GAIN Capital Reports Solid Q2 Metrics, But Still Below Q1 Frenzy

Earnings keep coming in, and after high-profile brokers such as are Charles Schwab and Interactive Brokers reported solid metrics for the second quarter, GAIN Capital is also providing more guidance for the state of the retail industry.

The largest retail FX broker in the United States reported net revenues at $101 million for Q2 2020. That was not as high as January to March quarter when GAIN reported a record $185.7 million compared to $38.4 reported back in the first quarter of 2019. Q2’s top line, however, was above the $75 million during the same period a year earlier.

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Another area of strength this quarter at GAIN Capital was its adjusted EBITDA which more than doubled from last year, coming in at $29 million compared to $13 million in the three months through June 2019‎. Still, this figure was way below the $114 million reported for the first three months of 2020.

In terms of Gain Capital’s bottom line, the quarterly net income from continuing operations was $15.2 million, or $0.40 per diluted share, a significant advance from a profit of $3.6 million in the second quarter a year before.

New retail investors flooded the market

Revenues Per Million traded or RPM also showed a notable leap to $150 per million. Though it was down from a record $231 in the first quarter but was 28 percent above the $130 per million reported for the Q2 2019.

Gain Capital also reported its customers metrics which revealed the extent to which new investors flocked to the market. Its retail traders transacted a total of $590 billion in the second quarter, up 27 percent year-over-year from $464 billion in Q2 2019, the firm said. The broker added a record 93,433 new retail accounts over the period as well.

“Client metrics in the second quarter further improved over the strong first quarter, as 42% more clients placed their first trade compared to the first quarter, an increase of 141% over prior year. These new clients, together with increased engagement from the large client base who opened accounts with us in 2019, helped improved our 3-month trailing active accounts by 34% over last year to a new record level. In addition, we look forward to the closing of the acquisition by StoneX Group (formerly INTL FCStone Inc.), which remains on track to complete later this quarter,” stated Glenn Stevens, CEO of GAIN Capital.

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