Table Of ContentAANNNNUUAALL RREEPPOORRTT
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. 2
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World Wide Presence .
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FXCM Inc. (NYSE: FXCM) is a global, online provider of .
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foreign exchange (forex) trading and related services .
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to retail and institutional customers world-wide.
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At the heart of FXCM's client offering is No Dealing Desk (NDD) forex trading. Clients benefit from .
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FXCM’s large network of forex liquidity providers enabling FXCM to offer competitive spreads on major .
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currency pairs. Clients have the advantage of mobile trading, one-click order execution, and trading .
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from real-time charts. FXCM's U.K. subsidiary, Forex Capital Markets Limited, also offers CFD .
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products with no re-quote trading and allows clients to trade oil, gold, silver, and stock indices along .
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with forex on one platform. In addition, FXCM offers educational courses on forex trading and .
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provides free news and market research through DailyFX.com.
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Founded in 1999 and headquartered in New York, NY, FXCM has operating subsidiaries regulated .
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in a number of jurisdictions, including the United States, the United Kingdom (where regulatory .
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passport rights have been exercised to operate in a number of European Economic Area .
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jurisdictions, including Italy, France, Germany, and Greece), Hong Kong, Japan, and Australia. .
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WORLD WIDE PRESENCE . 1
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1 . Geographic Locations
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2 . GEOGRAPHIC LOCATIONS
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Performance Highlights .
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Active Accounts Retail Trading Revenues per Million . E
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200,000 175,240 $150 .
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150,000 140,565 Growth=25% 57,033 $100 Growth=25% Growth=20% . .
100,000 54,379 Growth=5% $80 $100 $83 $100 . .
50,000 86,186 Growth=37% 118,207 $50 .
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FY 2009 FY 2010 Q4 2009 Q4 2010 FY 2009 FY 2010 .
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Standard Accounts Micro Accounts
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Daily Average Revenue Trades Volume by Region .
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($ in billions) .
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Total
360,000 800 T$o8t3a5l T$o8t3a6l $3,504 Total 4,000 . .
347,104 $3,178 .
320,000 600 3,000 .
313,035 317,658 315,210 .
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280,000 400 2,000
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240,000 200 1,000 .
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200,000 - - .
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Q4 2009 Q4 2010 FY 2009 FY 2010 Q4 2009 Q4 2010 FY 2009 FY 2010 .
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Asia EMEA United States Rest of World .
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PERFORMANCE HIGHLIGHTS . 3
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1 . Strong Growth Drivers
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RT . .
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EP . Total Active Accounts Customer Cash Balance
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AL . . ($ in millions)
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AN . . 140,000
M . 136,427 $641
XC . . 120,000 A G R $600
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. . 100,000 3 2 % 116,919 $500 % C A G
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. 80,000 86,149 $400
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$354
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. 20,000 $100
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. FXCM Pro Revenue FXCM Pro Volume
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. $753
. . . . . $$3205,,000000 % C A G R 27,833 760000 4 0 % C A G R
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4 . STRONG GROWTH DRIVERS
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Debt-Free Balance Sheet with .
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FXCM Inc. Statement of Financial Condition Dec. 31, 2010 . N
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ASSETS ($ in thousands) . EP
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Current assets FXCM’s Own Cash . . . RT
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Cash and cash equivalents $193,330 .
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Cash and cash equivalents, held for customers 641,152
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Other current assets 26,074 .
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Total current assets 860,556 .
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Office, communication, and computer equipment, net 18,709 .
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Intangible assets and goodwill, net 64,409 .
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Other assets 104,119 .
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TOTAL ASSETS $1,047,793
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LIABILITIES AND EQUITY .
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Current liabilities .
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Customer account liabilities $641,152 .
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Other current liabilities 62,445 .
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Total current liabilities 703,597
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Other liabilities 76,189 .
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TOTAL LIABILITIES $779,786 .
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COMMITMENTS AND CONTINGENCIES .
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STOCKHOLDERS' EQUITY
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Total stockholders' equity of FXCM Inc. $102,220 .
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Non-controlling interest 165,787 .
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TOTAL STOCKHOLDERS' EQUITY / MEMBERS' EQUITY 268,007 .
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,047,793 .
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DEBT-FREE BALANCE SHEET WITH CONSERVATIVE CAPITAL LEVELS . 5
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Strong Growth in Revenues
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X . REVENUES
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Retail trading revenue $318,472 $291,668 $281,385 $144,935
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. Institutional trading revenue 27,833 21,107 18,439 11,695
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. Interest income 2,373 1,289 9,085 16,357
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. Other income 11,599 8,666 13,731 11,535
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. Total revenues 360,277 322,730 322,640 184,522
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. EXPENSES
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. Referring broker fees 81,365 76,628 64,567 33,211
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. Compensation and benefits 76,195 62,588 54,578 53,575
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. Advertising and marketing 23,788 29,355 24,629 27,846
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Communication and technology 27,120 24,026 21,311 17,836
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. General and administrative 38,077 26,453 20,247 17,037
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. Depreciation and amortization 9,306 6,542 6,095 7,364
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. Interest expense 116 125 2,168 1,374
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. Total expenses 255,967 225,717 193,595 158,243
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. Income (loss) before income taxes 104,310 97,013 129,045 26,279
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. Income tax provision 4,149 10,053 8,872 3,120
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. Net income (loss) 100,161 86,960 120,173 23,159
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. Net income attributable
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to non-controlling interest 100,015 86,960 120,173 23,159
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. Net income attributable to FXCM Inc. 146 - - -
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. Weighted average shares of Class A
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. Net income per share attributable to stockholders of Class A common stock of FXCM Inc.
