GAIN Capital 8-K GAIN Capital Reports 2012 Second Quarter Results

2

nd

Quarter 2012

Financial and Operating Results

July 31, 2012

Exhibit 99.2

Special Note Regarding Forward-Looking Information

In addition to historical information, this 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, as filed with the Securities and Exchange Commission

on March 15, 2012, 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, including changes in regulation of the futures companies, errors or

malfunctions in our 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, including the

successful

closing

and

integration

of

Open

E

Cry,

our

ability

to

effectively

compete

in

the

futures industry, 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.

2

Overview

Glenn Stevens, CEO

Q2 Summary

•

Significant rebound from Q1 results

•

Capitalized on modest increase in market volatility to

drive higher retail revenue

•

GAIN GTX institutional platform continued to increase

market share

•

Invested in growth areas

Organic:

New

product

offerings

(CFDs)

and

Expanded

geographic

footprint

Acquisition:

Open

E

Cry

–

online

futures

•

Reduced expense run-rate for H2 2012

4

2

nd

Quarter 2012 Results Overview

5

•

Financial Results

•

Net Revenue: $45.7 million

•

Adjusted EBITDA

(1)

: $8.8 million

•

Net Income: $4.4 million

•

Adjusted Net Income

(2)

: $5.0 million

•

EPS (Diluted): $0.11

•

Adjusted EPS (Diluted)

(3)

: $0.13

•

Strong Balance Sheet

•

$95.6mm of free cash available as of June

30, 2012

•

$145.6mm

of

liquidity

including

revolver

•

Operating Metrics

(5)

•

Total trading volume up 72% to $783.3

billion

•

Retail volume declined 5% to $340.8 billion

•

Institutional volume increased to $442.5 billion from

$97.4 billion

•

Client assets up 9% to $320.2 million as of

June 30, 2012

All comparisons based on Q2 2011

43%

45%

48%

44%

48%

49%

0%

10%

20%

30%

40%

50%

60%

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Active Account Yield

$153.2

$151.4

$119.8

$135.9

$128.6

$100.1

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Retail Trading Revenue per Million

Retail Trading Revenue per Million (Quarterly)

Retail Trading Revenue per Million (Last Twelve Months)

(1)

Adjusted EBITDA is a non-GAAP financial measure that represents our earnings before interest, taxes, depreciation, amortization and non-recurring expenses. A reconciliation of net

income to adjusted EBITDA and adjusted EBITDA margin is available in the appendix to this presentation.

(2)

Adjusted net income is a non-GAAP financial measure that represents our net income excluding purchase intangible amortization. A reconciliation of net income to adjusted net income

and adjusted net income margin is available in the appendix to this presentation.

(3)

Reconciliation of EPS to adjusted EPS is available in the appendix to this presentation.

(4)

Calculation of balance sheet liquidity is available in the appendix to this presentation.

(5)

Definitions for all our operating metrics are available in the appendix to this presentation.

(4)

Q2 Trading Conditions

6

US Dollar Index Chart

•

Modest uptick in market

volatility from Q1 4-year low

•

Level remains significantly

lower than prior years

Retail Business

•

Enhanced CFD offering

–

New platform; launching with 200+ CFD products

•

Indices, commodities, sectors & FX

–

Beta testing began

–

Full release on schedule for September 2012

•

FOREX.com Canada launch

–

Licensed to offer forex, CFDs and futures

–

One of a small group of regulated firms approved to offer these products

–

5-7%

of

our

current

retail

trading

volume

without

direct

marketing

currently

•

Continuing to invest in our higher-growth regions

–

Asia-Pacific (SE Asia & China) and Middle East

•

Mobile volumes continue to ramp

–

Over 2x increase between Q2 2011 and Q2 2012

–

18% of Q2 2012 active accounts traded via mobile

•

Actively pursuing M&A opportunities

7

Open E Cry Acquisition

•

On June 28, 2012 Gain announced its acquisition of Open E

Cry from optionsXpress, a subsidiary of the Charles Schwab

Corp.

