Negative to positive: Breakdown of FXCM’s 2014 Q3 results


FXCM (NYSE:FXCM), a leading online provider of FX trading and related services, today announced for the quarter ended September 30, 2014, U.S. GAAP revenues of $116.1 million, compared to $113.2 million for the quarter ended September 30, 2013, an increase of 3%. U.S. GAAP net income attributable to FXCM was $2.4 million for the Third Quarter 2014 or $0.05 per diluted share, compared to U.S. GAAP net loss of $5.1 million or $0.15 per diluted share for the Third Quarter 2013.

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FXCM stock chart for today, Courtesy: Google

Q3 results look good given the fact that net income swung from negative to positive both quarter over quarter when Q2 revenue were reported at $97.9 million and year over year; but perhaps not quite as good as expected given Gain Capital’s blowout figures, which were reported this morning before the opening bell.

Nonetheless, as major indexes have stood firm this week in the wake of the Republicans victory in the mid-term elections, investors anticipated the latest earnings report as bullish and pushed FXCM share prices up to $16.66 by the end of the trading day, good for a jump of 1.77%. Moreover, FXCM decided to reduce the size of the float even more and will increase it’s share repurchasing plan from $80 million to $130 million, which is also a bullish sign for the future. Check out the full official break down of FXCM’s 2014 third quarter below:

Third Quarter 2014 Highlights:

  • U.S. GAAP revenues of $116.1 million, up 3% versus the same period in 2013 and 19% from the second quarter 2014
  • U.S. GAAP net income attributable to FXCM Inc. of $2.4 million or $0.05 per fully diluted share versus a loss of $0.15 per fully diluted share for the same period in 2013 and a loss of $0.08 per fully diluted share in the second quarter 2014
  • Adjusted EBITDA of $28.4 million, down 14% versus the same period in 2013 and up 112% from the second quarter 2014
  • Net income on an adjusted basis of $8.4 million or $0.11 per fully exchanged, fully diluted share down 13% and 15% respectively versus the same period in 2013 and versus a loss of $1.5 million or $0.02 per share in the second quarter 2014
  • Adding back tax-effected amortization and stock based compensation, net income on an adjusted basis would have been $0.17 per share for the quarter
  • Strong growth in client equity to $1.33 billion – up 12% year-to-date and up 2% from June 30, 2014

For the nine months ended September 30, 2014, U.S. GAAP revenues were $329.1 million, compared to $376.2 million for the nine months ended September 30, 2013, a decrease of 13%. U.S. GAAP net income attributable to FXCM Inc. was $1.4 million for the nine months ended September 30, 2014 or $0.03 per diluted share, compared to U.S. GAAP net income of $11.9 million or $0.37 per diluted share for the nine months ended September 30, 2013, a decrease of 88% and 92% respectively.

“At the beginning of this quarter, volatility in the currency markets hit all-time lows but conditions notably improved in September,” said Drew Niv, Chief Executive Officer. “The improvement continued into October and we are pleased to announce that October is our second consecutive month of record retail and institutional volumes.”

“With our client equity increasing by 12% year-to-date to over $1.3 billion and with overwhelming positive feedback from clients on our new retail forex pricing model which we recently announced,” continued Niv, “we believe we are well positioned for the future even if trading conditions were to moderate.”

Adjusted EBITDA for the Third Quarter 2014 was $28.4 million, compared to $33.0 million for the Third Quarter 2013, a decrease of 14%. Net income on an adjusted basis was $8.4 million or $0.11 per diluted, fully exchanged share for the Third Quarter 2014, compared to Net income on an adjusted basis of $9.7 million or $0.13 per diluted, fully exchanged share for the Third Quarter 2013, a decrease of 13% and 15% respectively.

Adjusted EBITDA for the nine months ended September 30, 2014 was $66.5 million, compared to $131.2 million for the nine months ended September 30, 2013, a decrease of 49%. Net income on an adjusted basis was $12.1 million or $0.15 per diluted, fully exchanged share for the nine months ended September 30, 2014, compared to $50.5 million or $0.66 per diluted, fully exchanged share for the nine months ended September 30, 2013, a decrease of 76% and 77% respectively.

Adjusted EBITDA, Net income on an adjusted basis and Net income on an adjusted basis per diluted, fully exchanged 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 U.S. GAAP, and our calculations of these measures may not be comparable to similarly entitled measures reported by other companies. See “Non-GAAP Financial Measures” beginning on A-3 of this release for additional information regarding these Non-GAAP financial measures and for reconciliations of such measures to the most directly comparable measures calculated in accordance with U.S. GAAP.


VOLUME REPORT: FXCM reports record Retail Forex volumes in October of $509 billion


Q3 Selected Operating Metrics

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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 December 31, 2014 to Class A stockholders of record at the close of business on December 19, 2014.

Share Repurchase Program

FXCM Inc. today announced that its board of directors increased its share repurchase program from $80 million to $130 million of its Class A common stock and/or FXCM Holdings, LLC units. Under this program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. This leaves approximately $67.4 million under the plan for future purchases, given the shares the company has already acquired to date.

For the official press release from FXCM, click here.

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Negative to positive: Breakdown of FXCM's 2014 Q3 results

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