FXCM Inc. Announces First Quarter 2013 Results

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FXCM Inc. Announces First Quarter 2013 Results

Releases April 2013 Operating Metrics

Revenues up 20% and EBITDA up 76%


Record Quarterly Revenues

First Quarter 2013 Highlights:

  • Revenues of $122.9 million, up 20% versus the same period in 2012 and highest in FXCM history
  • US GAAP net income attributable to FXCM Inc. of $6.9 million or $0.23 per fully diluted share up 138% and 44% respectively versus the same period in 2012
  • Adjusted Pro Forma EBITDA of $43.8 million, up 76% versus the same period in 2012
  • Adjusted Pro Forma net income of $17.5 million or $0.23 per fully exchanged, fully diluted share up 40% and 35% respectively versus the same period in 2012

April 2013 Operating Metric Highlights:

  • Retail customer trading volume of $366 billion, 48% higher than April 2012 and third highest in FXCM history
  • Institutional customer trading volume of $183 billion, 78% higher than April 2012 and highest in FXCM history

NEW YORK--(BUSINESS WIRE)-- FXCM Inc. (NYSE: FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended March 31, 2013, revenues of $122.9 million, compared to $102.6 million for the quarter ended March 31, 2012, an increase of 20%. U.S. GAAP net income attributable to FXCM Inc. was $6.9 million for the First Quarter 2013 or $0.23 per diluted share, compared to $2.9 million or $0.16 per diluted share for the First Quarter 2012, an increase of 138% and 44% respectively.

Adjusted Pro Forma EBITDA for the First Quarter 2013 was $43.8 million, compared to $24.9 million for the First Quarter 2012, an increase of 76%. Adjusted Pro Forma Net Income was $17.5 million or $0.23 per share for the First Quarter 2013, compared to $12.5 million or $0.17 per diluted, fully exchanged share for the First Quarter 2012, an increase of 40% and 35% respectively.

"FXCM turned in one of its best quarters with record revenues and our second highest EBITDA ever," said Drew Niv, Chief Executive Officer. "Having grown our client base so significantly over the past few years, we were well positioned to benefit from the improvement in currency trading conditions that occurred in the first quarter of this year."

"FXCM today is over four times the size in client equity than it was just five years ago," he continued.

Adjusted Pro Forma results assume the conversion and exchange of all FXCM Holdings, LLC Units into FXCM Inc. Class A common stock, resulting in the elimination of the non-controlling interest and the corresponding adjustment to the entity's tax provision. In addition, Adjusted Pro Forma results eliminate the equity based compensation expense regarding a grant of stock options at the time of FXCM's initial public offering ("IPO") in December 2010 as well as certain other non-recurring charges.

FXCM Inc. today announced certain key operating metrics for April 2013 for its retail and institutional foreign exchange businesses. Monthly activities included:

April 2013 Operating Metrics

Retail Trading Metrics

  1. Retail customer trading volume(1) of $366 billion in April 2013, third highest in FXCM history and 15% higher than March 2013 and 48% higher than April 2012.
  2. Average retail customer trading volume(1) per day of $16.6 billion in April 2013, third highest in FXCM history and 9% higher than March 2013 and 41% higher than April 2012.
  3. An average of 498,808 retail client trades per day in April 2013, the highest in FXCM history and 18% higher than March 2013 and 54% higher than April 2012.
  4. Tradeable accounts(2) of 196,174 as of April 30, 2013, an increase of 545, or 0.3%, from March 2013, and a decrease of 6,365,or 3%, from April 2012.

Institutional Trading Metrics

  • Institutional customer trading volume(1) of $183 billion in April 2013, the highest in FXCM history and 46% higher than March 2013 and 78% higher than April 2012.
  • Average institutional trading volume(1) per day of $8.3 billion in April 2013, the highest in FXCM history and 38% higher than March 2013 and 69% higher than April 2012.
  • An average of 22,851 institutional client trades per day in April 2013, 27% higher than March 2013 and 68% higher than April 2012.

"April continued the strong trading environment of the First Quarter," continued Niv. "We are pleased to report record or near-records in most of our key operating metrics."

More information, including historical results for each of the above metrics, can be found on the investor relations page of the Company's corporate website, www.fxcm.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of FXCM Inc. FXCM undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company's corporate website, www.fxcm.com.

(1)Volume that FXCM customers traded in period is translated into US dollars.

(2)A Tradeable Account is an account with sufficient funds to place a trade in accordance with FXCM trading policies.

