which occurs on a once-every-two years rotation.

Travel and business development increased $1.2 million, principally due to higher transportation and lodging costs. This increase is also partially related to the reorganization of certain IT personnel discussed above.

The decrease in Other is principally due to the increase in cost offset by the centralized shared services movement discussed above.

Liquidity, Financial Condition and Capital Resources

Overview

Liquidity is our ability to generate sufficient funding to meet all of our cash needs. Senior management establishes liquidity and capital policies, which we monitor and review for funding from both internal and external sources. We evaluate how effectively our policies support our business operations, issuing debt and equity securities, and accessing committed credit facilities. Liquidity and capital matters are reported regularly to our Board of Directors.

Regulatory

StoneX Financial Inc. is registered as a broker-dealer with the Securities and Exchange Commission (“SEC”) and is a member of both the Financial Industry Regulatory Authority (“FINRA”) and the Municipal Securities Rulemaking Board (“MSRB”). In addition, StoneX Financial Inc. is registered as a futures commission merchant with the Commodity Futures Trading Commission (“CFTC”) and National Futures Association (“NFA”), and a member of various commodities and futures exchanges in the U.S. and abroad. StoneX Financial Inc. has a responsibility to meet margin calls at all exchanges on a daily basis, and even on an intra-day basis, if deemed necessary by relevant regulators or exchanges. We require our clients to make margin deposits the next business day, and we require our largest clients to make intra-day margin payments during periods of significant price movement. Margin required to be posted to the exchanges is a function of our clients’ net open positions and required margin per contract. StoneX Financial Inc. is subject to minimum capital requirements under Section 4(f)(b) of the Commodity Exchange Act, Part 1.17 of the rules and regulations of the CFTC and the SEC Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). StoneX Financial Inc. is also subject to Rule 15c3-3 of the Exchange Act (“Customer Protection Rule”).

Gain Capital Group, LLC is registered as both a futures commission merchant and registered foreign exchange dealer, subject to minimum capital requirements under Section 4(f)(b) of the Commodity Exchange Act, Part 1.17 of the rules and regulations of the CFTC and NFA Financial Requirements, Sections 1 and 11.

StoneX Markets LLC is a CFTC registered swap dealer, whose business is overseen by the NFA. The CFTC imposes rules over net capital requirements, as well as the exchange of initial margin between registered swap dealers and certain counterparties.

These rules specify the minimum amount of capital that must be available to support our clients’ account balances and open trading positions, including the amount of assets that StoneX Financial Inc., Gain Capital Group, LLC and StoneX Markets LLC must maintain in relatively liquid form. Further, the rules are designed to maintain general financial integrity and liquidity.

StoneX Financial Ltd is regulated by the Financial Conduct Authority (“FCA”), the regulator of investment and payment firms in the U.K. as a MiFID investment firm under U.K. law, and is subject to regulations which impose regulatory capital requirements. In Europe, our regulated subsidiaries are subject to E.U. regulation. Across the U.K. and E.U., the respective transpositions of the Market Abuse Regulation, and the General Data Protection Regulation, also apply. StoneX Financial Ltd is a member of various commodities, futures, and securities exchanges in the U.K. and Europe and has the responsibility to meet margin calls at all exchanges on a daily basis and intra-day basis, as necessary. StoneX Financial Ltd is required to be compliant with the U.K.’s regulation for capital and liquidity, and CASS regulation for client money and safeguarding. To comply with these liquidity regulations, we have implemented daily liquidity procedures, conduct periodic reviews of liquidity by stressed scenarios, and are required to maintain enough liquidity for the firm to survive for one year under the appropriate stressed conditions.

StoneX Financial Pte. Ltd. is regulated by the Monetary Authority of Singapore (“MAS”) and operates as an approved holder of a Capital Market Services and a Payments Service License. StoneX Financial Pte. Ltd. is subject to the requirements of MAS pursuant to the Securities and Futures Act and the Payments Services Act 2019. The regulations include those that govern the treatment of client money and other assets which under certain circumstances must be segregated from the firm’s own assets.

The regulations discussed above limit funds available for dividends to us. As a result, we may be unable to access our operating subsidiaries’ funds when we need them.

