UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 23, 2020
Date of Report (Date of earliest event reported)
GAIN CAPITAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-35008
 
20-4568600
(State of Incorporation)
 
(Commission File No.)
 
(IRS Employer Identification No.)
Bedminster One
135 Route 202/206
Bedminster, New Jersey 07921
(Address of Principal Executive Offices)
(908) 731-0700
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
p
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
p
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
p
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
p
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001
GCAP
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
p
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. p






Item 2.02 Results of Operations and Financial Condition.

On April 23, 2020, GAIN Capital Holdings, Inc., a Delaware corporation (the “Company”), issued a press release to report the Company’s financial results for the quarter ended March 31, 2020. The full text of the press release is attached to this current report on Form 8-K as Exhibit 99.1.*

Item 7.01 Regulation FD Disclosure.
In connection with the reporting of the Company's financial results for the quarter ended March 31, 2020, the Company has made available for review on its website (ir.gaincapital.com) a copy of its corporate presentation concerning these results. A copy of the corporate presentation is also attached hereto as Exhibit 99.2.*
Item 8.01 Other Events.
On April 23, 2020, the Company announced that its Board of Directors has declared a dividend of $0.06 per share of the Company’s common stock. The dividend will be paid on June 26, 2020 to shareholders of record at the close of business on June 23, 2020.
Item 9.01. Financial Statements and Exhibits
 
 
 
Exhibit
No.
 
Description
 
 
99.1
 
Press Release of GAIN Capital Holdings, Inc., dated April 23, 2020, reporting its financial results.
99.2
 
Corporate Presentation

*
The information furnished in Items 2.02, 7.01 and 9.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 23, 2020
 
 
 
GAIN CAPITAL HOLDINGS, INC.
 
 
By:
 
/s/ Nigel Rose
Name:
 
Nigel Rose
Title:
 
Chief Financial Officer






Exhibit Index





LOGOA15.JPG

GAIN Capital Reports First Quarter 2020 Results

BEDMINSTER, N.J., April 23, 2020 /PRNewswire/ -- GAIN Capital Holdings, Inc. ("GAIN") (NYSE: GCAP), a leading global provider of online trading services, announced financial results for the first quarter of 2020.


Key Financial Results for the First Quarter 2020
•
GAAP net income of $77.3 million, or $2.06 per share
•
GAAP net revenue of $185.7 million
•
Adjusted net income of $78.6 million, or $2.09 per share
•
Adjusted EBITDA of $114.4 million

Operating Highlights
•
A quarter of exceptionally high volatility caused by economic concerns over COVID-19 drove Retail performance
•
Trailing 3-month direct active accounts increased a record 25% over prior year to 87,349
•
RPM of $231, a quarterly record, with average daily volume of $11.7 billion, 52% above prior year

A summary of GAIN’s financial results is included in the chart below.
 
Three Months Ended March 31,
 
2020
 
2019
Net Income/(Loss)
$
77.3

 
$
(28.4
)
Adjusted Net Income/(Loss)(1)
$
78.6

 
$
(28.4
)
 
 
 
 
Net Revenue
$
185.7

 
$
38.4

Operating Expenses(2)
(71.3
)
 
(61.9
)
Adjusted EBITDA(1)
$
114.4

 
$
(23.5
)
 
 
 
 
Diluted GAAP EPS
$
2.06

 
$
(0.76
)
Adjusted EPS(1)
$
2.09

 
$
(0.76
)
___________________________________
Note: Dollars in millions, except per share amounts and where noted otherwise. Columns may not add due to rounding.
1See below for reconciliation of non-GAAP financial measures.
2Operating Expenses excludes Depreciation and Amortization, Purchased Intangible Amortization, and certain one-off costs

“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.




“Client metrics were strong during the quarter, with a 57% year-on-year increase in clients who placed their first trade. Market conditions not only attracted new clients, but also engaged those who had previously opened accounts during 2019 but had not yet traded. That in turn helped improve our 3-month trailing active accounts by 25% compared to last year,” added Mr. Stevens.

Quarterly Operating Metrics
 
Q1 20
 
Q1 19
 
Year-over-year Change
Retail Segment
 
 
 
 
 
OTC Trading Volume (1) (2)
$
748.7

 
$
487.3

 
53.6
 %
OTC Average Daily Volume
$
11.7

 
$
7.7

 
51.9
 %
12 Month Trailing Active OTC Accounts (3)
132,841

 
120,641

 
10.1
 %
3 Month Trailing Active OTC Accounts (3)
87,349

 
70,051

 
24.7
 %
 
 
 
 
 
 
Futures Segment
 
 
 
 
 
Number of Futures Contracts
2,042,824

 
1,755,873

 
16.3
 %
Futures Average Daily Contracts
32,949

 
28,785

 
14.5
 %
12 Month Trailing Active Futures Accounts (3)
7,146

 
7,387

 
(3.3
)%
_______________________________________
All retail volume figures reported in billions.
1 US dollar equivalent of notional amounts traded.
2 For the quarter, indirect volume represented 21% of total retail OTC trading volume.
3 Accounts that executed a transaction during the relevant period.


