GAIN Capital’s CEO strikes upbeat note amid signs of market conditions returning to normal in Q2 2019

Glenn Stevens, CEO of online trading major Gain Capital Holdings Inc (NYSE:GCAP), has provided an update on the performance of the company over the recent months.

Mr Stevens conceded that GAIN’s first quarter 2019 results reflected unusually unfavorable market conditions, including the CVIX reaching a near decade low and the Euro in its narrowest quarterly range since its inception, and were an aberration against a backdrop of nearly a decade of being a public company.

He, however, managed to strike an upbeat note, saying that

“While customer trading activity has remained subdued and volatility remains lower than normal, we are encouraged by indications that market conditions appear to be returning to more normalized levels in the second quarter”.

In particular, in the first two months of the second quarter of this year, GAIN has been seeing a return to more normal RPM levels, in line with its historical trailing twelve-month rates. The company also continues to see the benefit of its increased levels of marketing spend, as average monthly new accounts for the first two months of the second quarter are up 8% versus first quarter of 2019 and up 37% versus the fourth quarter of 2018.

Further, Mr Stevens provided an update regarding costs. GAIN has previously guided to an annual range of $190- 200 million of overhead costs for full-year 2019. By focusing on continuing to optimize its cost structure outside of its growth initiatives such as marketing spend, the company is now targeting a range of $180 – 190 million of overhead costs for the full year.

GAIN Capital’s results for the first quarter of 2019 were far from rosy. The company reported GAAP net loss of $28.4 million, or a loss of $0.76 per share, whereas GAAP net revenue amounted to $38.4 million, down 61% year-over-year. GAIN incurred an adjusted net loss of $28.4 million, or a loss of $0.76 per share.