Marex Group (MRX) Q4 2025 Earnings Call Transcript

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Date

Tuesday, March 3, 2026 at 9 a.m. ET

Call participants

• Chief Executive Officer — Ian Lowitt
• Chief Financial Officer — Crispin Robert Irvin
• Chief Strategy Officer — Paolo Tonucci

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Takeaways

• Revenue -- $572 million in Q4, representing a 38% increase year over year.
• Adjusted Profit Before Tax (PBT) -- $115 million for Q4, up 41% year over year; full-year adjusted PBT rose 30% to $418 million.
• Earnings Per Share (EPS) -- $1.14 in Q4, up 50% year over year; full-year EPS increased by 39% to $4.12.
• Return on Equity (ROE) -- Reported ROE improved to 27.6% for the year; adjusted ROE in Q4 was 30.8%.
• Clearing Segment Revenue -- $137 million in Q4, up 10%; average clearing balances increased 18% to $14 billion.
• Agency and Execution Revenue -- $290 million in Q4, rising 51%; Prime contributed $70 million, with 30% annualized gross client growth and 5% attrition.
• Market Making Revenue -- $81 million in Q4, an increase of 83%, driven by metals ($50 million) and securities ($20 million), offset by lower agriculture and energy.
• Solutions Revenue -- $63 million in Q4, up 57%; Financial Products accounted for $40 million and Hedging Solutions contributed $23 million.
• Net Interest Income (NII) -- $153 million full year, a decline from $227 million, due to higher interest expense (up 21%) despite average balance growth; Q4 NII was $26 million, down $13 million from Q3.
• Dividend -- A quarterly dividend of $0.15 per share was confirmed, to be paid March 31.
• Regulatory Capital -- $927 million at year end against a $403 million requirement (230% ratio), with $1 billion in liquidity headroom.
• Client Concentration -- Top 50 clients produce one-third of annual revenue, averaging $14 million per client; this cohort grew 36% and revenue from them increased over 80%.
• Organic vs. Inorganic Growth -- Roughly 75% of growth was organic and 25% from acquisitions.
• M&A Activity -- ARNA acquisition delivered expected “day-one synergies” (about 50% profit uplift); Winterflood acquisition expected to close custody sale in Q2 at a discount to tangible book value; Hamilton Court integration expanded client base in UK/EU.
• Digital Assets Initiatives -- Launched 24/7 digital asset trading and are “actively involved in the CFTC's pilot program for the acceptance of stablecoin and crypto as collateral for futures.”
• Risk Metrics -- Average daily VaR was $3.8 million for 2025, with realized credit losses of $800,000 (less than 0.1% of revenue).
• Operating Expense Profile -- 55% of Q4 expenses are variable; $54 million of expense increases directly linked to variable compensation, $18 million to ongoing costs from new acquisitions, and $50 million to technology and growth investments.

Summary

Marex Group (NASDAQ:MRX) delivered record Q4 and full-year results, highlighting margin expansion and disciplined cost management amid elevated client activity and diversified business momentum.

• Fourth-quarter exchange volumes increased 5% year over year and 8% sequentially from Q3, directly supporting revenue growth despite non-“Goldilocks” volatility conditions.
• Management stated, “approximately 80% of our balance sheet supports client activity,” reflecting a liquid, client-driven asset structure.
• The company emphasized significant progress in onboarding and cross-selling to global hedge funds, asset managers, and large commodity firms, with North American growth outpacing other regions within the top client cohort.
• Digitization and AI deployment are being leveraged primarily for productivity, risk management, and product innovation, with notable regulatory progress in crypto collateral and 24/7 trading for institutional customers.
• Dividend continuity and a high Sharpe ratio (6.2 in 2025) underline balance sheet conservatism and earnings stability, as only six negative profitability days occurred all year.
• M&A remains core, with selective discipline and “high conviction in our ability to enhance returns through integration and scale,” as voiced by management.
• Outlook for 2026 remains within previously indicated organic growth targets (10% annually) supplemented by additional selective acquisitions.

Industry glossary

• Prime (Prime Brokerage/Services): Business segment offering custody, financing, clearing, and execution services for institutional clients across global asset classes.
• VaR (Value at Risk): A metric quantifying the maximum potential loss over a set period at a given confidence interval, used for risk management.
• Structured Notes: Debt securities with embedded derivatives, tailored to provide specific risk-return profiles for institutional clients.
• Digital Prime Brokerage: A subset of prime services focused on digital asset clients, supporting custody, trading, and collateral management for cryptocurrencies and tokenized assets.

