Earnings call transcript: Marex beats Q2 2025 forecasts with strong revenue growth

Marex (NASDAQ:MARX), with a market capitalization of $2.44 billion, reported robust financial results for the second quarter of 2025, surpassing analyst expectations with an earnings per share (EPS) of $1.02 compared to the forecasted $0.93, marking a 9.68% surprise. Revenue reached $500 million, exceeding the anticipated $470.53 million by 6.28%. The company’s stock maintained stability following the announcement, closing at $38.01. According to InvestingPro data, the company maintains a healthy financial profile with an overall score of 2.93, rated as GOOD.

Key Takeaways

• Marex’s Q2 2025 revenue increased by 18% year-over-year, reaching $500 million.
• The company achieved an EPS surprise of 9.68%, with actual EPS at $1.02.
• Revenue from the prime brokerage business more than doubled, contributing to overall growth.
• Marex strengthened its liquidity position with a $500 million senior notes issuance.
• The company is exploring potential M&A opportunities, with 6-7 transactions in the pipeline.

Company Performance

Marex demonstrated strong performance in Q2 2025, with revenue rising 18% year-over-year to $500 million. This growth was driven by a successful expansion of its prime brokerage business, which saw revenues increase from $85 million to over $200 million on a first-half run rate. The company’s diversified business model allowed it to offset varied market conditions across metals, energy, and securities markets.

Financial Highlights

• Revenue: $500 million, up 18% year-over-year
• Earnings per share: $1.02, exceeding forecast by 9.68%
• Adjusted profit before tax: $106 million, up 16% year-over-year
• Margins expanded to 21%

Earnings vs. Forecast

Marex’s Q2 2025 results exceeded expectations, with EPS of $1.02 compared to the forecast of $0.93, resulting in a 9.68% positive surprise. Revenue also surpassed projections, reaching $500 million against the expected $470.53 million, a 6.28% surprise. This performance reflects Marex’s successful execution of its growth strategies and effective management of market challenges.

Market Reaction

Following the earnings announcement, Marex’s stock remained stable, closing at $34.87. The stock’s stability suggests that investors were already anticipating strong results, or that the market had already priced in the company’s robust performance. Trading at a P/E ratio of 15.05 and offering a dividend yield of 1.74%, Marex appears overvalued according to InvestingPro Fair Value metrics. The stock has shown impressive momentum with a 68.14% return over the past year, though it currently trades 29% below its 52-week high of $49.34.

Outlook & Guidance

Marex remains optimistic about its growth prospects, targeting sustainable profit growth of 10-20%. The company is actively pursuing M&A opportunities, with 6-7 potential transactions in the pipeline. Marex expects continued growth in its financial and securities businesses, supported by its diversified business model and successful integration of recent acquisitions.

Executive Commentary

CEO Ian Oates stated, "We have built a platform that generates high quality, diversified earnings," highlighting the company’s strong foundation and growth potential. Oates also emphasized the importance of acquisitions, noting, "Acquisitions are part of the firm’s DNA," and expressed confidence in future opportunities, saying, "We are confident we will see more opportunities with an attractive M&A pipeline."

Risks and Challenges

• Potential market volatility in metals, energy, and securities markets could impact revenue.
• Integration risks associated with recent acquisitions, such as Winterflood.
• Macroeconomic pressures, including potential interest rate changes, could affect profitability.
• Competitive pressures in the prime brokerage and market-making sectors.

Q&A

During the earnings call, analysts inquired about the impact of a recent short seller report, to which Marex executives responded by rebutting key allegations and noting minimal client impact. The company also discussed potential capital management strategies, including stock buybacks, while maintaining a conservative approach to share count and dilution.

Full transcript - Medicis Pharmaceutical Corp (MRX) Q2 2025:

Conference Operator: by. Welcome to the Marek Second Quarter twenty twenty five Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. Please note that today’s conference is being recorded.

I would now like to hand the conference over to your speaker, Adam Strachan, Head of Investor Relations. Please go ahead.

Adam Strachan, Head of Investor Relations, Marex: Good morning, everyone, and thanks for joining us today for Monarch’s Second Quarter twenty twenty five Earnings Conference Call. Speaking today are Ian Oates, Group’s CEO and Rob Irvin, Group’s CFO. After Ian and Rob have made their formal remarks, we will open the call up to questions. Before we begin, I would like to remind everyone that certain matters discussed in today’s conference call are forward looking statements relating to future events, management’s plans and objectives for the business and the future financial performance of the company that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward looking statements.

The risk factors that may affect results are referred to in press release issued today. The forward looking statements made today are as of the date of this call, and Marix does not undertake any obligation to update their forward looking statements. Finally, the speakers may refer to certain adjusted or non IFRS financial measures on this call. A reconciliation schedule of the non IFRS financial measures to the most directly comparable IFRS measure is also available in Max’s earnings release issued today. A copy of today’s release and investor presentation may be obtained by visiting the Investor Relations page of the website at marex.com.

I will now turn the call over to Ian.

Ian Oates, Group CEO, Marex: Good morning, and welcome to our second quarter twenty twenty five earnings call. In the first six months of the year, we generated $967,000,000 of revenue and $203,000,000 of adjusted profit before tax, up 27% on the first half of last year. Our second quarter was yet another record with adjusted profit before tax of a $106,000,000, up 16% year on year and up 10% sequentially on a record first quarter. These are terrific results, and I’m delighted with the performance, which reinforces our belief that we have built platform that generates high quality, diversified earnings, and it set up a bit of growth across the range of market environment. While the second quarter had, as I will discuss later in my remarks, some positive factors, the operating environment was more varied.

So being able to outperform last year’s very strong quarter is heartening. These results validate our strategy and the way we are executing. Those of you who have followed our earnings calls and are in today will know I have cited the acquisition of Cowen and as potentially the most significant acquisition we have made to date. I remain positive about the opportunity even when the business has slow start in 2024. Prime is proving a huge success for us.

This is a business which had $85,000,000 of revenue at Cowen. And now on the Merit platform, it’s running well above $200,000,000 of revenue on an h one run rate basis. Our clearing business also continues to perform strongly as we grew our balance, adding new clients and increased activity with existing clients. Our success with larger, more financials oriented clients continues to drive higher clearing volumes. We continue to execute on our growth strategy while realizing benefits of previous bolt on acquisitions.

Arna, which closed most of the in Q1, is running as forecasted at around 50% above pre acquisition levels as the anticipated day one synergies were captured. I’ll be talking later in my remarks about the cumulative effect of all of our acquisitions, which is considerable. Now we are confident we will see more opportunities with an attractive M and A pipeline in the second half of the year. Proactively managed our risk, remaining in close dialogue with our clients through periods of uncertainty and elevated volatility, ensuring minimal losses in the quarter. Critically, we strengthened our liquidity position through the quarter with a $500,000,000 senior notes issuance that we executed in early May as we continue to extend and diversify our funding sources.

We held a record level liquidity at the end of the quarter with $2,000,000,000 of surplus versus the regulatory requirements. We also completed our second successful equity follow on transaction in mid April. The residual position held by our pre IPO private equity shareholders is now just 17%, down from 64% at the IPO. Increasing our public float was an important strategic goal, and we have been successful at this. On Slide five, we have laid out some of the key metrics that we used to assess our performance.

