StoneX Group (SNEX) 15th Annual Midwest IDEAS Investor Conference summary

Business overview and growth

• Compounded equity from $5 million to $1.6 billion and revenue to $3 billion over 22 years, with a 30% CAGR in key metrics.

• Stock price increased 125x since inception, currently trading at 11x PE and 1.6x book value.

• Offers a full suite of financial services, including trading, clearing, custody, and prime brokerage across all asset classes.

• Operates globally with offices in major financial centers and serves institutional, commercial, and retail clients.

• Client base includes 30,000 companies, 30,000 institutional accounts, and 400,000 retail clients.

Industry trends and market positioning

• Regulatory changes post-financial crisis led to industry consolidation, reducing U.S. derivative clearing firms from 225 to 6, with the company as the largest.

• Large banks are shedding clients due to increased capital requirements under Basel III, benefiting second-tier firms.

• Market share of tier-one banks in trading products has dropped from 80% to 60%, expected to fall further.

• The company is a preferred destination for clients leaving bulge bracket banks due to its infrastructure and access.

Revenue model and financial performance

• Generates revenue through transaction fees, commissions, and spreads on trades across its network.

• Positively correlated to market volatility and interest rates; higher volatility and moderate rates drive more revenue.

• Sits on over $10 billion in client cash and $20 billion in securities, earning interest and spreads.

• Trades nearly $30 trillion in notional value annually, with $1.6 billion in equity capital and 4,300 staff in 21 countries.

• Achieved several consecutive record years, with the business doubling or tripling since 2019.