FXCM Inc. Announces Second Quarter 2013 Results Releases July 2013 Operating Metrics

FXCM Inc. Announces Second Quarter 2013 Results
Releases July 2013 Operating Metrics

Revenues up 53% on Record Quarterly Retail and Institutional Volume of $1.7 trillion
Pro Forma EBITDA up 159% and Pro Forma EPS up 182%


Second Quarter 2013 Highlights:

  • Revenues of $140.1 million, up 53% versus the same period in 2012

  • U.S. GAAP net income attributable to FXCM Inc. of $10.1 million or $0.32 per fully diluted share

  • Adjusted Pro Forma EBITDA of $54.5 million, up 159% versus the same period in 2012

  • Adjusted Pro Forma net income of $23.3 million or $0.31 per fully diluted share up 196% and 182%, respectively, versus the same period in 2012

July 2013 Operating Metrics Highlights:

  • Retail customer trading volume of $388 billion - third highest in FXCM's history

  • Institutional customer trading volume of $185 billion - second highest in FXCM's history

NEW YORK--(BUSINESS WIRE)-- FXCM Inc. (NYS: FXCM) , a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended June 30, 2013, revenues of $140.1 million, compared to $91.7 million for the quarter ended June 30, 2012, an increase of 53%. U.S. GAAP net income attributable to FXCM Inc. was $10.1 million for the Second Quarter 2013 or $0.32 per fully diluted FXCM Inc. Class A share, compared to a loss of $1.4 million or $0.06 per FXCM Inc. Class A share for the Second Quarter 2012.

Adjusted Pro Forma EBITDA for the Second Quarter 2013 was $54.5 million, compared to $21.0 million for the Second Quarter 2012, an increase of 159%. Adjusted Pro Forma Net Income was $23.3 million or $0.31 per share for the Second Quarter 2013, compared to $7.9 million or $0.11 per fully diluted, fully exchanged share for the Second Quarter 2012, an increase of 196% and 182% respectively.

For the six months ended June 30, 2013, revenues were $263.0 million, compared to $194.3 million for the six months ended June 30, 2012, an increase of 35%. U.S. GAAP net income attributable to FXCM Inc. was $17.0 million for the six months ended June 30, 2013 or $0.55 per fully diluted FXCM Inc. Class A share, compared to $1.4 million or $0.07 per FXCM Inc. Class A share for the six months ended June 30, 2012.

Adjusted Pro Forma EBITDA for the six months ended June 30, 2013 was $98.3 million, compared to $45.9 million for the six months ended June 30, 2012, an increase of 114%. Adjusted Pro Forma Net Income was $40.8 million or $0.54 per share for the six months ended June 30, 2013, compared to $20.4 million or $0.28 per fully diluted, fully exchanged share for the six months ended June 30, 2012, an increase of 100% and 93%, respectively.

"FXCM turned in one of its best quarters with record revenues and our second highest EBITDA ever - only slightly below the fourth quarter of 2008, when volatility spiked to levels more than double what we saw in the second quarter," said Drew Niv, Chief Executive Officer. "We have expanded the scale of our business to the point that we were able to deliver outstanding results in a much more moderate climate."

"We now have $374 million of cash and are undrawn on our $155 million credit facility - leaving us with plenty of liquidity to pursue acquisitions," he added.

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 certain non-recurring charges and equity based compensation expense regarding a grant of stock options at the time of FXCM's initial public offering ("IPO") in December 2010 and reclassifies the allocation of earnings of Lucid non-controlling members recorded as compensation expense to net income attributable to non-controlling interest.

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

July 2013 Operating Metrics

Retail Trading Metrics

  • Retail customer trading volume(1) of $388 billion in July 2013, 2% lower than June 2013 and 35% higher than July 2012.

  • Average retail customer trading volume(1) per day of $16.9 billion in July 2013, 17% lower than June 2013 and 30% higher than July 2012.

  • An average of 456,044 retail client trades per day in July 2013, 22% lower than June 2013 and 28% higher than July 2012.

