GAIN Capital Reports First Quarter 2015 Results 

• Net revenue of $92.9 million, up 14%
• Earnings per diluted share of $0.18, up 100%
• Cash earnings per diluted share of $0.27, up 69%
• Net income of $8.3 million, up 118%
• Adjusted EBITDA of $19.7 million, up 63%

GAIN Capital Holdings, Inc. (“GAIN”) (NYSE: GCAP), a leading global provider of online trading services, announced financial results for the first quarter of 2015.

“We are extremely pleased with our performance in the first quarter,” said Glenn Stevens, Chief Executive Officer.  “We distinguished ourselves yet again through our risk management expertise during the SNB event onJanuary 15, strengthening our competitive position while allowing us to deliver positive financial results for the quarter.  Importantly, we delivered a double digit increase in profitability on a year-over-year basis, as we continued to execute on our strategic plan to achieve scale and diversify our products and revenue streams, while also tightly controlling our operating expenses,” continued Mr. Stevens.

“We had record retail trading volume in the quarter, although much of the customer trading activity was focused on one-way trading in euro/dollar, which muted our revenue capture for the quarter.  We also saw strong growth in other key operating metrics, including record futures contracts and a strong quarter-over-quarter increase in active accounts,” added Mr. Stevens.

“In the period we also continued actively planning for the acquisition of City Index, which closed on April 1, and are pleased to reaffirm our target of $45-$55 million of expense synergies over two years.   The City Index transaction further increases our scale, giving us a combined annualized trading volume run-rate of $3 trillion, while further diversifying our retail trading volume beyond FX into related asset classes such as commodities, equity indices and equities, via contracts-for-difference (CFDs), a key product category outside the U.S.  Today, GAIN has a greatly enhanced resilience to market conditions, and the scale to build a platform for sustainable, profitable growth,” Mr. Stevens concluded.

First Quarter Highlights
(Comparisons are to the first quarter of 2014)

• Net revenue of $92.9 million, up 14% from $81.4 million
• Net income of $8.3 million, up 118% from $3.8 million
• Earnings per diluted share of $0.18, up 100% from $0.09
• Adjusted earnings per diluted share* of $0.23, up 77% from $0.13
• Cash earnings per diluted share* of $0.27, up 69% from $0.16
• Adjusted EBITDA* of $19.7 million, up 63% from $12.1 million
• Retail OTC trading volume of $798.6 billion, up 40% from $572.3 billion
• GTX trading volume of $1.23 trillion, up 2% from $1.21 trillion
• Total futures contracts of 2.4 million, up 51% from 1.6 million

Retail OTC Business

In the first quarter of 2015, GAIN’s retail OTC business generated trading revenue of $66.1 million, up 29% from$51.2 million in the first quarter of 2014.  Retail OTC trading volume was $798.6 billion, up 40% from $572.3 billion in the first quarter of 2014. Average daily retail OTC trading volume was $12.6 billion, up 38% from $9.1 billion in the first quarter of 2014.

In the first quarter of 2015, the retail OTC business generated $2.4 million of commission revenue from our advisory business which was acquired in July 2014.

Institutional Businesses

In the first quarter of 2015, revenue from the GTX business increased to $9.9 million compared to $8.8 million in the prior year quarter.  Average daily volume for GTX was $19.6 billion in the quarter, an increase of 2% over the prior year quarter.  Revenue from the Sales Trader business was $5.5 million, compared to $14.5 million in the prior year quarter. The decrease in revenue in our Sales Trader business reflected the steps taken in the fourth quarter of 2014 to reposition the business on customers with a higher return of capital.

Futures

The exchange-traded futures business generated revenue of $10.4 million in the first quarter of 2015, up 60% from $6.5 million in the first quarter of 2014. Total futures contracts were 2.4 million in the first quarter of 2015, up 51% from 1.6 million in the first quarter of 2014. Average daily futures contracts were 39,034, up 56% from 24,960 in the first quarter of 2014.

City Index

City Index’s preliminary results for the first quarter of 2015, under U.K. GAAP, include net revenue of $37.2 million, up 33% from $27.9 million in the first quarter of 2014 and adjusted EBITDA* of $2.0 million, up 82% from$1.1 million in the first quarter of 2014. Total trading volume was $286.1 billion, up 22% from $234.7 billion in the first quarter of 2014.

Pro forma** results for GAIN and City Index for the first quarter of 2015 include net revenue of $130.1 million and adjusted EBITDA of $21.7 million, along with total client assets of $1.1 billion.  Pro forma** OTC trading volume was $1.1 trillion with combined active accounts of 153,540.

Having completed the acquisition of City Index on April 1, 2015, GAIN will consolidate City Index results starting with the second quarter of 2015.

(*City Index adjusted EBITDA is calculated on a basis consistent with GAIN’s calculation)
(**Represents the simple addition of GAIN and City Index results)

Dividend

GAIN’s Board of Directors declared a quarterly cash dividend of $0.05 per share of the Company’s common stock.  The dividend is payable on June 23, 2015 to shareholders of record as of the close of business June 12, 2015.

Source: GAIN Capital

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