Full Conference Call Transcript

Ian Lowitt: Good morning, and welcome to our fourth quarter and full year 2025 earnings call. 2025 was a year of continued growth for Marex Group plc. We delivered another year of record financial performance, with revenue of over $2,000,000,000. Over the past five years, we have increased profitability sevenfold, from $61,000,000 in 2020 to $418,000,000 in 2025. We have done this by broadening our product offering across our four interconnected services, expanding geographically and combining organic growth with targeted M&A. Acquiring, integrating, and scaling businesses is embedded in the DNA of Marex Group plc, enabling us to add clients, deepen relationships across products, asset classes, and geographies.

Our platform and organization are difficult to replicate, increasing further the high barriers to entry we benefit from in our industry. The results we are reporting today demonstrate that our strategy is effective and continues to deliver value for our shareholders. On slide four, you see that we closed the year with record profitability in the fourth quarter. Revenues grew 38% from $416,000,000 to $572,000,000 and adjusted profit before tax increased 41% to $115,000,000. We grew EPS by 50% to $1.14 per share. Pleasingly, this performance was not driven by an idiosyncratic market event, but by broad-based strength across the firm. Full year revenue grew 27%, from $1,600,000,000 to just over $2,000,000,000, and adjusted PBT increased 30% to $418,000,000.

Profit after tax increased at a faster rate, benefiting from an improved effective tax rate, which declined from 26% to 25%, reflecting our evolving geographic mix. Full year EPS grew 39% to $4.12. We experienced growth across all our segments, with continued strength and client balance growth in Clearing, strong performance in Agency and Execution driven in particular by Prime, which I will come back to, as well as good momentum in Market Making and Hedging and Investment Solutions. In Clearing, average customer balances increased over the year by 18% to $14,000,000,000 in the fourth quarter, with balances growing steadily quarter by quarter. We continue to execute our M&A strategy, strengthening earnings through disciplined integration and development of recent acquisitions.

We have developed a repeatable model for identifying complementary assets, acquiring them at attractive prices, integrating them efficiently, and enhancing their earnings power as part of the Marex Group plc platform. That capability continues to be a sustainable competitive advantage for the firm. We are very selective in the opportunities we pursue, and maintain high conviction in our ability to meet our return objectives and grow acquisitions once integrated. This is evidenced by the acquisitions we completed during the year, which are delivering in line with or ahead of expectations. ARNA provided an opportunity to establish a Clearing presence in the Middle East. The day-one synergies we identified, which increased profitability by around 50%, were realized as expected.

Hamilton Court provides us with access to a number of UK/EU corporates that we did not serve previously. It expands our client base and creates meaningful cross-sell opportunities. Winterflood, which we completed in December, has started strongly and enhances our UK equity market making franchise while creating cross-sell opportunities with leading UK participants. Following the subsequent sale of Winterflood's custody business, which we expect to complete in Q2, we will have acquired Winterflood at a meaningful discount to tangible book value, a transaction that we believe will generate substantial long-term value for our shareholders.

Alongside M&A, we continue to execute a number of organic growth initiatives including digital assets within Clearing, expanding our footprint in Asia, the Middle East, and Brazil, and growing our Prime brokerage and FX capabilities. A meaningful contributor to the diversification of the firm, and an example of how we scale businesses once integrated into our platform, is Prime Services. We acquired Prime in December 2023 for approximately $25,000,000 of premium. In 2025, it generated over $250,000,000 of revenue, and now accounts for around a quarter of the group's profitability. Prime also adds diversification to our earnings profile, broadening our revenue drivers beyond traditional exchange volume-linked activity.

Finally, as the breadth of our platform expands, we are increasingly scaling relationships with larger, more sophisticated clients, something I will touch on in more detail shortly. On slide five, you can see the consistent improvement in our key financial metrics: revenue, profitability, earnings per share, and return on equity. Beyond the headline growth, what is particularly encouraging is the quality of that growth. Full year revenues increased 27% to over $2,000,000,000, adjusted profit before tax grew faster than revenues, up 30% for the year, and EPS increased 39% reflecting the improved tax rate. Reported return on equity improved to 27.6%, underscoring the capital efficiency of the model, and pretax margins were 21%.

Looking now at the operating environment in more detail, on slide six. As we step back and look at the operating environment during the year, it is clear that on the whole, we have enjoyed a supportive backdrop for our services. The spike in volatility in April was notable at the start of the second quarter. While April was a strong month, it was not outsized in the context of the full year. We continue to deliver strong growth even as volumes reduced from April's peak, including through the seasonally quiet third quarter, amid the impact of the short report.

We also absorbed the impact of lower interest rates in Clearing, as we grew our client balances, which Rob will cover in more detail. In Q4, exchange volumes increased, up 5% year on year and 8% higher than the third quarter, while volatility also picked up modestly. Equity markets being at or around all-time highs in Q4 helped our Prime business, which is a function of customer balances and spreads. It also, to some extent, supports Solutions, where we tend to see higher client activity in structured products when markets are rising.