The regulations discussed above limit funds available for dividends to us. As a result, we may be unable to access our operating subsidiaries’ funds when we need them.

In our physical commodities trading, commercial hedging OTC, securities and foreign exchange trading activities, we may be required to meet margin calls with various counterparties based upon the underlying open transactions we have in place with those counterparties.

We review our overall credit and capital needs to determine whether our capital base, both stockholders’ equity and debt, as well as available credit facilities, can appropriately support the anticipated financing needs of our operating subsidiaries.

As of June 30, 2025, we had total equity of $1,978.8 million, outstanding loans under revolving credit facilities and other payables to lenders of $352.7 million, and $543.9 million outstanding on our senior secured notes, net of deferred financing costs.

A substantial portion of our assets are liquid. As of June 30, 2025, approximately 97% of our assets consisted of cash and cash equivalents; securities purchased under agreements to resell; securities borrowed; deposits with and receivables from broker-dealers, clearing organizations and counterparties; receivables from clients; financial instruments owned, at fair value; and physical commodities inventory. All assets that are not client and counterparty deposit financed are financed by our equity capital, bank loans, short-term borrowings from financial instruments sold, not yet purchased and under repurchase agreements, securities loaned and other payables.

Client and Counterparty Credit and Liquidity Risk

Our operations expose us to credit risk of default of our clients and counterparties. The risk includes liquidity risk to the extent our clients or counterparties are unable to make timely payment of margin or other credit support. We are indirectly exposed to the financing and liquidity risks of our clients and counterparties, including the risks that our clients and counterparties may not be able to finance their operations.

As a clearing broker, we act on behalf of our clients for all trades consummated on exchanges. We must pay initial and variation margin to the exchanges, on a net basis, before we receive the required payments from our clients. Accordingly, we are responsible for our clients’ obligations with respect to these transactions, which exposes us to significant credit risk. Our clients are required to make any margin deposits the next business day, and we require our largest clients to make intra-day margin payments during periods of significant price movement. Our clients are obligated to maintain initial margin requirements at the level set by the respective exchanges, but we have the ability to increase margin requirements for clients based on their open positions, trading activity, or market conditions.

As it relates to OTC derivative transactions, we act as a principal, which exposes us to the credit risk of both our clients and the counterparties with which we offset our client positions. As with exchange-traded transactions, our OTC transactions require that we meet initial and variation margin payments on behalf of our clients before we receive related required payments from our clients. OTC clients are required to post sufficient collateral to meet margin requirements based on value-at-risk models, as well as variation margin requirements based on the price movement of the commodity or security in which they transact. Our clients are required to make any margin deposits the next business day, and we may require our largest clients to make intra-day margin payments during periods of significant price movement. In this business as well, we have the ability to increase the margin requirements for clients based on their open positions, trading activity, or market conditions. On a limited basis, we provide credit thresholds to certain clients, based on internal evaluations and monitoring of client creditworthiness.

In addition, with OTC transactions, we are at risk that a counterparty will fail to meet its obligations to us when due. We would then be exposed to the risk that the settlement of a transaction which is due from a client will not be collected from the respective counterparty with which the transaction was offset. We monitor the credit quality of our respective counterparties and mark our positions held with each counterparty to market on a daily basis.

We enter into securities purchased under agreements to resell, securities sold under agreements to repurchase, securities borrowed and securities loaned transactions to, among other things, finance financial instruments, acquire securities to cover short positions, acquire securities for settlement, and to accommodate counterparties’ needs. In connection with these agreements and transactions, it is our policy to receive or pledge cash or securities to adequately collateralize such agreements and transactions in accordance with general industry guidelines and practices. The collateral is valued daily and we may require counterparties to deposit additional collateral or return collateral pledged, when appropriate.

Primary Sources and Uses of Cash

Our cash and cash equivalents and client cash and securities held for clients are held at banks, deposits at liquidity providers, investments in money market funds that invest in highly liquid investment grade securities including U.S. treasury bills, as well as investments in U.S. treasury bills. In general, we believe all of our investments and deposits are of high credit quality and we have more than adequate liquidity to conduct our businesses.

