GAIN Capital Sees Declines Across the Board in Q4, FY Figures Mixed

GAIN Capital's Q4 was characterized by falling revenues and net income, with an equally uneven performance across the 2015 year.

GAIN Capital (NYSE:GCAP) has reported its Q4 operating metrics for the year ending December 31, 2015, which showed an uneven performance across a number of key financial figures relative to the year prior, according to a GAIN Capital statement.

Q4 Snapshot

The latest quarter at GAIN Capital has revealed a rather lackluster period for the US broker, as characterized by retreating figures across the board. More specifically, GAIN’s net revenue fell to $102.8 million during Q4 2015, down -10.8% YoY from $115.2 million in Q4 2014.

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In addition, GAIN reported a net income of only $15.5 million during Q4 2015, which constitutes a sizable fall of -31.1% YoY from $22.5 million in Q4 2014. By extension, the group registered an adjusted EBITDA of $21.5 million in Q4 2015, down from $36.4 million in Q4 2014, or -40.9% YoY. Finally, GAIN’s earnings per diluted share (EPS) yielded only $0.32 in Q4 2015, having fallen precipitously from $0.51 in Q4 2014, or -37.3% YoY.

Looking at a more specified breakdown of its business in Q4, Gain saw a retail net revenue of $82.8 million, representing over 80% of its overall revenues for the quarter – furthermore, the retail segment showed an adjusted EBITDA of $24.8 million, reflecting a margin of 30%.

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Moving to the institutional side of GAIN’s business, the segment managed to produce only $7.4 million in net revenues and adjusted EBITDA of $2.1 million, having shown a margin of 28%.

GAIN’s average daily trading volume on the ECN and the Swap Dealer also came in at $6.4 billion and $2.8 billion respectively during Q4 2015. Finally, GAIN’s futures business represented the second highest portion of its business in Q4 2015, generating net revenue of $10.9 million and an adjusted EBITDA of $0.7 million, as well as a margin of 6%.

Yearly Overview

Despite a downtrodden performance across the board in Q4 2015, GAIN did manage to secure an otherwise highly upbeat performance when measured across the fiscal year. For the year ending December 31, 2015, GAIN showed a net revenue of $435.4 million, which was up $369.2 in 2014 or 17.9% YoY.

However, this was pared by a declining net income, which for the 2015 year was reported at just $10.2 million, down a staggering -59.0% YoY from $24.9 million in 2014. EPS also took a nosedive in the 2015 year, plummeting to $0.22 from $0.53 in the year prior, constituting a retreat of -58.5% YoY.

Looking deeper at its business segments, GAIN disclosed a retail net income of $15.4 billion in the 2016 fiscal year, up 39% YoY from $11.1 billion in 2014. During 2015, the broker also reported net revenues via its institutional segment of $35.1 million with an adjusted EBITDA of $10.1 million.

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