Dividend
GAIN’s Board of Directors declared a quarterly cash dividend of $0.06 per share of the Company’s common stock. The dividend is payable on June 26, 2020 to shareholders of record as of the close of business on June 23, 2020.

Acquisition by INTL FCStone, Inc.
Acquisition by INTL FCStone Inc. remains on track to complete during the 3rd quarter of 2020.



For more corporate information or to sign up for alerts, please visit: http://ir.gaincapital.com.

About GAIN
GAIN Capital Holdings, Inc. provides innovative trading technology and execution services to retail and institutional investors worldwide, with multiple access points to OTC markets and global exchanges across a wide range of asset classes, including foreign exchange, commodities, and global equities.  GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.  For further company information, visit www.gaincapital.com.

Investor Relations Contact: Jonathan Kay, GAIN Capital +1 908.731.0737, InvestorRelations@GAINCapital.com



Condensed Consolidated Statements of Operations
(unaudited)
 
Three Months Ended March 31,
 
2020

2019
REVENUE:
 
 
 
Retail revenue
$
173.1

 
$
24.3

Futures revenue
9.4

 
8.0

Other revenue
1.0

 
2.5

Total non-interest revenue
183.4

 
34.8

Interest revenue
2.7

 
4.3

Interest expense
0.5

 
0.6

Total net interest revenue
2.3

 
3.7

Net revenue
$
185.7

 
$
38.4

EXPENSES:
 
 
 
Employee compensation and benefits
$
24.2

 
$
20.3

Selling and marketing
7.1

 
10.2

Referral fees
12.5

 
7.1

Trading expenses
4.9

 
5.5

General and administrative
13.8

 
12.8

Depreciation and amortization
4.3

 
4.3

Purchased intangible amortization
1.8

 
3.3

Communications and technology
4.5

 
5.7

Bad debt provision
4.2

 
0.4

Restructuring expenses
1.4

 
0.0

Transaction costs
1.0

 
0.0

Total operating expense
$
79.9

 
$
69.5

OPERATING PROFIT/(LOSS)
105.8

 
(31.1
)
Interest expense on long term borrowings
3.4

 
3.3

INCOME/(LOSS) BEFORE INCOME TAX
102.4

 
(34.4
)
Income tax expense/(benefit)
25.1

 
(6.1
)
NET INCOME/(LOSS)
$
77.3

 
$
(28.4
)
_________________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.







Condensed Consolidated Balance Sheet
(unaudited)
 
March 31,
 
December 31,
 
2020
 
2019
ASSETS:
 
 
 
Cash and cash equivalents
$
293.3

 
$
190.1

Cash and securities held for customers
785.2

 
929.3

Receivables from brokers
53.1

 
112.3

Property and equipment, net
29.1

 
30.6

Intangible assets, net
21.2

 
24.2

Other assets
50.0

 
64.0

          Total assets
$
1,231.8

 
$
1,350.4

LIABILITIES AND SHAREHOLDERS' EQUITY:
 
 
 
Payables to customers
$
785.2

 
$
929.3

Payables to brokers
5.9

 
0.0

Accrued compensation and benefits
6.4

 
5.5

Accrued expenses and other liabilities
45.0

 
43.1

Income tax payable
11.8

 
0.6

Convertible senior notes
80.3

 
137.2

          Total liabilities
$
934.7

 
$
1,115.7

Shareholders' equity
297.1

 
234.7

          Total liabilities and shareholders' equity
$
1,231.8

 
$
1,350.4

_________________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.




Reconciliation of GAAP Net Income to Adjusted Net Income, Adjusted EPS and Adjusted Income Tax
Adjusted net income/(loss) is a non-GAAP financial measure representing our net income/(loss) excluding certain one-time costs and benefits. Adjusted EPS is calculated using adjusted net income/(loss). Adjusted income tax expense/(benefit) reflects the Company's GAAP income tax expense/(benefit) adjusted for (a) taxable or deductible items affecting income tax expense/(benefit) that are unrelated to pre-tax income/(loss) in the period and (b) the tax effect of other taxable adjustments made to the Company's pre-tax income. The tax effect of the adjustments to pre-tax income/(loss) are calculated using the tax rate applicable for the jurisdiction within which each of the adjustments arose. The Company believes that this non-GAAP financial measure provides investors with a more consistent and stable basis for determining the impact of taxes on the Company's core operations. These non-GAAP financial measures have certain limitations, including not having standardized meanings. Therefore, our definitions may be different from similar non-GAAP financial measures used by other companies and/or analysts. Thus, it may be more difficult to compare our financial performance to that of other companies. We believe reporting these measures assists investors in evaluating our operating performance. However, because they are not a measure of financial performance or income tax expense calculated in accordance with GAAP, such measures should be considered in addition to, not as a substitute for, other measures reported in accordance with GAAP.






