GAIN Capital’s Q1 Revenues Surge to $185M as Corona Sparks Activity

Gain's net income rose to $77.3 million in the first quarter, a significant advance from a loss of $28 million

GAIN Capital Holdings, Inc. (NYSE: GCAP), the largest provider of retail FX in the United States, has just released its financial results for the first quarter ending March 31, 2020, showing a strong increase in revenues relative to last year.

Gain and other brokers have experienced some of their busiest ever trading days this quarter as traders flocked to hedge and reposition their portfolios amid volatility on global markets. The continued spread of the coronavirus prompted massive increases in trading volumes across all retail and institutional platforms, as seen in their monthly updates.

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GAIN’s net revenues under the US GAAP for Q1 2020 increased four-fold from a year earlier, coming in at $185.7 million compared to $38.4 reported back in the Jan-March quarter of 2019. Over a quarterly basis, the company revenue rose 250 percent from $53.3 million in the fourth quarter of 2019.

Another area of strength this quarter at GAIN Capital was its adjusted EBITDA which was reported at $114 million compared to -$23.5 million in the three months through March 31, 2019‎.

In terms of Gain Capital’s bottom line, the quarterly net income from continuing operations was $77.3 million, a significant advance from a loss of $28 million in the first quarter a year before, which had swollen to $31.2 million in the fourth quarter.

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Gain Capital revealed that new accounts grew in the last quarter with trailing 3-month direct active accounts up by a record 25 percent over a yearly basis to 87,349. Revenues Per Million traded or RPM also showed a record advance to $231 per million from only $50 in the first quarter 2019.

GAIN’s board of directors approved a quarterly common stock dividend of 6 cents per share, payable on June 26, 2020.

GAIN Capital stock is trading up seven percent, hovering around a 13-month high at $6.4 per share. The stock was buoyed throughout the last month after news about an acquisition offer from INTL FCStone started making rounds in trading circles in March.

The transaction is set to be completed in mid-2020, subject to approval by GAIN’s stockholders and regulators, as well as other customary closing conditions.

Commenting on the results, Gain Capital’s CEO Glenn Stevens said: “Proactive steps taken to reduce our fixed overheads, broaden the customer base and ultimately improve the Company’s operating leverage during 2019 had positioned GAIN well to benefit upon the return of volatility, which was driven to extraordinary levels by economic concerns over the impact of the coronavirus pandemic in recent months. GAIN’s March volumes reached multi-year highs, amid market conditions that were favorable to revenue capture, as well as volumes, with RPM of $231 for the first quarter.”

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