FXCM reports flat revenues in Q4, February volumes down 11%

Full press release for FXCM’s Q4 and full year 2013 results follows. Details and analysis to follow…

The complete FXCM Q4 press release can be seen here.

FXCM Inc. Announces Fourth Quarter 2013 and Full Year 2013 Results

Record 2013 Revenues and EBITDA

Releases February 2014 Monthly Operating Metrics

Full-Year 2013 Highlights:
• Full year U.S. GAAP revenues of $489.6 million, up 17% compared to 2012 and a record for FXCM
• U.S. GAAP net income of $14.8 million or $0.44 per fully diluted share, up 66% and 19%, respectively, versus the same period in 2012
• Adjusted Pro Forma EBITDA of $158.0 million, up 40% compared to 2012 and a record for FXCM
• Adjusted Pro Forma net income of $57.8 million or $0.76 per fully exchanged, fully diluted share, up 36% and 31%, respectively, versus the same period in 2012
• Retail trading volume of $4.1 trillion, up 13% from 2012, a record for FXCM
• Institutional trading volume of $2.0 trillion, up 72% from 2012, a record for FXCM

Fourth Quarter 2013 Highlights:
• 2013 fourth quarter U.S. GAAP revenues of $113.3 million, up 5% versus the same period in 2012
• U.S. GAAP net income of $3.0 million or $0.08 per fully diluted share, down 1% and 27% versus the same period in 2012, respectively
• 2013 fourth quarter Adjusted Pro Forma Revenues of $107.6 million, down 0.5% versus the same period in 2012
• Adjusted Pro Forma EBITDA of $26.8 million, down 10% versus the same period in 2012
• Adjusted Pro Forma net income of $7.3 million or $0.10 per fully exchanged, fully diluted share, down 24% and 23%, respectively, versus the same period in 2012
• Active accounts of 183,679, up 7% from the same period in 2012
• Declared a quarterly dividend of $0.06 per share of Class A common stock

February 2014 Monthly Metrics Highlights:
• Retail average daily volume of $15.2 billion per day, down 2% from January 2014
• Retail customer trading volume of $305 billion, down 11% from January 2014
• Institutional average daily volume of $8.1 billion per day, down 4% from January 2014
• Institutional customer trading volume of $162 billion, down 12% from January 2014

NEW YORK–(BUSINESS WIRE)– FXCM Inc. (NYSE:FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced revenues under U.S. GAAP for the quarter ended December 31, 2013 of $113.3 million, compared to $108.1 million for the quarter ended December 31, 2012, an increase of 5%. U.S. GAAP net income was $2.97 million or $0.08 per fully diluted Class A share for the fourth quarter 2013, compared to $3.00 million or $0.11 per fully diluted Class A share for the fourth quarter 2012, a decrease of 1% and 27%, respectively.

Under U.S. GAAP, revenues for the year ended December 31, 2013 increased 17% to $489.6 million, compared to $417.3 million for the corresponding period in 2012. U.S. GAAP net income for the year ended December 31, 2013 was $14.8 million, or $0.44 cents per fully diluted Class A share versus $9.0 million or $0.37 cents per fully diluted Class A share, an increase of 66% and 19%, respectively.

Adjusted Pro Forma revenues for the fourth quarter 2013 were $107.6 million, compared to $108.1 million for the fourth quarter 2012, a decrease of 0.5%. Adjusted Pro Forma EBITDA for the fourth quarter 2013 was $26.8 million, compared to $29.8 million for the fourth quarter 2012, a decrease of 10%. Adjusted Pro Forma Net Income was $7.3 million or $0.10 per fully exchanged, fully diluted share for the fourth quarter 2013, compared to $9.7 million or $0.13 per fully exchanged, fully diluted share for the fourth quarter 2012, a decrease of 24% and 23%, respectively.

Adjusted Pro Forma EBITDA for the year ended December 31, 2013 was $158.0 million, compared to $112.9 million, for the corresponding period in 2012, an increase of 40%. Adjusted Pro Forma Net Income for the year ended December 31, 2013 was $57.8 million, or $0.76 per share on a fully exchanged, fully diluted basis, compared to $42.6 million, or $0.58 per share on a fully exchanged, fully diluted basis, for the corresponding period in 2012, an increase of 36% and 31%, respectively.

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 charges and equity based compensation expense granted at the time of FXCM’s initial public offering in December 2010.
“FXCM delivered strong results in 2013 with revenue growth of 16% and EBITDA growth of 40%” said Drew Niv, Chief Executive Officer of FXCM. “We delivered 40% net EBITDA margin, a solid improvement from the 34% we delivered in 2012” Niv continued.

“While the latter half of 2013 was a more muted trading environment, we expect a number of our organic initiatives to bear fruit in 2014 even if trading conditions do not pick up,” Niv added.

Subsequent to year end, FXCM, through affiliates, acquired certain assets and liabilities of Infinium Capital Holdings LLC and certain of its affiliates (collectively, “Infinium”), an electronic market maker in the commodities and foreign exchange trading sectors. The purchase price included approximately $11.9 million owed by Infinium to FXCM pursuant to certain senior secured notes issued by Infinium. The acquisition is intended to broaden FXCM’s subsidiary Lucid Markets Trading Limited (“Lucid”) into a broader array of financial instruments and provide more robust connectivity to various financial exchanges. FXCM shall hold a 50.1% interest and the principals of Lucid will hold a 49.9% interest in the new venture.

FXCM Inc. today also announced certain key operating metrics for February 2014 for its retail and institutional foreign exchange business. Monthly activities included:

February 2014 Operating Metrics

Retail Trading Metrics
• Retail customer trading volume(1) of $305 billion in February 2014, 11% lower than January 2014 and 15% lower than February 2013.
• Average retail customer trading volume per day of $15.2 billion in February 2014, 2% lower than January 2014 and 15% lower than February 2013.
• An average of 401,674 retail client trades per day in February 2014, 2% lower than January 2014 and 13% lower than February 2013.
• Tradable accounts(2) of 190,722 as of February 28, 2014, an increase of 1,112 or 1% from January 2014, and a decrease of 169 or less than 1% from February 2013.

Institutional Trading Metrics
• Institutional customer trading volume(1) of $162 billion in February 2014, 12% lower than January 2014 and 23% higher than February 2013.
• Average institutional trading volume per day of $8.1 billion in February 2014, 4% lower than January 2014 and 23% higher than February 2013.
• An average of 35,047 institutional client trades per day in February 2014, 8% lower than January 2014 and 96% higher than February 2013.

Drew Niv, FXCM’s Chief Executive Officer, commenting on February metrics, said, “Both January and February of this year have seen better trading conditions in the currency markets than the last half of 2013. It shall be interesting to see how the year unfolds with the Federal Reserve pulling back from bond purchases and with the recent volatility in the emerging markets.”

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 U.S. dollars.
(2) A tradable account is an account with sufficient funds to place a trade in accordance with FXCM trading policies.

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