Gain Capital reports Q1 2012 results – second losing quarter in a row amid higher volume

Gain Capital just announced its Q1 2012 results and just like with with all other brokers in the market the

Gain Capital just announced its Q1 2012 results and just like with with all other brokers in the market the lack of volatility seriously impacted trading volumes and eventually profitability.

On a slightly more positive note the net loss was down to $1.3 million from $3.3 million in Q4 2011. What is even more encouraging is that retail forex volumes were actually higher quarter on quarter – up 5.1% from $366.4 recorded in Q4 2011.

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GAIN Capital Reports 2012 First Quarter Results

  • Range-bound markets and multi-year lows in volatility impacted quarterly results;
  • Strong brand helps maintain and improve key metrics:
  • Client assets increased 15% to $325.9 million;
  • Average account size up 34% to $4,413;
  • Institutional trading volume continues to grow, rising 325% to $468.0 billion;

BEDMINSTER, N.J., May 9, 2012 /PRNewswire/ — GAIN Capital Holdings, Inc. (“GAIN”) (NYSE: GCAP), a leading global provider of online trading services, announced its results for the first quarter ended March 31, 2012.

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“Market conditions continued to be very challenging in the 2012 first quarter, with the Euro and other major currencies trading in a narrowing range and market volatility reaching four and a half year lows. Within this challenging environment, we successfully managed expenses to achieve positive EBITDA despite a decline in revenue,” said Glenn Stevens, Chief Executive Officer.

“There were several bright spots in the quarter. Overall, client engagement in our retail business remained strong due to the strength of our brand and our focus on execution quality, providing better tools, and our commitment to high levels of customer service. As a result, on a year over year basis client assets increased 15%, while the average account size grew 34% and the average trade size was stable at $43,046. The number of active accounts and volume per active account were stable from a year earlier, at 36,041 and $11.1 million, respectively. On the institutional side, our GAIN GTX platform continues to gain traction, with trading volume rising to $468.0 billion, up from $110.1 billion.”

“We continue to actively explore opportunities to diversify our revenue sources through product development and targeted acquisitions, leveraging our technology infrastructure, brand recognition and financial resources to build shareholder value,” Mr. Stevens said.

First Quarter Metrics (Comparisons below are referenced to Q1 2011)

  • Net revenue of $33.2 million, compared to $40.4 million
  • EBITDA* of $1.3 million, compared to EBITDA* of $5.0 million
  • Net loss of $1.3 million, compared to net income of $1.4 million
  • Adjusted net income* of $0.1 million, compared to adjusted net income* of $2.5 million
  • Diluted EPS of $(0.04), compared to $0.04
  • Adjusted diluted EPS* of $0.00, compared to $0.06
  • Total retail trading volume of $385.1 billion, compared to $402.5 billion
  • Total institutional trading volume up 325.1% to $468.0 billion
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