Marex Group plc Ordinary Shares (MRX) Q1 2025 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Marex Q1 2025 Earnings Call. At this time all participants are in a listen-only mode. After the speaker's presentation there'll be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Strachan, Head of Investor Relations. Please go ahead.

Good morning everyone and thanks for joining us today for Marex's first quarter 2025 earnings conference call. Speaking today are Ian Lowitt, Group Chief Executive Officer and Rob Irvin, Group Chief Financial Officer. After Ian and Rob have made their formal remarks we will open the call 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 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 Marex's press release issued today. The forward-looking statements made today are as of the date of this call and Marex does not undertake any obligation to update these 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 measures is also available in the press release issued today. A copy of today's press release and investor presentation may be obtained by visiting the investor relations page of the website at marex.com. I'll now hand the call over to Ian.

Good morning and welcome to our first quarter 2025 earnings call. This was a strong first quarter performance with adjusted profit before tax of $96 million at the top end of the preliminary range we published at our Investor Day and subsequently with our F1 filing. We've had a very busy few weeks since the end of the quarter. We hosted our Inaugural Investor Day on April 2nd, had a highly successful equity offering on April 17th and a well-received debt offering on May 1st. This has provided us with many opportunities to engage with our investors both existing and many new ones. We are very appreciative of the engagement we have experienced and would particularly like to thank our major long-term investors many of whom came to our Investor Day in New York for their ongoing support. Based on our interactions with investors it does feel as though there is increasing recognition, understanding and acceptance of the power of the Marex platform to deliver strong and reliable results through the cycle. So with that, let's turn to the performance highlights on Slide 4. We delivered a strong first quarter driven by robust client activity in what was a favorable operating environment for our business. The exchange volumes in Q1 were up 15% year-on-year and up 12% versus the fourth quarter, and there was a Goldilocks level of volatility across many asset classes which were able to monetize. Adjusted PBT was up 42% with strong revenue growth as Rob will discuss later in all of our business segments. Agency execution was a particular standout with continued growth in prime services and our energy business also performed strongly. At the start of April there was a period which included some very high volume days typically two to three times the average level for the first quarter. We were able to process these heightened volumes successfully on our platform confirming the operational resilience of the firm and the scalability of our platform. We also managed our risk well remaining in close dialogue with our clients and added materially to our liquidity position maintaining record levels of surplus. This liquidity surplus has further increased with a $500 million senior notes issuance that we executed in early May as we continue to extend and diversify our funding sources. Although there is a funding cost which impacts net interest income, this is very valuable insurance from our perspective in this type of environment and this is a trade off that we are willing to make to mitigate our risk. At the end of March we completed the Aarna acquisition and expect Hamilton Court to also close later this quarter. We successfully executed on our second equity follow-on transactions since our IPO and we're extremely pleased with the response which reflected very strong support from the market, and we have increased our dividend to $0.15 per share for the first quarter of 2025 from $0.14 per quarter in 2024 post our IPO. %: Our Sharpe ratio of monthly adjusted profits was five, reflecting the quality and resilience of our earnings and the relatively tight distribution of daily profitability. We also track our performance versus overall exchange volumes which are publicly available. We recognize this relationship is directional rather than determinative as volumes are only one driver of revenues albeit an important one and it does provide a very useful lens on our business. Volumes on exchange don't capture OTC or other off exchange activity such as prime services which are included in our revenues and explain for example the outperformance in our agency and execution segment in securities this quarter. While we're attentive to the quarterly numbers we typically focus on the longer term time period which has less noise in it. On this basis it's apparent that we continue to gain share and are growing faster than the market which itself is growing at a healthy rate as you can see on the next slide. Slide seven shows the growth and exchange volumes in our markets since 2021. This growth accelerated in Q1 reflecting the strong operating environment this quarter. As I said at the Investor Day this growth is above what we would have expected at IPO and is underpinned by secular trends. These secular trends include growing demand for listed derivatives due to increased receptivity to this as a hedging tool globally. There is also increasing demand from producers and consumers of energy and commodities to hedge out their exposures on a recurring basis. And the ongoing expansion of the financial product market is presenting us with significant opportunity to grow and diversify our firm. We're also in a world of macroeconomic uncertainty and geopolitical unpredictability that you see playing out every day. This is an attractive market backdrop for us with high exchange volumes not just in individual asset classes but across most asset classes simultaneously. In addition to exchange volumes another important driver of our performance is volatility. What's interesting about the data is that it shows volatility has been declining somewhat over the last three years during which time period we have grown our profits materially. We have set up the firm to generate reliable earnings growth across the cycle through servicing client flow and gaining share while also being able to capture upside in periods of unusual volatility. These volatility spikes tend to be quite short-dated often only a few weeks before reverting to more normalized levels. %: A quick word on our recent equity and debt issuance activity before I hand over to Rob. The secondary offering in mid-April was a standout success at over eight times over subscription notwithstanding the tough market backdrop at the time. To be able to accomplish this in such a volatile market environment with the vex in the mid-30s is something we're extremely proud of. We brought in many new investors and saw continued participation from existing shareholders further improving the quality of our share register and demonstrating our increased credibility as a public company. Our free float has increased from 38% at IPO to nearly 70% in a year. Our average daily trading volume has also increased from less than $10 million in the six months post IPO to mid-teens between the first and second follow-on and is now at over $40 million. Support from the market is also reflected in our $500 million issuance of senior notes that we executed intraday on May 1st. This demonstrated further the market's comfort with Marex as an issuer and our ability to support our growth as a public company. With that I'll hand over to Rob to take you through the financials in more detail.