Our assets and liabilities may vary significantly from period to period due to changing client requirements, economic and market conditions, and our growth. Our total assets as of June 30, 2025 and September 30, 2024, were $34,265.6 million and $27,466.3 million, respectively. Our operating activities generate or utilize cash as a result of net income or loss earned or incurred during each period and fluctuations in our assets and liabilities. The most significant fluctuations arise from changes in the level of client activity, commodities prices, and changes in the balances of financial instruments and commodities inventory. StoneX Financial Inc. and StoneX Financial Ltd occasionally utilize their margin line credit facilities, on a short-term basis, to meet intraday settlements with the commodity exchanges prior to collecting margin funds from their clients.

The majority of the assets of StoneX Financial Inc., StoneX Financial Ltd, StoneX Financial Pte. Ltd, StoneX Markets LLC, and Gain Capital Group, LLC are restricted from being transferred to us or other affiliates due to specific regulatory requirements. This restriction has no current impact on our ability to meet our cash obligations, and no such impact is expected in the future.

We have liquidity and funding policies and processes in place that are intended to maintain sufficient flexibility to address both company-specific and industry liquidity needs. The majority of our excess funds is held with high-quality institutions, under highly-liquid reverse repurchase agreements, U.S. government obligations, interest earning cash deposits and AA-rated money market investments.

We do not intend to distribute earnings of our foreign subsidiaries in a taxable manner, and therefore intend to limit distributions to earnings previously taxed in the U.S., or earnings that would qualify for the 100 percent dividends received deduction, and earnings that would not result in any significant foreign taxes. We repatriated $58.5 million and $80.0 million for the nine months ended June 30, 2025 and 2024, respectively, of earnings previously taxed in the U.S., resulting in no significant incremental taxes. Therefore, the Company has not recognized a deferred tax liability on its investment in foreign subsidiaries.

Senior Secured Notes

On March 1, 2024, we issued $550 million in aggregate principal amount of the Notes due 2031, which are fully and unconditionally guaranteed, jointly and severally, on a senior secured second lien basis, by certain subsidiaries of the Company that guarantee the Company’s senior committed credit facility and certain of its domestic subsidiaries. The Notes due 2031 will mature on March 1, 2031. Interest on the Notes due 2031 accrues at a rate of 7.875% per annum and is payable semiannually in arrears on September 1 and March 1 of each year. We incurred debt issuance costs of $7.6 million in connection with the issuance of the Notes due 2031, which are being amortized over the term of the notes.

On July 8, 2025, we issued $625 million in aggregate principal amount of the Notes due 2032, which are fully and unconditionally guaranteed, jointly and severally, on a senior secured second lien basis, by certain subsidiaries of the Company that guarantee the Company’s senior committed credit facility and certain of its domestic subsidiaries. The Notes due 2032 will mature on July 15, 2032. Interest on the Notes due 2032 accrues at a rate of 6.875% per annum and is payable semiannually in arrears on January 15 and July 15 of each year, commencing on January 15, 2026. On July 31, 2025, the net proceeds from the issuance of the Notes due 2032 were used to fund the cash portion of the purchase price of the RJO acquisition and to pay related fees and expenses.

Committed Credit Facilities

As of June 30, 2025, we had five committed bank credit facilities, totaling $1,355.0 million, of which $232.0 million was outstanding. Additional information regarding the committed bank credit facilities can be found in Note 9 of the Condensed Consolidated Financial Statements. The credit facilities include:

• A first-lien senior secured syndicated loan facility committed until June 3, 2028, under which $650.0 million is available to us for general working capital requirements and capital expenditures.
• An unsecured line of credit committed until October 28, 2025, under which $250.0 million is available to our wholly owned subsidiary, StoneX Financial Inc. to provide short-term funding.
• A syndicated borrowing facility committed until July 29, 2026, under which $325.0 million is available to our wholly owned subsidiary, StoneX Commodity Solutions LLC (“StoneX Commodity Solutions”), to facilitate physical commodity trade and provide marketing, procurement, logistics and price management services to clients across the commodity complex.
• An unsecured syndicated loan facility committed until October 9, 2025, under which our subsidiary, StoneX Financial Ltd is entitled to borrow up to $115.0 million, subject to certain terms and conditions of the credit agreement. This facility is intended to provide short-term funding.
• An unsecured revolving credit facility committed until September 5, 2025, under which $15.0 million is available to our wholly owned subsidiary, StoneX Financial Pte. Ltd. for general working capital requirements.

