StoneX Posts Positive Financial Results for Fiscal Q3, but Disappoints QoQ

StoneX’s net revenues for Q3 2020 increased five percent from a year earlier, coming in at $8.24 billion

StoneX (formerly known as INTL FCStone) has just released its financial results for the fiscal third quarter ending June 30, 2020, showing a modest increase in revenues relative to last year.

StoneX’s net revenues for Q3 2020 increased five percent from a year earlier, coming in at $8.24 billion compared to $7.87 billion reported back in the April-June quarter of 2019. Over a quarterly basis, however, the company revenue nearly halved from $20.4 billion for the three months through March 2020.

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On the bottom-line metrics, the company posted $228 million in net operating revenues and $36.6 million in quarterly profit. This was up from $165 million and $16.3 million, respectively, in the same period a year ago. But, compared with the first quarter, the Q2 figures pale when weighed against $243.4 million and $39.3 million in the first three months of 2020.

StoneX and other financial firms have experienced some of their busiest trading days ever in the last quarter as investors flocked to hedge and reposition their portfolios, amid volatility on global markets. The continued spread of the coronavirus prompted massive increases in trading volumes across all retail and institutional platforms as seen in their monthly updates.

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StoneX Completes the GAIN Acquisition

StoneX Group has recently completed the acquisition of GAIN Capital Holdings, which in July reported its last financial results as an independent business. The largest retail FX broker in the United States reported net revenues at $101 million for Q2 in 2020. That was not as high as the first quarter when GAIN reported a record $185.7 million compared to $38.4 million reported back in the first quarter of 2019. Q2’s top line, however, it was above the $75 million for the same period a year earlier.

“We continued to navigate the unprecedented market volatility and produced an outstanding financial result with ROE of 21.9% for the quarter and 19.2% for the year-to-date period,” commented Sean M. O’Connor, CEO of StoneX Group.

O’Connor told Finance Magnates in a previous interview that they look to leverage Gain’s highly digitized and efficient on-ramp for smaller customers, and he thinks they can deploy that on-ramp throughout other businesses in order to make their goal of becoming a global institutional grade financial network a reality.

Elaborating on Gain’s takeover, he further states: “We believe this transaction will be accretive both financially and strategically, enhancing and accelerating our goal of becoming the best in class platform connecting clients to global markets across asset classes with integrated execution and clearing capabilities. Longer term we see headwinds relating to continued low short-term interest rates with the potential offsets of heightened volatility and the opportunity to increase market share as the industry continues to consolidate.”

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