Thanks Ian and good morning everyone. As Ian said, we had another strong quarter in line with our published preliminary range. Q1 revenue grew 28% to $467 million with strong growth across all business segments. Total costs increased 26% to $365 million. Front office costs were up 23% predominantly reflecting higher compensation costs on strong revenue performance across the group. Control and support costs were up 33% primarily driven by investments in technology to support automation and business growth. We also continue to make investments in our finance, risk and compliance functions to support our controlled growth and development as a public company. This included specific investments relating to recent acquisitions and our compliance with Sarbanes-Oxley. Adjusted profit before tax grew 42% to $96 million while margins expanded 200 basis points to 21% reflecting margin improvement in agency and execution. Non-operating adjustments were a gain of $1.7 million this quarter due to a bargaining purchase gain of $3.4 million on Darton Group Limited. Adjusted return on equity rose to 30% while adjusted diluted EPS was $0.91 per share up 32% year-over-year. Now looking at our first quarter performance by business compared to Q1 2024. Clearing revenue grew 18% to $119 million, driven by growth in net interest income as higher average balances more than offset lower average Fed fund rates. Net commission income was $1.7 million lower as positive performance in energy and metals was offset by lower plant activity in agriculturals, which experienced higher volatility in Q1 2024 compared to this quarter. Agency and execution revenue grew 42% to $240 million driven by growth in all asset classes. Securities revenue grew 59% to $151 million the most significant contribution came from the continued build out of our prime services offering including growth and security based swaps. Energy revenue grew 20% to $88 million reflecting the combination of record volumes, strong demand for our environmentals offering and the benefit of acquisitions. Adjusted profit before tax more than doubled in this segment as margins improved from 13% to 24%. This was driven by the benefit from restructuring as well as growth in higher margin activity particularly in prime services. Market making revenue grew 27% to $53 million with growth in all asset classes. Security revenues doubled more metals revenue growth was more muted at 6% due to the uncertainty arising from the potential implementation of global tariffs on base metals. Average daily VAR or value at risk remained low at $3.4 million as we continue to manage our market risk well with 92% of trading days and 100% of weeks positive in the quarter. Solutions revenue grew 9% to $45 million against a very tough first quarter comparative as the business continued to benefit from the expanding sales team and onboarding of new clients. Financial products grew 41% to $31 million driven by structured notes balance growth. Hedging solutions decreased 27% to $14 million also reflecting higher volatility in parts of the ag markets in Q1 2024. Average balances in the first quarter increased to $17.1 billion up from $11.3 billion a year ago driven by growth in client balances and our increased liquidity position. As Ian said, we intentionally hold high levels of liquidity to support our businesses and clients through volatile markets even if this costs us more from a funding perspective as was the case this quarter. Net interest income was $53.4 million compared to $35.6 million in Q1 last year reflecting the significant step up in average balances including growth in prime services despite a lower average Fed fund rate. NII reduced by $9 million versus the fourth quarter driven by several items. First, higher interest expense reflecting the full quarter's impact of the $600 million notes issued in late October 2024 and increased structured notes issuance. This meant our liquidity position was very strong at the start of April. Second, the impact of average Fed funds decreasing by 35 basis points and third, the repricing of fixed term investments at lower rates. These factors were partially offset by $1.6 billion growth in average balances. The Fed funds forward curve is currently implying two to three rate cuts by year end and as before we have given you our illustrative rate sensitivity. This indicates that a 100 basis points decrease in rates across a full year would reduce adjusted profit before tax by around $20 million. This is of course assuming a static balance sheet and ignoring any future growth or actions we might take. We have a rolling hedge program in place which causes a modest drag to NII today and offers us protection if rates were to fall below the current Fed funds curve. Turning now to our balance sheet and strong capital and liquidity position on the next two slides before I hand back to Ian to conclude. 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 clients activity we are left the corporate balance sheet that carries corporate cash and other assets against group liabilities including our structured notes portfolio and senior note issuance. Total assets remain broadly stable at $24.4 billion as at the end of March as did our residual assets of $5.1 billion. We manage our capital and liquidity risks very prudently as reflected in the headroom that we maintain above minimum requirement to ensure we're well positioned in periods of market stress. During the first quarter in particular we held very high levels of liquidity which as I mentioned before had an impact on NII. At the end of Q1 2025 total funding was $4.3 billion up from $3.8 billion at year end with $1.2 billions of surplus to support our day-to-day operations. Our structured note program remains a core source of funding for us and we further extended our funding maturity profile with our $500 million senior debt issuance earlier this month. Taking this into account our liquidity surplus over our regulatory minimum as of last week stood at $1.6 billion. This also supports our investment grade credit ratings from S&P and Fitch. Last month Fitch updated its rating outlook for Marex from stable to positive to reflect our strong earnings and diversification of our franchise. Our strong capital generation meant we were able to announce an increased quarterly dividend of $0.15 to share for the first quarter of 2025 payable to shareholders on the 10th of June. And now I'll hand back to Ian.

