StoneX Group (Nasdaq: SNEX), which owns Forex.com and City Index brands, ended the three months between January and March with a decline of 38 percent in revenue from its forex and contracts for difference (CFDs) units.
Strong Pullback in FX/CFDs Demand
According to the recently filed Form 10-Q with the Securities and Exchange Commission (SEC), StoneX generated $61.8 million in operating revenue from FX/CFDs business in the second quarter of the fiscal year 2023 compared to $98.9 million in the same period of the previous year. In the first quarter of the fiscal year, the FX/CFDs revenue of the Group went down 32 percent.
The revenue decline was propelled by a drop in FX/CFDs trading demand on platforms controlled by StoneX. The average daily volume (ADV) with FX/CFDs instruments declined 10 percent in the last three months, from $14,937 to $13,490. The FX/CFDs rate per million (RPM) decreased to $72 from $104, which is a decline of 31 percent.
The retail demand took a further hit as the FX/CFDs revenue dropped 42 percent to $52.5 million. The retail ADV with these instruments also declined 22 percent to come in at $8,411.
An Overall Flat Performance
StoneX is a financial services conglomerate with a range of business divisions. The overall quarterly revenue of the Group came in almost flat, with a marginal decline of 1 percent at $16.1 billion. The net operating revenue came in at $399.4 million, similar to the previous year's figure.
There was a substantial decline in the Group's earnings as well. The diluted earnings per share of the Group declined 37 percent to $1.95. The return on equity also dropped to 13.8 percent from 26.1 percent.
"We achieved another set of solid results in the fiscal second quarter 2023," said the CEO of StoneX, Sean M. O'Connor. "Trading conditions moderated during the quarter, but were offset by higher interest and fee earnings on our client float. We believe that macro conditions remain generally favorable for us, which should put us in a favorable position to continue to deliver shareholder value in the near future."
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