Second quarter revenues grew 18% to 500,000,000 delivering adjusted PBT of 106,000,000 Revenue in the first six months of the year grew 23% to $967,000,000 while margins expanded to 21%. Revenues per front office FTE increased to $1,500,000 on an annualized basis, reflecting the significant efforts our businesses have made to improve our productivity at the desk level as we invest in growing each of our segments. I had hoped coming into this week to be able to focus my remarks entirely on the success the firm was enjoying as we are continuing to execute our strategy. On Tuesday of last week, a short seller report was published. The allegations in the report, if true, were serious.

And out of respect to the market, I want to spend some time providing a response before we move on to the detailed financials in Rob’s section. I’ve been a vocal advocate of the benefits of being a public company. On earnings calls, I shared how we see the listing as having improved our brand, raised awareness about our firm, enabling us to win more business. It provides the currency for acquisitions and compensation paid in stock, aligned stock investors, indeed your stakeholders. Part of being a public company, though, is investors can show your stock, and indeed, people can publish reports about your firm with no requirement to be accurate.

As unpleasant as it is to be the focus of a short report, I accept that it is part of the way the market operates. And while it imposes the cost of good companies like Narex, it is part of the ecosystem which ensures markets function well. We’ve analyzed the report thoroughly and can all of the allegations. While I won’t go point by point through every rebuttal, I do want to address several of the allegations. It is simply untrue that the two Luxembourg entities cited in the report are off balance sheet.

There are no off balance sheet entities at Merix, All our activity is consolidated in our reporting and our all activity, including that booked in the Luxembourg entity, are reviewed by our accountants, Deloitte. The Luxembourg

Conference Operator: Ladies and gentlemen, please continue to stand by. Your conference will resume shortly. Thank you. Ladies and gentlemen, please continue to stand by. Your conference will resume shortly.

Thank you.

Ian Oates, Group CEO, Marex: Are we live? Apologies, everybody. We didn’t realize that the sound wasn’t, working. Hopefully, it’s working now. So we’ll go back to the beginning and, you know, work through the results and then, and and the remarks, and then we will, you know, be available to take questions.

So good morning, and welcome to our second quarter twenty twenty five earnings call. In the first six months of the year, we generated $967,000,000 of revenue and $2.00 $3,000,000 of adjusted profit before tax, up 27% on the first half of last year. Our second quarter was yet another record with adjusted profit before tax of $106,000,000 up 16% year on year and up 10% sequentially on a record first quarter. These are terrific results, and I’m delighted with this performance, which reinforces our belief that we have built a platform that generates high quality, diversified earnings, and is set up to deliver growth across a range of market environments. While the second quarter had, as I will discuss later in my remarks, some positive factors, the operating environment was more varied.

So being able to outperform last year’s very strong quarter is heartening. These results validate our strategy and the way we are executing. Those of you who have followed our earnings calls and our Investor Day will know I have cited the acquisition of Cowen Prime Brokerage as potentially the most significant acquisition we have made to date. I remain positive about the opportunity even when the business had a slow start in 2024. Prime is proving a huge success for us.

This is a business which had $85,000,000 of revenue at Cowen, and now on the Marex platform, is running well above $200,000,000 of revenue on an h one run rate basis. Our clearing business also continues to perform strongly as we grew our balances, adding new clients and increasing activity with existing clients. Our success with larger, more financials focused clients continues to drive higher clearing volumes. We continue to execute on our growth strategy while realizing the benefits of previous bolt on acquisitions. Arna, which closed at the end of Q1, is running as forecasted at around 50% above pre acquisition levels as the anticipated day one synergies were captured.

I’ll be talking later in my remarks about the cumulative effect of all of our acquisitions, which is considerable, and we are confident we will see more opportunities with an attractive M and A pipeline in the second half of the year. We proactively managed our risk, remaining in close dialogue with our clients through periods of uncertainty and elevated volatility, ensuring minimal losses in the quarter. Critically, we strengthened our liquidity position through the quarter with a $500,000,000 senior notes issuance that we executed in early May as we continue to extend and diversify our funding sources. We held a record level of liquidity at the end of the quarter with $2,000,000,000 of surplus versus the regulatory requirement. We also completed our second successful equity follow on transaction in mid April.

The residual position held by our pre IPO private equity shareholders is now just 17%, down from 64% at the IPO. Increasing the public float was an important strategic goal, and we have been successful at this. On slide five, we have laid out some of the key metrics that we used to assess our performance. Second quarter revenues grew 18% to $500,000,000 delivering adjusted PBT of $106,000,000 Revenue in the first six months of the year grew twenty three percent $967,000,000 while margins expanded to 21%. Revenues per front office FTE increased to 1,500,000.0 on an annualized basis, reflecting the significant effort our businesses have made to improve our productivity at the desk level as we invest in growing each of our segments.

I had hoped coming into this week to be able to focus my remarks entirely on the success the firm was enjoying as we have continued to execute our strategy. On Tuesday of last week, a short seller report was published. The allegations in the report, if true, were serious. And out of respect to the market, I wanna spend some time providing a response before we move on to the detailed financials in Rob’s section. I’ve been a vocal advocate of the benefits of being a public company.

On earnings calls, I’ve shared how I see the listing as having improved our brand, raised awareness about our firm, enabling us to win more business. It provides the currency for acquisitions and compensation paid in stock, aligned staff, investors, indeed all stakeholders. Part of being a public company, though, is investors can short your stock, and indeed, people can publish reports about your firm with no requirement to be accurate. As unpleasant as it is to be the focus of a short report, I accept that it is a part of the way the market operates. And while this imposes a cost on good companies like Marex, it is part of the ecosystem which ensures markets function well.

We have analyzed the report thoroughly and can rebut all of the allegations. While I won’t go point by point through every rebuttal, I do want to address several of the several of the allegations. It is simply untrue that the two Luxembourg entities cited in the report are off balance sheet. There are no off balance sheet entities at Marex, and all of our activity is consolidated in our reporting and in our public financials. All activity, including that booked in the Luxembourg entity, are reviewed by our accountants, Deloitte.

The Luxembourg entity, VPF, was not created by Marex but acquired in 2020 as part of our acquisition of BIP, a market maker in listed equity futures and options. This is the only activity that was booked in VPF, which operated from 2020 to 2023 or its replacement entity, Marek’s Fund. It is important also to appreciate, in addition to the limited purpose of the entity, what a small entity this is. While the local Luxembourg reporting requirements present derivative longs and shorts with a single counterparty on a gross basis on the face of the balance sheet, IFRS accounting would report these net. On that basis, the net asset value in the fund is currently $2,000,000, and it has a VAR of around a $100,000.

The maximum NAV over the past three years was $8,000,000. We have never booked any OTC transactions in the entity as asserted. It is simply a way the equity options market maker faces the exchange. It is also untrue that the acquisition of BIP was not approved by the board as asserted in the report. It was.

The transaction was presented, reviewed, and explicitly approved by the board. Anything else would indicate a failure of governance. The original VPF fund was audited by who remained the orchard of the fund after being acquired by Marex. When we chose to dissolve the original entity and replace it with the new Marex fund, we had Deloitte, who are the auditors for the entire firm, also ordered this very small fund. Marek’s management initiated a discussion with Deloitte, and we agreed together with Deloitte that we would not be renewed they would not be renewed as statutory auditors for the fund, which resulted as is required technically when one is changing auditors in a resignation filing with the Luxembourg Companies Register.

