Good day and thank you for standing by. Welcome to the StoneX Group Inc. Q4 fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during this session, you will need to press star, one on your telephone. Please be advised that today’s conference is being recorded. If you require any further assistance, please press star, zero. I would now like to hand the conference over to your speaker today, Bill Dunaway, Chief Financial Officer. Please go ahead.

Good morning. My name is Bill Dunaway. Welcome to our earnings conference call for our fourth quarter ended September 30, 2021. After the market closed yesterday, we issued a press release reporting our results for the fourth fiscal quarter of 2021. This release is available on our website at www.stonex.com, as well as a slide presentation which we’ll refer to on this call and our discussions of our quarterly and fiscal year results. You will need to sign onto the live webcast in order to view the presentation. The presentation and an archive of the webcast will also be available on our website after the call’s conclusion. Before getting underway, we are required to advise you and all participants should note that the following discussion should be taken in conjunction with the most recent financial statements and notes thereto, as well as the Form 10-K filed with the SEC. This discussion may contain forward-looking statements within the meaning of Section 27(a) of the Securities Act of 1933 and Section 21(e) of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties and are detailed in our filings with the SEC. Although the company believes its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can be no assurances the company’s actual results will not differ materially from any results expressed or implied by the company’s forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. Readers are cautioned that any forward-looking statements are not guarantees of future performance. With that, I’ll now turn the call over to Sean O’Connor, the company’s CEO. Sean O’Connor: Thanks Bill. Good morning everyone and thanks for…

Thank you Sean. I’ll be starting with Slide No. 8, which shows our consolidated income statement for the fourth quarter of fiscal ’21. Sean covered many of the consolidated highlights for the quarter, so I’ll just highlight a few and then move onto a segment discussion. Transaction-based clearing expenses were up 13% to $64.4 million in the current period, primarily related to the increase in listed derivative operating revenues in our commercial segment, higher costs in our equity capital markets business, as well as a full three months of cost of the Gain business acquired effective August 1, 2020. In addition, broker commissions were up 17% to $39.7 million in the current period primarily as a result of the incremental costs of Gain, as well as the increased activity in independent wealth management and listed derivatives. Interest expense increased $4.1 million versus the prior year primarily due to higher average borrowings on short term financing facilities at our subsidiaries and an increase in securities lending activities. Interest expense on corporate funding decreased $4.6 million versus the prior year primarily as a result of the prior year period including a $4.4 million of bridge financing fees related to the issuance of our senior secured notes used for the Gain acquisition. Variable compensation increased $3.9 million versus the prior year and represented 32% of net operating revenues, compared to 36% of net operating revenues in the prior year period. The decrease in variable compensation as a percentage of net operating revenues was principally related to lower back office and administrative incentives versus the prior year period as they are impacted by overall company performance. Fixed compensation increased $13.8 million versus the prior year with the growth principally related to salary and benefit costs of increased headcount along with an incremental month of…

[Operator instructions] Our first question comes from the line of Dan Fannon from Jefferies. Your line is now open.

Thanks, good morning gentlemen. Sean O’Connor: Hi Dan.

Hi. First, I know you mentioned in the securities business the RPM decline year-over-year, lower volatility, but it’s been declining for several quarters now. This is the lowest--this quarter was the lowest in at least as far back as we can see, so just if you could give a little bit more color on what was going on in that business and how we should think about that on a, I don’t know, a more normalized basis. Sean O’Connor: Okay. Obviously, it’s highly dependent on market conditions, on volatility, on the flow we see, so it’s hard to be very prescriptive in terms of giving you guidance going forward. But I think what we can say was the revenue capture was very elevated last year at way above mean, and I would say the last quarter was probably below where we would like to see it. We’re going to probably narrow in somewhere between those two ranges, I would think over time. I think we are also looking to expand our offering, and we’re moving from some of the niche areas like the foreign securities, where we have very large market share and can drive decent rate per million, to maybe going into some new areas where we’re probably going to see a lower rate per million, so that could skew the overall results, but we should see in aggregate more revenue and more segment income as a result. As we start to digitize, as I mentioned, and we start going into some of this white space and leveraging some of our client relationships to move beyond what we’ve just been doing for the last year, that’s going to have some impact on the rate per million, so it’s going to be a tough thing to track, I think, for that reason. I don’t know if I can give you any better guidance than that, but I would say for our core areas of the business we’ve been in historically, I would say this quarter is probably below trend, last quarter was above trend, but we are entering some more areas which are probably going to be slightly more competitive.