    

Condensed Consolidated U.S. GAAP and Adjusted Pro Forma Results

 
Unaudited U.S. GAAP
(thousands, except per share data)
Three Months Ended March 31,

2013

 

2012

% Change

 
Total net revenues$122,864$102,58920%
 
Referring broker fees21,35020,1896%
Compensation and benefits23,53323,2171%
Other expenses36,11536,360-1%
 
Loss on equity method investments, net148-0%
 
Depreciation and amortization11,9746,18194%
Interest on borrowings 817 269
Income before income taxes 28,927 16,37377%
 
Income tax provision7,9592,367236%
 
Net Income 20,968 14,00650%
 
Net income attributable to non-controlling interest in FXCM Holdings, LLC10,23011,118-8%
 
Net income attributable to non-controlling interest in Lucid Markets Trading Limited3,878-0%
  
Net Income Attributable to FXCM Inc.$6,860$2,888138%
 
 
Net Income$6,860$2,888138%
 
Net Income per Class A Share
Basic$0.24$0.1650%
Net Income per Class A Share
Diluted$0.23$0.1644%
 
Weighted average Class A shares outstanding - Basic 28,472 17,98958%
Weighted average Class A shares outstanding - Diluted 29,678 17,98965%
 
   

Unaudited Adjusted Pro Forma

(thousands, except per share data)

Three Months Ended March 31,

2013

 

2012

 

% Change

 
Total Revenues$122,864$102,58920%
 
Referring broker fees21,35020,1896%
Compensation and benefits21,47121,1092%
Loss on equity method investments, net148-0%
Other expenses 36,115 36,360-1%
 
EBITDA 43,780 24,93176%
 
Depreciation and amortization11,9746,18194%
 
Interest on borrowings 817 269204%
Income before income taxes 30,989 18,48168%
 
Income tax provision9,5965,96861%
 
Net Income 21,393 12,51371%
 
Net income attributable to non-controlling interest in FXCM Holdings, LLC--0%
 
Net income attributable to non-controlling interest in Lucid Markets Trading Limited3,878-0%
  
Net Income Attributable to FXCM Inc.$17,515$12,51340%
 
Pro forma fully exchanged, diluted weighted average shares outstanding75,78572,6754%
 
Earnings Per Share$0.23$0.1735%
 
     

Selected Operating Metrics

 
(Unaudited)
Three Months Ended March 31,

2013

2012

% Change

 
Total trading volume ($ in billions)$1,041$9856%
 
Total institutional trading volume ($ in billions)$373$398-7%
 
Total active accounts173,265171,2961%
 
Trading days in period6365-3%
 
Daily average trades437,813379,28915%
 
Daily average trades per active account2.52.213%
 
Retail trading revenue per million traded$88$94-6%
 
Total customer equity ($ in millions)$1,190.4$1,135.95%
 

Non-GAAP Financial Measures

Adjusted Pro Forma EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per fully diluted share are non-GAAP financial measures. These measures do not represent and should not be considered as a substitute for net income, net income attributable to FXCM Inc. or net income per Class A share or as a substitute for cash flow from operating activities, each as determined in accordance with GAAP, and our calculations of these measures may not be comparable to similarly entitled measures reported by other companies. See "Adjusted Pro Forma Results" beginning on A-3 of this release for additional information regarding these non-GAAP financial measures and for reconciliations of such measure to the most directly comparable measures calculated in accordance with GAAP.

Declaration of Quarterly Dividend

The company also announced today that its board of directors has declared a quarterly dividend of $0.06 per share on its outstanding Class A common stock. The dividend is payable on July 1st, 2013 to Class A stockholders of record at the close of business on June 6th, 2013.

Conference Call

As previously announced, FXCM Inc. will host a conference call to discuss its results at 8:15 a.m. (EDT) today. This conference call will be available to domestic participants by dialing 877.303.9132 and 408.337.0136 for international participants. The conference ID number is 60363575.

A live, audio webcast, a copy of FXCM's earnings release, and a presentation and replay of this conference call will also be available at http://ir.fxcm.com/.

Disclosure Regarding Forward-Looking Statements

In addition to historical information, this earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect FXCM Inc.'s current views with respect to, among other things, its operations and financial performance for the future. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. FXCM Inc. believes these factors include but are not limited to evolving legal and regulatory requirements of the FX industry, the limited operating history of the FX industry, risks related to the protection of its proprietary technology, risks related to its dependence on FX market makers, market conditions and those other risks described under "Risk Factors" in FXCM Inc.'s Annual Report on Form 10-K and other SEC filings, which are accessible on the SEC website at sec.gov.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in our SEC filings. FXCM Inc. undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

About FXCM Inc.

FXCM Inc. (NYS: FXCM) is a global online provider of foreign exchange, or FX, trading and related services to retail and institutional customers world-wide.

At the heart of FXCM's client offering is No Dealing Desk FX trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. FXCM's U.K. subsidiary, Forex Capital Markets Limited, offers Contract for Difference ("CFD") products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with FX on one platform. In addition, FXCM offers educational courses on FX trading and provides free news and market research through DailyFX.com.

Trading foreign exchange and CFDs on margin carries a high level of risk, and may not be suitable for all. Read full disclaimer.

   

ANNEX I

     
Schedule   Page Number
     
U.S. GAAP Results    
Unaudited U.S. GAAP Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012   A-1
Unaudited U.S. GAAP Condensed Consolidated Statements of Financial Condition As of March 31, 2013 and December 31, 2012   A-2
     
Adjusted Pro Forma Results   A-3
Unaudited Adjusted Pro Forma and U.S. GAAP Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012   A-4
Reconciliation of EBITDA to U.S. GAAP Net Income   A-5
 
    
FXCM Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited )
Three Months Ended March 31,
 2013  2012 
Revenues
 
Retail trading revenue$91,254$92,726
Institutional trading revenue 27,556  5,820 
Trading revenue118,81098,546
 
Interest income679860
Brokerage interest expense
Read Full Story

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