In this context, our fourth quarter profits were up 41% year on year, and up 14% compared to the third quarter, and also above our prior record in Q2. This demonstrates that we are growing faster than underlying market volumes, and that we have set up the firm to deliver growth through a variety of environments. I will now turn the call over to Rob, who will take you through the financials in more detail.

Crispin Robert Irvin: Thanks, Ian, and good morning, everyone. I will take you through our financial performance for the full year and the fourth quarter, following the same structure as usual. For the full year, we grew revenue by 27% to $2,020,000,000 with growth across all our business segments. Total expenses increased by 24% reflecting the higher revenues as well as ongoing investment to support growth and acquisitions during the year. Adjusted PBT margin expanded by 60 basis points to 20.7%, delivering a 30% growth in adjusted PBT to $418,000,000. The effective tax rate for the full year decreased from 26% to 25%, reflecting mainly the geographical mix of our earnings.

This is an excellent result for the year, capped off by the fourth quarter, which was the strongest quarter in our history. Q4 revenue of $572,000,000 was up 38% versus last year, while total expenses grew 36%, broadly in line with revenues, driven by higher compensation costs and ongoing investments to support growth. Adjusted profit before tax increased 41% to $115,000,000 as margins increased 50 basis points to 20.1%. Our adjusted return on equity remained very strong at 30.8%, and we grew basic EPS to $1.14 per share, up 50% year on year. Focusing now on our segmental performance, starting with Clearing. In the fourth quarter, Clearing revenue increased 10% to $137,000,000.

This was driven by growth across all revenue lines, higher volumes, and continued momentum in client onboarding, particularly large institutional client wins during 2025. Average Clearing balances increased to $14,000,000,000 from $11,900,000,000 in the fourth quarter of last year, reflecting the contribution from ARNA and new client wins. Net commission income increased 6% reflecting higher client activity as well as our broadened product offerings across regions. Net interest income was stable at $59,000,000. The durability of Clearing NII even as rates have declined shows how well this business is positioned, as growth in client balances offset these rate pressures. Adjusted profit before tax for the quarter increased to $67,000,000 with margins at 49%.

For the full year, Clearing revenue increased 13% to $528,000,000 with sustained growth in client balances, new client wins, and an expanded product offering. Adjusted profit before tax increased to $262,000,000 with margins at 50%, reflecting disciplined investment to support growth. Overall, the fourth quarter capped a year of sustained momentum in Clearing, with strong client acquisition, higher balances, and disciplined investment, positioning us well going into 2026. Turning now to Agency and Execution. This quarter, we are providing a more granular breakdown of performance across the asset classes to reflect the continued expansion and diversity of the platform. The fourth quarter was another strong period, with revenue increasing 51% to $290,000,000.

This was driven primarily by strong growth in securities, reflecting the continued strategic expansion of Prime alongside more modest growth in energy. Securities revenues increased to $209,000,000, reflecting broad-based growth across the platform with all major asset classes contributing. Prime was again a standout performer with revenue increasing to $70,000,000, supported by a significant increase in clients on our platform and continued expansion of our securities-based swaps offering. FX also performed strongly, benefiting from the integration of Hamilton Court, completed in July, and growth across the broader FX platform. In Energy, revenue increased to $76,000,000 driven by higher activity in UK and European gas and power markets, and continued capability expansion.

Adjusted profit before tax increased to $89,000,000 in the quarter, with margins expanding to 31%, reflecting growth in higher-margin activities, particularly Prime. For the full year, Agency and Execution revenue increased to $1,050,000,000 with strong contributions from both securities and energy. Adjusted profit before tax increased to $281,000,000, reflecting the continued build-out of a more diversified high-quality platform with 27% margins. Turning now to Market Making. Fourth quarter revenue grew 83% to $81,000,000, driven by particularly strong performance in metals and securities, partly offset by softer conditions in agriculture and energy. Metals delivered the second-best quarter on record with revenue increasing to $50,000,000.

While supportive market conditions and high volatility provided a favorable backdrop, performance was driven by increased client activity across both precious and base metals. Securities revenue increased to $20,000,000 reflecting the inclusion of Winterflood following the completion in December, alongside improved performance from our FX and credit desks. In Energy, revenue was lower year on year, as the prior period benefited from elevated volatility and large client flows, whereas the fourth quarter in 2025 saw more muted hedging activity. Agriculture also moderated year on year, reflecting a more challenging macro backdrop and elevated commodity prices, although performance improved sequentially from the third quarter as conditions stabilized.

Adjusted profit before tax increased to $27,000,000 with margins expanding to 33%, as strong revenue growth more than offset higher front-office compensation and the additional headcount following the Winterflood acquisition. For the full year, revenue increased to $236,000,000 driven primarily by strong performance in both metals and securities, which more than offset softer conditions in agriculture. Adjusted profit before tax increased to $69,000,000 with margins at 29%, reflecting investment through the year and the mix of revenues across the platform. Finally, Solutions, which had its strongest quarter on record in Q4. Revenue increased by 57% to $63,000,000, reflecting growth across both Financial Products and Hedging Solutions.

