FXCM's stock jumps 14% on solid 2012 year and Q4 2011 report

Finally some good news for the fx industry which lately suffered from low volumes and disappointing metrics. FXCM’s stock jumped

Finally some good news for the fx industry which lately suffered from low volumes and disappointing metrics. FXCM’s stock jumped 14% on better than expected full 2011 and Q4 2011 results. FXCM’s stock now trades at $12 still 14% lower than the IPO’s $14 price but substantially higher than its all time low of $8.13. FXCM’s management knew what it was doing when it started buying FXCM’s shares when they were trading at around $9. FXCM itself also took $30 million loan in May 2011 to buy back shares – so it seems patience paid off.

This is also good news for other forex brokers who are planning an IPO soon.

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Fourth Quarter Highlights:

  • 2011 fourth quarter US GAAP revenues of $108.8 million, up 13% versus the same period in 2010
  • Adjusted Pro Forma EBITDA of $26.4 million, down 18% versus the same period in 2010
  • Adjusted Pro Forma net income of $20.7 million, up 14% versus the same period in 2010
  • Adjusted Pro Forma fully diluted earnings per share of $0.28, up 17% versus the same period in 2010
  • Fourth quarter US GAAP net income of $3.2 million(1)
  • Fourth quarter US GAAP fully diluted earnings per share of $0.21(1)
  • Customer equity of $1,047 million, up 63% from same period in 2010
  • Active accounts of 163,094, up 20% from the same period in 2010
  • Completed acquisition of Foreland, a Japanese FX broker

Full-Year Highlights:

  • Full year revenues under US GAAP of $415.9 million, up 15% compared to 2010
  • Adjusted Pro Forma EBITDA of $111.9 million, down 7% compared to 2010
  • Adjusted Pro Forma net income of $67.2 million, down 4% compared to 2010
  • Adjusted Pro Forma fully diluted earnings per share of $0.90, down 2% compared to 2010
  • 2011 US GAAP net income of $12.7 million(1)
  • 2011 US GAAP fully diluted earnings per share of $0.77(1)

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

NEW YORK, NY – March 14, 2012 – FXCM Inc. (NYSE: FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended December 31, 2011, revenues under US GAAP of $108.8 million, compared to $96.1 million for the quarter ended December 31, 2010, an increase of 13%. Adjusted Pro Forma EBITDA for the fourth quarter 2011 was $26.4 million, compared to $32.3 million for the fourth quarter 2010, a decrease of 18%. Adjusted Pro Forma Net Income was $20.7 million for the fourth quarter 2011, compared to $18.1 million, an increase of 14%. Adjusted Pro Forma fully diluted earnings per share for the fourth quarter 2011 of $0.28 on a fully exchanged, fully diluted basis, compared to $0.24 per share for the fourth quarter 2010, an increase of 17%. U.S. GAAP net income for the fourth quarter 2011 was $3.2 million, or $0.21 cents per fully diluted Class A share.

Adjusted Pro Forma results assume the conversion and exchange of all FXCM Holdings, LLC units into FXCM Inc. Class A shares, resulting in the elimination of the non-controlling interest and the corresponding adjustment to the entity’s tax provision. In addition, Adjusted Pro Forma results eliminate certain non-recurring charges and equity based compensation expense.

For the year ended December 31, 2011, revenues under US GAAP increased 15% to $415.9 million, compared to $360.3 million for the corresponding period in 2010. Adjusted Pro Forma EBITDA for the year was $111.9 million, compared to $120.5 million, for the corresponding period in 2010, a decrease of 7%. Adjusted Pro Forma Net Income was $67.2 million, or $0.90 per share on a fully exchanged, fully diluted basis, compared to $69.6 million, or $0.92 per share, for the corresponding period in 2010, a decrease of 4%. U.S. GAAP net income for the year ended December 31, 2011 was $12.7 million, or $0.77 cents per fully diluted Class A share.

In addition, FXCM Inc. today announced certain key operating metrics for February 2012 for its retail and institutional foreign exchange business. Monthly activities included:

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February 2012 Operating Metrics

Retail Trading Metrics

  • Retail customer trading volume(2) of $347 billion in February 2012, 17% higher than January 2012 and 39% higher than February 2011.
  • Average retail customer trading volume per day of $16.5 billion in February 2012, 22% higher than January 2012 and 32% higher than February 2011.
  • An average of 396,979 retail client trades per day in February 2012, 15% higher than January 2012 and 34% higher than February 2011.
  • Tradeable accounts(3) of 197,766 as of February 29, 2012, an increase of 1,056 or 1% from January 2012, and an increase of 57,146 or 41% from February 2011.

Institutional Trading Metrics

  • Institutional customer trading volume(2) of $127 billion in February 2012, 16% higher than January 2012 and 106% higher than February 2011.
  • Average institutional trading volume per day of $6.1 billion in February 2012, 22% higher than January 2012 and 96% higher than February 2011.
  • An average of 29,534 institutional client trades per day in February 2012, 38% higher than January 2012 and 403% higher than February 2011.

“2011 was a strong year for FXCM. We grew our active retail account base by 20% to 163,094 accounts, increased retail customer trading volume by 19% to a record $3.8 trillion, increased institutional customer trading volume by 56% to a record $1.2 trillion and closed two acquisitions in Japan, considerably increasing our position in that region, the world’s largest retail FX market,” said Drew Niv, Chief Executive Officer.

“We are also pleased with February’s metrics. February average daily volume of $16.5 billion in our retail business was the third highest in FXCM history – helped by our Japanese business and solid levels of client profitability in the month.”

More information, including historical results for each of the above metrics, can be found on the investor relations page of the Company’s corporate website, www.fxcm.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of FXCM Inc. FXCM undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company’s corporate website, www.fxcm.com.

(1) On December 7, 2010, FXCM Inc. completed an IPO. Prior to the IPO, FXCM Inc. had not engaged in any business or other activities except in connection with its formation and the IPO. Net income and fully diluted earnings per share attributable to FXCM Inc. under US GAAP for the full year and fourth quarter 2010 are not presented for comparison as they reflect only the period from December 7, 2010 to December 31, 2010.

(2) Volume that FXCM customers traded in period is translated into US dollars.

(3) A Tradeable Account is an account with sufficient funds to place a trade in accordance with FXCM trading policies.

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