We have since reappointed as the auditor for statutory reporting purposes of the Marix Fund given their prior experience. However, Deloitte remains the auditors of the group into which the fund is consolidated, and they have full access to the financial records. Acquisitions have been an important driver of growth for the firm. One consequence of that is complex consolidation accounting. Getting this accounting right is important, and we and our auditors spend a lot of time on this.

The report asserts that some of this is hard to follow, which is true, and also that MCML and ED and F entity is not consolidated. Those of you who have followed the firm will recall that when we acquired ED and F, one of the key structural elements of the transaction was ensuring we were not exposed to the ongoing liabilities of The UK entity, ED and F Mann Capital Markets Limited or MCML, which we knew was liable for an FCA fine and ongoing litigation with various European taxing authorities. It was precisely to avoid this that we structured The UK purchase as an asset purchase. In short, we do not need to consolidate because we never bought this entity. The report also alleges that the firm’s market making revenue in capital markets must be overstated because revenues in the segment have grown while volumes have declined.

Within market making in capital markets, we include not just the equity option market making, which which uses the Luxembourg fund, but also other businesses, including our corporate bond market making, stock loan, and various other activity. This activity has grown over time together with the firm. The volume cited in the report applies only to the exchange traded component of this broad set of activities. This is disclosed. So there’s no mystery here.

We removed this volume KPI in the 2025 as we believed it was no longer a useful comparison to our revenue. The broader business is growing, and a subset of it, ironically, the equity option market making, which uses the Luxembourg entities and is being wound down as it is no longer competitive given new entrants in the marketplace, is declining. The report draws attention to how cash flow is accounted for. It is true that we include the proceeds of our structured note issuance in operating cash flow as well as the proceeds of our debt issuance. This follows IFRS accounting, and it’s completely consistent with how other large financial institutions report cash flow.

We fully disclose this, highlighting this as a row as well as in a footnote. So analysts who have a different view of where the cash on the cash flow statement, they wanna see these items can make those adjustments. But for the avoidance of doubt, this debate is about where on the cash flow statement cash is reflected, not a debate about the total level of cash, which is the same no matter where one counts the subcomponent. The report notes that our structured notes are cash consumptive in part. This is true because some of the proceeds are required for hedges on the embedded investment return.

There is, again, no mystery in that. Part of the benefit of being a public company is the number of eyes on the firm. Our auditors, Deloitte, have had to audit us to a very high standard consistent with us being listed. We have had an unqualified ordered opinion on our financial statements from Deloitte in each of the ten years they have audited us. In addition to the rating agencies, S and P and Fitch, our regulators, and the exchanges we are members of all engage with us actively and review and audit our activity.

We reviewed the short report with our audit committee, which includes very seasoned financial professionals, including our board member, who is who is the retired CFO of CME, who is also on the financial accounting standards advisory council of the FASB. We examined the allegations on a point by point basis, and the audit committee are completely comfortable with our rebuttal. I’d like to thank our investors, our debt holders, and our clients who have engaged with us over the past week. You all completely understandably took the allegation seriously, but we’re open to hear our response and listen with an open mind, and we’re convinced. We can now return to the main purpose of our call, our earnings.

Rob?

Rob Irvin, Group CFO, Marex: Thanks, Ian, and good morning, everyone. As Ian said, we are really pleased with the strength of our performance in the first half of the year With $967,000,000 of revenue and $203,000,000 of adjusted profit before tax in the first half of the year, this reflects the strength and scale of our business. On an adjusted basis, first half margins increased to 21%, up from 20.2% last year, reflecting margin expansion in agency and execution as we built out our prime services business and the benefits from restructuring some of our desks. The second quarter was perhaps more noteworthy than the first given the more varied market environment that we experienced. Q two revenue of $500,000,000 was 18% ahead of last year.

Strong growth in agency and execution and steady progression in clearing more than offset softer performances in hedging and investment solutions and market making, demonstrating the value of our diversified model. Total reported costs grew 16%, broadly in line with revenues. Front office costs were up 21%, reflecting strong revenue performance and continued investments in future growth. Control and support costs were up 16%, primarily driven by investments in support functions, which included investments relating to recent acquisitions and our compliance with Sarbanes Oxley. Margins were broadly stable versus the second quarter of last year at 21.3%, delivering adjusted PBT of 106,000,000 up 16% versus q two of last year.

Our adjusted return on equity remained very strong at 31.4%, all of which meant we did we delivered an adjusted basic EPS of $1.08 per share, up 13 year on year. Focusing now on our segmental performance in q two. Clearing revenues grew 12% to a $139,000,000 as we grew both client balances and volumes whilst managing risk well amid amid elevated volatility. We also saw contribution from the recently closed acquisition of Anna this quarter, adding around $7,000,000 of revenues. Adjusted profit before tax grew 2% to $71,000,000 as margins decreased to 51%, reflecting continued investment in the business as we expanded into new geographies, including Abu Dhabi, APAC, and South America.

Q two was a record quarter for agency and execution as we grew revenues 59% to $261,000,000. Security revenues grew 80% to a $169,000,000, primarily driven by the continued expansion of our prime services offering include including growth in security based swaps, and Ian will say more about this shortly. Securities is also driven by growth in all asset classes from an increase in transaction volumes. Energy revenues grew 31% to $92,000,000, reflecting the combination of record volumes, strong demand for our environmental offerings, and continued expansion of large desks in oil and energy. Adjusted profit before tax more than tripled to $69,000,000 as margins improved from 14% to 26% driven by improvements in productivity as well as growth in higher margin activity, notably in prime services.

Market making revenue declined 17% to $57,000,000 compared to an exceptionally strong performance in q two last year. We saw heightened market activity across copper, aluminum, and nickel. However, this represented a small increase on the first quarter despite a mixed environment by asset class as we benefited from diversification across the business. Metals posted its second best quarter on record with revenues of $41,000,000 supported by continued strength in precious metals, partially offset by continued tariff uncertainty on base metals. Energy also performed strongly, benefiting from the market volatility, driving increased revenues across all energy desks.

This is a challenging environment for agriculture with revenues down $9,000,000 due to tariff announcements and elevated prices, notably in cocoa and coffee, which reduced market liquidity. Solutions revenues reduced by 9% to $41,000,000 in challenging market conditions, notably the volatility that followed the announcements of US tariffs in April. Hedging solutions revenue fell by 15% to 20,000,000 as tariff uncertainty led to an overall reduction and shortening of duration in client hedging activity before recovering towards the end of the quarter. Financial products revenue was broadly stable at $21,000,000 as tariff announcement in April caused an initial slowdown in client activity, which has subsequently normalized. Margins reduced to 15% due to investment in our new, more scalable technology platform, which will position us well for future growth.

Now looking at the first half performance by segment. Clearing revenue grew 15% on last year, driven by the same higher market volatility I mentioned for q two and the additions of new clients leading to higher volumes and client balances. Margins remained strong at 49%, albeit lower than last year, reflecting an increase in performance cost and investment as we expanded into new markets. Agency and execution was the strongest performer with a 50% increase in revenues and strong profit growth as margins expanded to 25%. This was driven by strong performance in all asset classes within securities, including particularly from our prime business and record volumes in energy.

