FXCM Reports 2013 Financial Results and February Metrics, Revenue Jumps 17% YoY

Forex Capital Markets Inc. (FXCM), a leading provider of fx trading and financial services has just released its Financial Results

fxcmForex Capital Markets Inc. (FXCM), a leading provider of FX trading and financial services, has just released its financial results ending December 31, 2013, as well as its February 2014 metrics, according to an FXCM statement.

2013 Financial Results Disclosed, Revenue Jumps 17% YoY

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Detailing the results, revenues under US GAAP for Q4 ending December 31, 2013 came in at $113.3 million, compared with $108.1 million in December 31, 2012, constituting an increase of 5%. Moreover, the year ending December 31, 2013 netted a revenue growth of 17% YoY, having jumped to $489.6 million from $417.3 million YoY.

The adjusted Pro Forma revenues for Q4 2013 shrunk slightly to $107.6 million vs. $108.1 million for the fourth quarter 2012, a relatively small decrease of -0.5%. YoY. Furthermore, the adjusted Pro Forma EBITDA also fell -1.0% YoY, coming in at $26.8 million in Q4 2013, weighed against $29.8 million in Q4 2012.

Adjusted Pro Forma EBITDA for the year ending December 31, 2013, however was stronger, climbing 40% YoY after revealing a figure of $158.0 million, vs. only $112.9 million in year ending December 31, 2012. According to Drew Niv, Chief Executive Officer of FXCM, in a statement on the results, “FXCM delivered strong results in 2013 with revenue growth of 16% and EBITDA growth of 40%. We delivered 40% net EBITDA margin, a solid improvement from the 34% we delivered in 2012. While the latter half of 2013 was a more muted trading environment, we expect a number of our organic initiatives to bear fruit in 2014 even if trading conditions do not pick up.”

February 2014 Metrics

Coupled with a full breakdown of its 2013 financial results were the release of FXCM Inc.’s February 2014 operating and retail trading metrics. In particular, retail customer trading volume fell -11% MoM to $305 billion in February 2014, compared with a fall of -15% YoY. This drop was also reflected in average retail customer trading volumes per day of $15.2 billion in February 2014, constituting a -2% decline MoM and a decline of -15% YoY.

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A bright spot however was seen across tradable accounts, which were reported at 190,722 by the end of February 2014, marking an improvement of 1,112 accounts or 1% MoM – unfortunately this was also indicative of a -1.0% drop in accounts YoY.

“Both January and February of this year have seen better trading conditions in the currency markets than the last half of 2013. It shall be interesting to see how the year unfolds with the Federal Reserve pulling back from bond purchases and with the recent volatility in the emerging markets,” added Niv in a statement on the February metrics.

Earnings and Quarterly Statement Expected

Later today FXCM will report on its quarterly statement for Q4. Analysts expect FXCM’s consensus 2013 Q4 earnings of $0.09 per share and revenue of $106.18 million for the quarter.

Unfortunately, shares of FXCM have thus far failed to snap its recent slump, trading near 2014 year-to-date lows in late February ($16.26). Shares are essentially facing a yearly low of $12.75, whilst peaking at a yearly high of $19.17 last September. According to Forex Magnates’ research, the stock has a 200-day simple moving average of $16.60, with a 50-day simple moving average of $16.44. The company’s market share sits a shade under $714.81 million with a P/E ration of 32.51 and closed at $16.43 yesterday heading into the release (-1.62%).

Analysts Weigh in on FXCM

Shortly before bottoming out at its 2014 lows on February 13, analysts at Zacks downgraded FXCM’s shares to ‘underperform’ from a previous rating of ‘neutral’. According to Zacks’ analysts, the stock now maintains a $16.10 price target. Conversely, TheStreet was more optimistic in its projections, instead upgrading its rating to ‘buy’ from a previous ‘hold’.

FXCM has been active on the newsfront lately, particularly with the rapid outflow of shares being sold on the open market. On February 27 alone, Matthew Frederic Wilhelm, a major shareholder, sold 56,520 shares that effectively snapped a five-day rally, which took shares back above $17.00. Despite his recent sale however, Wilhelm still owns a total of 3,738,206 of FXCM stock, which hardly constitutes a sustained level of panic.

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