Hedging Solutions revenue increased to $23,000,000 supported by institutional client wins and higher activity in energy and FX, more than offsetting softer agricultural markets. Financial Products revenue increased to $40,000,000 reflecting continued strength in structured products. Performance was supported by improved market conditions, expanded exchange access, regional expansion, particularly in Asia, and rollout of our new technology platform, which also supported higher issuance volumes and broader product accessibility. Adjusted profit before tax increased to $14,000,000 with margins improving to 23% despite continued investment in technology and headcount. For the full year, revenue increased to $197,000,000 reflecting sustained growth across both businesses. Adjusted profit before tax increased to $44,000,000, margins at 22%, reflecting our investment to support long-term scalability.

Turning now to net interest income at the group level. For the full year, NII was $153,000,000 compared to $227,000,000 in the prior year. Interest income increased 4% year on year as a $4,800,000,000 increase in average balances more than offset a 100 basis points decline in rates. However, interest expense increased 21% reflecting $1,500,000,000 of additional average structured note balance and senior debt issuance, which more than offset the increase in interest income. NII for Q4 was $26,000,000, down $13,000,000 compared to Q3 2025, primarily reflecting the further 40 basis points decline in the average Fed funds rate during the quarter. Interest income was $181,000,000 as lower rates offset growth in average balances.

Interest expense was broadly flat, with the decrease in rates being broadly offset by higher structured note balance. Throughout the quarter, we continued to hold significant liquidity headroom. While this creates a modest near-term headwind to group NII, it is a deliberate choice that strengthens the balance sheet, positions us to support clients, and pursue future growth opportunities. Importantly, as we highlighted in the Clearing segment, Clearing NII remains resilient. Average Clearing balances increased to $14,000,000,000 in the fourth quarter, and that growth has continued to broadly offset the impact of lower rates. I will briefly touch on expenses as it is important to how our cost base evolves as we grow.

As I have said before, our cost base is highly flexible with around 55% of total expenses in Q4 variable in nature, which are linked to the performance of the group. In the front office, variable expenses primarily flex with revenues, while back-office variable expenses flex with the overall profitability of the group. Given the strong revenue performance year over year, $54,000,000 of the increase in total expenses was driven by higher variable compensation, including variable compensation for recently completed acquisitions. A further $18,000,000 relates to the fixed costs associated with the recently completed acquisitions. These acquisition-related costs are not the one-off transaction expenses but the continuing operating costs of growing these business which generate revenue and drive overall profitability.

And an additional $50,000,000 to support the organic growth of the organization and investment in control and support, notably technology. These investment decisions are deliberate choices we have made to support the future growth of the organization. Looking now at our balance sheet, as a reminder, approximately 80% of our balance sheet supports client activity, and consists of higher-quality liquid assets. Total assets increased to $35,000,000,000 at December, driven by growth in Clearing client balances and securities activity, including Prime. After netting client assets and liabilities, the remaining residual balance sheet primarily comprises corporate cash and other assets against group liabilities, including our structured notes portfolio and senior notes issuance. Turning now to capital and liquidity.

We continue to manage capital and liquidity prudently, maintaining substantial headroom above regulatory requirements to ensure resilience across market environments. At year end 2025, regulatory capital was $927,000,000 against the requirement of $403,000,000, representing a capital ratio of 230%. This provides a substantial buffer and supports our investment grade credit ratings. Total corporate funding increased to $6,200,000,000, up from $3,800,000,000 at year end 2024, primarily reflecting structured notes issuance and a senior debt issuance of $500,000,000 during the year. We maintained approximately $1,000,000,000 of liquidity headroom at year end.

In line with the growth of the business, we have increased our liquidity stress testing limits and associated buffers to ensure we remain well positioned to support higher client volumes while maintaining a conservative risk profile. While carrying excess liquidity creates a modest drag on net interest income, maintaining substantial headroom remains a deliberate and conservative choice that strengthens the balance sheet and ensures we are well positioned to support all clients and navigate periods of market volatility. Overall, our capital and liquidity framework remains robust, scalable, and aligned with our growth ambitions. Finally, we announced again a quarterly dividend of $0.15 per share for 2025 to be paid to shareholders on March 31 this year.

Finally, we have a proactive and involved risk management approach at Marex Group plc. 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. Average daily VaR was $3,800,000 for the full year, and remains at a very low level relative to the growth in the overall business. In terms of credit risk, we had a realized credit loss of $800,000, representing less than 0.1% of revenues. Now I will hand you back to Ian. Thanks, Rob.