Market making was broadly flat versus last year as the second quarter was more challenging for parts of the business compared to a very strong period for metals last year, as I previously mentioned. Hedging and investment solutions revenues were flat year on year, also reflecting a more challenging second quarter compared to the first. I’ll make a few comments on our performance versus overall exchange volumes on slide 10. As we have said before, we recognize the relationship between volumes and revenues is directional, hence why we provide both the stand alone quarter and the longer term trailing twelve month view on the slide. There’s also activity that flows through the revenue line.

This is not included in the volumes. You can see this specifically in securities with an agency in execution, where volumes that we present only account for around a third of total revenues or half of revenues once you exclude Prime. Volumes on exchanges don’t capture volumes from business such as equities, repos, Prime services, and other OTC activities, which are part of our revenues and explain, for example, the outperformance in agency and execution this quarter. Viewed in aggregate, we continue to gain market share across our platform, and our performance continues to outpace the broader market, which itself continues to grow at a healthy rate. Now I’ll cover net interest income.

Our NII for 02/2025 was 35,000,000, down $31,000,000 compared to q two twenty twenty four. We think about NII in its two components parts. Firstly, interest income, which is a $181,000,000 for the quarter and broadly flat on q two twenty four. Although total average balances increased from 13,500,000,000.0 to 18,000,000,000, this growth was partly was broadly offset by a decrease of a 100 bps in average Fed funds. Interest expense increased by $28,000,000 to a $147,000,000 as we had an additional 1,400,000,000.0 of average structured note balances and completed two senior debt issuances of $600,000,000 in November 2024 and 500,000,000 in May 2025.

This meant we had record levels of liquidity as we went through the second quarter and allows us to position the firm strongly to support our clients and grow organically. However, this does create a headwind headwind to net interest income. As you can see, we’ve continued to evolve our NII disclosure and split out our client balances from our house balances. Average clearing balances increased to 12,800,000,000.0 for the quarter, reflecting client growth and in and increased client activity. Turning now to our balance sheet.

As a reminder on this slide, you can see that 80% of our balance sheet consists of high quality liquid assets, which support client activity. Once we net off assets and liabilities by client activity, we’re left with a corporate balance sheet that carries corporate cash and other assets against group liabilities, including our structured notes portfolio and senior note issuance. Total assets increased to $31,200,000,000 at the June, driven by growth in client balances in clearing and growth in securities, includes prime. Our debt securities have increased to 5,300,000,000.0, enabling us to increase our liquidity and support future business growth. We continue to manage our capital and liquidity risk prudently, maintaining significant headroom above minimum requirements to ensure we’re well positioned in periods of market stress.

At the end of the second quarter, total funding was $5,700,000,000, up from 3,800,000,000.0 at year end with $2,000,000,000 of surplus liquidity to support our day to day operations. Our structured note program remains a core source of funding for us, and we’ve further extended our mature our funding maturity profile with a 500,000,000 US dollar senior debt issuance in May. This also supports our investment grade credit ratings from both S and P and Fitch. In May, Fitch upgraded its rating outlook for Marix from stable to positive to reflect our strong earnings and diversification of our franchise. Finally, we announced again a quarterly dividend of 15¢ per share for the 2025 to be paid to shareholders on the September 11.

We have a proactive and involved risk management approach at Marex. In market making, we are a client flow driven business and do not take a directional view on prices. However, we do carry a small level of inventory to source client demand and capture the trading spreads. We transitioned to a new consolidated group VaR model, and each of the businesses was moved across separately during the first half of the year on completion of the model validation and back testing. On this basis, average daily bar was $4,000,000 in the 2025 and remains at a very low relative relative level to the compared to the growth in the overall business.

Daily average revenue in market making increased by 15% versus 2024 to just over $900,000 per day, maintaining a 100% positive weeks and months during the first half. In terms of credit risk, we had a realized credit loss of $700,000 representing just naught point 1% of revenues and reflecting our proactive and disciplined approach to credit risk management. Now I’ll hand you back to Ian.

Ian Oates, Group CEO, Marex: Thanks, Rob. As you see on Slide 16, we have grown our revenue over the past two quarters with and with expanding margins, profit has grown somewhat faster than revenues. Although average exchange volumes were similar to the first quarter, which were up around 12% on Q4 levels, the month to month picture was more varied in May and June after very high levels of activity in the April. And although average volatility, using VIX to illustrate, was up 27% on q one, there was a sharp spike at the April before normalizing as the quarter progressed. As I’ve said before, our business model is set up to capture upside in such periods of elevated volatility, but not reliant on them to deliver our profit growth.

We presented a version of the slide that you see on you see here at our Investor Day, and many of you have told us that this is a helpful way to depict the quality and reliability of our earnings. On the left hand side of the slide, we show the consistent growth in our average monthly PBT and the relatively low variability in the distribution, driving a high Sharpe ratio of six in the first six months of the year. Our profitability is not a result of a few great months. It is quite stable. This was true in the second quarter as well as our range of monthly profitability was relatively evenly split.

On the right hand side of the chart, we show the distribution of our daily average profitability on a trailing twelve month basis through June 30 this year versus last year. You can see the distribution has shifted to the right by around $400,000 for the trailing twelve months to June 2025 from around 1,000,000 to 1,400,000.0. The left tail is very small and includes only five negative days. You can also see in the right tail how we have successfully captured market opportunities with more above average profitability days. Given the strong growth in agency and execution revenues and margins in the first six months of the year, we felt it was helpful to break out the growth drivers in more detail.

First half revenues of $500,000,000 were up 50% year on year, driven by strong growth in both securities and energy. Adjusted PBT margin expanded to 25% from 13% in the 2024. This reflects growth in higher margin prime services, which is becoming a larger portion of agency and execution, as well as more gradual improvements in the segment ex prime. Our prime business is a great example of how business can flourish as part of Marex. We always believed we could improve the business, and in particular, by moving from a prime of prime to doing more business on balance sheet, we could capture additional economics.

It is this on balance sheet activity, which includes both securities and synthetic total return swaps, where we have seen real success. We have seen increased client demand for financing, which is an important component of revenue within Prime. We also have an outsourced trading business, creating a balanced business here. Across all parts of our prime offering, we have continued to see significant increase in clients and have a strong pipeline. As the business grows, we are not naive about the risks.

The primary risk is client leverage, which we manage very carefully. Overall client risk remains low, and the client leverage at which we operate is below 50% and below industry averages. Turning now to our M and A activity in the first half on Slide 19. Acquisitions are part of the firm’s DNA. We believe we have differentiated ability to source, negotiate, close, integrate, and capture synergies from acquisitions, where we add new capabilities, clients, products to our platform.

We have an impressive track record. What perhaps is underappreciated, though, is an aggregate how much these acquisitions, all of which are relatively modest in the amount of premium paid, can deliver in terms of growth and earnings. The advantage of a number of smaller acquisitions is diversification and how they strengthen the firm more broadly. The concern with a number of smaller acquisitions is it adds complexity, which needs to be managed, but more relevant, it may, in aggregate, not have a material impact. But as you see, over three years, we have paid an aggregate of around a $150,000,000 in premium, and the profit after tax contribution is nearly a $150,000,000 on a run rate basis, largely, but not exclusively, as a result of the success with Cowen.

