Marex Group plc Ordinary Shares Q3 FY2025 earnings call

• Outperformed in Q3 despite challenging operating environment, with adjusted profit before tax up 25% year-on-year in Q3. • Clearing segment had increasing client balances and strong new client onboarding. • Prime Services was a key driver of growth in Agency and Execution. • Hedging and Investment Solutions offset weaker Market Making. • Active M&A pipeline including acquisitions like Winterflood, Aarna, Hamilton Court, and Agrinvest. • Diversified business mix to enhance earnings resilience, reducing reliance on exchange volume-correlated profits.

Clearing grew 14% versus the prior year, driven by growth across all revenue lines, record client balances and higher volumes. NII remained flat in the $50 million to $60 million range. Agency and Execution had revenue up 52%, with Securities (especially Prime Services) as the largest driver. Prime revenues in Q3 rose to $57 million. Energy grew 7%, with adjusted PBT margins improving to 26%. Market Making revenue declined by 16% due to challenging market conditions, with adjusted PBT margins at 16%. Solutions revenues grew 36%, its strongest quarter on record, with Hedging Solutions up 20% and Financial Products up 54%.

• Expecting a record fourth quarter profit, with October showing strong momentum. • Targeting 10-20% sustainable profit growth, with ~10% organic and ~40% from inorganic. • Declared a quarterly dividend of $0.15 per share for Q3 2025 to be paid on December 3.

• Market conditions affecting Market Making, including lower exchange volumes, volatility, and tariff-related uncertainties. • Litigation risks from short seller reports, though legal team confident in dismissal. • Regulatory changes and competitive landscape impacts on business growth.

Q: Chris Allen asked about the fourth quarter commentary and client additions.

A: Ian Lowitt said there's strength across all businesses, with October being a record month and expecting a record fourth quarter profit.

Q: Ben Budish inquired about Prime business clients and go-to-market.

A: Ian Lowitt discussed Clearing client pipeline, and Paolo Tonucci talked about strong Prime client pipeline.

Q: Alexander Blostein asked about crypto opportunities and liquidity.

A: Ian Lowitt spoke about building crypto prime brokerage capabilities and liquidity strategy.

Q: Dan Fannon asked about competitive environment and M&A.

A: Ian Lowitt and Paolo Tonucci discussed competitive landscape and M&A pipeline.

Q: Bill Katz asked about tokenization and M&A margins.

A: Paolo Tonucci talked about acquisition progress and margin outlook.

Q: Carlos Gomez-Lopez asked about AT1 market and litigation.

A: Ian Lowitt and Paolo Tonucci discussed AT1 market interest and litigation costs being minor.