Ian Lowitt: Let me spend a moment on clients because this is the critical component of the Marex Group plc growth story. As our platform has expanded, particularly since we went public, we are increasingly having success with larger and more sophisticated clients. You can see on slide 19 that while active clients, which we now define as those generating over $25,000 in annual revenue, grew 19% year on year, revenues grew 32%, and average revenue per client increased 11%. Consistent with my commentary throughout the year, that growth is particularly evident amongst our largest clients. Our $5,000,000-plus client cohort increased by 36% and revenue from that segment grew by over 80%, with average revenue per client up 35%.

Today, those top circa 50 clients generate on average $14,000,000 annually versus $10,000,000 last year, and drove over $300,000,000 of our revenue growth in 2025. Importantly, this does not mean we are becoming overly concentrated. The top cohort represents around a third of firm revenue. But we remain diversified across more than 3,400 active clients and no single counterparty represents undue exposure. We included slide 20 at last year's Investor Day, and again at the half year results. We think it is a helpful way to demonstrate the quality and reliability of our earnings.

On the left-hand side of the chart, we show the consistent year on year growth in our average monthly PBT, and the relatively low variability in the distribution, driving an extremely high Sharpe ratio of 6.2 for the full year 2025. This shows that our profitability is not driven by a few exceptional months. It is stable and in a narrow band, demonstrating high quality earnings. On the right of the chart, we show the distribution of our daily profitability for the full year versus last year. You can see the distribution has shifted to the right by around $400,000 year over year, from around $1,300,000 to $1,700,000.

The left tail remains very small with only six negative days during the year. In the right tail, you can also see how we have successfully captured market opportunities with more above-average profitability days. This is not just successful market making. We are doing more larger transactions with clients as we become more relevant to sophisticated market participants. So in conclusion, at our Investor Day last April, we described our goal of delivering sustainable profit growth with roughly 10% organic and 5% to 10% from selective inorganic opportunities. 2025 performance reinforces our belief in our competitive position and ability to continue to deliver growth.

Structural shifts in bank focus, high barriers to entry, the breadth of our capabilities, and the quality of our service creates opportunities for Marex Group plc. Our M&A pipeline remains attractive, opportunity sets continues to expand, as our scale and reputation improve. And we are increasingly seeing inbound opportunities. As a result, we are able to be more selective, executing only those transactions where we have high conviction in our ability to enhance returns through integration and scale. Our digital assets initiatives continue to progress well, as we are seeing growing engagement from clients coming to us to solve real world use cases for them.

We already have 24/7 trading capability in place for our digital assets offering in Solutions and plan to extend this imminently to Clearing, where we clear crypto futures for clients primarily on CME. This will also give us the ability to support prediction markets at limited additional cost. In 2025, we went live as a day-one clearer for SGX Derivatives’ launch of digital asset perpetual futures, meeting institutional demand for transparent access to regulated crypto derivatives. And we are actively involved in the CFTC's pilot program for the acceptance of stablecoin and crypto as collateral for futures, and we expect to go live with this in March.

While still early days, we believe these initiatives position us strongly as market structure continues to evolve. They represent a meaningful long-term opportunity for the firm. Artificial intelligence is clearly a major theme in the markets today, and given how topical it is, I would like to address it. We see AI as an accelerant to our competitive advantages and are already deploying it internally to enhance productivity, improve risk management, and deepen client engagement. As a vertically integrated firm with deep expertise and institutional knowledge of market infrastructure, and strong client relationships, we believe our competitive moats are reinforced, not threatened, by the technological advancement.

Looking ahead, we remain confident in our ability to continue to deliver sustainable growth across a range of market environments. For eleven straight years, we have reported to our Board and shareholders that Marex Group plc has delivered record profitability. We are extremely proud of that track record, and we feel confident in our ability to continue that trajectory in 2026 and beyond. We remain committed to disciplined capital allocation, excellent client service, and long-term value creation for shareholders. Finally, you may have seen we announced a second Investor Day on March 26 in New York. We look forward to seeing as many of you as possible there later this month.

With that, I will hand it back to the operator to open the line for questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, please press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Daniel Thomas Fannon with Jefferies. Your line is open. Please go ahead.

Daniel Thomas Fannon: Ian, I was hoping you could just talk a little bit more about the current environment given we are in early March and a lot has changed not only recently here in the last week or so, but just even year to date. I was hoping to get an update in terms of how clients are behaving, maybe balances or any real changes in the environment that you have seen so far?

Ian Lowitt: Hi, Dan. As you say in your question, it has been a very interesting couple of months and certainly it feels like there is a great deal going on at the moment. I think that there are a series of things that I would regard as tailwinds for our business and then a series of things that probably feel more like headwinds. The tailwinds are obviously increased exchange volumes, which are actually quite a bit higher this year than they were last year. Volatility has been a lot higher, particularly around commodities.