Thanks Rob. So in conclusion this was a strong quarter. It was an above-normal operating environment with higher levels of activity and volumes that we were able to convert into revenue and profit growth. The second quarter has started well. We saw higher volumes in early April which tested the operational resilience of our infrastructure before they reverted to more normalized levels in the second half of the month. As far as the rest of the year is concerned we see a lot of momentum and are excited about our future but remain sanguine about the risks and how the environment might change. We've laid on a lot of extra liquidity to protect the firm at a cost obviously but that is one that we believe is well worth paying. Rates are expected to continue to fall which will impact net interest income, but as we saw in the first quarter we're able to deliver very strong results not withstanding this impact. We continue to evaluate many M&A opportunities and are maintaining our strict discipline as you would expect us to. We have passed on select deals where we felt we were unable or unlikely to meet our return hurdles but are confident that there will be many transactions which will in fact meet our return targets. Through a combination of organic and inorganic initiatives we expect to be able to deliver continued structural growth which offsets macro headwinds. We've had a great start to the year are aware of the challenges and are very confident about the position of the franchise and our opportunity set. With that I'll ask the operator to open the call for your questions.

Thank you. [Operator Instructions]. We will now go to our first question. And the first question comes from the line of Benjamin Budish from Barclays. Please go ahead.

Hi. Good morning and thank you for taking my questions. Ian, I was wondering if perhaps to start, we could come back to the prime business. Just try to think through, I mean, can you unpack in a little bit more detail what is going on there that's changed? Just kind of looking at the last five, six quarters of revenues, it looks like there's been a step function higher in both the last couple of quarters. So just trying to think through, like, are we at a new run rate? Is there more upside? Like, how much is sort of environmentally kind of benefiting you right now? And it looks like your profit margin in the agency execution segment also stepped up quite a bit. Is that something we should see more of, or are we kind of at the right level in, like the low to mid-20s?

Well, thanks, Ben. I'll give you sort of my perspective, and then Paolo runs the businesses with us, and I think he can sort of add additional sort of points there. I mean, I think with regard to sort of prime services, there are a couple of things that are sort of worth noting. One is, as we described previously, we always felt that this was going to be a hugely important part of the sort of strategic plan of the firm and that it represented a really important level of growth for us. I think as we also shared, it was a little bit slower than we expected in the sense that integrating it and making it part of Marex and reversing, sort of some of the sort of issues that had arisen while it was sort of for sale as part of TD just took a little bit longer than we thought. And so it was sort of a bit slower in 2024 than we would have expected, but we've definitely seen a really nice pickup in the fourth quarter, and that's extended to the first quarter. In terms of the expectation with regard to the run rate, I think there was a certain amount of unmet demand which we have now captured, and I think that that has elevated the level. I don't think that it represents a peak, but I do think that the growth rate will probably slow from what we've experienced over the last two quarters. But I certainly have an expectation that over the long term this will, you know, continue to represent a really important opportunity for us. Then I would say similarly with regard to securities, the agency and execution segment which you asked about, we have been sort of flagging for a while that we did believe that it was a real opportunity to raise margins in that segment as a result of the restructuring of an integration of sort of the acquisitions that we've done in that space. I think Paulo is going to be sort of too modest to sort of claim all the credit there, but he really does deserve, and the team, a lot of credit for the work that they've done to improve the margins and the profitability of that particular business. And again, I think that there's been a lift which it's not going to maintain at the same pace, but I don't believe we're absolutely at sort of the limit, but the amount of margin expansion we would expect there will be less than the expansion we've seen today. Do you want to add?