Our facility agreements contain certain financial covenants relating to financial measures on a consolidated basis, as well as on a stand-alone basis for certain subsidiaries, including minimum tangible net worth, minimum regulatory capital, minimum net unencumbered liquid assets, maximum net loss, minimum fixed charge coverage ratio and maximum funded debt to net worth ratio. Failure to comply with any such covenants could result in the debt becoming payable on demand. As of June 30, 2025, we and our subsidiaries were in compliance with all of our financial covenants under the outstanding facilities.

In accordance with required disclosure as part of our first-lien senior secured syndicated loan facility, during the trailing twelve months ended June 30, 2025, interest expense directly attributable to trading activities includes $1,004.9 million in connection with trading activities conducted as an institutional dealer in fixed income securities, and $87.5 million in connection with securities lending activities.

As reflected above, certain of our committed credit facilities are scheduled to expire during the next twelve months following the quarterly period ended June 30, 2025. We intend to renew or replace these facilities as they expire, and based on our liquidity position and capital structure, we believe we will be able to do so.

Uncommitted Credit Facilities

We have access to certain uncommitted financing agreements that support our ordinary course securities and commodities inventories. The agreements are subject to certain borrowing terms and conditions. As of June 30, 2025 and September 30, 2024, the Company had $114.2 million and $104.9 million total borrowings outstanding under these uncommitted credit facilities, respectively.

Other Capital Considerations

Our activities are subject to various significant governmental regulations and capital adequacy requirements, both in the U.S. and in the international jurisdictions in which we operate. Our subsidiaries are in compliance with all of their capital regulatory requirements as of June 30, 2025. Additional information on our subsidiaries subject to significant net capital and minimum net capital requirements can be found in Note 16 of the Condensed Consolidated Financial Statements.

Cash Flows

We include client cash and securities that meet the short-term requirement for cash classification to be segregated for regulatory purposes in our Condensed Consolidated Statements of Cash Flows. We hold a significant amount of U.S. Treasury obligations, which represent investments of client funds or client-owned investments pledged in lieu of cash margin. U.S. Treasury securities held with third-party banks or pledged with exchange-clearing organizations representing investments of client funds or which are held for particular clients in lieu of cash margin are included in the beginning and ending cash balances reconciled on our Condensed Consolidated Statements of Cash Flows to the extent that they have an original or acquired maturity of 90 days or less and, therefore, meet the definition of a segregated cash equivalent. Purchases and sales of U.S. Treasury securities representing investment of clients’ funds and U.S. Treasury securities pledged or redeemed by particular clients in lieu of cash margin are presented as operating uses and sources of cash, respectively, within the operating section of the Consolidated Statements of Cash Flows if they have an original or acquired maturity of greater than 90 days. Typically, there is an offsetting use or source of cash related to the change in the payables to clients. However, we will report a use of cash in periods where segregated U.S. Treasury securities that meet the aforementioned definition of a segregated cash equivalent mature and are replaced with U.S. Treasury securities that have original or acquired maturities that are greater than 90 days.

Our cash, segregated cash, cash equivalents, and segregated cash equivalents increased by $800.5 million from $6,672.6 million as of September 30, 2024 to $7,473.1 million as of June 30, 2025. During the nine months ended June 30, 2025, net cash of $858.9 million was provided by operating activities, $58.9 million was used in investing activities and net cash of $3.9 million was used in financing activities.

Net cash used in financing activities during the nine months ended June 30, 2025 included outflows in the period related to deferred payments on acquisitions of $21.1 million and share withholdings of $6.4 million. Inflows in the period related to short term loans, netting $13.9 million, and stock option exercises of $9.7 million.

