FXCM Reports Q1 2014 Financial Results and April Metrics: Revenue, Volumes Lead Decline

Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Capital Markets Inc. (FXCM), a leading FX trading and services provider, has just announced its financial results for the first quarter ending March 31, 2014, coupled with its April 2014 metrics, according to an FXCM statement.

FXCM's Q1 Characterized by Lagging Figures

FXCM has been a popular name across the industry as of late, as indicated by the acquisition of FXDD's client base. With regards to operating figures however, FXCM’s revenues under US GAAP for Q1 ending March 31, 2014 came in at $115.0 million, compared with $122.9 million as of March 31, 2013, which correlated to a drop of nearly -6.0% YoY. The Adjusted Pro Forma EBITDA yielded a figure of $24.6 million at the end of Q1 2014, compared to $43.8 million during the same period in 2013, or -44.0% YoY. In addition, the adjusted Pro Forma revenues for Q1 2014 shrunk slightly to $111.3 million vs. $122.9 million for the Q1 2013, a notable decrease of -9.0% YoY. The $0.07 EPS was below analyst expectations of $0.12.

According to Drew Niv, Chief Executive Officer of FXCM, in a statement on the results, “Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the currency markets is currently at lows only seen twice in the past 20 years. However, having grown our business so significantly in the past few years, we believe we have the scale to continue to weather the difficult trading conditions relative to our competition and use them to expand our market share for when conditions improve."

April 2014 Retail Trading Metrics in Decline

In a move that has been seen across the rest of the forex industry, April proved to be a sour month for trading volumes, with FXCM being no exception. The firm’s April 2014 retail customer trading volume came in at $250.0 billion, which reflected a -14% drop MoM from March, and a -32% YoY decline from April 2013.

Moreover, the average retail customer trading volume per day was reported at $11.4 billion in April, or down a sizable -17% from March and -32% YoY from April 2013. This lag was also reflective in retail client trades, which witnessed a similar weakness. April 2014 saw 351,138 retail client trades per day, down -18% MoM from March and -30% YoY from April 2013.

The lone bright spot for FXCM across the retail sector in April came across is Tradeable accounts, which yielded a figure of 192,605 accounts, justifying an increase of 3,342 accounts or 2% MoM from March. However, weighed against April 2013, this was negated by a drop of -2% YoY.

April 2014 Institutional Trading Metrics Mixed

FXCM’s institutional customer trading volume for April 2014 unfolded in a similar way as its retail figures – institutional customer trading volume came in at just $185 billion in April 2014, nearly -8% lower MoM from March, though notching a 1% advance YoY from April 2013.

Additionally, average institutional trading volume per day was reported at $8.4 billion in April 2014, down -12% MoM from March, while also experiencing a slight 1% growth YoY from April 2013. Without a doubt the firm’s strongest numbers came across institutional client trades per day in April 2014, revealing 42,876 trades. This corresponded to a 14% MoM increase from March and a staunch 88% gain YoY from April 2013.

In early trading, shares of FXCM are down 3.7% to $13.50