GAIN Capital Holdings, Inc. (“GAIN”) (NYSE: GCAP), the owner and operator of popular broker FOREX.com has reported solid financial data for the first quarter 2020 in its latest regulatory filings with the SEC. The company reported the following key metrics:
- GAAP net income amounted to $77.3 million, or $2.06 per share
- GAAP net revenue to $185.7 million, up from $38.4 million a year earlier
- Adjusted net income of $78.6 million, or $2.09 per share
The surge in net revenues and incomes comes on the heels of massive market volatility that has been affecting all international markets since the spread of the Covid-19 virus. Indeed, in its filing GAIN Capital highlighted that trailing 3-month direct active accounts increased a record 25% over prior year to 87,349, whereas RPM reached $231, a quarterly record, with average daily volume of $11.7 billion, 52% above prior year.
“Proactive steps taken to reduce our fixed overheads, broaden the customer base and ultimately improve the Company’s operating leverage during 2019 had positioned GAIN well to benefit upon the return of volatility, which was driven to extraordinary levels by economic concerns over the impact of the coronavirus pandemic in recent months. GAIN’s March volumes reached multi-year highs, amid market conditions that were favorable to revenue capture, as well as volumes, with RPM of $231 for the first quarter,” stated Glenn Stevens, CEO of GAIN Capital.
It’s interesting to point out that GAIN Capital is currently in a merger agreement with INTL FCStone Inc., under which FCStone will buy out all of GAIN Capital’s stock and effectively take over the company. Since the rise in market volatility, GAIN Capital’s Board has indicated that they plan to continue with the sale, despite experiencing exceptional short-term revenue growth.