The total Q1 2016 net income of Gain Capital (NYSE:GCAP), the second-largest US and world’s third-largest forex broker in terms of trading volume, reached $8.4 million, rising the spectacular 52.7% over the year. The adjusted net income (US dollar equivalent of notional amounts traded) for the period was $16.9 million, up 56.5% from Q1 2015.
At the same time, the net revenue of the broker, rose 24.3% on an annual basis. According to the quarterly results for the period ending on March 31, 2016, released by the company, the net revenue in the quarter reached $115.6. In comparison, in the first quarter of 2015 it was $93 million.
The adjusted EBITDA was $31.7 million, up from $19.8 million in the first quarter of 2015.
In comparison, in the preceding quarter, ending December 2015, the net revenue of Gain Capital was $102.8 million, the net income was $15.5 million and the adjusted EBITDA was $21.5 million.
In the first quarter of this year the retail segment of Gain Capital’s business generated a net revenue of $96.7 million and adjusted EBITDA of $36.3 million, reflecting a margin of 38%. In the 12 months ending on March 31, 2016, the total net revenue, generated by this segment reached almost $375 million and adjusted EBITDA of $107.6 million, reflecting a margin of 29%. At the same time, however, the average daily retail trading volume (ADV) in Q1 2016 dropped 5% from Q1 2015, to $13.5 billion.
In Q1 2016 Gain Capital’s institutional segment generated a net revenue of $7.1 million and adjusted EBITDA of $1.5 million, reflecting a margin of 21%. For the trailing twelve months ended March 31, 2016, the institutional segment generated net revenue of $32.0 million and adjusted EBITDA of $8 million, reflecting a margin of 25%. The ADV on the electronic communication network (ECN) and for the Swap Dealer was $8.3 billion and $2.9 billion, respectively.
The futures segment of Gain Capital generated a net revenue of $12.2 million and adjusted EBITDA of $1.0 million, reflecting a margin of 8%. For the twelve months ended March 31, 2016, the futures segment generated net revenue of $46.5 million and adjusted EBITDA of $3.6 million, reflecting a margin of 8%. Average daily futures contracts were 38 275 in the first quarter of 2016.
“The first quarter of 2016 represents the third consecutive quarter that GAIN has delivered more than $20 million of adjusted EBITDA,” said Glenn Stevens, CEO of Gain Capital. “Operating margins should continue to improve as we deliver approximately $45 million in run-rate cost synergies by Q4 2016 from the City Index integration and focus on overall cost reductions,” concluded Stevens.
Gain Capital is the second-largest US forex and CFD broker, operating the brands Forex.com, City Index, the multi-dealer foreign exchange trading platform for institutions and futures group GTX, as well as the advisory CFD business Galvan and futures provider, Daniels Trading. It also offers white-label solutions for online forex trading companies.
Gain Capital was founded in 1999 and went public in 2010. It is based in the US, but serves customers from more than 140 countries and has offices in London, Sydney, Tokyo, Seoul, Singapore and Hong Kong.