GAIN Capital Holdings, Inc. (NYSE: GCAP) reported a sharper-than-expected drop in third-quarter earnings on Thursday, citing an “unusually low volatility environment” across financial markets that led to weaker activity on its retail FX platform.
The largest provider of retail FX in the United States suffered from lower revenues, which weighed down the broker’s bottom line for the July-September quarter. However, the latest report shows positive figures across its client engagement on a year-over-year basis, per Gain’s financial disclosure.
GAIN’s net revenues under the US GAAP for Q3 2019 came in at $66.7 million, constituting a drop of 30 percent compared to $95.5 reported back in the third quarter of 2018. On a quarterly basis, the company revenue was also lower 11 percent from $75.5 million in the second quarter.
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Another area of weakness this quarter at GAIN Capital was its adjusted EBITDA, which was reported at $6.0 million, five times lower than the $30.5 million it generated in the three months through September 30, 2018.
In terms of Gain Capital’s bottom line, the quarterly net income from continuing operations achieved a net loss of $2.1 million, or $0.06 per share, compared to a profit of $10.0 million, or $0.22 per share, in Q3 2018.
Furthermore, the metrics of the nine months ending September 30 show financials are far bleaker for Gain in 2019. The broker netted a strong revenue fall year-on-year, having dropped to $180.6 million from $278 million reported back in the same period of 2018. The net loss also swallowed to $29.5 million compared with $96 million in profit the company tuned in Jan-Sep period a year ago.
Commenting on the results, Gain Capital’s CEO Glenn Stevens said: “The third quarter continued to show positive signs of client engagement as our Retail trailing 3-month direct active accounts increased for a third consecutive quarter, providing evidence that our marketing efforts are helping to grow active accounts, even amid the unusually low volatility environment.”