FXCM Announces Dividend, Reports Q2 Financials and July Metrics

US forex broker FXCM declared a quarterly dividend of $0.06 per share of Class A common stock, alongside reporting its financial operations for Q2 and July’s monthly metrics.

FXCM’s revenue passed the $100 million mark and reached $103.4 million in Q2. Client equity has risen to  $839.0 million — up 97% from a year ago and up 31% just from the end of 2010. Another interesting metric is the amount of tradeable accounts: 174,306 as of July 31, 2011, an increase of 3,168, or 2% from June 2011, and an increase of 5,653,or 3%, from July 2010.

The recent volatility in the markets has certainly helped the publicly traded broker. Drew Niv, the CEO of FXCM, is quoted: In fact, in the first seven trading days in August our retail clients traded $19.0 billion per day in volume — a record for FXCM.

FXCM already reported that trading volume in Q2 was very close to $1 trillion. The summer months in the northern hemisphere are usually more quiet, but this summer is different. As seen in August’s initial numbers, volume has gone up. Perhaps they will surpass the $1 trillion traded mark in Q3.

These publicly available results provide an interesting insight to what is going on in the industry, with all the brokers. The extreme market conditions that are the result of the ongoing debt crisis in Europe, the S&P downgrade in the US and more, all result in high volatility. And in general, when stocks are down, forex volume tends to rise.

Here is the full data, from the press release:

FXCM Inc. Announces Second Quarter 2011 Results and July Operating Metrics

Declares Quarterly Dividend

 

Highlights:

 

• Second quarter 2011 revenues of $103.4 million, up 9% from first quarter 2011 and 7% versus the same period in 2010
• Adjusted Pro Forma EBITDA of $28.5 million, up 12 % from first quarter 2011 and down 19% versus the same period in 2010
• Pro Forma net income of $15.6 million, or $0.21 per fully diluted share
• US GAAP net income of $3.3 million, or $0.19 per fully diluted share
• Customer equity of $839.0 million at June 30, 2011, up 31% from year-end 2010 and up 97% from June 30, 2010
• Declared a quarterly dividend of $0.06 per share of Class A common stock

 

NEW YORK, NY –August 11, 2011 – FXCM Inc (NYSE: FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended June 30, 2011, revenues increased to $103.4 million, compared to $94.7 million for the first quarter 2011 and $96.7 million for the second quarter 2010, an increase of 9% and 7% respectively. Adjusted Pro Forma EBITDA for the second quarter 2011 was $28.5 million compared to $25.5 million for the first quarter 2011 and $35.2 million for the second quarter 2010, an increase of 12% and a decrease of 19%, respectively.  Adjusted Pro Forma Net Income was $15.6 million, or $0.21 per share on a fully exchanged, fully diluted basis, compared to $13.7 million, or $0.18 per share for the first quarter 2011 and $21.1 million, or $0.28 per share, for the second quarter 2010, an increase of 14% and a decrease of 26%, respectively. U.S. GAAP net income for the second quarter 2011 was $3.3 million, or $0.19 cents per fully diluted Class A share. 

Adjusted Pro Forma results assume the conversion and exchange of all FXCM Holdings, LLC units into FXCM Inc. Class A shares, 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.

For the six months ended June 30, 2011 revenues increased 14% to $198.1 million, compared to $173.6 million for the corresponding period in 2010. Adjusted Pro Forma EBITDA for the six months ended June 30, 2011 was $54.0 million, compared to $60.3 million, for the corresponding prior period, a decrease of 10%.  Adjusted Pro Forma Net Income was $29.4 million, or $0.39 on a fully exchanged, fully diluted basis, compared to $35.8 million, or $0.48 per share, for the corresponding prior year period, a decrease of 18%. U.S. GAAP net income for the six months ended June 30, 2011 was $6.1 million, or $0.35 cents per fully diluted Class A share.

During the three months ended June 30, 2011, FXCM Inc. established a reserve of $16.0 million related to a settlement with the National Futures Association (“NFA”) and ongoing discussions with the Commodity Futures Trading Commission (“CFTC”). Certain founding members of FXCM Holdings, LLC have agreed to reimburse the expense, resulting in no impact to the net income of FXCM Inc.

 “FXCM delivered solid results in the second quarter. In particular, we are pleased with growing client equity to $839.0 million – up 97% from a year-ago and up 31% just from December 31, 2010,” said Drew Niv, Chief Executive Officer of FXCM Inc. “We are also pleased that in the quarter our retail clients generated record trading volume of $938 billion.”

“FXCM is well positioned in the event of market turmoil,” he continued. “In fact, in the first seven trading days in August our retail clients traded $19.0 billion per day in volume – a record for FXCM,” he continued.

In addition, FXCM Inc. today announced certain key operating metrics for July 2011 for its retail and institutional foreign exchange business. Monthly activities included:

July Monthly Metrics:

Retail Trading Metrics

• Retail customer trading volume⁽¹⁾ of $311 billion in July 2011, 2% lower than June 2011 and 21% higher than July 2010.
• Average retail customer trading volume⁽¹⁾ per day of $14.8 billion in July 2011, 3% higher than June 2011 and 26% higher than July 2010.
• An average of 367,787 retail client trades per day in July 2011, 1% higher than June 2011 and 23% higher than July 2010.
• ·         Tradeable accounts⁽²⁾ of 174,306 as of July 31, 2011, an increase of 3,168, or 2% from June 2011, and an increase of 5,653,or 3%, from July 2010.

Institutional Trading Metrics

• ·         Institutional customer trading volume⁽¹⁾ of $60 billion in July 2011, 17% lower than June 2011 and 11% lower than July 2010.

 

• ·         Average institutional trading volume⁽¹⁾ per day of $2.8 billion in July 2011, 13% lower than June 2011 and 7% lower than July 2010.

 

• ·         An average of 6,282 institutional client trades per day in July 2011, 14% lower than June 2011 and 84% higher than July 2010.

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 translated into US dollars.

⁽²⁾ An account that has traded at least once in the previous twelve months.

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 September 30, 2011 to Class A stockholders of record at the close of business on September 19, 2011.

Conference Call

As previously announced, FXCM Inc. will host a conference call to discuss its results at 8:15 a.m. (EST) today. This conference call will be available to domestic participants by dialing 866.788.0546 and 857.350.1684 for international participants. The conference ID number is 21502238.

A live, 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 most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2011 and subsequently filed quarterly reports on Form 10-Q.

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. (NYSE: 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 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.

Full Disclosure: FXCM is an advertiser on this site.

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