StoneX Group (NASDAQ:SNEX) reported third-quarter fiscal 2026 net income of $127.9 million, up 102% from a year earlier, as growth in its Commercial and Institutional businesses offset a moderation in market volatility from the prior quarter.
Net operating revenue rose 47% year over year to $719.7 million, while diluted earnings per share increased 85% to $1 on a split-adjusted basis. The company completed a three-for-two stock split in July, and all per-share figures discussed on the call reflected the split adjustment.
Commercial and Institutional Growth Drives Results
Commercial segment net operating revenue increased 90% from the prior-year quarter, supported by global hedging activity as well as contributions from the R.J. O’Brien acquisition. The company reported double-digit net operating revenue growth across listed derivatives, OTC derivatives and physical contracts.
- Listed derivatives net operating revenue increased 62% to $68.6 million.
- OTC derivatives net operating revenue rose 73% to $101.9 million.
- Physical contracts net operating revenue increased 162% to $87.4 million.
Smith said the physical business benefited from strong precious-metals activity and continued growth in non-metals businesses, including physical cotton, coffee and cocoa. He said StoneX is combining its physical offerings with financial hedging capabilities, including the ability to embed optionality into physical contracts.
Institutional segment net operating revenue rose 56% year over year, while segment income increased 49%. The company cited its highest-ever securities volumes, with average daily volume up 33%, driven by equities market-making in American depositary receipts and U.S.-listed stocks.
The Benchmark Company, which StoneX acquired, contributed $29.5 million in net operating revenue during the quarter, its strongest quarterly performance to date, according to management. R.J. O’Brien contributed $78.8 million in quarterly net operating revenue, net of a $9.8 million unrealized negative mark-to-market adjustment on its investment portfolio and exchange common stock.
Margins, Expenses and Client Balances
Chief Financial Officer Bill Dunaway said total operating revenue increased 43% from a year earlier to about $1.47 billion. Net operating revenue increased by $231.4 million, or 47%, from the prior-year period, but fell 13% sequentially from the record fiscal second quarter.
Total fixed compensation and other expenses rose $58.1 million, or 22%, from a year earlier. Dunaway said $48.5 million of the increase was attributable to acquisitions completed during the past 12 months, particularly R.J. O’Brien and Benchmark. The expense increase was partly offset by an $18 million decline in professional fees, primarily reflecting insurance recoveries of legal fees and lower legal defense costs related to the BTIG matter.
Dunaway identified approximately $8.5 million of net insurance-recovery-related benefit within professional fees during the quarter, along with more than $4 million in severance and retention costs.
Average client equity and FDIC sweep balances reached $16.2 billion, up 108% from a year earlier and 7% sequentially. Interest and fee income on aggregate client float increased 64% to $66.1 million, with R.J. O’Brien contributing $56.9 million.
StoneX reported quarterly return on equity of 18.4%, above its 15% target, and return on tangible equity of 25%. Book value per share was $23.70 at quarter-end, up 32% from a year earlier. For the trailing 12 months, the company reported record net income of $526.9 million, up 77%, and return on equity of 20.8%.
R.J. O’Brien Integration and Interest-Rate Positioning
Smith said the company completed the vast majority of the remaining U.S.-based R.J. O’Brien client migrations during the quarter. StoneX expects U.S. futures commission merchant consolidation work to be substantially complete later in fiscal 2026. It held nearly $13 billion in required client assets at the end of the quarter and described itself as the largest non-bank futures commission merchant in the United States.
Dunaway said cost-synergy savings from the R.J. O’Brien acquisition were tracking toward an annualized run rate of roughly $37 million to $38 million exiting the third quarter. The company is targeting a $45 million to $46 million run rate by the end of fiscal 2026 and the originally announced $50 million level by the end of its fiscal first quarter.
Management said it is pursuing revenue synergies through cross-selling but is not setting a timeline for such gains, emphasizing client suitability and education before offering products such as OTC derivatives, foreign exchange and physical hedging programs to legacy R.J. O’Brien clients.
During the quarter, StoneX entered into an additional $750 million of fixed-rate SOFR swaps, bringing its aggregate swap position to $2.55 billion. The swaps have an average duration of approximately 1.5 years and an average rate of 3.51%. The company estimated that a 100-basis-point move in short-term rates, in either direction, would affect annualized net income by $46.9 million, or $0.38 per share.
Payments and Global Prime Services
Payments segment net operating revenue increased 12% year over year and segment income rose 22%. Average daily volume reached a record $96 million, up 20%, though revenue per million declined 7% due to a shift toward higher-volume, lower-value payment flows.
Smith said investments in the company’s XPay proprietary platform have expanded capacity and enabled StoneX to serve more banks, financial institutions and payment companies. StoneX recently announced a strategic partnership with South Korea’s Shinhan Bank for complex cross-border payments.
The company also highlighted its Global Prime Services operation, which serves more than 700 accounts globally and holds more than $16 billion in client balances. The business generated nearly $140 million in net operating revenue over the trailing 12 months, according to Smith, and has grown at a rate exceeding 60% annually over the past seven years.
Looking ahead, StoneX said Global Prime Services is expanding its financing offerings, including U.S. equity swaps, fixed-income total return swaps and fixed-income prime brokerage. The company also plans to pursue organic growth, acquisitions and cross-selling opportunities as integrations of Benchmark and R.J. O’Brien progress.
About StoneX Group (NASDAQ:SNEX)
StoneX Group Inc (NASDAQ: SNEX) is a global financial services firm offering execution, risk management, advisory and post-trade solutions across commodities, currencies, securities and digital assets. The company serves commercial businesses, institutional clients and financial intermediaries, providing market access and tailored services designed to help clients manage price risk, optimize working capital and execute complex transactions.
StoneX operates through several core segments.