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. Basic $0.01 - - -
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Diluted $0.01 - - -
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6 . STRONG GROWTH IN REVENUES AND PROFITS
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Letter to Shareholders .
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Dear Fellow Shareholders After years of profitable growth as a privately held .
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partnership, we believed it was time to take the
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next step and become a publicly listed company. .
For FXCM, 2010 was a momentous year. .
We are confident that the increased visibility, .
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When we started this company eleven years .
transparency, and accountability that accompany .
ago, we held a strong belief that foreign currency .
a NYSE listing will increase our global client’s .
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(FX) trading, a long- established market for .
confidence in our financial strength and give us .
banks, institutional funds, and corporations, .
a competitive advantage. .
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could be made accessible to the retail investor
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in the same way as equities and options. Since .
From an operating perspective, FXCM made .
then, we have been a major driver behind the .
progress in 2010 on all of its principal strategic .
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expansion of retail FX through our innovation, .
initiatives. We increased our penetration of the .
customer focus, and market leadership. .
global market place through organic growth .
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Continuing our history of innovation, in 2010, .
initiatives, establishing a local sales presence .
FXCM introduced seventeen new instruments, .
in Germany and Greece. We also expanded our .
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released three new trading platforms, and
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presence and reach in Europe and the Middle
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added numerous new client services. We .
East through the acquisition of ODL Group. Ltd, .
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delivered strong growth in active clients, client
the fourth largest U.K.-based broker of FX, .
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equity, revenues, and net income. In December, .
Contracts-for-Difference, and equity options. The .
we completed an initial public offering of our .
ODL acquisition also gave us a regulated entity .
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stock on the New York Stock Exchange. .
in Japan, the world’s largest FX market by volume. .
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LETTER TO SHAREHOLDERS . 7
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0. In March 2011, we expanded our footprint there, The new show serves as the centerpiece for a
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1. . adding the FX business of GCI Capital to our ODL broad digital-marketing campaign that is a key
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operate as FXCM Japan. We believe our financial in 2011.
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. strength, global reach, and a scalable
ORT . . . infrastructure that delivers our solutions to over These achievements in 2010 took place against
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RE . 180 countries in sixteen languages from a single a macro-economic environment that was
AL . . platform will enable us to continue to expand our challenging for retail FX brokers, including FXCM.
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N . share both organically and via acquisitions. The global FX market has been subject to
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M . Our institutional group, FXCM Pro, grew for the extended periods of moderate-to-low volatility,
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F . fifth consecutive year, expanding its client base punctuated by short bursts of high volatility.
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. to over 470 banks, hedge funds, and Interest-rate differentials, historically a
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corporations. We expanded our product offerings significant driver of our revenue, have
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. in 2010 by adding seventeen new instruments, languished at historic lows for over two years.
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. including Contracts-for-Difference on gold, oil, Finally, regulatory changes in major markets,
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. and stock indices. We introduced new trading including the United States, Japan, and South
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. platforms, including Strategy Trader, for Korea, were enacted, improving the long-term
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. automated trading, Mobile Trading Station, market environment but depressing trading
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. for trading on iPhone, Blackberry, and Android volumes in the near term. These factors
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smart-phones, and Trading Station Gateway, combined to create a challenging environment
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. a browser-based version of our award-winning for retail FX brokers, in spite of the overall
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. Trading Station II. We also expanded the data growth of the global market.
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. and services we provide our clients via
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. educational programs offered through fxcm.com While these macro forces contributed to a
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. and research, news, and data offered through decline in total trading volume and the absence
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. DailyFX, notably the Speculative Sentiment Index of interest-rate sensitive revenue streams,
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(SSI), a unique indicator of trader positioning FXCM was still able to grow client equity,
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. and sentiment in the retail FX market. increase its pool of active customers, add new
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. sources of trading revenue, and grow both total
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. We completed work on new marketing initiatives revenues and net income.
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. that will be launching throughout this year.
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. In 2010, FXCM started development with CNBC The upside to this challenging macro
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. on a weekly television program focusing on the environment is the opportunity it creates for
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retail FX market. These efforts culminated in the FXCM to expand via acquisition, as evidenced
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. March 2011 premiere of Money in Motion by the ODL and GCI transactions. Our agency
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Currency Trading, a weekly program broadcast model (NDD) is less sensitive to volatility swings,
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. by CNBC in the United States, Europe, Asia, and is less risky, and produces more stable revenue
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8 . LETTER TO SHAREHOLDERS
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Description:Dec 31, 2010 In addition, FXCM offers educational courses on forex trading and .. Programming Services Unit to Build EAs on Demand and Support EA
