Retail forex broker FXCM Inc. (NASDAQ:FXCM) has announced for the quarter ended September 30, 2016, U.S. GAAP trading revenue from continuing operations was $57.8 million, compared to $56.2 million for the quarter ended September 30, 2015. U.S. GAAP net loss attributable to FXCM Inc. from continuing operations was $35.8 million (including a $27.0 million net loss on derivative liabilities) for the quarter ended September 30, 2016, or $6.39 per diluted share, compared to U.S. GAAP net income attributable to FXCM Inc. from continuing operations of $64.3 million (including a $137.6 million net gain on derivative liabilities), or $12.10 per diluted share, for the quarter ended September 30, 2015.
For the nine months ended September 30, 2016, U.S. GAAP trading revenue from continuing operations was $196.6 million, compared to $184.7 million for the nine months ended September 30, 2015. U.S. GAAP net income attributable to FXCM Inc. from continuing operations was $85.9 million for the nine months ended September 30, 2016, or $15.34 per diluted share, compared to U.S. GAAP net loss attributable to FXCM Inc. from continuing operations of $427.9 million, or $86.13 per diluted share, for the nine months ended September 30, 2015. These results include a $200.4 million net gain on derivative liabilities for the nine months ended September 30, 2016 and a $254.7 million net loss on derivative liabilities for the nine months ended September 30, 2015.
The net loss/gain on derivative liabilities consists of non-cash changes in the value of embedded derivatives associated with the Leucadia Letter and Credit Agreements. The Letter Agreement is a component of the financing package provided by Leucadia National Corp.
On January 15, 2015, FXCM’s customers suffered negative equity balances due to the unprecedented move in the Swiss Franc after the Swiss National Bank (SNB) discontinued its peg of the Swiss Franc to the Euro. On January 16, 2015, FXCM entered into a financing agreement with Leucadia that permitted FXCM’s regulated subsidiaries to meet their regulatory capital requirements and continue normal operations after significant losses were incurred resulting from the events of January 15, 2015.
On September 1, 2016 FXCM completed the restructuring of the financing arrangements with Leucadia.
U.S. GAAP trading revenue from discontinued operations for the quarter ended September 30, 2016 was $8.8 million, compared to $13.4 million for the quarter ended September 30, 2015. U.S. GAAP net loss attributable to FXCM Inc. from discontinued operations was $3.3 million for the quarter ended September 30, 2016, or $0.59 per diluted share, compared to U.S. GAAP net income attributable to FXCM Inc. from discontinued operations of $9.3 million, or $1.76 per diluted share, for the quarter ended September 30, 2015.
U.S. GAAP trading revenue from discontinued operations for the nine months ended September 30, 2016 was $22.6 million, compared to $60.2 million for the nine months ended September 30, 2015. U.S. GAAP net loss attributable to FXCM Inc. from discontinued operations was $14.9 million for the nine months ended September 30, 2016, or $2.67 per diluted share, compared to U.S. GAAP net loss attributable to FXCM Inc. from discontinued operations of $21.1 million, or $4.24 per diluted share, for the nine months ended September 30, 2015.
For the nine months ended September 30, 2016, operating expenses include a $2.3 million settlement of a longstanding legal matter.
October 2016 Customer Trading Metrics from Continuing Operations
Retail Customer Trading Metrics
- Retail customer trading volume of $305 billion in October 2016, 6% lower than September 2016 and 9% lower than October 2015.
- Average retail customer trading volume per day of $14.5 billion in October 2016, 1% lower than September 2016 and 5% lower than October 2015.
- An average of 538,098 retail client trades per day in October 2016, 4% lower than September 2016 and 5% higher than October 2015.
- Active accounts of 177,949 as of October 31, 2016, an increase of 131, or 0.1%, from September 30, 2016, and a decrease of 324, or 0.2%, from October 31, 2015.
- Tradeable accounts of 154,986 as of October 31, 2016, a decrease of 81, or 0.1%, from September 30, 2016, and a decrease of 6,099, or 4%, from October 31, 2015.
Institutional Customer Trading Metrics
- Institutional customer trading volume of $24 billion in October 2016, 17% lower than September 2016 and 29% lower than October 2015.
- Average institutional trading volume per day of $1.1 billion in October 2016, 15% lower than September 2016 and 31% lower than October 2015.
- An average of 37,709 institutional client trades per day in October 2016, 9% lower than September 2016 and 32% higher than October 2015.