Net Income/(Loss) to Adjusted Net Income/(Loss) and Adjusted EPS
(unaudited)
 
Three Months Ended March 31,
 
2020
 
2019
Net income/(loss)
$
77.3

 
$
(28.4
)
Income tax expense/(benefit)
25.1

 
(6.1
)
Pre-tax income/(loss)
$
102.4

 
$
(34.4
)
Adjustments:
 
 
 
Restructuring expenses(1)
1.4

 
0.0

Transaction costs(2)
1.0

 
0.0

Adjusted pre-tax income/(loss)
104.9

 
(34.4
)
 Adjusted income tax expense/(benefit)
26.3

 
(6.1
)
Adjusted net income/(loss)
$
78.6

 
$
(28.4
)
 
 
 
 
Adjusted earnings/(loss) per common share
 
 
 
Basic
$
2.09

 
$
(0.76
)
Diluted
$
2.09

 
$
(0.76
)
 
 
 
 
Weighted average common shares outstanding used in computing earnings/(loss) per common share
 
 
 
Basic
37,554,579

 
37,525,073

Diluted
37,585,806

 
37,525,073

_____________________________
1Represents expenses for reducing global headcount as part of our long-term strategic objective of reducing fixed overheads.
2Represents transaction-related expenses with respect to the sale to INTL FCStone, Inc., which include legal, accounting and investment banking fees.

Note: Dollars in millions, except per share data and where noted otherwise. Columns may not add due to rounding.

Adjusted Income Tax Reconciliation
(unaudited)

 
Three Months Ended March 31,
 
2020
 
2019
 
 
 
 
GAAP pre-tax income/(loss)
$
102.4

 
$
(34.4
)
GAAP tax rate
24.5
%
 
17.6
%
Initial adjusted tax expense/(benefit)(1)
25.1

 
(6.1
)
 
 
 
 
Tax law changes(3)
0.7

 
0.0

One off adjustments(4)
0.5

 
0.0

Adjusted tax expense/(benefit)
$
26.3

 
$
(6.1
)
 
 
 
 
Adjusted pre-tax income/(loss)
$
104.9

 
$
(34.4
)
Adjusted tax rate(2)
25.0
%
 
17.6
%

1Initial adjusted tax expense/(benefit) calculated as GAAP pre-tax income/(loss) multiplied by the YTD GAAP Tax Rate
2Adjusted tax rate calculated as adjusted tax expense/(benefit) divided by adjusted pre tax income/(loss)
3Represents a tax benefit of $0.7 million due to NOL carry-back arising from the CARES Act
4Represents the tax effect of the adjustments to pre-tax income/(loss), which were transaction costs of $1.0 million taxed at 21.0% and $1.4 million of restructuring expenses taxed at a hybrid rate of 19.3% derived from the weighted average of the tax rates for the jurisdictions where the costs were incurred




Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is a non-GAAP financial measure that represents our earnings/(loss) before interest, taxes, depreciation and amortization, purchased intangible amortization, convertible note interest, non-controlling interest, and certain one-time costs and benefits. This non-GAAP financial measure has certain limitations, including not having a standardized meaning. Therefore, our definition may be different from similar non-GAAP financial measures used by other companies and/or analysts. Thus, it may be difficult to compare our financial performance to other companies'. We believe reporting adjusted EBITDA assists investors in evaluating our operating performance. However, because adjusted EBITDA is not a measure of financial performance calculated in accordance with GAAP, it should be considered in addition to, not as a substitute for, other measures of our financial performance reported in accordance with GAAP, such as net income/(loss).

Reconciliation of GAAP Net Income/(Loss) to Adjusted EBITDA and Adjusted EBITDA Margin
(unaudited)
 
Three Months Ended March 31,
 
2020
 
2019
Net revenue
$
185.7

 
$
38.4

Net income/(loss)
77.3

 
(28.4
)
Net income/(loss) margin %
42
%
 
(74
)%
 
 
 
 
Net income/(loss)
$
77.3

 
$
(28.4
)
Depreciation and amortization
4.3

 
4.3

Purchased intangible amortization
1.8

 
3.3

Interest expense on long term borrowings
3.4

 
3.3

Income tax expense/(benefit)
25.1

 
(6.1
)
Restructuring expenses
1.4

 
0.0

Transaction costs
1.0

 
0.0

Adjusted EBITDA
$
114.4

 
$
(23.5
)
Adjusted EBITDA Margin(1)
62
%
 
(61
)%
_________________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.
1 Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by net revenue.





Segment Information:
ASC 280, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision making group, in deciding how to allocate resources and in assessing performance. Reportable segments are defined as operating segments that either (a) exceed 10% of revenue, or (b) reported profit or loss in absolute amount exceed 10% of profit of all operating segments that did not report a loss or (c) exceed 10% of the combined assets of all operating segments. Based on the Company’s management strategies, and common production, marketing, development and client coverage teams, the Company has concluded that it operates in two operating segments: Retail and Futures.