This is around 30% of profits before considering our unallocated corporate center. As you know, we recently announced the expected acquisition of Winterflood, which is not included in these numbers, but will contribute to our performance in 2026 and beyond. This deal gives us an opportunity to transform our existing Equity UK market making business, which is currently small with around $10,000,000 of run rate revenues and a margin in the low to mid teens. WinterFlood makes around a $100,000,000 of revenue and is essentially breakeven. We are confident we can run the consolidated business at a margin above what we do currently in our small Amerix business.

So we expect to materially improve its profitability by scaling the business, capturing efficiencies and introducing broader products and services from our platform to a new set of clients. Before I conclude, a quick update on our shareholder overhang and trading liquidity. Following our successful secondary offering in mid April and two subsequent smaller placings by our private equity shareholders, their residual shareholding is down to 17% of our issued share capital or around 12,000,000 shares. To put this in perspective, this is around the same number of shares as the April follow on transaction. To be in this position some fifteen months post IPO is remarkable, and we are grateful for the support our institutional shareholders have shown in helping us get to this stage.

This has allowed us average trading volume to grow materially since this time last year to now between 45 and $65,000,000 per day. Our inclusion in the Russell indices at the annual reconstitution in June has also helped generate new demand for our stock. And we expect further index tracking flows to come as the increase in our free float is fully reflected in future. So in conclusion, at the Investor Day, we said we expected to grow profits in a 10% to 20% range sustainably, with around 10% of this organic and the remainder from inorganic opportunities. In the first half, we delivered profit growth of 27%, somewhat below our ten year average at 35%, but above our target range.

We remain excited about the opportunities to continue to grow, adding new clients and gaining market share, While we are aware of potential headwinds, including rate reductions, we are maintaining record levels of surplus liquidity and managing our risk well, supporting our clients through periods of market volatility. We were pleased that we were able to process the extremely high volume successfully on our platform at the April, confirming the operational resilience of the firm and the scalability of our platform. We’ve had a great first half of the year and are very confident about the position of the franchise and our opportunity set. With that, I’d like to ask the operator to open the call for questions.

Conference Operator: Thank you,

Ian Oates, Group CEO, Marex: sir.

Conference Operator: We are now going to proceed with our first question. And the questions come from the line of Dan Fannon from Jefferies. Please ask your question. Your line is open.

Dan Fannon, Analyst, Jefferies: Thanks. Good morning. Ian, wanted to follow-up on some of your comments. I was hoping you could just clarify or state what your free cash flow was for the quarter as well as what it’s been over the last twelve months.

Ian Oates, Group CEO, Marex: Sure, Dan. You know, so thanks for the question. You know, as as you probably know, because this is a sort of half year, you know, we do file interim sort of financial statements with the SEC, and the sort of cash flow numbers are included in that particular filing. So I’ll sort of talk to cash flow for the first half, which is what the reported numbers are, you know, as well as for 2024. And, know, mean, as a financial services firm, we’re obviously, you know, extremely focused on cash and liquidity management.

In terms of sort of the free cash flow that was sort of created in the firm, I mean, the net cash increased in the firm in 2024 by almost a billion 1, and it increased in the first half of, 2025 by $779,000,000 to 3.329, sort of billion dollars. That’s sort of worth trying to just unpack that a little bit. So as you try to understand sort of what are the drivers of cash flow, you start with the reported PBT. So the reported PBT for the first half of, 2025 was $202,000,000. You know, the comparable number for 2024 was $296,000,000.

Now the first sort of set of adjustments you make to that is just to look at what are the elements of sort of PBT that are noncash. And in terms of this particular sort of half year, the sort of the two big components are the fair value of derivatives, you know, and then a number of other items. The fair value of derivatives is actually a loss this quarter of $84,000,000, and the other cash items are sort of immaterial. So, actually, our cash PBT is $285,000,000, so $83,000,000 higher than, what it was in terms of reported PBT. In contrast to 2024, in 2024, the fair value of derivative was a gain of a 188, and the other sort of cash items were sort of positive 73.

So the sort of cash version of reported PBT was a $181,000,000. If you sort of take those numbers and then reflect, you know, what are the taxes that are paid, what are sort of the the cash consumed invest through investments to to make acquisitions, and then for dividends, stock buybacks, things of that kind. What that gets you to from that 2 85 is a reduction in terms of what the cash goes to, which is 47. And that’s consistent with the 51 that we had in 2024. Then, of course, there are obviously adjustments to working capital.

So we’re supporting clients through the activities that that we do with them. We issue notes and and debt, and then we utilize the cash to support our clients. And that increase in net working capital for 2025 is $733,000,000. So the total cash increase is $779,000,000, which includes sort of the $47,000,000, which is the PBT adjusted for cash for all of our acquisitions and for the dividends and sort of the buybacks and then an increase in working capital. And that’s, that’s where we are.

You know, the the fair value of derivatives, that is important to appreciate, though, is offset essentially against, fair value adjustments that turn up in our sort of working capital. So the fair value sort of loss that we had that was sort of included in the adjustment to PBT is offset by changes in the value of sort of the structured notes and to the extent that hedges are conducted on exchange in changes in payables and receivables.

Rob Irvin, Group CFO, Marex: I think the only thing I’d add, Ian, is, Dan, as Ian said, we have filed unaudited accounts on the SEC website, but Deloitte did carry out a SaaS 100 review of those, to PCAB guidance.

Ian Oates, Group CEO, Marex: Hopefully, that answered your question, Dan.

Dan Fannon, Analyst, Jefferies: Yeah. That was very detailed. I appreciate all all of that. And then just just to follow-up, as we think about the remainder of this year and and also, I guess, into next, given given the inorganic adds that you’ve made and you outlined in the deck, can can you talk about expense synergies and realizations and just kind of how we what what’s left in terms of, you know, operational efficiencies that we could see coming out of the business, understanding also there’s revenue upside, but thinking more around the cost would be helpful.

Ian Oates, Group CEO, Marex: Yeah. I think that, know you know, in terms of the the acquisitions that we described, you know, on that one particular slide, I think most of the synergies have really been captured. And as a general matter, I think most of the synergies we anticipate, you know, our revenue synergies from here rather than cost synergies. You know, Hamilton Court, obviously, we closed quite recently. You know, there, I think our expectation is, you know, sort of revenue synergies more than it’s sort of cost synergies.

You know, winter flood, we haven’t closed yet. And I suspect winter flood, you know, driving up the margins will be a combination of, you know, sort of revenue and costs. But, you know, from our perspective, what’s really important from these acquisitions is, you know, being able to sort of forecast what the synergies are gonna be as was the case in Arna, although those were revenue synergies. And and and and then capturing those, and I think we’ve been able to do that, you know, very successfully.

Rob Irvin, Group CFO, Marex: Great. Thank you.

Conference Operator: We are now going to proceed with our next question. And the questions come from the line of Benjamin Vidish from Barclays. Please ask your question.

Benjamin Vidish, Analyst, Barclays: Hi, good morning and thank you for taking the question. Ian, maybe following up in the end of your prepared remarks around sort of the sustainability of the business. Just looking into Q3, we kind of see exchange volumes around the board kind of softening just a little bit. It’s mostly environmental and some very tough comps. I guess, where in your P and L, as we think about the back half of the year, do you think the kind of recent performance is most sustainable?

