TradeStation Reports a 19% Revenue Decline in Q4 FY22.

TradeStation, an online broker and a fully-owned subsidiary of Monex Group, has released its financials for the first three months of 2022. The broker reported total net revenue of $52.6 million for the period, a 19.1% decline year-over-year. In addition, it closed the fiscal year 2022, which ended on March 31, with total revenue of $209.6 million, a decline of 4.1%.

The primary reason for the revenue drop was; decreases in trading-related revenue, net interest income, and subscription and other revenue streams. However, the company reported an increase in customer assets, which rose to $17.4 billion at the end of the first quarter, an 11% increase from the previous quarter. 

The company generated just $44.1 million across trading-related activities between January and March, marking a 14.8% drop from previous levels. This downturn was driven primarily by reduced equities and cryptocurrency trading volume, which dampened overall trading activity and contributed to lower net interest income. 

The trend appears likely to continue, with TradeStation’s total quarterly expenditures doubling over the same period. As a result, the company ended up with a net loss of $14.8 million compared to just $31.7 million for the entire fiscal year. 

Strong Client Metrics

Despite the challenging market conditions, the broker’s customer metrics remained strong. At the end of March, it had 226,506 customer accounts, representing a massive 55.3% year-on-year increase. 

In addition, the platform saw a steady influx of new customers, with 62,787 gross new accounts added in the last three months of fiscal 2022. Furthermore, total customer assets on the trading platform also rose to a robust $12 billion, marking a 16.4% jump from the previous year.

Meanwhile, daily average revenue trades (DARTs) witnessed a significant decline despite these positive trends compared to previous years. Overall, DARTs dropped by 14.2% to 237,694 during this period. However, despite this downturn in performance metrics, it is clear that the broker’s customers continue to find value and growth opportunities on its platform. 

With its strong track record and solid foundation in place, it seems poised for even greater success.

In the recent earnings report from brokerage firm TradeStation, CEO John Bartleman acknowledged that while total customer accounts had grown over the last year, trading volume had decreased during the March 2022 fiscal quarter. He suggested a combination of factors likely caused this drop in volume, including overall uncertainty and high market volatility brought about by the COVID-19 pandemic.

However, despite this decline, Bartleman reported that TradeStation’s customers were still actively engaging in futures and options trading during this time, resulting in year-over-year increases across these markets. 

Overall, while experiencing some losses due to lower trading activity in certain areas, TradeStation is weathering this storm relatively well. And with a continued focus on our customers’ needs and strengthening relationships with key industry partners, we will undoubtedly come out stronger on the other side.