Yes, I mean, thanks Ben, only to add a couple of points. On the first question around sort of prime brokerage, as Ian said, it took some time to sort of reverse the sort of negative momentum, but we have consciously added product capability, and that takes a little bit of time. And I think that some important extensions to products, particularly some of the synthetic offerings that we now have really only came online in, late in the third quarter and into the fourth quarter, and that sort of allowed us to increase the volume of activity across a very large number of clients. It now feels as though that's quite stable. I think that it will grow from here, but at a much more modest rate, so somewhere in the sort of high single digits, maybe sort of low double digits as opposed to the very sort of rapid growth that we saw between the second -- between the third quarter, the fourth quarter and into the first quarter. And then as we sort of, we talked about consistently, our margin target for agency and execution was in the mid-20s, and we didn't really expect to get there as quickly as we have, but we always expected that we would be able to get there through some combination of capabilities and restructuring some of our businesses, so I think we're close to our target levels. We might see some improvement. We certainly hope to have some improvement, but we're not going to see these sort of large percentage increases again. It will be much more modest.

All right, all very helpful. Maybe just a quick follow-up on Aarna, which closed at the end of March, I'm assuming there was very little contribution, if any, in the quarter. So any, just sort of modeling help you could provide, where do the revenues show up, what are the sort of -- what's the P&L profile look like. And in terms of kind of cross-sell in the Middle East, what's sort of the timeline for when you think you can start to execute on some of those opportunities? Thank you.

So with regard to Aarna, it closed absolutely at the end of the quarter, so you've seen almost no contribution in the quarter from Aarna. I think that it's performed in April, at the levels that we'd anticipated. So we've seen some of the sort of day one synergies we anticipated sort of coming through, and it's certainly performing consistently with all of those expectations. What has been heartening with regard to that is we have now had a couple of the sort of marquee accounts in Abu Dhabi reach out to become clients of the firm, which previously we'd been in discussions with them, but not having an Abu Dhabi, entity had prevented us from being able to onboard those. So it's still very, very early days with regard to the cross-sell and the addition of new clients because of the Abu Dhabi presence, but certainly for the first month, it's going extremely well. Rob, do you want to talk about where it's going to turn up?

Yes, so it'll turn up in our clearing segment then onboard.

All right, thank you very much.

Thanks.

Thanks, Ben.

Thank you. Your next question comes from the line of Kyle Voigt from KBW. Please go ahead.

Hi, good morning, everyone. If I could just start on the clearing commissions. I hear your point about ag volatility kind of pulling back a bit on a year-over-year basis, but even so, at CME, we saw over 20% growth in ag volumes in 1Q, and I think even you disclosed 27% growth in total cleared futures volumes in the quarter. So I was just wondering if you could provide a bit more color on the divergence between your cleared volume growth and the commission revenue growth. Was there anything to note from a pricing perspective that you were seeing in the quarter, whether that's competition-related or product mix? And then, if you could just provide a bit more color on what we're seeing in the market on the ag side versus what you're seeing and what you're telling us in terms of your ag's business on the clearing front, I'm assuming it's product mix related as well?

Yes, I mean, the number of things you're asking about, I think around ag, you'll recall that the first quarter of last year was a sort of unusually sort of positive environment, particularly around cocoa, but also with a bunch of the other sort of agricultural products. So I think that that was sort of genuinely an unusual environment that I think we were able to do particularly well with. What we're seeing at the moment is not sort of pricing pressure or anything of that kind. We are seeing, as we saw in metals, some amount of people sitting on the sidelines around some of the agricultural products, as well as some of the metal products where people are just sort of unsure of how the tariffs are going to play out. It's actually being evident in market making, in the agricultural products where the open interest has been declining with some of those products. So broadly, the reason that you want to have a diversified business is because there will be periods where individual asset classes perform well and other asset classes are seeing less activity, and that's the power of sort of broadening out. So I think that's really the story as I see it, and if there's something you want to add on.