In the broker-dealer and related trading industries, companies report trading activities in the operating section of the statement of cash flows. Due to the daily price volatility in the commodities market, as well as changes in margin requirements, fluctuations in the balances of deposits held at various exchanges, marketable securities and client commodity accounts may occur from day-to-day. A use of cash, as calculated on the consolidated statement of cash flows, includes unrestricted cash transferred and pledged to the exchanges or guaranty funds. These funds are held in interest-bearing deposit accounts at the exchanges, and based on daily exchange requirements, may be withdrawn and returned to unrestricted cash. Additionally, within our unregulated OTC and foreign exchange operations, cash deposits received from clients are reflected as cash provided from operations. Subsequent transfer of these cash deposits to counterparties or exchanges to margin their open positions will be reflected as an operating use of cash to the extent the transfer occurs in a different period than the cash deposit was received.

Unrealized gains and losses on open positions revalued at prevailing foreign currency exchange rates are included in trading revenue but have no direct impact on cash flow from operations. Similarly, gains and losses become realized when client transactions are liquidated, although they do not affect cash flow. To some extent, the amount of net deposits made by our clients in any given period is influenced by the impact of gains and losses on our client balances, such that clients may be required to post additional funds to maintain open positions or may choose to withdraw excess funds on open positions.

We evaluate opportunities to expand our business. Investing activities included $44.9 million in capital expenditures for property and equipment during the nine months ended June 30, 2025 compared to $48.5 million during the prior year. Additionally, we expended $13.8 million of net cash on the Company’s acquisitions.

Fluctuations in exchange rates increased our cash, segregated cash, cash equivalents and segregated cash equivalents by $4.4 million.

Based upon our current operations, we believe that cash flows from operations, available cash and available borrowings under our credit facilities will be adequate to meet our future liquidity needs for the following year.

Commitments and Contingencies

Information about our commitments and contingent liabilities is contained in Note 11 of the Condensed Consolidated Financial Statements.

Off Balance Sheet Arrangements

We are party to certain financial instruments with off-balance sheet risk in the normal course of business as a registered securities broker-dealer, futures commission merchant, U.K. based investment firm, provisionally registered swap dealer and from our market-making and proprietary trading in the foreign exchange and commodities and debt securities markets. These financial instruments include futures, forward and foreign exchange contracts, exchange-traded and OTC options, To Be Announced (“TBA”) securities and interest rate swaps. Derivative financial instruments involve varying degrees of off-balance sheet market risk whereby changes in the fair values of underlying financial instruments may result in changes in the fair value of the financial instruments in excess of the amounts reflected in the Condensed Consolidated Balance Sheets. Exposure to market risk is influenced by a number of factors, including the relationships between the financial instruments and our positions, as well as the volatility and liquidity in the markets in which the financial instruments are traded. The principal risk components of financial instruments include, among other things, interest rate volatility, the duration of the underlying instruments and changes in commodity pricing and foreign exchange rates. We attempt to manage our exposure to market risk through various techniques. Aggregate market limits have been established and market risk measures are routinely monitored against these limits. Derivative contracts are traded along with cash transactions because of the integrated nature of the markets for such products. We manage the risks associated with derivatives on an aggregate basis along with the risks associated with our proprietary trading and market-making activities in cash instruments as part of our firm-wide risk management policies.

A significant portion of these instruments are primarily the execution of orders for commodity futures and options on futures contracts on behalf of our clients, substantially all of which are transacted on a margin basis. Such transactions may expose us to significant credit risk in the event margin requirements are not sufficient to fully cover losses which clients may incur. We control the risks associated with these transactions by requiring clients to maintain margin deposits in compliance with both clearing organization requirements and internal guidelines. We monitor required margin levels daily and, therefore, may require clients to deposit additional collateral or reduce positions when necessary. We also establish contract limits for clients, which are monitored daily. We evaluate each client’s creditworthiness on a case-by-case basis. Clearing, financing, and settlement activities may require us to maintain funds with or pledge securities as collateral with other financial institutions. Generally, these exposures to exchanges are subject to netting of open positions and collateral, while exposures to clients are subject to netting, per the terms of the client agreements, which reduce the exposure to us by permitting receivables and payables with such clients to be offset in the event of a client default. Management believes that the margin deposits held as of June 30, 2025 are adequate to minimize the risk of material loss that could be created by positions held at that time. Additionally, we monitor collateral fair value on a daily basis and adjust collateral levels in the event of excess market exposure. Generally, these exposures to both counterparties and clients are subject to master netting agreements and the terms of the client agreements, which reduce our exposure.

