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Segment Analysis | 9 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
Segment Analysis | Segment Analysis The Company’s operating segments are principally based on the nature of the clients it serves (commercial, institutional, and retail), and a fourth operating segment, its payments business. The Company manages its business in this manner due to its large global footprint, in which it has approximately 4,400 employees allowing it to serve clients in more than 180 countries. The Company’s business activities are managed as operating segments, which are our reportable segments for financial statement purposes as shown below. •Commercial •Institutional •Retail •Payments (previously disclosed as Global Payments) Commercial The Company offers commercial clients a comprehensive array of products and services, including risk management and hedging services, execution and clearing of exchange-traded and OTC products, voice brokerage, market intelligence and physical trading, as well as commodity financing and logistics services. The ability to provide these high-value-added products and services differentiates the Company from its competitors and maximizes the opportunity to retain clients. Institutional The Company provides institutional clients with a complete suite of equity trading services to help them find liquidity with best execution, consistent liquidity across a robust array of fixed income products, competitive and efficient clearing and execution in all major futures and securities exchanges globally, as well as prime brokerage in equities and major foreign currency pairs and swap transactions. In addition, the Company originates, structures and places debt instruments in the international and domestic capital markets. These instruments include asset-backed securities (primarily in Argentina) and domestic municipal securities. Retail The Company provides retail clients around the world access to over 18,000 global financial markets, including spot foreign exchange ("forex"), both financial trading and physical investment in precious metals, as well as contracts for difference (“CFDs”), which are investment products with returns linked to the performance of underlying assets. In addition, its independent wealth management business offers a comprehensive product suite to retail investors in the U.S. Payments The Company provides customized foreign exchange and treasury services to banks and commercial businesses, as well as charities and non-governmental organizations and government organizations. The Company provides transparent pricing and offers payments services in more than 180 countries and 140 currencies, which it believes is more than any other payments solution provider. ******** The total revenues reported combine gross revenues from physical contracts for subsidiaries that are not broker-dealers and net revenues for all other businesses. In order to reflect the way that the Company’s management views the results, the table below also reflects the segment contribution to ‘operating revenues’, which is shown on the face of the consolidated income statements and which is calculated by deducting physical commodities cost of sales from total revenues. Segment data includes the profitability measure of net contribution by segment. Net contribution is one of the key measures used by management to assess the performance of each segment and for decisions regarding the allocation of the Company’s resources. Net contribution is calculated as revenue less direct cost of sales, transaction-based clearing expenses, variable compensation, introducing broker commissions, and interest expense. Variable compensation paid to risk management consultants/traders generally represents a fixed percentage of revenues generated, and in some cases, revenues generated less transaction-based clearing expenses, base salaries and an overhead allocation. Segment data also includes segment income which is calculated as net contribution less non-variable direct expenses of the segment. These non-variable direct expenses include trader base compensation and benefits, operational employee compensation and benefits, communication and data services, business development, professional fees, bad debt expense and other direct expenses. Inter-segment revenues, expenses, receivables and payables are eliminated upon consolidation. Total revenues, operating revenues and net operating revenues shown in the table below as “Corporate” primarily consist of interest income from the Company’s centralized corporate treasury function. In the normal course