  • Tradable accounts(2) of 194,519 as of July 30, 2013, an increase of 3,521, or 2% from June 2013, and a decrease of 12,226 or 6%, from July 2012.

Institutional Trading Metrics

  • Institutional customer trading volume(1) of $185 billion in July 2013, 1% higher than June 2013 and 208% higher than July 2012.

  • Average institutional trading volume(1) per day of $8 billion in July 2013, 13% lower than June 2013 and 196% higher than July 2012.

  • An average of 44,139 institutional client trades per day in July 2013, 8% higher than June 2013 and 604% higher than July 2012.

"July continued the strong trading environment of the Second Quarter," continued Niv. "We are pleased to report near-record levels 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's customers traded in period is translated into U.S. dollars.

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

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

Unaudited Adjusted Pro Forma
(thousands, except per share amounts)

Unaudited Adjusted Pro Forma
(thousands except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

% Change

2013

2012

% Change

Total net revenues

$

140,133

$

91,683

53

%

$

262,997

$

194,273

35

%

Referring broker fees

22,422

19,968

12

%

43,772

40,157

9

%

Compensation and benefits

24,529

19,830

24

%

45,999

40,939

12

%

Loss on equity method investments, net

397

-

0

%

545

-

0

%

Other expenses

38,306

30,879

24

%

74,421

67,239

11

%

EBITDA

54,479

21,006

159

%

98,260

45,938

114

%

Depreciation and amortization

12,481

6,863

82

%

24,455

13,044

87

%

Interest on borrowings

1,290

271

376

%

2,107

540

290

%

Income before income taxes

40,708

13,872

193

%

71,698

32,354

122

%

Income tax provision

9,365

5,124

83

%

18,960

11,091

71

%

Net income

31,343

8,748

258

%

52,738

21,263

148

%

Net income attributable to non-controlling interest in FXCM Holdings, LLC

-

-

0

%

-

-

0

%

Net income attributable to non-controlling interest in Lucid Markets Trading Limited

8,043

873

821

%

11,921

873

1266

%

Net income attributable to FXCM Inc.

$

23,300

$

7,875

196

%

$

40,817

$

20,390

100

%

Pro forma fully exchanged, diluted weighted average shares outstanding

75,715

72,848

4

%

75,750

72,761

4

%

Earnings per share

$

0.31

$

0.11

182

%

$

0.54

$

0.28

93

%

Unaudited U.S. GAAP

Unaudited U.S. GAAP

(thousands, except per share amounts)

(thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

% Change

2013

2012

% Change

Total net revenues

$

140,133

$

91,683

53

%

$

262,997

$

194,273

35

%

Compensation and benefits

26,587

33,802

-21

%

50,120

57,019

-12

%

Allocation of net income to Lucid members for services provided

15,004

-

0

%

15,004

-

0

%

Total compensation and benefits

41,591

33,802

23

%

65,124

57,019

14

%

Referring broker fees

22,422

19,968

12

%

43,772

40,157

9

%

Other expenses

38,306

34,804

10

%

74,421

71,164

5

%

Loss on equity method investments, net

397

-

0

%

545

-

0

%

Depreciation and amortization

12,481

6,863

82

%

24,455

13,044

87

%

Interest on borrowings

1,290

271

2,107

540

290

%

Income before income taxes

23,646

(4,025

)

687

%

52,573

12,349

326

%

Income tax provision

6,390

(1,109

)

676

%

14,349

1,258

1041

%

Net income

17,256

(2,916

)

692

%

38,224

11,091

245

%

Net income attributable to non-controlling interest in FXCM Holdings, LLC

14,093

(2,348

)

700

%

24,323

8,771

177

%

Net income attributable to non-controlling interest in Lucid Markets Trading Limited

(6,961

)

873

-897

%

(3,083

)

873

-453

%

Net income attributable to FXCM Inc.

$

10,124

$

(1,441

)

803

%

$

16,984

$

1,447

1074

%

Net income

$

10,124

$

(1,441

)

803

%

$

16,984

$

1,447

1074

%