I’m curious in particular on the securities business where you’ve seen some really phenomenal growth. But but where do you see the, you know, things being a little bit more resilient versus more susceptible, at least in the in the near term, to some market swings?

Ian Oates, Group CEO, Marex: Yeah. Look. I mean, I think that, you know, we thought about this a lot. I I I think we see strength in, frankly, every part of our business. Look.

I mean, I don’t think that we’re anticipating the same level of growth in throughout securities business, but, you know, we’re as as we look at the set of things that are underway and the initiatives that are underway, we don’t see that, retreating, and we do see sort of opportunity to continue to grow. You know, we’ve we’ve had a very strong July, so we’re sort of feeling that, you know, good about, you know, the momentum in the in the franchise. I mean, we do recognize that, you you know, in all likelihood, there will be, you know, rate reductions. And I think that, you know, the impact of, you know, rate reductions as we sort of described is, you know, relatively modest. It’s something like $20,000,000 of PBT for a 100 basis point move.

So, you know, we expect some level of headwinds from that. But, you know, we think that, you know, we can offset those through the remaining, you know, through the growth that we see around the franchise. So we’re actually, as I said in my remarks, you know, pretty positive.

Benjamin Vidish, Analyst, Barclays: Helpful. Maybe one kind of follow-up, just a modeling question kind of in the weeds. But I’m curious if you could talk a little bit about the allocation of net interest expense. Just the sort of mix looked a little bit different this quarter than it has in the past, sort of a higher expense allocation to the Solutions business, lower corporate interest net corporate interest income despite higher cash balances. Curious if there’s anything we need to understand.

I know it’s a little bit hard from a modeling perspective, but, you know, if you could talk a little bit about what’s going on there and how to think about that allocation would be helpful. Thank you.

Ian Oates, Group CEO, Marex: Rob, why don’t you take that? Yeah.

Rob Irvin, Group CFO, Marex: Let me just sort of start off just talking about net interest income in the first quarter. Sorry, in the second quarter compared to the first quarter. So as you saw on the slides that we presented, our interest income was up marginally. Although rates were flat, we did have some balance, some balance growth. Interest expense, though, is up $21,000,000 compared to the first quarter, reflecting $800,000,000 worth of debt issuance.

And as we said, you know, this has positioned the firm well for future growth. And given the market volatility that we saw in April, we thought it was an important thing to do. As I look at as I look at, therefore, it meant I was long on liquidity. So, therefore, what I look to do is to optimize our liquidity across the group as much as I can, and we did deploy some of that additional liquidity into the business. And that’s why house balances only went up by point one, billion on on the chart that’s that we’ve, given out.

The majority of the additional cash that we raised went to support some of our trading businesses, notably in capital markets and our prime business. I wanna be really clear. These businesses are are sort of self funding typically, but we made a conscious decision to use house cash to support them. So I think you are seeing a little bit of a sort of change in perhaps how we’ve, how we’ve deployed some of that cash. At a high level, though, from a from a solutions perspective, the the increase really in interest expense is is reflects the higher in issued structure structured notes and any liquidity that they’ve used within the quarter.

And in the corporate center, it’s predominantly the headwinds from additional senior issuance.

Benjamin Vidish, Analyst, Barclays: All right. Thanks, Rob. Very helpful.

Conference Operator: We are now going to proceed with our next question. And the questions come from the line of Alexander Blostein from Goldman Sachs.

Alexander Blostein, Analyst, Goldman Sachs: Just maybe building on that last point, when we think about the trajectory from here off of this kind of $35 ish million quarterly run rate, I think the debt issuance was partial quarter, so presumably there’s a little bit of headwind into Q3. But you also talked about just growth in the business. So with rate cuts, maybe just give us a bit of a reset on how you’re thinking about NII trajectory from here? And also, are there any other incremental debt you expect to issue for the deals that haven’t closed yet?

Rob Irvin, Group CFO, Marex: Why don’t I start, Alex? And I’m sure Ian can add. So as I sort of think about interest income for the rest of the year, obviously, we all look at the forward curve, I think it’s currently predicting two to three cuts potentially by the end of the year. So, you know, I’d expect our interest income to be sort of broadly flat to to where we are, at the end of the second quarter because I think that, you know, we will be able to broadly offset those headwinds with with additional balances. I do think, though, that interest expense has probably peaked, and I think that going forward, you can expect to see two things.

Obviously, the interest expense cost will go down as interest rates come down because it’s all floating rate debt. And I also think we are beginning to see a little bit of compression on our debt spreads.

Ian Oates, Group CEO, Marex: Yeah. I mean, I think that, you know, we’ve, you know, we’ve been operating with very high liquidity surfaces, Alex, and I don’t think that in light of the size of those surpluses, which seems completely appropriate going into the environment we were in, that, you know, we’ll look to sort of see those increase. So I think that, you know, the second half of the year is about deploying some of that cash that we’ve raised, you know, to sort of support our clients.

Alexander Blostein, Analyst, Goldman Sachs: Gotcha. Understood. So in other words, the the 100,000,000 plus pound payment for for winter flood, you guys don’t expect to issue any incremental liquidity. That’s something you can fund with, internal

Ian Oates, Group CEO, Marex: point. Absolutely.

Alexander Blostein, Analyst, Goldman Sachs: Gotcha. Okay. And then speaking of deals, maybe zooming out a little bit, you spoke to a fairly robust pipeline, I guess, and you guys continue to do, you know, more frequent deals, but also some of them tend to be a little larger. So when you assess the opportunity set for the next kind of six to twelve months when it comes to inorganic opportunities, what’s roughly the makeup? What are some of the geographies and maybe product sets that comprise the more kind of actionable items within that pipeline?

Paolo Tinucci, Executive, Marex: Perhaps I can cover that. It’s Paolo Tinucci. In terms of the size of the acquisitions, the largest will be winter floods. We have probably six or seven that are sort of live transactions at the moment of sort of varying size. But, I mean, nothing nothing larger than winter floods.

I would say, you know, 50% of the transactions are on the in within the sort of financials or securities part of the business. So winter floods being sort of the most obvious, and then there are some some other sort of smaller transactions that will add to that. They are not not, I think this is just a function of, you where the opportunities exist. They are primarily in The UK and in Europe. And but I expect that, you know, the times we’ve sort of talked about before, we’ll see, you know, more opportunities in in in The US and and in Asia.

And we do have sort of interestingly a couple of sort of smaller acquisitions in Asia, which, you I think are sort of gonna build out our profile. So quite a mix geographically. Although, I mean, in terms of size, they’re typically smaller than the sort of £100,000,000 or so winter floods transaction.

Alexander Blostein, Analyst, Goldman Sachs: Great. Thank you very much.

Ian Oates, Group CEO, Marex: Thanks, Alex.

Conference Operator: We are now going to proceed with our next question. And the questions come from the line of Bill Katz from TD Cowen. Please ask your question.

Bill Katz, Analyst, TD Cowen: Okay. Thank you very much for taking the question and the expanded commentary this quarter. Just a question coming back to capital management at large now. Given that the liquidity in the shares is higher, given the cash flow of the company is stronger and given where the stock is trading particularly in light of recent events, how are you thinking through maybe just capital management priorities? Is there room here to potentially step into doing buyback and or working with the PE sponsors to potentially limit leakage into the market through buyback versus maybe the the deal backdrop?

Thank you.