Retail
 
Three Months Ended March 31,
 
2020
 
2019
Trading revenue
$
173.1

 
$
24.3

Other retail revenue
3.2

 
3.9

Total revenue
$
176.3

 
$
28.2

 
 
 
 
 Employee compensation and benefits
14.4

 
13.0

Selling and marketing
6.9

 
10.0

Referral fees
9.5

 
4.4

Other operating expenses
22.1

 
18.2

Segment profit/(loss)
$
123.4

 
$
(17.4
)
 Segment Profit Margin %
70
%
 
(62
)%
_________________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.

Futures
 
Three Months Ended March 31,
 
2020
 
2019
Trading revenue
$
9.4

 
$
8.0

Other futures revenue
0.8

 
1.4

Total revenue
$
10.2

 
$
9.4

 
 
 
 
 Employee compensation and benefits
2.9

 
2.2

Selling and marketing
0.2

 
0.3

Referral fees
3.0

 
2.7

Other operating expenses
3.1

 
3.2

Segment profit
$
0.9

 
$
1.1

Segment Profit Margin %
8
%
 
11
%
____________________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.







Corporate and Other
 
Three Months Ended March 31,
 
2020
 
2019
(Loss)/revenue
$
(0.7
)
 
$
0.9

 
 
 
 
Employee compensation and benefits
6.9

 
5.1

Other operating expenses
2.2

 
2.9

Loss
$
(9.9
)
 
$
(7.2
)
____________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.


Reconciliation of Segment Profit/(Loss) to Income/(Loss) Before Income Tax Expense/(Benefit)
 
Three Months Ended March 31,
 
2020
 
2019
Retail segment
$
123.4

 
$
(17.4
)
Futures segment
0.9

 
1.1

Corporate and other
(9.9
)
 
(7.2
)
Segment profit/(loss)
$
114.4

 
$
(23.5
)
 
 
 
 
Depreciation and amortization
4.3

 
4.3

Purchased intangible amortization
1.8

 
3.3

Restructuring expense
1.4

 
0.0

Transaction costs
1.0

 
0.0

Operating profit/(loss)
$
105.8

 
$
(31.1
)
Interest expense on long term borrowings
3.4

 
3.3

Income/(loss) before income tax expense/(benefit)
$
102.4

 
$
(34.4
)
____________________
Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding.




Forward-Looking Statements:
In addition to historical information, this earnings release contains "forward-looking" statements that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors are noted throughout GAIN Capital's annual report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 16, 2020, and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, evolving industry regulations, errors or malfunctions in GAIN Capital’s systems or technology, rapid changes in technology, effects of inflation, customer trading patterns, the success of our products and service offerings, our ability to continue to innovate and meet the demands of our customers for new or enhanced products, our ability to successfully integrate assets and companies we have acquired, our ability to effectively compete, changes in tax policy or accounting rules, fluctuations in foreign exchange rates and commodity prices, adverse changes or volatility in interest rates, as well as general economic, business, credit and financial market conditions, internationally or nationally, and our ability to continue paying a quarterly dividend in light of future financial performance and financing needs. The forward-looking statements included herein represent GAIN Capital’s views as of the date of this release. GAIN Capital undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.


Q12020 Results April 2020 1

 
SAFE HARBOR STATEMENT Forward Looking Statements In addition to historical information, this earnings presentation contains "forward-looking" statements that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors are noted throughout GAIN Capital's annual report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 16, 2020, and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, evolving industry regulations, errors or malfunctions in GAIN Capital’s systems or technology, rapid changes in technology, effects of inflation, customer trading patterns, the success of our products and service offerings, our ability to continue to innovate and meet the demands of our customers for new or enhanced products, our ability to successfully integrate assets and companies we have acquired, our ability to effectively compete, changes in tax policy or accounting rules, fluctuations in foreign exchange rates and commodity prices, adverse changes or volatility in interest rates, as well as general economic, business, credit and financial market conditions, internationally or nationally, and our ability to continue paying a quarterly dividend in light of future financial performance and financing needs. The forward-looking statements included herein represent GAIN Capital’s views as of the date of this release. GAIN Capital undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law. Non-GAAP Financial Measures This presentation contains various non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and adjusted EPS. These non-GAAP financial measures have certain limitations, including that they do not have a standardized meaning and, therefore, our definitions may be different from similar non-GAAP financial measures used by other companies and/or analysts. Thus, it may be more difficult to compare our financial performance to that of other companies. We believe our reporting of these non-GAAP financial measures assists investors in evaluating our historical and expected operating performance. However, because these are not measures of financial performance calculated in accordance with GAAP, such measures should be considered in addition to, but not as a substitute for, other measures of our financial performance reported in accordance with GAAP, such as net income. See the Appendix for a reconciliation of the non-GAAP financial measures used herein to the most directly comparable GAAP measure. 2

