Gain Capital reports Q3 2011 Results - Net Revenue $53.9 million

Gain just released its Q3 2011 results which show a solid increase in revenues and improvement in net income. Retail volume was almost unchanged from Q2 2011.

Gain's institutional GTX platform is experiencing high growth and its volumes were $260 billion in Q3 - a little more than third of all Gain's volume.

BEDMINSTER, N.J., Oct. 27, 2011 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP), a leading global provider of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term services, announced its results for the third quarter ended September 30, 2011.

(Percentage changes and comparisons are referenced to Q3 2010 except where otherwise specified)

(*See below for reconciliation of non-GAAP financial measures)

Financial Highlights

• Net revenue up 4.7% to $53.9 million, compared to net revenue of $51.5 million
• EBITDA* of $15.6 million, compared to adjusted EBITDA* of $18.4 million; EBITDA margin of 28.8%
• Adjusted net income* of $9.3 million, compared to adjusted net income* of $10.5 million
• Adjusted diluted EPS* of $0.24, compared to adjusted diluted EPS* of $0.27

Operating Highlights

• Total retail trading volume up 43.7% to $447.9 billion
• Total institutional trading volume grew to $260.0 billion
• Traded retail accounts for the trailing twelve months up 8.4% to 65,401
• Funded retail accounts up 8.7% to 77,013
• Client assets up 28.8% to $286.4 million

"Third quarter year-on-year revenue growth reflected strong performance in our established markets as well as the continued acceleration of our international expansion. Our strong net revenue and EBITDA performance also demonstrate GAIN's ability to effectively manage the business during periods of significant market 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, as we experienced in the third quarter, and our solid EBITDA margin of 28.8% underscores the operating leverage inherent in our business model," commented Glenn Stevens, Chief Executive Officer.

"In the third quarter, we continued to successfully grow both our retail and institutional businesses, which posted significant year-on-year and sequential volume increases. In particular, our institutional platform, GAIN GTX, showed strong growth, with volume increasing to $260.0 billion, accounting for 36.7% of third quarter trading volume, compared to 12.2% in the third quarter of 2010. Our core retail operating metrics also progressed year-on-year, demonstrating the competitive strengths of our technology, products and service offerings, as well as the net benefit of the dbFX business we acquired from Deutsche Bank AG earlier this year," Mr. Stevens continued.

Recent Developments

• The Board of Directors has voted to initiate a quarterly dividend of $0.05 per share, to be paid on December 23, 2011 to shareholders of record as of December 10, 2011
• After approving a $10.0 million share repurchase plan in May 2011, the Company has purchased 0.85 million shares for a total of approximately $5.0 million to date
• The Company recently expanded its revolving credit facility from $20.0 million to $50.0 million

"We are continuously evaluating ways to optimize the allocation of our capital. The initiation of a quarterly dividend and stock repurchase program, while also maintaining a strong cash position and a $50.0 million revolving credit facility, demonstrates our ability to return value to shareholders without compromising the Company's ability to actively pursue M&A and other strategic opportunities," Mr. Stevens concluded.

Forex Magnates tracks volumes and income of all major forex brokers as can be found in the quarterly report.