Breaking: EZTrader Revenues Flat, Despite Volumes Growing 117%

The number of active clients has increased by 8.5 per cent year-on-year as the firm continues bleeding cash.

EZTrader has reported the company’s key figures for the first quarter of 2016. The company reported that trading volumes have increased by 117 per cent when compared to a year ago to mark $52.8 million for the three months ending on March 31st 2016.

While the trading volumes have increased, the firm’s revenues have remained more or less consistent with EZTrader reporting $7.0 million for the quarter, a number that is lower than a year ago, when the binary options brokerage announced revenues totaling $7.1 million. Sequentially, total revenues increased by 9.4% since the fourth quarter of 2015.

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Looking at the number of transactions, the picture is similar to the trading volumes – the number of trading tickets increased by 125 per cent to 1.17 million, which compares to 519,000 transactions in the first quarter of 2015.

The number of active clients has increased by 8.6 per cent to 18,425 in Q1 2016.

Losses Increase Amid Regulatory Scrutiny

The firm states in its earnings announcement that its net losses have increased almost threefold to $3.37 million when compared to $1.25 million a year ago. The number reflects increased regulatory costs after the introduction of addition requirements for binary options operators operating in Cyprus and is likely to be a one off cost.

That said, the company also has to cope with the brand damage that the company has been hit with from the fine that the Cyprus Securities and Exchange Commission has imposed on the company.

To tackle the issue, EZTrader has launched a new website dedicated to aligning the brand with a number of leading football clubs. The website currently features the logos of French Monaco FC, English Tottenham Hotspur and German VfL Wolfsburg.

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Japanese Market Focus

Commenting to the announcement, the company’s CEO Shimon Citron said: “As we implement our strategy to increase the number of customers as well as the value per customer, we continue to make great strides in all of our markets.”

“We recently finished making adjustments to our business in Japan to comply with the regulator’s requests, and will start generating revenue from this subsidiary in the coming weeks as we prepare for what we believe will be a very successful market for our company. In addition, we are focusing on expanding into other Asian countries, the Gulf States and Australia, which are all markets we believe will contribute to our growth,” Citron elaborated.

The CEO of the company explained that the firm is preparing for more anticipated growth by investing in sales and marketing.

“We remain enthusiastic about new business opportunities as we continue to pursue potential partners in our targeted markets. We look forward to reporting on what we believe will be another year of growth and market expansion,” Mr. Citron concluded.

Additional $6 million Raised in Q1

The company has raised in the first quarter an additional $6 million in a private placement transaction at a share price of $6.00 per share, compared with a trading price of $4.20 per share on that date.

Investment throughout the quarter in business development and brand awareness has resulted in increased acquisition costs of $5.0 million, compared with $3.6 million in the quarter ended on March 31st, 2015.

EZTD has also effected a 1-for-30 reverse split of its common stock in order to attempt to meet NASDAQ’s share price eligibility criteria, one of the several requirements necessary to list on that market.

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