Marex Group plc Ordinary Shares Q1 FY2026 earnings call

Bullet points:

• Q1 2026 was a record quarter for Marex, with revenues up 48% and adjusted profit before tax up 59%.
• Performance was broad-based with all businesses contributing strongly. Clearing had high client activity and new onboarding. Market-making benefited from elevated volatility. Agency and execution drove by volatility. Prime had modest negative impact but strong overall. Solutions had record quarter from client activity and technology investments.
• Q1 was challenging for credit exposure but issues resolved. April continued Q1 momentum.
• Winterflood started strongly, regulatory approval for custody business sale received. $500 million senior unsecured debt issuance completed. Progress on redomiciling to Bermuda expected in second half of 2026.
• Increased first quarter dividend to $0.16 per share.

First quarter revenues grew 48% from $467 million to $692 million, and adjusted profit before tax increased 59% to $153 million. Clearing revenues increased by 15% to $137 million, with adjusted profit before tax growing 2% to $58 million. Agency and execution revenue increased 35% to $322 million, with adjusted profit before tax increasing 61% to $91 million. Market-making revenue grew 164% to $140 million, with adjusted profit before tax increasing to $56 million. Solutions revenue more than doubled to $93 million, with adjusted profit before tax increasing nearly threefold to $33 million. Clearing client balances increased to $16 billion. Agency and execution had broad-based growth. Market-making benefited from elevated volatility. Solutions had record quarter driven by client activity and technology investments. Prime saw modest negative impact on client balances from lower equity markets but was still strong.

Bullet points:

• While individual quarters hard to forecast, underlying trajectory is positive with strong start to year.
• Outlook for full year is positive with balanced growth, client wins, platform scaling.
• April tracking above last year's, running above February's level but below March's.

Bullet points:

• Forward-looking statements subject to risks and uncertainties. Actual results could differ from forward-looking statements.
• Risk factors detailed in Marex's press release.
• Challenges in managing credit exposure during Q1, though small client issues resolved.

Q: Chris Allen with KBW asked about April's organic perspective and incremental impact from inorganic/build out.

A: April was strong with strong client balances, prime interest, and contributions from acquisitions like Hamilton Court. Exchange volumes down from March but April tracking above last year.

Q: Alexander Blostein with Goldman Sachs asked about operating leverage and re-domiciling.

A: Expect margins to increase over time with infrastructure-intensive businesses, AI potential. Re-domiciling not for capital efficiencies but to evolve firm, with modest operational efficiencies.

Q: Bill Katz with TD Cohen asked about April framework and pipeline.

A: April between February and March, client balances strong, prime product interest. Pipeline robust with progress on acquisitions, similar to last year's outcomes.

Q: Alex Cram with UBS asked about energy trading environment and new client onboarding.

A: Less activity from market makers in energy, but spreads wider. Pipeline robust with onboarding of large mandates, clearing pipeline visible, prime business robust.

Q: Dan Fannin with Jefferies asked about acquisitions and hedging solution business.

A: Hamilton Court performing strongly, Winterflood revenue strong with scope for margin expansion. Hedging solutions受益于 volatile environment and structural improvements in business and infrastructure investments.