FXCM sees net income surge in Q4’14, revises assessment of CHF losses


All eyes are set on FXCM Inc (NYSE:FXCM), with the US retail Forex broker reporting a set of important financial and operating metrics.

Whereas the trading volumes data for February 2015 has painted a rather gloomy picture, the financial metrics for the final quarter of 2014 provided a piece of good news, as revenues and profits showed a pronounced rise in quarterly and annual terms.

The most impressive financial parameter for the fourth quarter of 2014 was definitely the net profit on an adjusted basis, which amounted to $16.1 million, surpassing the result for the third quarter of 2014 by massive 100%.

What seems to have interested investors more at this point is what happened on January 15, 2015 and how it will affect the financial performance of FXCM in the future. As suggested in an earlier post by LeapRate the losses that FXCM suffered as a result of “Black Thursday” events seem to be way harsher than the originally reported $225 million.

As per today’s report by FXCM:

  • On January 15th, 2015, FXCM customers generated negative equity balances owed to the  company of approximately $276 million due to the unprecedented volatility in the Swiss Franc.
  • On January 16th, 2015, FXCM entered into a $300 million financing transaction with Leucadia National Corporation.
  • FXCM has since repaid $12 million of the facility and is in the process of disposing of non-core assets to further repay a portion of the debt.

It would be interesting to see how the broker manages to tackle the complicated financial situation in the future and whether its robust performance in the final three months of 2014 will ever be repeated again.

But let’s see some numbers concerning the financial performance.

Fourth Quarter 2014 Highlights:

  • U.S. GAAP revenues of $134.7 million, up 19% versus the same period in 2013 and up 16% from the third quarter 2014
  • U.S. GAAP net income attributable to FXCM Inc. of $15.8 million or $0.35 per fully diluted share versus $0.08 per fully diluted share for the same period in 2013 and $0.05 per fully diluted share in the third quarter 2014
  • Adjusted EBITDA of $40.8 million, up 53% versus the same period in 2013 and up 43% from the third quarter 2014
  • Net income on an adjusted basis of $16.1 million or $0.20 per fully exchanged, fully diluted share up 120% and 100% respectively versus the same period in 2013 and versus $8.4 million or $0.11 per share in the third quarter 2014
  • Adding back tax-effected amortization and stock based compensation, Net income on an adjusted basis would have been $0.27 per diluted share for the fourth quarter

Full Year 2014 highlights:

  • U.S. GAAP revenues were $463.8 million, compared to $489.6 million for the twelve months ended December 31, 2013, a decrease of 5%.
  • U.S. GAAP net income attributable to FXCM Inc. was $17.2 million for the twelve months ended December 31, 2014 or $0.39 per fully diluted share, compared to U.S. GAAP net income of $14.8 million or $0.44 per fully diluted share for the twelve months ended December 31, 2013, an increase of 16% and decrease of 11% respectively.
  • Adjusted EBITDA for the twelve months ended December 31, 2014 was $107.3 million, compared to $158.0 million for the twelve months ended December 31, 2013, a decrease of 32%.
  • Net income on an adjusted basis was $28.2 million or $0.35 per fully diluted, fully exchanged share for the twelve months ended December 31, 2014, compared to $57.8 million or $0.76 per fully diluted, fully exchanged share for the twelve months ended December 31, 2013, a decrease of 51% and 54% respectively.

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You can view the detailed data by clicking here.

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FXCM sees net income surge in Q4'14, revises assessment of CHF losses

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