Ian Oates, Group CEO, Marex: Yeah. Look. I mean, I think that, you know, our priority to date has been about increasing the float. And as a result, you know, buybacks were not part of our, you know, our sort of capital plan. I mean, exactly to the points that you’ve raised, I think, you know, now that we’ve got, you know, very substantial float, you know, that becomes sort of less of an issue.

I mean, to the extent that we can deploy capital in acquisitions, you know, I think that’s, you know, that’s very desirable, and you’ve seen sort of the impact of, you know, the acquisitions in driving value. So I think that, you know, that you know, to the extent that we still feel that we have, you know, really good acquisition, opportunities, you know, we’re going to pursue those. But I do think that, you know, we’re now in a world where, as you say, you know, I think buybacks become something that, you know, we can con we can consider and perhaps should. And and I think that it’s definitely the case given sort of the recent, you know, sort of news out in the marketplace that, you know, that the that the private equity shareholders would, you know, be likely to, you know, sort of hold their positions, although, obviously, that’s, you know, decision for them.

Bill Katz, Analyst, TD Cowen: Okay. Just as a follow-up, maybe looking into should be looking into the businesses a little bit. You’d mentioned that pretty optimistic on the prime side. I was wondering if you could talk a little bit about maybe quantifying the pipeline of opportunity there. And is there any way to sort of unpack the margin of the prime business versus the residual business just to think through the incremental segment Mhmm.

Of overall? Thank you.

Paolo Tinucci, Executive, Marex: Bill, it’s Powell. I’ll I’ll I’ll try and cover that. In terms of in terms of the, progress and the sort of opportunities, most of the most of the the impact has been by adding new clients and by adding, products. And we’re seeing a really good pipeline of new clients. So I think in the, in the first half of the year, we added, some somewhere around a 150 new, prime accounts.

And when I, you know, when I look at the the the pipeline of, of, clients going forward, it’s it’s it’s probably stronger than, you know, it has been before. So, you we’re adding a lot of clients. I think that you will see, you know, continued growth in that business, not not at the sort of rate that we, that we saw in the in the past twelve months, but, you know, certainly somewhere in the sort of, you know, low, double digits, perhaps, you know, high high single, low double digits. And primarily, as I say, driven by, by so that addition of clients. The, the other parts of of, the agency and execution business on the security side are also have also been growing, strongly.

And, we have added more people, and we’ve added more products and more capability. So I so I expect that, we will be we will be able to drive further growth. I mean, every every segment within the sort of financials part of the business has grown quite considerably mid teens to sort of, you know, 30% across the sort of nonprime segments. And, you know, as I say, we’re investing, some of the reorganizations that we some of the reorganizations at the desk level are, you know, starting to generate, to generate some good returns. And then I think, you know, I’m I’m very optimistic about the winter floods transaction.

And, I I mean, just sort of reiterate, you know, Ian’s point, I mean, we generate a mid teens return of really a, you know, relatively small one one might sort of, call it a sub scale, equities business. And, you know, Winter Floods is you know, it’s a great brand. It’s a, you know, it’s a $100,000,000 revenue business, and we feel sort of confident that we’ll be able to, to, to generate, you know, very good margins, at least sort of comparable margins from, from that. So, you know, overall, across that that part of, I mean, obviously, that’s market making, predominantly and, as opposed to just the execution. But across the sort of financial, parts of our business, I’m I’m confident we’ll see good growth.

Patrick Molley, Analyst, Piper Sandler: Thank you.

Ian Oates, Group CEO, Marex: Thanks, Bill.

Conference Operator: We are now going to proceed with our next question. And the questions come from the line of Alex Kramm from UBS. Please ask your question.

Adam Strachan, Head of Investor Relations, Marex0: Yes. Hey, good morning, everyone. Just wanted to follow-up on an earlier question on kind of the outlook for the remainder of the year and maybe be a little bit more specific about this quarter so far. You talked about July was strong, but that can make mean a lot of different things. So when I look at kind of exchange volumes, I think metals are down 10% quarter to date versus the second quarter, energy down 20%, securities markets mix.

So maybe talk about how you’re trending against those kinda KPIs or any reason why you would be outperforming some of what we’re seeing

Ian Oates, Group CEO, Marex: in the market? Thank you. Yeah. Look, I think that, you know, as as we’ve as we sort of talked about before, there’s two things that go on. Right?

Obviously, there’s what’s going on in the market and then what’s going on with with share. And as a result, you know, you could grow as we have, you know, faster than the market if you’re gaining share. And in the event that markets are declining, you can actually, you know, continue to grow if the share gains sort of, you know, offset those. And and I think the other sort of point is, you know, we have a lot of sort of growth levers inside the firm, which mean that, you know, even when some businesses are down, others are likely to be, you know, sort of performing better. So when I sort of said July is strong, you know, it’s operating, you know, at levels that are comparable to the second quarter.

Adam Strachan, Head of Investor Relations, Marex0: K. Very good. And then thanks for obviously addressing the short report in all detail. Maybe one question related to that. I hope it’s fair.

But just wondering what kind of feedback you’ve gotten from clients, because I’m sure they are they’re watching this. And I think some of your large clients have taken you apart a lot over the years and as they onboarded, but this is financial services, and a lot of it is built on trust. So just wondering how those conversations have been or if any if you’ve seen any sort of change in activity or any any lines being pulled? Just just wanted to to to get more detail there. Thanks.

Ian Oates, Group CEO, Marex: Yeah. No. It’s a it’s a good question. I mean, look, I think the, you know, the impact has been pretty modest. I mean, as as I sort of indicated in my remarks, I mean, there have been, you know, active conversations with, you know, a very large number of counterparts and, you know, and people were have been, I think, you know, sort of interested in in what it is we have to say.

You know, there there are a couple of data points which I’m sure you track, Alex, you know, which is what’s going on with the, you know, take balances in The US, which are sort of reported on a daily basis. And, you know, what we see there is, you know, our balances are, you know, essentially sort of flat to where they were before, you know, the short seller came out. I mean, certainly rounds to an identical number. And I think that’s sort of indicative of, you know, broadly what we’re seeing in the firm. I mean, there is, you know, some very limited amount of sort of sort of retrenchment, but it’s, you know, it is very limited.

And, you know, often post the engagement with, you know, with the firm, you know, people, you know, have broad balances back. And interestingly, you know, two of the largest, most sophisticated hedge funds in the world have, you know, sort of, you you know, extended their sort of clearing mandates with us just over, you know, the last week. So, you know, it’s a it it really is something that we’re putting a lot of time and effort against. But I think I’m pretty pleased with how sort of muted that effect is. You know, our liquidity, which was always extremely strong, you know, remains extremely strong.

So, you know, there’s sort of zero issues there. The amount of structured notes that we’ve had to buy back is absolutely trivial amount. So, really, the impact to date has been extremely muted.

Adam Strachan, Head of Investor Relations, Marex0: Very helpful. Thank you.

Ian Oates, Group CEO, Marex: Thanks, Alex.

Conference Operator: We are now going to proceed with our next question. The next question comes from the line of Patrick Molley from Piper Sandler.

Patrick Molley, Analyst, Piper Sandler: Yes, good morning. Thanks for taking the question. I had one on the Market Making segment in the second quarter, specifically in Ag. The revenues there flipped negative in the quarter. I think in your prepared remarks, you had said that there was some tariff related impact, but just was hoping you could give a little bit more color on the dynamic there in the second quarter and whether some of those headwinds that you were facing have abated in the third quarter?