of operations, the Company operates a centralized corporate treasury function in which it may sweep excess cash from certain subsidiaries, where permitted within regulatory limitations, in exchange for a short-term interest bearing intercompany payable, or provide excess cash to subsidiaries in exchange for a short-term interest bearing intercompany receivable in lieu of the subsidiary borrowing on external credit facilities. The intercompany receivables and payables are eliminated during consolidation. “Overhead costs and expenses” include costs and expenses of certain shared services such as information technology, accounting and treasury, credit and risk, legal and compliance, and human resources and other activities. These amount represent the gross overhead costs and expenses, before any allocation of overhead costs to operating segments. Information for the reportable segments is shown in accordance with the Segment Reporting Topic of the ASC as follows:
| Three Months Ended June 30, |  | Nine Months Ended June 30,
(in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Total revenues: |  |  |  |  |  |  |
Commercial | $ | 26,410.3 |  |  | $ | 14,444.5 |  |  | $ | 66,867.4 |  |  | $ | 42,188.7 |
Institutional | 508.9 |  |  | 381.1 |  |  | 1,408.0 |  |  | 1,087.1 |
Retail | 104.1 |  |  | 170.7 |  |  | 317.1 |  |  | 791.5 |
Payments | 51.1 |  |  | 53.2 |  |  | 161.0 |  |  | 158.4 |
Corporate | 8.3 |  |  | 8.6 |  |  | 31.9 |  |  | 23.9 |
Eliminations | (13.0) |  |  | (10.2) |  |  | (36.6) |  |  | (29.1) |
Total | $ | 27,069.7 |  |  | $ | 15,047.9 |  |  | $ | 68,748.8 |  |  | $ | 44,220.5 |
Operating revenues: |  |  |  |  |  |  |
Commercial | $ | 262.2 |  |  | $ | 252.7 |  |  | $ | 661.1 |  |  | $ | 655.2 |
Institutional | 508.9 |  |  | 381.1 |  |  | 1,408.0 |  |  | 1,087.1 |
Retail | 96.2 |  |  | 91.5 |  |  | 290.7 |  |  | 240.6 |
Payments | 51.1 |  |  | 53.2 |  |  | 161.0 |  |  | 158.4 |
Corporate | 8.3 |  |  | 8.6 |  |  | 31.9 |  |  | 23.9 |
Eliminations | (13.0) |  |  | (10.2) |  |  | (36.6) |  |  | (29.1) |
Total | $ | 913.7 |  |  | $ | 776.9 |  |  | $ | 2,516.1 |  |  | $ | 2,136.1 |
Net operating revenues (loss): |  |  |  |  |  |  |
Commercial | $ | 220.5 |  |  | $ | 213.6 |  |  | $ | 548.1 |  |  | $ | 551.4 |
Institutional | 157.7 |  |  | 120.3 |  |  | 456.1 |  |  | 401.4 |
Retail | 68.5 |  |  | 65.1 |  |  | 209.8 |  |  | 159.8 |
Payments | 48.7 |  |  | 51.0 |  |  | 153.7 |  |  | 151.7 |
Corporate | (26.9) |  |  | (14.1) |  |  | (55.3) |  |  | (47.0) |
Total | $ | 468.5 |  |  | $ | 435.9 |  |  | $ | 1,312.4 |  |  | $ | 1,217.3 |
Net contribution: |  |  |  |  |  |  |
(Revenues less cost of sales of physical commodities, transaction-based clearing expenses, variable compensation, introducing broker commissions and interest expense) |  |  |  |
Commercial | $ | 168.7 |  |  | $ | 156.9 |  |  | $ | 414.4 |  |  | $ | 413.5 |
Institutional | 104.8 |  |  | 81.7 |  |  | 307.5 |  |  | 265.6 |
Retail | 63.7 |  |  | 60.3 |  |  | 196.2 |  |  | 147.9 |
Payments | 40.1 |  |  | 41.9 |  |  | 125.0 |  |  | 122.1 |
Total | $ | 377.3 |  |  | $ | 340.8 |  |  | $ | 1,043.1 |  |  | $ | 949.1 |
Segment income: |  |  |  |  |  |  |
(Net contribution less non-variable direct segment costs) |  |  |  |  |  |
Commercial | $ | 125.7 |  |  | $ | 117.0 |  |  | $ | 298.5 |  |  | $ | 302.7 |
Institutional | 62.2 |  |  | 45.1 |  |  | 188.7 |  |  | 162.9 |
Retail | 27.6 |  |  | 17.2 |  |  | 89.5 |  |  | 17.8 |
Payments | 28.2 |  |  | 28.6 |  |  | 87.8 |  |  | 76.8 |
Total | $ | 243.7 |  |  | $ | 207.9 |  |  | $ | 664.5 |  |  | $ | 560.2 |
Reconciliation of segment income to income before tax: |  |  |  |
Segment income | $ | 243.7 |  |  | $ | 207.9 |  |  | $ | 664.5 |  |  | $ | 560.2 |
Net operating revenue (loss) with Corporate | (26.9) |  |  | (14.1) |  |  | (55.3) |  |  | (47.0) |
Overhead costs and expenses | (128.8) |  |  | (99.3) |  |  | (353.2) |  |  | (289.1) |
Gain on acquisition | — |  |  | — |  |  | — |  |  | 23.5 |
Income before tax | $ | 88.0 |  |  | $ | 94.5 |  |  | $ | 256.0 |  |  | $ | 247.6 |
(in millions) | As of June 30, 2024 |  | As of September 30, 2023 |  |  |  |
Total assets: |  |  |  |  |  |  |
Commercial | $ | 4,743.7 |  |  | $ | 4,676.3 |  |  |  |  |
Institutional | 18,635.7 |  |  | 15,059.3 |  |  |  |  |
Retail | 1,056.9 |  |  | 1,014.2 |  |  |  |  |
Payments | 562.3 |  |  | 376.6 |  |  |  |  |
Corporate | 932.2 |  |  | 812.3 |  |  |  |  |
Total | $ | 25,930.8 |  |  | $ | 21,938.7 |  |  |  |  |

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- Definition The entire disclosure for reporting segments including data and tables. 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