Okay, that’s helpful. Then just on expenses, and understand the year-over-year comparisons associated with Gain, but even a sequential pick-up in some of the fixed costs, I was hoping to get a little bit more color on the investment you mentioned, on a lot of the new initiatives, some of the digital investments you’ve been making for several years, so a little bit of context around this quarter, if there was anything one-time outside of the bad debt, but other parts of the business, other things, and then as you think about next year, the budget and how you’re thinking about growth rates of kind of the fixed costs, is there an acceleration in that spend, or any context there would be helpful. Sean O’Connor: Okay, well I’ll start and then maybe Bill can follow up with any comments he has. I think we’ve got a couple push factors on us here. The first thing is our business is obviously expanding significantly. I mean, when you grow your revenues 50% over two years, when you see big growth rates year-on-year, you have to backfill some of that growth with making sure you’ve got the right infrastructure in place, and we tend to see the revenue and then sort of fill in behind that. There was a little bit, I guess, of infrastructure debt we have to catch up on generally because of all the growth that happened over the last two years, so I think there’s a bit of that. There has been a fairly significant technology spend over the last three or four years, which I mentioned, which I think to be honest hasn’t delivered much in the way of incremental revenue or scalability thus far, but we’re pretty excited that we’re now starting to see real validation on…

Yes, just a few points, Dan. I guess I pointed out during my portion of the script, there was about $1.6 million in severance costs that we had here in the fourth quarter, which skews that run rate a little bit. There’s also about half a million dollars’ worth of contingent consideration for one of the smaller acquisitions that flowed through the Q4, which we wouldn’t expect to see that on a go-forward basis. Overall professional fees were up Q4 versus Q3 - you know, a good portion of that, probably a million, million and a half of it is just increased audit fees that come through as the work--you know, as we get through the audit period here in Q4. We tend to see Q4 being higher, so overall the fee on a year-to-date basis is probably about where it will be, but you see kind of a spikiness in the Q4 results versus where you see lower work being done in Q2, Q3. Then probably the only other point there is just selling and marketing, which is up $1.8 million versus Q3, but some of that flexes a little bit, particularly with the Gain business as they deploy the marketing dollar. I think it was a little higher than what our run rate has been historically, you know, in the prior three quarters of the fiscal year, so probably certainly leveling off on that aspect.

Okay, great. That’s helpful. Then last one, and thanks for taking all my questions, just given we’re two months into the quarter, maybe if you could characterize the current environment. We’ve had a little bit more volatility in recent weeks, and maybe just in some of the initiatives that you’ve talked about, which I know are much longer term, but maybe some context around how the first fiscal quarter is trending at this point. Sean O’Connor: Dan, sorry, I was on mute. I wanted to chip in on costs. I guess one thing that will start to become noticeable on our costs is as we spend more on technology, what we tend to find is those costs are much more fixed relative to the legacy StoneX mix of variable and fixed, right, because we’re not paying high payouts to brokers and relationship people, but we’re now spending more money on technology, so we are going to see a shift to a little bit more--and it will be incremental over time from here, to more of a fixed cost model, but obviously the flip side of that is it’s much more scalable, right, so if you start getting some real scalability, your incremental margins on that growth are much higher than they would be for our legacy business, because you don’t have those payouts to deal with. Just something to be aware of. I don’t think it’s--you know, you’re not going to see it move the needle quickly, but I think that’s a trend we see in our business now, particularly since we acquired Gain. Does that make sense?

Yes, that does. Thank you. Sean O’Connor: Well you know, our business can move very quickly. The markets can move day to day, month to month, and you never quite know where you’re going to end up until you’re at the end of the quarter. But I would say generally speaking, this is a more positive environment for us right now. I didn’t want to opine in my sort of formal remarks on the environment. Obviously the news on COVID is not great right now, but I think what that does say to us is we’re still a long way from the normalization here. It feels like COVID is going to have sort of a long path towards some sort of endemic normal for us, and then you still have to deal with the Fed’s normalization of its position in the markets, and I think both of those things are going to provide periodic bouts of volatility, which can be very good for us. I think it’s generally a pretty positive environment. That doesn’t mean it will be positive every quarter, but I think we see that as a pretty good environment for us, and there’s also--with all the talk around inflation, there’s some real talk now that interest rates are going to start being pushed up sometime soon, and obviously that has a pretty dramatic effect on our bottom line. I think the environment for us is setting up well. As I said, it’s hard to know quarter to quarter how that’s going to play out, but I’m pretty bullish about the environment we’re facing and I think the current market is better for us.

Okay, thank you. Sean O’Connor: All right. Any other questions, Operator?

At this time, I’m showing no further questions. Sean O’Connor: All right, well thanks everyone, and enjoy the holidays. We will be speaking to you, I guess in early February. Thanks. Bye bye.

This concludes today’s conference call. Thank you for participating. You may now disconnect.