LMAX Exchange Unveils Record Results

LMAX Group has unveiled record profitability and financial performance for the year ended 31 December 2019, reporting that 2019 EBITDA grew by 30% to $26.2 million. With an EBITDA margin of 47%, the firm claims it is one of the most profitable operators of global venues for electronic FX trading.

Gross revenues were $59.6m, up 19% from 2018, while gross profit was also up, by 27% to $56.3m and operating profit soared 45% to $18.6 million.

Total FX trading volume across LMAX’s exchanges was $3.5 trillion, up 15% from 2018, using 281 business days as the benchmark this translates into average daily volume on a gross basis of $12.5 billion. LMAX Digital, the group’s crypto exchange, saw volume increase 14 times from its nascent year of 2018 to hit $53 billion for the year. Institutional clients delivered an 86% increase in revenues and a 20% increase in volumes, while the firm’s investment manager segment, trading via bank algos, doubled revenues and volumes. In the funds segment revenues increased 100% and volumes were up 30%, while the retail broker segment delivered a 23% increase in revenues.

Continuing the strong nature of the report, LMAX reports three-year compound annual growth rates of 26% growth in gross profit: 47% growth in Statutory EBITDA; and 83% growth in operating profit.

“During a period of consistent low level of volatility in 2019, where volumes at most major venues have declined and margins have contracted for monoline institutional transactional businesses, we have delivered strong growth in both volumes and revenues while continuing to invest in our global distribution, market leading technology and best-in-class service for our clients,” says LMAX Group CEO David Mercer. “We view this as a vote of confidence in our award-winning, robust proprietary technology and our ability to consistently deliver efficient market structure and transparent, precise, consistent execution – which has set us apart from the competition over a number of years.

2019 was the year that LMAX Group demonstrated the value and resilience of our distinctive ‘all market access’ business model. Access to 100% of the FX market doesn’t just differentiate our business proposition, it’s a source of diversified and consistent revenue streams. A diversified revenue mix ensures the resilience of our financial performance in all market cycles.”

Commenting on the group’s future plans, Mercer continues, “We are extremely excited for the year ahead and expect our core FX business to continue its growth trajectory, reflecting the increasing demand from all client segments for firm limit-order liquidity and transparent, precise, consistent execution. We are entirely focused on our mission to build the leading global electronic FX and crypto trading businesses.

“We see further opportunities to continue leveraging our technology to launch new exchanges, whether it’s setting up more FX matching engines globally or building exchange infrastructure for trading other asset classes, just like we did with LMAX Digital,” he adds. “Another strategic growth area for us is to capitalise on the potential of our market data offering. Our ability to gather firm liquidity market data from all client segments, often not accessible through primary venues, puts us in a differentiated and advantageous position compared to other players. This will be a key growth story for us in the next decade.”

Colin Lambert

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