As a broker-dealer in U.S. Treasury obligations, U.S. government agency obligations, agency mortgage-backed obligations, and asset-backed obligations, we are engaged in various securities trading, borrowing and lending activities serving solely institutional counterparties. Our exposure to credit risk associated with the nonperformance of counterparties in fulfilling their contractual obligations pursuant to these securities transactions and market risk associated with the sale of securities not yet purchased can be directly impacted by volatile trading markets which may impair the counterparties’ ability to satisfy outstanding obligations to us. In the event of non-performance and unfavorable market price movements, we may be required to purchase or sell financial instruments, which may result in a loss to us.

We transact OTC and foreign exchange contracts with our clients, and our OTC and foreign exchange trade desks will generally offset the client’s transaction simultaneously with one of our trading counterparties or will offset that transaction with a similar, but not identical, position on the exchange. These unmatched transactions are intended to be short-term in nature and are conducted to facilitate the most effective transaction for our client.

Additionally, we hold options and futures on options contracts resulting from market-making and proprietary trading activities in these product lines. We assist clients in our commodities trading business to protect the value of their future production (precious or base metals) by selling them put options on an OTC basis. We also provide our physical commodities trading business clients with sophisticated option products, including combinations of buying and selling puts and calls. We mitigate our risk by effecting offsetting options with market counterparties or through the purchase or sale of exchange-traded commodities futures. The risk mitigation of offsetting options is not within the documented hedging designation requirements of the Derivatives and Hedging Topic of the ASC.

As part of the activities discussed above, we carry short positions. We sell financial instruments that we do not own, borrow the financial instruments to make good delivery, and therefore are obliged to purchase such financial instruments at a future date in order to return the borrowed financial instruments. We record these obligations in the condensed consolidated financial statements as of June 30, 2025 and September 30, 2024, at fair value of the related financial instruments, totaling $3,707.7 million and $2,853.3 million, respectively. These positions are held to offset the risks related to financial assets owned, and reported in our Condensed Consolidated Balance Sheets in Financial instruments owned, at fair value and Physical commodities inventory, net. We will incur losses if the fair value of the financial instruments sold, not yet purchased, increases subsequent to June 30, 2025, which might be partially or wholly offset by gains in the value of assets held as of June 30, 2025. The totals of $3,707.7 million and $2,853.3 million include a net liability of $207.7 million and $265.0 million for derivative contracts, including those designated as hedges, based on their fair value as of June 30, 2025 and September 30, 2024, respectively.

We do not anticipate non-performance by counterparties in the situations described above. We have a policy of reviewing the credit standing of each counterparty with which we conduct business. We have credit guidelines that limit our current and potential credit exposure to any one counterparty. We administer limits, monitor credit exposure, and periodically review the financial soundness of counterparties. We manage the credit exposure relating to our trading activities in various ways, including entering into collateral arrangements and limiting the duration of exposure. Risk is mitigated in certain cases by closing out transactions and entering into risk reducing transactions.

We are a member of various exchanges that trade and clear futures and option contracts. We are also a member of and provide guaranties to securities clearinghouses and exchanges in connection with client trading activities. Associated with our memberships, we may be required to pay a proportionate share of the financial obligations of another member who may default on its obligations to the exchanges. While the rules governing different exchange memberships vary, in general our guaranty obligations would arise only if the exchange had previously exhausted its resources. In addition, any such guaranty obligation would be apportioned among the other non-defaulting members of the exchange. Our liability under these arrangements is not quantifiable and could exceed the cash and securities we have posted as collateral at the exchanges. However, management believes that the potential for us to be required to make payments under these arrangements is remote. Accordingly, no contingent liability for these arrangements has been recorded in the Condensed Consolidated Balance Sheets as of June 30, 2025 and September 30, 2024.