As we have spoken on this call a few times, when we think about volatility, there is a Goldilocks level of volatility, which is active volatility, but it is not excessive or too high. I think the volatility that we have seen in January and we are seeing again in March does not fall into the Goldilocks category. It is pretty high, and it makes a big difference and puts a lot of pressure on clients. So I think that it is very active. I think there is a lot of uncertainty in the marketplace.

I think that the demand for our services is high, and I think that, consistent with the message that we had in the prepared remarks, we are very confident with regard to our ability over the course of the full year to deliver growth in the sort of corridor that we previously indicated to the market. Exactly how that plays out through the course of the year is obviously impossible to tell. But we feel very good about our business, our business model, our competitive position, and the opportunities ahead of us given how diversified our business is.

Daniel Thomas Fannon: Understood. And then just as a follow-up, I was hoping you could expand on the growth and outlook for the Hedging and Investment Solutions business. Obviously, I think you said a record quarter, really strong 4Q results. Just to get a little bit more underneath that in terms of what is driving that and the sustainability of that as we think about 2026.

Ian Lowitt: I think about all of our businesses in 2026, I have quite a lot of confidence that all can continue to grow. The management in each of those businesses is ambitious. They all see opportunity, and we see ourselves as broad-based and looking to ensure that all the elements of the firm are growing. Your question is about Solutions specifically, and I think that what we are seeing there is the impact of global expansion as well as the addition of additional products, and then additional penetration of clients.

I do not see anything that will undermine that over the long term, and I think that we should and expect to see Solutions continuing to grow consistent with broadly how the overall firm is expecting to grow.

Operator: Your next question comes from the line of William Raymond Katz with TD Cowen. Your line is open. Please go ahead.

William Raymond Katz: Thank you. I apologize for any background noise in transit this afternoon. Thank you very much for your commentary. I was really keyed in on your commentary around the growth in some of the larger accounts and not a lot of concentration. Could you unpack that a little bit, maybe where you are seeing the greatest rates of growth either by distribution channel, geography, the segment of the business? I am curious what some of the underlying drivers are in the process there.

Ian Lowitt: What I have been sharing with people is client wins that we have been enjoying with prominent hedge funds and with some of the largest and most sophisticated players in our space. We have had traditional strengths with commodity producers and consumers. As you are aware, as part of our efforts to diversify the firm, we were looking to expand out the products that we could offer leading financial players. And I think that what we are seeing now is the fruit of that. It does not feel like it is the end. It feels like it is building momentum. So who are the people in that $5,000,000-plus category? It is the largest financial players in the world.

It is the largest commodity producers and consumers. I think if there was a geographic focus, it is probably in North America, which again I think is not surprising just given the preponderance of large players in the US, and I think the success we have had growing our US franchise. But the growth has been with financial players—banks, hedge funds, large asset managers—more than in any other client type. And those are all clients who are engaging with us across a number of different segments and a number of different desks.

So part of what is driving that growth is just the cross-sell, so that those players who are able to engage with us across a lot of products and do so in size are increasingly doing that.

William Raymond Katz: Just as a follow-up, I am very intrigued by the digital opportunity, the stablecoin, crypto, what have you. A lot of debate just in terms of the impact of tokenization on the ecosystem at large. If you can maybe break down where you see the opportunities for tokenization at the front—maybe that is already on expanded trading activity—but maybe post trade, how we should think about the durability of the business to the extent that tokenization continues to mature and season into the market structure system. Thank you.

Ian Lowitt: What we are focused on is what I think we described last quarter as our digital prime brokerage offering. What we are very keen to be able to support for clients is our ability to take digital assets as collateral with all the things that go with that, to ensure that is viable and supported. There is a lot of work that goes into that, and that has really been our focus more than around what our view is with regard to the long-term prospects of tokenization. My expectation is that there will be week-in, week-out trading. I think it will be done in tokenized form.

I think it will just live alongside the exchanges for some period of time, and maybe forever. And it will not replace it. It will just exist as a separate world meeting very specific requirements of a specific set of investors. How tokenization moves into post trade, I do not really have a specific perspective, and we are not currently investing in that. But I think that if that does turn out to be more relevant, we will be in a position to take advantage of it. But really, the emphasis at the moment is being able to create some products for clients which are more around being able to take digital assets as collateral.

What I would add to the answer, though, is we have certainly seen with some of the digital asset products that we have been involved with, the ability to collect margin real time and in particular over the weekends is a very attractive feature in terms of risk mitigation. And so, as I think about the impact on Clearing, as a general matter, the ability to get collateral or get payment 24/7, I think, is actually a really attractive risk mitigant. I do not know if you have anything to add to that, Paolo.

Paolo Tonucci: Yes, just a couple of points, but it is a good question, Bill. I think, just to extend Ian's point on where we are focusing, the key components of both the Clearing and the Prime offering—one is more futures-oriented and the other is more securities-oriented—is that we can receive the collateral and recognize the collateral, which I think there has been progress both with the exchanges and on the regulatory side, that we can provide a combined sort of margining on a risk basis, which includes the activities, the risks, and the collateral. That we can provide all of the reporting and the reconciliations, and I think that in each of those dimensions, we have made significant progress.