 
FIRST QUARTER 2020 REVIEW • Q1 2020 net revenue of $185.7 million, compared to $38.4 million in Q1 2019 • Q1 2020 net income of $77.3 million, compared to net loss of $(28.4) million in Q1 2019 • Q1 2020 adjusted EBITDA of $114.4 million, compared to a loss of $(23.5) million in Q1 2019 • A quarter of exceptionally high volatility caused by economic concerns over COVID-19 which drove Retail performance: • ADV of $11.7bn, up 52% compared to Q1 2019 • RPM of $231, a quarterly record • Trailing 3-month direct active accounts increased 25% over prior year to 87,349, a record since reporting of this metric commenced • Acquisition by INTL FCStone Inc. remains on track to complete during the 3rd quarter of 2020 3

 
ORGANIC EFFORTS ARE SHOWING RESULTS 1 60,000 New Direct Accounts Direct Volume per Active Increased 68% y/y and 38% q/q Increased 24 % y/y and 50% q/q 50,000 10 2.50% • Retail marketing spend 40,000 8 2.00% down 9% QoQ. 6 1.50% 30,000 • Three month trailing active 4 1.00% 20,000 $ (Millions) accounts up 20% QoQ and 2 0.50% 25% YoY driven by 10,000 0.00% heightened market volatility 0 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 and marketing efficiency Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Direct Volume per Active GVIX Three Month Trailing Active Accounts Total Volume • Direct volume increased 100,000 Direct Actives increased 25% y/y and 20% q/q 2.5% $1,000 Direct Vol increased 56% y/y and 80% q/q 2.5% 80% q/q and 56% y/y due to 80,000 2.0% $800 2.0% increase in volatility (GVIX up 153% y/y) 60,000 1.5% $600 1.5% 40,000 1.0% $400 1.0% 20,000 0.5% $200 0.5% 0 0.0% $ 0.0% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Direct Indirect GVIX Volume (Direct) Volume (Indirect) GVIX 1. New direct accounts are defined as organically acquired clients that opened an account during the corresponding period. By definition this figure will exclude the FXCM clients that were inorganically acquired in February 2017. 2. GVIX, GAIN’s volatility indicator, is a metric calculated daily by volume weighting the 5-Day % average true ranges (ATR) of 6 of our major products (Dax, EUR/USD, GBP/USD, USD/JPY, Dow and Gold). The volume weights are based on the relative monthly volumes across these 6 markets. 4

 
ORGANIC GROWTH INITIATIVES Direct Active Accounts1 New Direct Accounts and Marketing Spend 80,000 Direct actives up 21% vs Q4’19 2.5% New Direct accounts up 68% YoY, Marketing spend down 29% YoY 60,000 $14.m 2.0% 50,000 $12.m 60,000 $10.m 40,000 1.5% $8.m 40,000 30,000 1.0% $6.m 20,000 20,000 $4.m 0.5% 10,000 $2.m 0 0.0% 0 $.m Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Direct Actives GVIX New Direct Accounts Direct Spend (City Index + FOREX.com) GVIX • Trailing 3-month direct active accounts have increased driven • Steady growth in New Direct Accounts driving growth in by heightened market volatility and steady acquisition of new Direct Actives driven by market conditions and continuous clients through 2019. optimisation of Marketing spend. 1. Excludes acquired FXCM US accounts as these accounts are not impacted by increased marketing spend and are only expected to decrease 5

 
2020 Q1 EXCEPTIONAL MARKET CONDITIONS VIX1 CVIX2 90 82.7 18 16.4 80 16 70 14 60 12 50 10 40 8 30 6 20 10 4 0 2 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 After multi-year lows in 2019, Q1 2020 experienced extraordinary spikes in volatility, driven by the COVID-19 outbreak and its economic impact, specifically in equity markets : • VIX closed at a record high of 82.7 on Mar 16 2020 which surpassed the previous peak of 80.9 on Nov 20 2008 • Average VIX during March was 57.7 compared with the Q1’20 average of 31.2, and March 2019 average of 14.5 • CVIX also recorded multi-year highs during Q1’20 • CVIX peaked at 16.4 during March, levels not observed since the global financial crisis 1. Chicago Board Options Exchange Volatility Index 2. Deutsche Bank Currency Volatility Index 6

