EZTD’s Q1 2016 net loss deepens despite flat revenue and record-high trading volume

EZTD’s Q1 2016 net loss deepens despite flat revenue and record-high trading volume


Binary options and forex broker EZTD said on Wednesday its net loss widened to $3.4 million in the first three months of 2016 from $1.3 million a year earlier, despite its revenue declining by just 1.4% on the year to $7.0 million.  

EZTD Q1 2016

Meanwhile, the broker reached a record-high trading volume of $52.8 million in the months under review, posting an annual growth of 117%. It also saw the number of transactions it executed growing by 125% over the year to 1.17 million in January-March. Its active clients numbered 18,425 at the end of March, which is 8.6% higher than a year earlier.

Overall, despite the growing loss the company seems satisfied with its performance and is set for global expansion and growth. EZTD noted it will increase its focus on the Asian countries, the Gulf States and Australia.

We recently finished making adjustments to our business in Japan to comply with regulator requests, and will start generating revenue from this subsidiary in the coming weeks as we prepare for what we believe will be a very successful market for our company,” said EZTD CEO Shimon Citron. “In addition, we are focusing on expanding into other Asian countries, the Gulf States and Australia, which are all markets we believe will contribute to our growth,” he added.

In the first quarter of 2016, the brokerage turned to a negative adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.2 million from $844,000 a year earlier. It explained the slight decrease in revenue was due to significant changes in operations made to comply with new regulations imposed by the Cypriot financial regulator, which oversees it.

“The company invested significant sums this quarter to accommodate regulator demands and improve regulatory compliance. We believe this work will place us as one of the leading companies in the industry as customers will look to better, highly regulated “by the book” companies as their binary and forex investment providers,” Citron said.

EZTD Q1 2016 loss

Customer acquisition costs also increased by an annual 38.9% to $5.0 million in the first quarter of 2016, since the company invested more heavily in expanding its business and brand awareness and in better technology. It recently launched a new trading website for sports fans, www.eztraderfc.com, in line with its strategy to align itself with leading football clubs and attract avid sports fans as active clients.

The broker’s assets totaled $12.6 million at end-March, up 78% from $7.0 million at the end of December 2015.

EZTD is an online binary options broker and platform provider. It offers binary options trading on more than 120 instruments, such as forex, stocks, indices, and commodities. It runs three binary option and forex platform brands – www.eztrader.com, www.globaloption.com, EZInvest.com, and www.eztraderfc.com. It has also developed EZTrader Mobile, a mobile trading application for Android and iOS devices.

EZTD operates in Europe through its CySEC-regulated subsidiary WGM Services Ltd. and in Asia through recently-licensed EZInvest Securities Co., which is based in Japan.

EZTD is listed on the NASDAQ and, in order to meet exchange regulations, performed in April this year a one-for-30 reverse split of its stocks.

Source: Business Wire

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