FXCM Misses Earnings Estimates As Revenues Fall

FXCM has announced their Q4 and 2012 earnings results. For the quarter, the broker posted revenues of $108.1 million, a 1% decline versus the same period in 2011. Adjusted Pro Forma net income, and US GAAP net income were $0.13, and $0.11 per share respectively, both below analysts’ estimates of $0.15. During 2012, total revenues were $417.3 million, 0.4% higher than 2011, with adjusted net income of $42.6 million, or $0.58/share. Quarterly income was well below the same period in 2011 which FXCM attributed to “This decrease is primarily due to $8.2 million or $0.11 per fully exchanged, fully diluted share in deferred tax benefits recognized by FXCM's Japanese subsidiary in the fourth quarter 2011 adjusted Pro Forma results.”

FXCM also posted February volume data. During the month, FXCM achieved a record for average daily retail volume (ADV) of $17.9 billion. Total volumes for February were $359 billion, the fourth best month in company history. The ADV was 8% higher than January 2013 and 16% above February 2012 figures.

In its institutional division, volumes also rose. Total volumes for the month were $132 billion, with $6.6 billion ADV, which was a 25% month over month increase. FXCM will be also conducting an analysts conference call later today which we will be reviewing. Expectations are that the broker will be highlighting the firm's 2013 upsides following statements from their presentation earlier this week and strong volumes.

Fourth Quarter Highlights:

• 2012 fourth quarter U.S. GAAP revenues of $108.1 million, down 1% versus the same period in 2011

• U.S. GAAP net income of $3.0 million or $0.11 per fully diluted share

• Adjusted Pro Forma EBITDA of $29.8 million, up 13% versus the same period in 2011

• Adjusted Pro Forma net income of $9.7 million or $0.13 per fully exchanged, fully diluted share

• Customer equity of $1,190.8 million, up 14% from same period in 2011

• Active accounts of 170,930, up 5% from the same period in 2011

• Declared a quarterly dividend of $0.06 per share of Class A common stock

Full-Year Highlights:

• Full year U.S. GAAP revenues of $417.3 million, up 0.4% compared to 2011

• U.S. GAAP net income of $9.0 million or $0.37 per fully diluted share

• Adjusted Pro Forma EBITDA of $112.9 million, up 1% compared to 2011

• Adjusted Pro Forma net income of $42.6 million or $0.58 per fully exchanged, fully diluted share

• Paid dividends of $0.24 per share of Class A common stock

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February 2013 Operating Metrics

• Record retail customer trading volume of $17.9 billion per day

• $359 billion in total retail customer trading volume — fourth highest in FXCM history

Retail Trading Metrics

• Retail customer trading volume(1) of $359 billion in February 2013, 1% lower than January 2013 and 3% higher than February 2012.

• Average retail customer trading volume per day of $17.9 billion in February 2013, 8% higher than January 2013 and 8% higher than February 2012.

• An average of 460,761 retail client trades per day in February 2013, 6% higher than January 2013 and 16% higher than February 2012.

• Tradable accounts(2) of 190,891 as of February 28, 2013, an increase of 1,784 or 1% from January 2013, and a decrease of 6,875 or 3% from February 2012.

Institutional Trading Metrics

• Institutional customer trading volume(1) of $132 billion in February 2013, 14% higher than January 2013 and 4% higher than February 2012.

• Average institutional trading volume per day of $6.6 billion in February 2013, 25% higher than January 2013 and 8% higher than February 2012.

• An average of 17,888 institutional client trades per day in February 2013, 13% higher than January 2013 and 39% lower than February 2012.