So the one thing I would say that within the press release, the contracts cleared is the trailing 12 months, if not the quarter only. So if you actually look in on the slide six, you'll see that our volumes are up 17%, which is very much in line with our revenues.

Understood. Thank you for clarifying. Just a follow-up on the 500 million notes issuance in May. Do you feel comfortable with where you're at now from a funding perspective as we think about the remainder of this year? And how should we think about the need for additional funding as we're modeling out into 2026?

Yes. I think we feel very comfortable with sort of our liquidity position. As Rob was indicating, I think that when you're in these periods of heightened uncertainty, and this week may feel like it's all sort of dampening down and everything's fine, I mean, that's not in the way it's felt at various points in the course of sort of April, and I suspect there will other weeks where it'll feel sort of less benign. So given that as a basic backdrop, it seemed to us that it's sensible to increase the amount of liquidity you hold. We were -- as you'll be aware, able to issue under our F1, because we had statutory account information that had not yet gone stale, and so we were able to sort of issue in a format that is typically the one that the market is looking for, and that was a driver of the timing and why we wanted to do it in early May. But when you have an opportunity to raise liquidity in a business like ours, it just seems sensible to do, and it does provide us with sort of two things. One is sort of insurance in the event that the markets sort of behave in a much, much more volatile way and we have to support our clients with additional liquidity, particularly around clearing, but what it also does is it supports the ongoing growth of the franchise and our ability to add clients and to continue to support them. So whether it's on defense because the world is just a sort of more volatile place and we need more liquidity to support the existing clearing or it turns out to be offense where it gives us an ability to add new clients or increase the amount of business we do with clients, we feel that that added liquidity is very valuable. We don't currently have plans to sort of issue again, but I don't want to say definitively that we won't because if you have opportunities to grow the firm and add liquidity, I think you typically do take that.

Thank you.

Thank you. Your next question comes from the line of Patrick Moley from Piper Sandler. Please go ahead.

Good morning. I have a question on client clearing balances. You've now grown those average balances by over 10% sequentially in each of the last two quarters. Can you speak to what drove the growth there in the first quarter? And then from a modeling perspective, can you give us an idea of maybe where those balances ended the quarter and how they've trended in the second quarter given some of the volatility we've seen and how that might have impacted it?

Yes, so I'll start here and then why don't you add. So the total balances that we disclose is made up of three things. First of all, it includes house cash. Secondly, it would include clearing balances. And thirdly, it would include balances related with our prime services business. What we saw in the first quarter is obviously, as you saw, there has been an increase in the house liquidity, but we also did see some reasonable growth within clearing and within our prime business. In terms of the second quarter, balances have held up well in April. Obviously, it's still very early days. We're only six weeks into the quarter, but so far, balances are holding up. And as we've shown here, we do have experience of growing our franchise, growing our customer balances, and we would expect that to continue throughout the rest of this year.

Yes, I think the thing I'd add is, we do have a very robust pipeline of clients that we're sort of bringing on to be clearing clients of the firm. So as I think we've discussed with you -- that tends to have quite a long lead time. You need to do a lot of work to get clients integrated onto your platform. And once somebody's a clearing client, it's a very sticky relationship, but it does involve a lot of work to get them onto the platform. And the relevant point here is it means that we actually do have quite good visibility onto new clients coming onto the platform, and that remains extremely robust and consistent with historic trends. I think that you never know how much activity your existing clients are going to do with you, not because it's sort of going anywhere else, but it's just because you don't quite know what the market opportunity is going to be for them. But again, we have no reason to believe that's not going to continue at least the current levels, and certainly into April we've seen some increases, so both of the drivers of that seem to be consistent with history.

Okay, great. And then just a follow-up on M&A, an update just on the overall appetite, what conversations have been like with potential targets. And it's been a few months now since you've announced a deal, just wondering how we should think about M&A throughout the rest of the year?

Yes, I think that we continue to be very active looking at potential acquisitions. We're in conversation with a number of potential acquisitions. As we indicated in the commentary, we also are very disciplined, and if we can't sort of generate our target of 20% or are we at the end of the first year, then something has to be sort of super strategic for us to sort of proceed with it. And so, I think what you're seeing is the impact of our discipline, but it's not really slowing down, and it's not a case that our appetite has declined. If anything, I think it's probably gone up for acquisitions. And I would also say that we're pretty excited about the set of things that we're looking at, but the one thing that is important to us and we believe important to our investors is that we remain disciplined

Yes, just to say that by their nature, the sort of timing of signing and closing is not going to be completely smooth, and we would never expect to have sort of an announcement every quarter, even if over the course of a year, we would hope to have four or five acquisitions. So I know we've not announced anything. It doesn't mean that we've not been working on quite a few opportunities, and I would hope that we'll be at a point where we can have some agreed transactions in the next in the next few weeks or months.

