GAIN Capital Holdings, Inc. (NYSE: GCAP), the largest provider of retail FX in the United States with over 70,000 customer accounts, has just released its financial results for the first quarter ending March 31, 2017, having had its metrics take a dive in what has become an industry wide trend, according to a GAIN statement.
Detailing the results, GAIN’s net revenues under the US GAAP for Q1 2017 came in at $59.6 million, constituting a drop of -48.5 percent when compared with $115.6 million in the same quarter a year ago. However, the first quarter of 2017 netted an operating expenses drop of -13.0% YoY, having declined to $73.0 million from the $83.9 million reported back in the three months through March 2016.
Adjusted EBITDA was weaker across both quarterly and yearly timetables, revealing a figure of -$13.4 million, vs. $31.7 million in Q1 2016.
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In terms of Gain Capital’s net income, the company achieved a net loss of $18.9 million, or $0.39 per share, compared to $8.4 million in net profits during the first quarter of 2016.
Coupled with a full breakdown of its Q1 2017 financial results, GAIN Capital revealed that it completed acquisition and integration of FXCM US client assets, resulting in the transfer of over $140 million to the FOREX.com platform and nearly 13,000 active accounts in the quarter. In addition, GAIN paid $5.1 million to FXCM per the terms of the acquisition agreement.
Total trading volumes at GAIN Capital institutional unit GTX decreased in the month of April, as Finance Magnates reported. Pockets of volatility have caused increased activity on select days, but overall the currency markets remained subdued and confined to range trading for the most part of last month.
Meanwhile, Glenn Stevens, CEO of GAIN Capital, attributed the firm’s first-quarter revenue decrease primarily to the low volatility and narrow average trading ranges which characterized the first two months of the year, although it presented challenging market fundamentals for its business.
He added: ”We remain optimistic about the growth prospects for the company,” commented. Market conditions improved in March and have continued to improve in April, with revenue capture returning to a normalized level consistent with our trailing twelve month average of $107 per million. Strong Q1 retail operating metrics, highlighted by 18 percent growth in client assets, reflect the opportunity for market share gains as we optimize our position as the #1 provider of retail FX in the U.S. As we look at ways to reduce costs and more efficiently allocate capital, we continue to focus on our organic growth strategy, investing in product enhancements and customer acquisition and retention initiatives to drive increased engagement and expand our global reach.”