 
Financial Review 7

 
KEY FINANCIAL RESULTS & OPERATING METRICS Three Months Ended March 31, $ Change 2020 2019 • Market conditions had a significant impact upon financial performance in the quarter, a total contrast Net revenue $ 185.7 $ 38.4 $ 147.3 to those of a year ago Operating expenses(3) (71.3) (61.9) (9.4) (1) Adjusted EBITDA $ 114.4 $ (23.5) $ 137.9 • Net revenue of $185.7 million versus prior year's Adjusted EBITDA margin % 62% (61)% 123% $38.4 million Net income/(loss) $ 77.3 $ (28.4) $ 105.7 Adjusted net income/(loss)(1) $ 78.6 $ (28.4) $ 107.0 • Net income of $77.3 million against prior year's loss of $(28.4) million GAAP diluted EPS $ 2.06 $ (0.76) $ 2.82 Adjusted diluted EPS(1) $ 2.09 $ (0.76) $ 2.85 • Adjusted EBITDA of $114.4 million compared to prior year's loss of $(23.5) million Operating Metrics(2) Retail OTC ADV (bns) $ 11.7 $ 7.7 $ 4.0 • EPS of $2.06 with adjusted EPS of $2.09 Retail RPM $ 231$ 50$ 181 Avg. daily futures contracts 32,949 28,785 4,164 • Quarterly dividend of $0.06 per share approved Futures RPC $ 4.59 $ 4.55 $ 0.04 ◦ Record date: June 23, 2020 ◦ Payment date: June 26, 2020 Note: Dollars in millions, except per share data. Columns may not add due to rounding. (1) This is a non-GAAP financial measure. Please see the appendix to this presentation for a reconciliation to the corresponding GAAP financial measure. (2) Definitions for operating metrics are available in the appendix to this presentation. 8 (3) Operating Expenses excludes Depreciation and Amortization, Purchased Intangible Amortization, and certain one-off costs.

 
OPERATING SEGMENT RESULTS: RETAIL Retail Financial & Operating Results Three Months Ended March 31, 2020 2019 TTM 3/31/20 Trading revenue $ 173.1 $ 24.3 $ 326.5 • Market conditions saw quarterly ADV increase 52% Other retail revenue 3.2 3.9 15.9 year-over-year to $11.7 billion Total revenue $ 176.3 $ 28.2 $ 342.4 • RPM of $231 for the quarter, well above our long- Employee compensation and benefits 14.4 13.0 51.0 term expectation, and above Q1'19 RPM of $50, Selling and marketing 6.9 10.0 34.5 due to market conditions Referral fees 9.5 4.4 23.3 Other operating expenses 22.1 18.2 72.6 • Combined impact of ADV and RPM saw Q1'20 total Segment profit/(loss) $ 123.4 $ (17.4) $ 161.0 retail revenue increase 525% year-over-year Margin % 70% (62%) 47% • Marketing investment down 31% for the first three Operating Metrics months of 2020 as compared to prior year period ADV (bns) $ 11.7 $ 7.7 $ 8.1 12 month trailing active OTC accounts 132,841 120,641 132,841 • Overheads1 for the quarter up 17% compared to Client assets $ 597.1 $ 652.6 $ 597.1 prior year driven by variable component RPM $ 231$ 50$ 155 1. Overheads defined as employee compensation and benefits plus other operating expenses. Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding. 9

 
OPERATING SEGMENT RESULTS: FUTURES Futures Financial & Operating Results Three Months Ended March 31, • Futures average daily contracts were up 14% to 2020 2019 TTM 3/31/20 32,949 during Q1'20 Trading revenue $ 9.4 $ 8.0 $ 36.2 Other futures revenue 0.8 1.4 4.3 Total revenue $ 10.2 $ 9.4 $ 40.5 • Revenue per contract increased slightly to $4.59 due to a shift in product mix Employee compensation and benefits 2.9 2.2 10.2 Selling and marketing 0.2 0.3 0.8 1 Referral fees 3.0 2.7 11.4 • Overheads for the quarter were 11% higher over Other operating expenses 3.1 3.2 12.5 the prior year period caused by variable Segment Profit $ 0.9 $ 1.1 $ 5.5 Margin % 8% 11% 14% component Operating Metrics • Quarter profit margin decreased slightly to 8%, Avg. daily contracts 32,949 28,785 30,086 due to impact of Fed rate reductions on interest 12 month trailing active futures accounts 7,146 7,387 7,146 income Client assets $ 188.1 $ 217.1 $ 188.1 Revenue/contract $ 4.59 $ 4.55 $ 4.75 ◦ Trading revenue increased $1.4 million ◦ Operating expenses increased $0.8 million Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding. 10

 
Appendix 11

 
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended March 31, 2020 2019 REVENUE Retail revenue $ 173.1 $ 24.3 Futures revenue 9.4 8.0 Other revenue 1.0 2.5 Total non-interest revenue 183.4 34.8 Interest revenue 2.7 4.3 Interest expense 0.5 0.6 Total net interest revenue 2.3 3.7 Net revenue $ 185.7$ 38.4 EXPENSES Employee compensation and benefits $ 24.2 $ 20.3 Selling and marketing 7.1 10.2 Referral fees 12.5 7.1 Trading expenses 4.9 5.5 General and administrative 13.8 12.8 Depreciation and amortization 4.3 4.3 Purchased intangible amortization 1.8 3.3 Communications and technology 4.5 5.7 Bad debt provision 4.2 0.4 Restructuring expenses 1.4 0.0 Transaction costs 1.0 0.0 Total operating expenses $ 79.9$ 69.5 OPERATING PROFIT/(LOSS) 105.8 (31.1) Interest expense on long term borrowings 3.4 3.3 INCOME/(LOSS) BEFORE INCOME TAX 102.4 (34.4) Income tax expense/(benefit) 25.1 (6.1) NET INCOME/(LOSS) $ 77.3 $ (28.4) Note: Dollars in millions, except share and per share data. Columns may not add due to rounding. (1) Total shares outstanding at March 31, 2020 was 37,787,196 12