We have applied for a license which will allow for the conversion—for us to provide the conversion between crypto and fiat currencies, and we hope that will come through in the next few weeks. We have got the infrastructure in place and we have partnered with very established players to establish the infrastructure both for execution as well as for Clearing. And that extends to tokenization where we are working with some of our most progressive clients to ensure that all of the rails for tokenization, whether that is for post trade or whether that is for supporting 24/7 activities.

So I think we have moved a long way and my sense is relative to where the rest of our competitor group are, we are probably towards the front, if not at the very front of that queue.

William Raymond Katz: Thank you very much.

Ian Lowitt: Thanks, Bill.

Operator: Your next question comes from the line of Benjamin Elliot Budish with Barclays. Your line is open. Please go ahead.

Benjamin Elliot Budish: Hi. Good morning, thank you for taking the question. Maybe first, Ian, I was wondering if you could unpack a little bit more the comment you made earlier in the Q&A around this not being a Goldilocks volatility kind of environment. Maybe talk about what you typically see when there are volatility spikes in terms of either exchanges’ collateral requirements or how customers respond. And I gather—I think your comments maybe were referring to mid-February—but things have changed a bit more in the last couple of days. So just curious how to think about—you know, we can see your collateral balances daily through your website, but things have changed more the last couple of days.

So if you could unpack that a little bit, that would be helpful. Thank you.

Ian Lowitt: Sure, Ben. It is a really good question. At times of very high volatility, a couple of things are happening. One is either we are increasing margin multipliers or the exchanges are often increasing their margins, and you certainly saw that in January. So people are having to put more margin up against the existing positions. The other thing that plays out is, in terms of their own existing risk models, they have limits for what kind of positions they can maintain relative to the risk that they have been authorized to hold. They tend to reduce their positions in order to remain within their risk limits.

The other thing that is just an obvious consequence of extremely high levels of volatility is it impacts how people choose to hedge and how they think about hedging, in the sense that they have to decide what their entry points are. They have to decide how long they are willing to hedge for. And just as we saw in April with Liberation Day, when people are unsure what is driving pricing and where it is going to settle, their reaction is often to shorten the duration of their hedges or actually just be unsure about when to begin to hedge. They also have to manage their liquidity carefully in addition to managing their risk carefully.

So all of those things play through when you have those volatility spikes. And just to put that in perspective, I am sure you appreciate that some of the moves in some of these commodity contracts were one-in-35-year events that were playing through at the end of January. I do not know, in terms of over the last few days and where this thing is going to go, whether we are going to see volatility of that magnitude. But certainly, in natural gas prices, we are seeing price moves that are not dissimilar to what we saw with the Ukrainian invasion.

So that is a bit more color on what is actually involved when you are operating in a world of extremely high volatility.

Benjamin Elliot Budish: Understood. That is very helpful. Maybe just to follow up, a separate topic. You mentioned briefly prediction markets in your opening remarks. And just curious, from your seat, how do you see this evolving from an institutional perspective? It seems like from all the data that is trackable, most of this is happening in sports and in the retail channel, but there is a big question mark around how and when this might evolve into something broader. So just curious, what does institutional interest look like? Where in prediction markets are you looking to participate? How do you think this plays out over the next few quarters?

Ian Lowitt: The method that is interesting to us is if this results in contracts that are really listed on the principal exchanges. So where the CME or ICE or Cboe end up listing a series of contracts which are not sports-related specifically, but are financial instrument-related, which I think is certainly a direction that people are looking at. We also believe that there is interest from retail aggregators for this particular product. So I do believe that we will see these products listed on exchanges so that you deal with the credit risk associated with some of these other venues.

And you will, I think, see experimentation with financial instruments and strategies expressed as event contracts in the coming quarters—maybe it will take a little longer than that—but I think that is my expectation. And I think there is a variety of people who are interested in experimenting with it and, at some level, you could imagine these contracts actually being quite intuitive ways for retail investors to express certain investment theses they have. And so I can see that actually taking off. But you do not want to deal with the credit risk associated with some of these venues, and I think that the exchanges will naturally evolve into this space.

Benjamin Elliot Budish: Great. Thank you.

Ian Lowitt: Thanks, Ben.

Operator: Your next question comes from the line of Patrick Malcolm Moley with Piper Sandler. Your line is open. Please go ahead.

Patrick Malcolm Moley: Yes. Good morning. Thanks for taking the question. I know the Middle East has been an area of focus for you and it is a place where you have found success, especially with the ARNA acquisition. Just curious, with all the geopolitical turmoil going on, if we do see an extended conflict in the Middle East, how that impacts Marex Group plc’s business and the overall strategy there?