–

Purchase price: $12mm

–

Expected to close in Q3 2012

•

Company Overview

–

Online retail provider of exchange-traded futures

–

FY 2011 revenue: $13.6mm

–

Customers

(1)

: 8,101

–

Assets

(1)

: $95.9mm

•

Transaction Rationale

–

New commission revenue stream generated on a per trade basis

–

Global expansion of OEC’s geographic footprint

–

Cross-selling between futures and FX

8

(1)

As of June 30, 2012.

Institutional Business

9

•

Institutional business increasing share and strong revenue

growth

–

Q2 2012: $4.2mm

–

Q2 2011: $0.9mm

•

Expanding 24-hour execution desk, hired a 10-person team

–

More than doubles size of existing team

–

Specializes in FX options and emerging markets

–

Significantly scales client base and product coverage

•

Successful traction providing liquidity & technology services

to exchanges in emerging markets

Financial Review

Daryl Carlough, Interim CFO

Q2 & 1H 2012 Financial Results

11

Note: Dollars in millions.

(1)

Reconciliation

of

net

income

to

adjusted

net

income

available

in

appendix.

(2)

Adjusted EBITDA is a non-GAAP financial measure that represents our earnings before interest, taxes, depreciation, amortization and non-recurring expenses. A reconciliation of

net income to Adjusted EBITDA is available in the appendix to this presentation.

Q2

1

Half

$55.6

$45.7

$96.0

$78.9

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2011

2012

2011

2012

Net Revenue

Q2

1

Half

Q2

1

Half

$39.6

$39.7

$77.7

$74.8

$0

$20

$40

$60

$80

$100

$0

$20

$40

$60

$80

$100

2011

2012

2011

2012

Total Expenses

Comp & Benefits

Marketing

Trading

Purchase Intangible Amort.

All Other

Q2

1

Half

$11.2

$5.0

$13.7

$5.1

$10.0

$4.4

$11.4

$3.2

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

2011

2012

2011

2012

GAAP & Adjusted Net Income

(1)

Adjusted Net Income

GAAP Net Income

$19.1

$8.8

$24.2

$10.1

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2011

2012

2011

2012

Adjusted EBITDA

(2)

st

st

st

st

Quarterly Dividend

•

$0.05 per share quarterly dividend

approved

–

Record Date: September 12, 2012

–

Payment Date: September 21, 2012

12

Closing Remarks

•

Executing on growth and diversification strategy

–

Retail:

Expanded CFD offering & new platform

Canadian service taps new market opportunity

–

Institutional:

New hires to grow GAIN GTX product portfolio and

accelerate market share gains

–

Acquisitions:

•

OEC acquisition adds exchange-traded futures and

source of commission-based revenue

•

Continue to manage expenses by increasing operating

efficiency in core business in order to invest in growth areas

13

•

•

•

Appendix

Condensed Consolidated Statements of Operations

15

Note: Unaudited.  Dollars in millions, except per share data.

(1)

Non-recurring expenses relating to cost savings effected in Q2 2012.

Three Months Ended June 30,

Six Months Ended June 30,

Revenue

2012

2011

2012

2011

Retail trading revenue

40.8

$        

54.1

$        

70.3

$       

93.9

$       

Institutional trading revenue

4.2

0.9

8.0

1.9

Other revenue

0.7

0.7

0.7

0.7

Total non-interest revenue

45.7

55.7

79.0

96.5

Interest revenue

0.2

0.2

0.3

0.3

Interest expense

(0.2)

(0.3)

(0.4)

(0.8)

Total net interest revenue/(expense)

-

(0.1)

(0.1)

(0.5)