 
CONDENSED CONSOLIDATED BALANCE SHEET As of 3/31/2020 12/31/2019 ASSETS: Cash and cash equivalents $ 293.3 $ 190.1 Cash and securities held for customers 785.2 929.3 Receivables from brokers 53.1 112.3 Property and equipment, net 29.1 30.6 Intangible assets, net 21.2 24.2 Other assets 50.0 64.0 Totalassets $ 1,231.8$ 1,350.4 LIABILITIES AND SHAREHOLDERS' EQUITY: Payables to customers $ 785.2 $ 929.3 Payables to brokers 5.9 0.0 Accrued compensation and benefits 6.4 5.5 Accrued expenses and other liabilities 45.0 43.1 Income tax payable 11.8 0.6 Convertible senior notes 80.3 137.2 Total liabilities $ 934.7 $ 1,115.7 Shareholders' Equity 297.1 234.7 Totalliabilitiesandshareholders'equity $ 1,231.8 $ 1,350.4 Note: Dollars in millions. Columns may not add due to rounding. 13

 
LIQUIDITY Q1 2020 Q4 2019 Q3 2019 Q2 2019 TTM Cash and Cash Equivalents Prior Period $ 190.1 $ 200.7 $ 208.5 $ 218.0 $ 218.0 Adjusted EBITDA $ 114.4 $ (0.2) $ 6.0 $ 13.0 $ 133.2 Capital expenditures (4.2) (4.4) (4.8) (4.0) (17.4) Tax and convertible interest (4.1) (1.8) (4.3) (2.5) (12.7) Dividends, buybacks and convertible principal (60.8) (3.7) (2.2) (5.0) (71.7) Receivables from brokers 59.2 (4.5) 3.2 (12.2) 45.7 Working capital (1.3) 4.0 (5.7) 1.2 (1.8) Total Cash Inflow/(Outflow) $ 103.2$ (10.6)$ (7.8)$ (9.5) $ 75.3 Cash and Cash Equivalents Current Period $ 293.3 $ 190.1 $ 200.7 $ 208.5 $ 293.3 Note: Dollars in millions. Columns may not add due to rounding. 14

 
GROUP ADJUSTED EBITDA & ADJUSTED NET INCOME Three Months Ended March 31, 2020 2019 Net revenue $ 185.7 $ 38.4 Operating expenses: Employee compensation and benefits $ 24.2 $ 20.3 Selling and marketing 7.1 10.2 Referral fees 12.5 7.1 Trading expenses 4.9 5.5 General and administrative 13.8 12.8 Communication and technology 4.5 5.7 Bad debt provision 4.2 0.4 Total operating expenses 71.3 61.9 Adjusted EBITDA $ 114.4$ (23.5) Margin % 62% (61)% Depreciation and amortization $ 4.3 $ 4.3 Purchased intangible amortization 1.8 3.3 Interest expense on long term borrowings 3.4 3.3 Adjusted Pre-Tax Income/(Loss) 104.9 (34.4) Adjusted income tax expense/(benefit) 26.3 (6.1) Adjusted Net Income/(Loss) $ 78.6 $ (28.4) Note: Dollars in millions. Columns may not add due to rounding. 15

 
ADJUSTED EBITDA & MARGIN RECONCILIATION Three Months Ended March 31, 2020 2019 Net revenue $ 185.7 $ 38.4 Net income/(loss) 77.3 (28.4) Net income/(loss) Margin % 42% (74)% Net income/(loss) $ 77.3 $ (28.4) Depreciation and amortization 4.3 4.3 Purchase intangible amortization 1.8 3.3 Interest expense on long term borrowings 3.4 3.3 Income tax expense/(benefit) 25.1 (6.1) Restructuring expenses 1.4 0.0 Transaction costs 1.0 0.0 Adjusted EBITDA $ 114.4 $ (23.5) Adjusted EBITDA Margin %(1) 62% (61)% Note: Dollars in millions. Columns may not add due to rounding. (1) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by net revenue. 16

