StoneX Sees 32% Q1 FY23 FX/CFDs Revenue Drop from Dull Retail Demand

by Arnab Shome
  • ADV from retail FX/CFDs contracts decreased by 10 percent.
  • Overall, the group reported an 84 percent jump in net income.
StoneX
StoneX

StoneX Group (Nasdaq: SNEX), the owner of Forex.com and City Index, published its financials for the first quarter of the fiscal year 2023, which ended on 31 December, reporting an operating revenue of $48.8 million from forex and contracts for differences (CFDs) contracts.

FX/CFDs Revenues Decline for StoneX

The quarter between October and November turned out to be dull for the company’s FX/CFDs business, as the operating revenue declined by 32 percent year-over-year. The figure also tanked by more than 40 percent from Q4 FY22.

The acquisition of GAIN Capital in mid-2020 for $236 million gives StoneX control over the two retail FX/CFDs broker brands, Forex.com and City Index.

The company highlighted a 27 percent decline in FX/CFD contracts RPM behind the significant drop in revenue from the division. On top of that, retail demand dragged the numbers down as institutional FX contracts revenue on StoneX showed an uptick of 74 percent to $9.2 million, with a 24 percent jump in FX average daily volume (ADV).

However, the operating revenue from retail FX/CFDs contracts came in at $39.6 million, which is 41 percent lower than the comparable quarter of the previous fiscal year. In addition, the ADV with retail FX/CFDs contracts dropped 10 percent to $7.96 billion, and there was also a 29 percent decline in retail contracts.

Check out the FMLS22 session on "What CFDs Traders Value Most & How They Choose Their Brokers."

Overall Performance of StoneX

StoneX is a large financial services group with offerings beyond FX/CFDs contracts. The overall total revenue of the larger group came in 9 percent lower at $13 billion. However, its net operating revenue jumped by 22 percent to $382 million.

The group ended the quarter with a net income of $76.6 million, which is an 84 percent increase from the first quarter of the previous fiscal year. The basic earnings per share (EPS) jumped 79 percent to $3.75, while the diluted EPS came in 84 percent higher at $3.62.

“We achieved very strong results in the fiscal first quarter 2023, delivering increases in operating revenues and net income,” said the CEO of StoneX, Sean O’Connor. “While trading conditions moderated towards the end of the first quarter, the multiple drivers of our results, including our disciplined approach to acquisitions, the strong growth in client assets and our core operating performance, exemplify the diversity in our operating model. We believe that these multiple drivers and our ongoing investments position us to continue to empower our clients, drive growth and deliver shareholder value.”

StoneX Group (Nasdaq: SNEX), the owner of Forex.com and City Index, published its financials for the first quarter of the fiscal year 2023, which ended on 31 December, reporting an operating revenue of $48.8 million from forex and contracts for differences (CFDs) contracts.

FX/CFDs Revenues Decline for StoneX

The quarter between October and November turned out to be dull for the company’s FX/CFDs business, as the operating revenue declined by 32 percent year-over-year. The figure also tanked by more than 40 percent from Q4 FY22.

The acquisition of GAIN Capital in mid-2020 for $236 million gives StoneX control over the two retail FX/CFDs broker brands, Forex.com and City Index.

The company highlighted a 27 percent decline in FX/CFD contracts RPM behind the significant drop in revenue from the division. On top of that, retail demand dragged the numbers down as institutional FX contracts revenue on StoneX showed an uptick of 74 percent to $9.2 million, with a 24 percent jump in FX average daily volume (ADV).

However, the operating revenue from retail FX/CFDs contracts came in at $39.6 million, which is 41 percent lower than the comparable quarter of the previous fiscal year. In addition, the ADV with retail FX/CFDs contracts dropped 10 percent to $7.96 billion, and there was also a 29 percent decline in retail contracts.

Check out the FMLS22 session on "What CFDs Traders Value Most & How They Choose Their Brokers."

Overall Performance of StoneX

StoneX is a large financial services group with offerings beyond FX/CFDs contracts. The overall total revenue of the larger group came in 9 percent lower at $13 billion. However, its net operating revenue jumped by 22 percent to $382 million.

The group ended the quarter with a net income of $76.6 million, which is an 84 percent increase from the first quarter of the previous fiscal year. The basic earnings per share (EPS) jumped 79 percent to $3.75, while the diluted EPS came in 84 percent higher at $3.62.

“We achieved very strong results in the fiscal first quarter 2023, delivering increases in operating revenues and net income,” said the CEO of StoneX, Sean O’Connor. “While trading conditions moderated towards the end of the first quarter, the multiple drivers of our results, including our disciplined approach to acquisitions, the strong growth in client assets and our core operating performance, exemplify the diversity in our operating model. We believe that these multiple drivers and our ongoing investments position us to continue to empower our clients, drive growth and deliver shareholder value.”

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6294 Articles
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