Revenue, on the other hand, declined by 7% year-on-year.
Gain Capital, a US-based provider of retail forex trading services, announced its second-quarter earnings for 2018 on Thursday. While the firm reported a drop in earnings year-on-year, net income saw a significant increase.
The results follow the recently completed sale of its institutional business GTX to Deutsche Börse Group for $100 million. This will allow the company to invest in its organic growth, return capital to its shareholders and invest in marketing.
For the second quarter, GAAP Net income came in at $67.1 million or $1.47 per share. This was a significant increase of 79 percent. GAAP Net revenue, on the other hand, was $84.2 million, a decline of seven percent year-over-year.
Looking at its operations, the retail average daily volume was $10.6 billion, up seven percent from the second quarter of 2017. The direct volume per active account was also up 11 percent from the same period last year. Following this trend, new direct accounts jumped by eight percent year-over-year.
H1 earnings increase YoY
Simultaneously, the company also announced its first-half earnings for 2018. These results actually showed an increase in revenue from the first half of 2017. In addition, the company announced its priorities for the second half of 2018. These are driving organic growth, increasing operating excellence and reducing revenue volatility. The main way the firm plans to achieve organic growth is through increasing its marketing spending to reach new clients.
Commenting on the results, Glenn Stevens, CEO of GAIN said: "Despite the lower volatility environment during the second quarter, our results for the first half of 2018 remained strong with net revenue from continued operations increasing 29% year-over-year, demonstrating our early success in executing on our strategic priorities to deliver more sustainable returns and drive growth.”
When asked about the volatility in the Forex markets and whether he believes the market will flatline in a conference call following the release of the results, Stevens replied: "it’s been a mixed market, it certainly is clear that it isn’t a super robust high, GVIX environment but that doesn’t mean that it’s flatlined either.”
Gain Capital expects to lose revenue due to EU regulations
With the deadline for regulations that impose restrictions on CFDs fast approaching, the broker warned that it expects to lose three percent of its revenue due to compliance costs. These regulations put a significant cap on leverage limits, require Negative Balance protection for retail traders and apply strict marketing standards.
In the conference call following the release of the results, Stevens said the firm believes it will benefit from the regulations: “In addition, the new ESMA regulations are expected to decrease the number of providers operating in the UK and EU. And given our strong brands, we’re confident we’re well positioned to increase our market share."
Furthermore, Stevens added that he expects they can make up some of the loss by acquiring new customers: "there are a fair amount of providers in the UK and on EU that are going to find the burden of compliance here too much bear to make sense financially and ultimately will leave us in an environment where we’re competing with fewer participants and so that’s got some positive impact for us…"
"Now that won’t happen overnight, but I think that will happen sooner than later and we haven’t factored in all, but it’s generally positive driver… that will offset some of the reduction that we’ve guided to.”
In addition, the broker will also temporarily withdraw GetGo, an AI-enhanced trading app, from the UK-EU market. This is because it wants to reposition the app and its offering, so it is compliant with the upcoming regulation. However, the firm did say it is planning to launch the app in other geographies, such as Australia.
Gain Capital, a US-based provider of retail forex trading services, announced its second-quarter earnings for 2018 on Thursday. While the firm reported a drop in earnings year-on-year, net income saw a significant increase.
The results follow the recently completed sale of its institutional business GTX to Deutsche Börse Group for $100 million. This will allow the company to invest in its organic growth, return capital to its shareholders and invest in marketing.
For the second quarter, GAAP Net income came in at $67.1 million or $1.47 per share. This was a significant increase of 79 percent. GAAP Net revenue, on the other hand, was $84.2 million, a decline of seven percent year-over-year.
Looking at its operations, the retail average daily volume was $10.6 billion, up seven percent from the second quarter of 2017. The direct volume per active account was also up 11 percent from the same period last year. Following this trend, new direct accounts jumped by eight percent year-over-year.
H1 earnings increase YoY
Simultaneously, the company also announced its first-half earnings for 2018. These results actually showed an increase in revenue from the first half of 2017. In addition, the company announced its priorities for the second half of 2018. These are driving organic growth, increasing operating excellence and reducing revenue volatility. The main way the firm plans to achieve organic growth is through increasing its marketing spending to reach new clients.
Commenting on the results, Glenn Stevens, CEO of GAIN said: "Despite the lower volatility environment during the second quarter, our results for the first half of 2018 remained strong with net revenue from continued operations increasing 29% year-over-year, demonstrating our early success in executing on our strategic priorities to deliver more sustainable returns and drive growth.”
When asked about the volatility in the Forex markets and whether he believes the market will flatline in a conference call following the release of the results, Stevens replied: "it’s been a mixed market, it certainly is clear that it isn’t a super robust high, GVIX environment but that doesn’t mean that it’s flatlined either.”
Gain Capital expects to lose revenue due to EU regulations
With the deadline for regulations that impose restrictions on CFDs fast approaching, the broker warned that it expects to lose three percent of its revenue due to compliance costs. These regulations put a significant cap on leverage limits, require Negative Balance protection for retail traders and apply strict marketing standards.
In the conference call following the release of the results, Stevens said the firm believes it will benefit from the regulations: “In addition, the new ESMA regulations are expected to decrease the number of providers operating in the UK and EU. And given our strong brands, we’re confident we’re well positioned to increase our market share."
Furthermore, Stevens added that he expects they can make up some of the loss by acquiring new customers: "there are a fair amount of providers in the UK and on EU that are going to find the burden of compliance here too much bear to make sense financially and ultimately will leave us in an environment where we’re competing with fewer participants and so that’s got some positive impact for us…"
"Now that won’t happen overnight, but I think that will happen sooner than later and we haven’t factored in all, but it’s generally positive driver… that will offset some of the reduction that we’ve guided to.”
In addition, the broker will also temporarily withdraw GetGo, an AI-enhanced trading app, from the UK-EU market. This is because it wants to reposition the app and its offering, so it is compliant with the upcoming regulation. However, the firm did say it is planning to launch the app in other geographies, such as Australia.
Devexperts Checks Off Type 2 SOC 2 Audit for Enhanced Data Security
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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