Effects of Inflation

Increases in our expenses, such as compensation and benefits, transaction-based clearing expenses, as well as occupancy and equipment rental, may result from inflation and may not be readily recoverable from increasing the prices of our services. While heightened interest rates are generally favorable for us, to the extent that changes in interest rates arise from inflationary pressures, and such inflationary pressures have other adverse effects on the financial markets and on the value of the financial instruments held in inventory, it may adversely affect our financial position and results of operations.

One Big Beautiful Bill Act (“OBBBA”)

On July 4, 2025, the OBBBA was signed into law in the US. This law contains a broad range of tax reform provisions. We are currently evaluating the potential impacts of the OBBBA, but, at this time, we do not expect this law to have a material impact on our financial position or the results of our operations.

Critical Accounting Policies

See our critical accounting policies discussed in the Management’s Discussion and Analysis of the most recent Annual Report filed on Form 10-K. There have been no material changes to these policies.

Other Accounting Policies

Note 1 to the Consolidated Financial Statements included within the most recent Annual Report filed on Form 10-K includes our significant accounting policies. There have been no material changes to these policies.

Accounting Development Updates

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance primarily will require enhanced disclosures about certain types of expenses. ASU 2024-03 is effective for the Company’s fiscal year ending September 30, 2027. Early adoption is permitted. The guidance allows for adoption using either a prospective or retrospective transition method. We are currently evaluating the impact that adopting this guidance will have on our disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 is effective for the Company’s fiscal year ending September 30, 2026. Early adoption is permitted. The guidance allows for adoption using either a prospective or retrospective transition method. We are currently evaluating the impact that adopting this guidance will have on our disclosures.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which will require us to disclose segment expenses that are significant and regularly provided to to our chief operating decision maker (“CODM”). In addition, ASU 2023-07 will require us to disclose the title and position of our CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for the Company’s fiscal year ending September 30, 2025 and for interim periods within the fiscal year ending September 30, 2026. Early adoption is permitted, but we have not early adopted. The guidance should be applied retrospectively unless impracticable. We do not believe that ASU 2023-07 will have a material impact on our disclosures.

Credit Risk

See also Note 4 to the condensed consolidated financial statements, “Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk”.

Market Risk

We conduct our market-making and trading activities predominantly as a principal, which subjects our capital to significant risks. These risks include, but are not limited to, absolute and relative price movements, price volatility and changes in liquidity, over which we have virtually no control. Our exposure to market risk varies in accordance with the volume of client-driven market-making transactions, the size of the proprietary positions and the volatility of the financial instruments traded.

We seek to mitigate exposure to market risk by utilizing a variety of qualitative and quantitative techniques:

• Diversification of business activities and instruments;
• Limitations on positions;
• Allocation of capital and limits based on estimated weighted risks; and
• Daily monitoring of positions and mark-to-market profitability.

We utilize derivative products in a trading capacity as a dealer to satisfy client needs and mitigate risk. We manage risks from both derivatives and non-derivative cash instruments on a consolidated basis. The risks of derivatives should not be viewed in isolation, but in aggregate with our other trading activities.

We are exposed to market risk in connection with our self-directed/retail trading activities. Because we act as counterparty to our self-directed/retail clients’ transactions, we are exposed to risk on each trade that the value of our position will decline. Accordingly, accurate and efficient management of our net exposure is a high priority, and we have developed policies addressing both our automated and manual procedures to manage our exposure. These risk-management policies and procedures are established and reviewed regularly by the Risk Committee of our Board of Directors. Our risk-management policies require quantitative analyses by instrument, as well as assessment of a range of market inputs, including trade size, dealing rate, client margin and market liquidity. Our risk-management procedures require our team of senior traders to monitor risk exposure and update senior management both informally over the course of the trading day and formally through intraday and end of day reporting. A key component of our approach to managing market risk is that we do not initiate market positions for our own account in anticipation of future movements in the relative prices of products we offer.