Thanks.

Ian Oates, Group CEO, Marex: So thanks, Patrick. As I

Rob Irvin, Group CFO, Marex: said in in my prepared remarks, revenues were down on, the back of the tariff announcements. And what we were actually seeing going on notably in cocoa and coffee was elevated prices, which significantly reduced market liquidity. So it was a much slower quarter, for the business.

Ian Oates, Group CEO, Marex: Yeah. And and I think I can say it sort of continued, you know, into this quarter as well. I mean, again, it’s a benefit of a diversified business is even when you have sort of a slowdown in one part of your market making. You know, other parts can, can take up the slack. It’s certainly in as I sort of reflect on the second quarter, you know, we had, you know, pretty strong performance in metals, and we actually had, you know, pretty strong performance in energy, and that offset, to some extent, the impact in eggs.

But I think you’re seeing the impact in eggs in,

Rob Irvin, Group CFO, Marex: you know, a lot of places.

Ian Oates, Group CEO, Marex: I think you saw that in sort of car deals announcement this week. You saw it, I think, in sort of Stonex’s announcement. So this isn’t something that’s just affecting Marix. I think it’s a more broad sort of effect.

Patrick Molley, Analyst, Piper Sandler: Okay. Thanks for that. And then maybe just the last one on, clearing balances in the quarter. It’s still up up strong year over year, but moderated a bit sequentially. So I was hoping you could just talk about, you know, how we should think about balance growth from here throughout the rest of the year and where you’d expect that to kinda settle.

Thanks.

Ian Oates, Group CEO, Marex: Again, I mean, I think that we have a pretty strong pipeline. It you know, you’re never quite sure exactly, you know, when those close, but, you know, our pipeline is, you know, probably, you know, sort of consistent with what you saw in the average for the first half of the year.

Patrick Molley, Analyst, Piper Sandler: Alright. Great. Thank you.

Ian Oates, Group CEO, Marex: Thanks, Patrick.

Conference Operator: We are now going to take one final question. And the questions come from the line of Carlos Gomez Lopez from HSBC. First,

Adam Strachan, Head of Investor Relations, Marex1: I wanted to thank you for the increased disclosure and the improvement, especially in the share count that you show in Page 16 of your earnings release or 25 of your presentation. You are now at 71,700,000.0 shares at the end of the period. Can you remind us what we should expect for the share count to do over the next year or two years? Well,

Ian Oates, Group CEO, Marex: look, I mean, I I think you should expect that to remain very consistent unless, you know, to, you know, one of the earlier questions, you know, we begin, you know, to buy back stock, which is not currently sort of our plan. So I think, you know, what we committed to was, you know, not increasing dilution, by more than 1%. And so I don’t think so that that would be sort of the maximum amount, but we don’t have any expectation of, you know, either diluting or at the moment of sort of buying back stock. Although, you know, that that that could adjust if we if we changed our view on how much capital we had and how we wanted to deploy it.

Adam Strachan, Head of Investor Relations, Marex1: So that was my question. There are no particular share option plans or anything else that should lead us to have to have more than 1% dilution going forward from from what you have today?

Adam Strachan, Head of Investor Relations, Marex0: No.

Adam Strachan, Head of Investor Relations, Marex1: Okay. And if I could ask one last question. I imagine you obviously must have looked at RJ O’Brien. Was that too large a transaction for you, or that is a business that perhaps you could have been interested in?

Ian Oates, Group CEO, Marex: Look. I I think it’s a it’s a transaction that we would have been interested in. You know, I think our view was, you know, it wasn’t a great cultural fit for us. And I think that, you know, our you know, what we’re what we’re excited about is what we’re actually doing, which is, you know, a number of, you know, more modest acquisitions, which collectively, you know, are delivering, you know, very substantial increases to the earnings of the firm. And so it’s, you know, it it it’s less of a you know, we didn’t wanna do it.

I mean, you know, we we we did have some conversations. You know, they didn’t lead to, you know, to anything. But I think it’s you know, it it wasn’t a great fit for us. You know, it seems like it’s a benefit for Stonix, and so, you know, they were the ones who did it. But, mean, it’s not the case that we would not consider a transaction of that size if we felt it was, you know, the right fit for us and that we were highly confident that we could deliver value for our shareholders if we pursued it.

Adam Strachan, Head of Investor Relations, Marex1: Very clear. Thank you so much.

Conference Operator: We are now going to take the last question. And the questions come from the line of Alex Kramm from UBS. Please ask your question.

Adam Strachan, Head of Investor Relations, Marex0: Yes. Hey, again. Thanks for squeezing me in here for a follow-up. Just one quick one. I think someone asked earlier about margins and agency execution.

I don’t think you fully addressed that. So maybe you can just talk about the outlook there a little bit. I mean, seems like that’s been doing really nice and improving nicely with with the prime growth. And just wondering if that’s all that is. And then maybe talk about the front office cost.

I think early last year, it was running, like, close to 80%, I guess, comp expense. We’re in the mid-50s now. So just curious how we should be thinking about the ceiling on, I guess, compensation expense and how that will ultimately impact the margins?

Paolo Tinucci, Executive, Marex: Alex, it’s Paolo again. I’ll try and cover them to the margin point. We’d always said that in the agency and execution part of

Adam Strachan, Head of Investor Relations, Marex0: the business

Paolo Tinucci, Executive, Marex: margins, we would be targeting margins of over 20% and you know, hoping to get towards 20, towards the mid twenties, and we obviously exceeded that. You know, there there has been a a change in mix, with a larger proportion of our, of our profits coming from from Prime and from some of the sort of the the the activities around that supports the Prime and its clients as well as the clearing clients. So more coming through on, for example, repo and and stock loan. So I think that these margins are, you know, are sustainable. I think there’s yeah.

There there there’s room for some improvement because certainly within the the sort of the the the composition of our desks, there are some that are still not quite in scale, and it takes a little bit of time for for that to come through. There’s some that are still generating, bottom line losses, so profit level losses. So I think there’s there’s there’s room for some improvement, but I think we’re sort of close to the to optimal level. And certainly with the prime business, you know, as as as you as we talked about, as you know, it’s a, you know, relatively high fixed cost business. So the the the margin at the margin is high, and is you know, it’s some it’s comparable to the clearing business.

So, you know, we we we are achieving margins that on average that are sort of comparable to clearing and at the margin, it probably has a similar dynamics, you know, more than 50% margin at the margin.

Adam Strachan, Head of Investor Relations, Marex0: Super helpful. Thanks, guys.

Ian Oates, Group CEO, Marex: Alright. Alright. Well, thanks, everybody. A lot of questions and a lot of materials. Apologize for the sort of sound issues that we had at the outset.

I I guess these things sometimes happen. It’s unfortunate. But thank you for remaining online with us. And, you know, we’re obviously extremely pleased with, you know, with the quarter. We’re extremely pleased with the half year.

You know, we really are, you know, excited about sort of the prospects over, you know, the next period, and we feel that, you know, the strategy is the right strategy and that we’re executing that strategy extremely well. So thank you all, and look forward to following up with some of you over the next couple of weeks.

Conference Operator: This concludes today’s conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a great day.

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