Okay, I appreciate the color that's in for me.

Thank you. [Operator Instructions]. And your next question comes from the line of Alex Kramm from UBS. Please go ahead.

Yes. Hi, good morning, everyone. I wanted to ask about the environment so far this quarter. This is a topic that's been coming up, obviously, on some of the other calls this quarter, but it's really this question of what has happened to client health, et cetera. So obviously, a lot of good volatility and good for you, but also there's always the worry that things turn bad. And it sounds like your business has held up pretty well, but just wondering if there's anything underneath that you can point to where there were certain client segments with outsized losses or anything as we wake up in a month or two and see, hey, there was something that could hurt us in the future, or do you think everything was pretty normal?

Yes, I mean, I was extremely pleased with how the recent bout of volatility was sort of absorbed within our particular client set. As I sort of reflect on why that is, I think that although we had quite a lot of volatility, what you didn't have was very substantial increase in prices in specific commodity, which is what you've seen, for example, of the Ukraine invasion or in some of the metals markets. And it's those marketplaces where you have very sizable movements in the price of a commodity typically up that creates liquidity pressure for our particular client set because they own the physical. The physical is worth more, but they're hedging it with a financial instrument, and the amount of margin they have to post on the financial instrument goes up, and that creates some amount of liquidity pressure for them. And interestingly, this bout of sort of volatility didn't have that. So we had an experience of almost no missed margin calls or late margin calls. And so, it was sort of unusual in the sense that there was a lot of volatility, but the clients all appeared to be well able to meet whatever sort of the requirements were. I mean, I do share your question of where are the losses. Do they just sort of sit in retail balance sheets, or are they actually going to get manifested in some financial institution? I mean, all I can say is that we're not seeing it in any of our clients at all, and that the performance of the client set has been sort of terrific. I mean, we have hardly used margin multipliers at all. I mean, there was sort of one client set that we weren't that familiar with, and we added some margin multipliers for a couple of weeks and then took them all. So there's really been surprisingly little sort of client stress that had manifested itself through our franchise. So we're pleased to see that, and long may it continue.

All right, very good. And then just a quick follow-up on the clearing segment. I heard the answer, obviously, earlier on a year-over-year basis, but even on a quarter-over-quarter basis, the business on a commission side seems to have lagged kind of some of the expectations we had, given what's going on in the market. But maybe related to that, if my numbers are right, I think the front office headcount was down as well, and maybe even down the last couple quarters. So just wondering, are there any teams that have left, or are you de-emphasizing certain markets? Just I thought you were in growth mode, so just surprised to see that the front office personnel number came down. Thank you.

So there's been a little bit of remapping of headcount, particularly in our ag business, which straddles both clearing and market making. So I think that's what you're seeing, Alex.

Yes, I mean, what I can say is there's no change in our outlook with regard to the opportunity in clearing or our interest in investing in it, and there's been no loss of teams or producers over this period. So I think what you're just seeing is there's some unusual numbers underlying the overall number when you dig down a level inevitably in any opposite-type business. The overall business is performing extremely well. Its margins are extremely strong. Its level of growth is one that we're very pleased with and one which we continue to invest in and have high confidence we'll be able to continue to grow. It has a great pipeline. We're, again, seeing sort of top clients looking to come onto the platform, and so in terms of all the real things that sort of drive the health of your franchise, all of those are showing a very healthy franchise that is continuing to grow and gain share.

All right, very good. Thanks, guys.

Thanks, Alex.

Thank you. There are currently no further questions. I will hand the call back for closing remarks.

Well, thanks, everybody, for joining us. As said, it was a strong quarter. We've had a strong start to our second quarter. We're very pleased with the reaction to our equity offering and our debt offering. We're very pleased with where the franchise is, how it's performing, the ability that we have to convert the capabilities and clients that we acquire, like the Cowen acquisition, and show how much more profitable that can become as part of the Marex platform. And so, we are extremely confident over the long term and very pleased with what we've accomplished year-to-date, which has been a very strong start. Thank you for your questions, and we look forward to updating you with the half year.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.