Ian Lowitt: The answer clearly depends on what actually happens with regard to this conflict, whether it resolves relatively quickly or not. Certainly, we see that opportunity as attractive and sustained, and certainly we are hopeful that there is nothing that undermines it, and there is not knowledge at the moment that it might undermine it. But there is obviously a lot that we do not know. I do not know what you would add, Paolo.

Paolo Tonucci: It is difficult to have certainty about the longer-term impacts, but so far, we have got a very broad-based business in both Dubai and Abu Dhabi. Volumes have been consistently increasing. The breadth of product offering has been consistently increasing. It does not feel as though that trend is going to change, but we may have obviously some disruption in the short term just as we all watch what is transpiring.

Patrick Malcolm Moley: Thanks for that. And then you mentioned in your prepared remarks the pipeline of opportunities that you are looking at from an M&A perspective. Could you just update us on maybe what is in focus right now in terms of both asset classes and geographies? Any color there would be great. Thank you.

Paolo Tonucci: Absolutely, Patrick. We have continued, I think, the pace of acquisitions that we have seen for the last couple of years, and we have had a couple of announced transactions this year. We most recently announced that we will be purchasing WebTraders, which is an options market making group. So somewhat away from the Clearing and Agency and Execution areas where we have traditionally more focused on acquisitions. Winterflood also is a Market Making business. So it shows that there are opportunities across all of the different service lines. We remain of a view that we are buying the capabilities and not just the revenues, and the other capabilities include both the geographic coverage as well as product capabilities.

There are opportunities across each of the service lines, but I think that you will see both Clearing and Agency and Execution businesses being added in the next couple of quarters. And from a geographic perspective, whilst it is really hard to predict when these opportunities will arise, we are still focused on both extension in Asia, where we have probably a slightly subscale business, certainly on the Capital Markets side, and in Latin America where we bought AgriInvest last year. We are really pleased with how that is going. That is obviously an agricultural-focused business, but we are seeing opportunities on the financial side as well. So the geographic focus remains the same.

It is just hard to say exactly when those will come to fruition, but we are seeing good opportunities. And the thing I would just add to that is we are always looking to fill in holes where, within a geography, we do not have the product. If we think we could build that organically, then that is typically what we would choose to do. But in many cases, and particularly as you try to expand geographically, that is just very hard to do organically. Those are the places where we would typically focus around acquisitions.

Patrick Malcolm Moley: Very good. Thank you, and look forward to seeing you at the Investor Day. Thanks.

Operator: Your next question comes from the line of Alexander Blostein with Goldman Sachs. Your line is open. Please go ahead.

Alexander Blostein: Hey. This is Anthony on for Alex. Wanted to hit on Prime Services, which continues to see solid growth. How much of this growth has been a function of maybe existing clients doing more with you versus onboarding new accounts? And what does the pipeline of new clients look like today?

Paolo Tonucci: Hi, Anthony. Thank you for the question. I am going to split the answer into this longer-term trend and what we saw in the fourth quarter. In terms of our annual accumulation of new clients, we are adding about 30%. We have a growth rate of about 30% a year on a gross basis, and then we lose about 5% of our clients because they cease to be or they move into different structures. So the long-term trend is around that type of growth rate. In the short term, where you see a bit more volatility is with existing clients which have relationships and are able to ramp up.

In the fourth quarter, there was more increase in activity from existing clients increasing activity than there was from new clients. But the trend over the longer term, and I think you will see this over the course of both 2025 and 2026, is that we are adding clients and we are adding them at about a 30% annualized growth rate.

Alexander Blostein: Thanks. That is helpful. And maybe just to follow up on the M&A you either completed or announced in 2025. Could you talk about the aggregate annual impact on run-rate earnings from these transactions? And where do you think they might scale to over the next few years as you realize revenue and expense synergies?

Paolo Tonucci: The majority of the earnings increase in this year was organic. That does include the impact, as we have talked about very extensively, of the Prime business, and it comes through on the organic side because we have owned that for some time. It has really been about our investment in the products and capabilities. While the platform is obviously very important, it is the basis on which we have been able to develop that business. I expect the split between organic and inorganic will be somewhere in the range we have had before.

Crispin Robert Irvin: Yes. So this year, the growth was roughly 75% organic and 25% inorganic.

Alexander Blostein: Thank you. That is helpful.

Operator: There are no further questions at this time. I will now turn the call back to Ian Lowitt for closing remarks.

Ian Lowitt: Thanks, everybody, for joining us. We are very pleased with the full year numbers that we were able to deliver. We are really pleased that it was another record and that we had a record quarter in the fourth quarter, and, as I have indicated, we really are quite excited about our prospects over the course of the year and our ability to continue to grow in 2026 and beyond. Thank you for joining us, and hopefully we will see as many of you as possible at our Investor Day.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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