GAIN Capital Q2 Revenues Drop YoY, But Notably Higher from Q1

Gain Capital’s quarterly net income from continuing operations was only $0.9 million, or $0.02 per share.

GAIN Capital Holdings, Inc. (NYSE: GCAP), the largest provider of retail FX in the United States, has just released its financial results for the second quarter ending June 30, 2019, showing a notable drop in revenues relative to last year.

GAIN’s net revenues under the US GAAP for Q2 2019 came in at $75.5 million, constituting a fall of 10 percent compared to $84.2 reported back in the April-June quarter of 2018. Over a quarterly basis, however, the company revenue nearly doubled from $38.4 million in the first quarter.

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Another area of weakness this quarter at GAIN Capital was its adjusted EBITDA which was reported at $13.0 million, more than 30 percent lower from $18.9 million in the three months through June 30, 2018‎.

In terms of Gain Capital’s bottom line, the quarterly net income from continuing operations was only $0.9 million, or $0.02 per share, compared to $6.8 million in the year before and a net loss of $28.4 million in the Q1 2019.

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Taking a half-year prospective, the six-month period ending June 30 netted a similar drop in key financial metrics year-on-year, with revenues having slumped to $113.9 million from $182.5 million reported back in the same period of 2018.

On the positive side, Gain Capital revealed that new direct accounts grew for the fourth consecutive quarter, having increased 83 percent over a yearly basis and 5 percent quarter-over-quarter. Revenues Per Million traded or RPM also showed a notable advance to $130 per million from only $50 in the first quarter and was also 18 percent above the trailing twelve month average of $110 per million.

Commenting on the results, Gain Capital’s CEO Glenn Stevens said: “Q2 results, while mixed, showed positive signs of increased client engagement which will benefit GAIN and drive trading revenue upon the return of market volatility.”

He added: “Market conditions remained challenging during the second quarter and the Eurodollar, our most traded product, was even more tightly range-bound than the previous quarter’s record, impacting overall client activity and volume. Despite these headwinds, pockets of volatility across the British Pound and major indices helped drive Q2 revenue per million of $130, improving the trailing twelve month average by 6% to $110.”

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