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Revenue Recognition | 3 Months Ended
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Mar. 31, 2025
Revenue Recognition [Abstract] |
Revenue Recognition | 11. Revenue Recognition Refer to Note 2 – Summary of Significant Accounting Policies in Company’s 2024 Form 10-K for detail on the Company’s primary sources of revenue and the corresponding accounting treatment. There were no significant changes to the accounting policies for revenue recognition and except as set forth below, those policies were unchanged during the three months ended March 31, 2025. Principal Transactions and Proprietary Trading The Company continuously invests in treasury bill and treasury notes as part of its normal operations to meet deposit requirements, which are primarily in the line item “Cash and securities segregated for regulatory purposes” on the statements of financial condition, in order to enhance its yield on its excess 15c3-3 deposits. In 2025, the Company acquired the Investment in Equity Security and the unrealized gain related to this investment is included in the “Unrealized gain on investment in equity security” line in the table below. Refer to Note 1 – Organization and Basis of Presentation, Note 4 – Fair Value Measurements, and Item 2. – Management’s Discussions and Analysis of Financial Condition and Results of Operations for further detail. Restricted Equity Securities The following table represents detail related to principal transactions and proprietary trading.
|  | Three Months Ended March 31, |
|  | 2025 |  |  | 2024 |  |  | Increase (Decrease) |
Principal transactions and proprietary trading |  |  |  |  |  |  |  |  |
Realized and unrealized gain on primarily riskless principal transactions |  | $ | 3,712,000 |  |  | $ | 3,443,000 |  |  | $ | 269,000 |
Unrealized gain on investment in equity security |  |  | 9,233,000 |  |  |  | — |  |  |  | 9,233,000 |
Realized and unrealized gain on portfolio of U.S. government securities |  |  | 16,000 |  |  |  | 63,000 |  |  |  | (47,000 | )
Total Principal transactions and proprietary trading |  | $ | 12,961,000 |  |  | $ | 3,506,000 |  |  | $ | 9,455,000 |
Disaggregation of Revenue The Company generated a significant portion of its revenue from financial instruments comprising of margin revenue, securities lending, principal transactions and proprietary trading, and interest revenue. These net interest and other revenues are not within the scope of FASB ASC Topic 606 – “Revenue from Contracts with Customers” (“Topic 606”), because they are generated from financial instruments covered by various other areas of GAAP. Market making activities are not within the scope of Topic 606, as they do not meet the definition of a contract with a customer under the standard. Consequently, revenue and expenses related to market making activity are accounted for separately and not included in the revenue figures presented in accordance with Topic 606. The Company also has fee revenue and transaction revenue which are within the scope of Topic 606. Revenue from contracts with customers includes commission income charged to retail clients for executing transactions, markups on riskless principal transactions charged to retail clients for executing transactions, distribution income received from mutual funds for client transactions, stock locate fees charged to counterparties for providing locate services, payment for order flow received for executing transactions, and administrative fees to retail clients including for maintenance and other ancillary services. Under Topic 606, Revenue from Contracts with Customers, requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The table below presents detailed information on the Company’s recognition of revenue from contracts with customers as well as revenues from financial instruments, which are outside the scope of Topic 606, by major types of services for the periods indicated.
|  | Three Months Ended March 31, |
|  | 2025 |  |  | 2024 |
Revenues from Contracts with Customers |  |  |  |  |  |
Principal transactions and proprietary trading |  |  |  |  |  |
Riskless principal transactions with customers |  | $ | 3,740,000 |  |  | $ | 3,562,000 |
Commissions and fees |  |  |  |  |  |  |  |
Brokerage commissions |  |  | 1,543,000 |  |  |  | 1,892,000 |
Distribution fees |  |  | 357,000 |  |  |  | 325,000 |
Insurance commissions |  |  | 202,000 |  |  |  | 82,000 |
Stock borrow / stock loan |  |  |  |  |  |  |  |
Retail fees (rebates) |  |  | 6,000 |  |  |  | (9,000 | )
Stock locate services |  |  | 4,032,000 |  |  |  | 3,598,000 |
Other income |  |  |  |  |  |  |  |
Administrative fees |  |  | 528,000 |  |  |  | 342,000 |
Payment for order flow |  |  | 246,000 |  |  |  | 295,000 |
Other commissions |  |  | — |  |  |  | (9,000 | )
Advisory fees |  |  | 748,000 |  |  |  | 490,000 |
Total Revenues from contracts with customers |  | $ | 11,402,000 |  |  | $ | 10,568,000 |
Revenue outside the scope of Topic 606 |  |  |  |  |  |  |  |
Principal transactions and proprietary trading |  |  |  |  |  |  |  |
Proprietary trading |  |  | (12,000 | ) |  |  | (56,000 | )
Principal transactions - equity investment |  |  | 9,233,000 |  |  |  | — |
Interest, marketing and distribution fees |  |  |  |  |  |  |  |
Margin interest |  |  | 3,395,000 |  |  |  | 3,976,000 |
Interest income |  |  | 3,050,000 |  |  |  | 4,281,000 |
Marking and distribution fees |  |  | 500,000 |  |  |  | 506,000 |
Stock borrow / stock loan |  |  |  |  |  |  |  |
Stock rebate revenue |  |  | 799,000 |  |  |  | 509,000 |
Market making |  |  | 552,000 |  |  |  | 672,000 |
Total Revenue Outside the Scope of Topic 606 |  |  | 17,517,000 |  |  |  | 9,888,000 |
Total Revenue |  | $ | 28,919,000 |  |  | $ | 20,456,000 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-7 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
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