Management believes that the volatility of revenues is a key indicator of the effectiveness of our risk management techniques. The graph below summarizes volatility of our daily revenue, determined on a marked-to-market basis, during the nine months ended June 30, 2025The graph above includes unrealized price movements in our precious metals inventories and related futures hedge positions during the period depicted in which we experienced temporary dislocations in published London spot market cash prices and Comex listed gold and silver futures contracts, related to potential tariffs to be imposed by the U.S. government on imported metals.

In our securities market-making and trading activities, we maintain inventories of equity and debt securities. In our Commercial segment, our positions include physical commodities inventories, precious metals on lease, forwards, futures and options on futures, and OTC derivatives. Our commodity trading activities are managed as one consolidated book for each commodity encompassing both cash positions and derivative instruments. We monitor the aggregate position for each commodity in equivalent physical ounces, metric tons, or other relevant unit.

Interest Rate Risk

In the ordinary course of our operations, we have interest rate risk from the possibility that changes in interest rates will affect the values of financial instruments and impact interest income earned. Within our domestic institutional dealer in fixed income securities business, we maintain a significant amount of trading assets and liabilities which are sensitive to changes in interest rates. These trading activities primarily consist of securities trading in connection with U.S. Treasury, U.S. government agency, agency mortgage-backed and agency asset-backed obligations, as well as investment grade, high-yield, convertible and emerging markets debt securities. Derivative instruments, which consist of futures, TBA securities and forward settling transactions, are used to manage risk exposures in the trading inventory. We enter into TBA securities transactions for the sole purpose of managing risk associated with mortgage-backed securities.

In addition, we generate interest income from the positive spread earned on client deposits. We typically invest in U.S. Treasury bills, notes, and obligations issued by government sponsored entities, reverse repurchase agreements involving U.S. Treasury bills and government obligations or AA-rated money market funds. In some instances, we maintain interest earning cash deposits with banks, clearing organizations and counterparties. We have an investment policy which establishes acceptable standards of credit quality and limits the amount of funds that can be invested within a particular fund, institution, clearing organization or counterparty. We estimate that as of June 30, 2025, an immediate 25 basis point decrease in short-term interest rates would result in approximately $6.8 million less in annual net income.

We manage interest expense using a combination of variable and fixed rate debt. The debt instruments are carried at their unpaid principal balance which approximates fair value. As of June 30, 2025, $352.7 million of outstanding principal debt was variable-rate debt. We are subject to earnings and liquidity risks for changes in the interest rate on this debt. As of June 30, 2025, $550.0 million of outstanding principal debt was fixed-rate long-term debt.

Foreign Currency Risk

Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the value of our earnings and assets. Entities that have assets and liabilities denominated in currencies other than the primary economic environment in which the entity operates are subject to remeasurement. Principally, all sales are denominated in the currency of the subsidiary, while related operating costs are denominated in the currency of the local country and translated into USD for consolidated reporting purposes. Although the majority of the assets and liabilities of these subsidiaries are denominated in the functional currency of the subsidiary, they may also hold assets or liabilities denominated in other currencies. As a result, our results of operations and financial position are exposed to changing currency rates. We have executed hedging transactions in relation to certain currencies to mitigate our exposure to volatility in those certain foreign currency exchange rates. From time-to-time, we may consider entering into larger hedges in those certain contracts or hedging transactions in additional currencies to mitigate our exposure to more foreign currency exchange rates. These hedging transactions may not be successful.

In connection with the filing of this Form 10-Q, our management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of June 30, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to provide reasonable assurance that their objectives were met as of June 30, 2025.

There are limitations inherent in any internal control, such as the possibility of human error and the circumvention or overriding of controls. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met, and may not prevent or detect misstatements. As conditions change over time, so too may the effectiveness of internal controls. As a result, there can be no assurance that a control system will succeed in preventing all possible instances of error and fraud. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the conclusions our Chief Executive Officer and Chief Financial Officer are made at the “reasonable assurance” level.

There were no changes in our internal controls over financial reporting during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this report, information regarding risks affecting us appears in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024. These are not the only risks we face. Additional risks and uncertainties not currently known to us or that management currently considers to be non-material may in the future adversely affect our business, financial condition and operating results.