KCG’s Q4 Financials Buck Quarterly Uptrend as Revenues Weigh

KCG's quarterly uptick has evaporated in Q4 2015, with its GAAP revenues coming in at just $262.7 million, down -30.3%

KCG Holdings, Inc. (NYSE: KCG) has reported its financial metrics for Q4 2015, with diminishing revenues snapping a previously strong uptrend in H2, according to a KCG statement.

The lackluster volumes follow on the heels of KCG Holdings Q3 2015 figures, which saw strong revenues of $377.0 million, vs. just $261.9 million in Q2 2015, or a 42.8% QoQ.

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However, the strength of the past quarter evaporated in Q4 2015, as KCG’s GAAP revenues came in at just $262.7 million, vs. $377.0 million in Q3 2015, or -30.3% QoQ. This figure was also notably weak when weighed against its 2014 equivalent, constituting a similar decline of -24.1% YoY from $346.1 million in Q4 2014.

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In terms of volumes, KCG saw an average daily dollar volume of $28.8 billion in Q4 2015, which represents a drop of -8.6% QoQ from $31.5 in Q3 2015. Across a yearly timeframe, KCG’s latest volumes figures were even weaker, which fell by -8.9% YoY from $31.6 billion in Q4 2014.

KCG’s quantitative trading volumes also saw an average of 3.7 million trades in Q4 2015, down -7.5% QoQ from just 4.0 million trades in Q3 2015. In particular, NYSE and NASDAQ shares traded also shrunk to 922,000 in Q4 2015, declining -6.4% QoQ from 985,000 in Q3 2015.

According to Daniel Coleman, Chief Executive Officer (CEO) of KCG, in a recent statement on the Q4 metrics: “The decline in consolidated U.S. equity market volumes and volatility was exacerbated by continuing strong competition, tight spreads and the weakest quarterly gross retail dollar volume in a year and a half.”

“Retail investors pulled money from the U.S. equity market in December and we saw evidence of institutional-size portfolio liquidations late in the quarter. In fixed income market making, KCG Acknowledge FI set a new quarterly record for average daily U.S. Treasury notional volume with a 51 percent rise year over year despite a decline in market volumes,” he added.

At the time of writing, KCG share prices are sitting deep in negative territory for the month, settling at $10.40 ahead of the US open. KCG’s share prices are presently operating near its YTD low of $10.35 from earlier this month, though the company carries despite a low P/E of just 4.02.

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