 
ADJUSTED NET INCOME AND EPS RECONCILIATION Three Months Ended March 31, 2020 2019 Net income/(loss) $ 77.3 $ (28.4) Income tax expense/(benefit) 25.1 (6.1) Pre-tax income/(loss) $ 102.4$ (34.4) Adjustments: Restructuring expenses 1.4 0.0 Transaction costs 1.0 0.0 Adjusted pre-tax income/(loss) 104.9 (34.4) Adjusted income tax (1) 26.3 (6.1) Adjusted net income/(loss) $ 78.6 $ (28.4) Adjusted earnings/(loss) per Common Share: Basic $ 2.09$ (0.76) Diluted $ 2.09 $ (0.76) Weighted average common shares outstanding used in computing adjusted earnings/(loss) per common share: (2) Basic 37,554,579 37,525,073 Diluted 37,585,806 37,525,073 Note: Dollars in millions, except per share and share data. Columns may not add due to rounding. (1) The company’s forecast tax rate reconciliation is included in this presentation. 17 (2) Total shares outstanding at March 31, 2020 was 37,787,196

 
ADJUSTED INCOME TAX (EXPENSE)/BENEFIT RECONCILIATION Three Months Ended March 31, 2020 2019 GAAP pre-tax income/(loss) $ 102.4$ (34.4) GAAP tax rate 24.5% 17.6% Initial adjusted tax expense/(benefit) 25.1 (6.1) Tax law changes 0.7 0.0 One off adjustments 0.5 0.0 Adjusted tax expense/(benefit) $ 26.3$ (6.1) Adjusted pre-tax income/(loss) $ 104.9$ (34.4) Adjusted tax rate 25.0% 17.6% Note: Dollars in millions, except per share and share data. Columns may not add due to rounding. 18

 
EPS COMPUTATION Three Months Ended March 31, 2020 2019 Net income/(loss) $ 77.3 $ (28.4) Earnings/(loss) per common share Basic earnings/(loss) $ 2.06 $ (0.76) Diluted earnings/(loss) $ 2.06 $ (0.76) Weighted average common shares outstanding used in computing earnings/(loss) per common share:(1) Basic 37,554,579 37,525,073 Diluted 37,585,806 37,525,073 Note: Dollars in millions, except per share and share data. Columns may not add due to rounding. (1) Total shares outstanding at March 31, 2020 was 37,787,196 19

 
RECONCILIATION OF SEGMENT PROFIT TO INCOME BEFORE INCOME TAX EXPENSE Three Months Ended March 31, 2020 2019 Retail segment $ 123.4 $ (17.4) Futures segment 0.9 1.1 Corporate and other (9.9) (7.2) Segment profit/(loss) $ 114.4$ (23.5) Depreciation and amortization 4.3 4.3 Purchased intangible amortization 1.8 3.3 Restructuring expense 1.4 0.0 Transaction costs 1.0 0.0 Operating profit/(loss) $ 105.8 $ (31.1) Interest expense on long term borrowings 3.4 3.3 Income/(loss) before income tax expense/(benefit) $ 102.4 $ (34.4) Note: Dollars in millions. Columns may not add due to rounding. 20

 
RETAIL REVENUE PER MILLION 21

 
OPERATING SEGMENT RESULTS: CORPORATE & OTHER Corporate & Other Financial & Operating Results Three Months Ended March 31, 2020 2019 TTM 3/31/20 (Loss)/revenue $ (0.7) $ 0.9 $ (1.7) Employee compensation and benefits 6.9 5.1 20.8 Other operating expenses 2.2 2.9 10.9 Loss $ (9.9)$ (7.2)$ (33.5) Note: Dollars in millions, except where noted otherwise. Columns may not add due to rounding. 22

 
QUARTERLY OPERATING METRICS Three Months Ended, Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Retail Segment OTC Trading Volume (1)(2) $ 487.3 $ 464.3 $ 463.1 $ 428.3 $ 748.7 OTC Average Daily Volume $ 7.7 $ 7.1 $ 7.0 $ 6.6 $ 11.7 12 Month Trailing Active OTC Accounts (3) 120,641 118,320 118,751 122,532 132,841 3 Month Trailing Active OTC Accounts (3) 70,051 69,556 72,909 72,916 87,349 Futures Segment Number of Futures Contracts 1,755,873 1,978,251 2,041,253 1,549,323 2,042,824 Futures Average Daily Contracts 28,785 31,401 31,895 24,208 32,949 12 Month Trailing Active Futures Accounts (3) 7,387 7,406 7,406 7,019 7,146 1 US dollar equivalent of notional amounts traded. 2 For Q1 2020, indirect volume represented 21% of total retail OTC trading volume. 3 Accounts that executed a transaction during the relevant period. Note: Retail volumes in billions. Definitions for all operating metrics are available elsewhere in this presentation. 23

 
OPERATING METRICS 24

 
DEFINITION OF METRICS • Active Accounts: Accounts that executed a transaction during the period • Trading Volume: Represents the U.S. dollar equivalent of notional amounts traded • Customer Assets: Represents amounts due to clients, including customer deposits and unrealized gains or losses arising from open positions 25