Net revenue

45.7

55.6

78.9

96.0

Expenses

Employee compensation and benefits

13.2

12.2

23.5

23.3

Selling and marketing

7.2

9.0

14.4

19.2

Trading expenses and commissions

9.2

8.4

17.9

15.6

Bank fees

0.9

1.1

1.7

2.1

Depreciation and amortization

1.0

1.0

2.1

1.9

Purchased intangible amortization

1.0

2.0

2.9

3.7

Communication and data processing

0.8

0.8

1.5

1.4

Occupancy and equipment

1.1

1.1

2.3

2.3

Bad debt provision

0.2

0.1

0.2

0.6

Professional fees

1.2

1.1

2.0

2.0

Product development, software and maintenance

1.1

1.1

2.2

2.0

Restructuring

(1)

0.6

-

0.6

-

Other

2.2

1.7

3.5

3.6

Total

39.7

39.6

74.8

77.7

Income before income tax expense

and equity in earnings of equity method

investment

6.0

16.0

4.1

18.3

Income tax expense

1.6

6.0

0.9

6.9

Net income

4.4

$          

10.0

$        

3.2

$         

11.4

$       

Earnings per common share:

Basic

0.13

$        

0.29

$        

0.09

$       

0.33

$       

Diluted

0.11

$        

0.26

$        

0.08

$       

0.29

$       

Weighted averages common shares outanding used

in computing earnings per common share:

Basic

34,945,835

34,544,643

34,710,915

34,156,494

Diluted

38,677,417

39,086,435

38,605,108

38,978,908

Consolidated Balance Sheet

16

Note: Unaudited.  Dollars in millions.

June 30,

December 31,

2012

2011

ASSETS:

Cash and cash equivalents

22.4

$            

60.3

$            

Cash and cash equivalents, held for customers

320.2

310.4

Short term investments

0.1

0.1

Receivables from banks and brokers

115.7

85.4

Property and equipment - net of accumulated depreciation

9.5

7.5

Prepaid assets

9.6

9.9

Goodwill

3.1

3.1

Intangible assets, net

7.4

10.8

Other assets

19.0

18.1

          Total assets

507.0

$          

505.6

$          

LIABILITIES AND SHAREHOLDERS' EQUITY:

Payables to brokers, dealers, FCM'S and other regulated entities

18.4

$            

17.3

$            

Payable to customers

301.8

293.1

Accrued compensation & benefits payable

4.4

4.9

Accrued expenses and other liabilities

13.3

14.9

Income tax payable

1.6

2.6

Notes payable

-

7.9

   ��             

          Total  liabilities

339.5

$          

340.7

$          

Shareholders' Equity

167.5

$          

164.9

$          

          Total  liabilities and shareholders' equity

507.0

$          

505.6

$          

Current Liquidity

17

Note: Dollars in millions.

(1)

Reflects cash that would be received from brokers following the close-out of all open positions.

(2)

Excludes current liabilities of $17.7mm and capital charges associated with open positions.

6/30/2012

12/31/2011

Cash & cash equivalents

$22.4

$60.3

Cash & cash equivalents held for customers

320.2

310.4

Short term investments

0.1

0.1

Receivable

from

banks

and

brokers

(1)

115.7

85.4

Total Operating Cash

$458.4

$456.2

Less: Cash & cash equivalents held for customers

(320.2)

(310.4)

Free Operating Cash

$138.2

$145.8

Less: Minimum regulatory capital requirements

(42.6)

(35.8)

Less: Note payable

-

(7.9)

Free

Cash

Available

(2)

$95.6

$102.1

Add: Available credit facility

50.0

50.0

Available Cash & Liquidity

$145.6

$152.1

Adjusted Net Income & Margin Reconciliation

18

Note: Dollars in millions, except per share data.

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

2012

2011

Net Revenue

45.7

$           

55.6

$           

78.9

$           

96.0

$           

Net income

4.4

10.0

3.2

11.4

Plus: Purchase intangible amortization (net of tax)

0.6

1.2

1.9

2.3

Adjusted Net Income

5.0

$             

11.2

$           

5.1

$             

13.7

$           

Adjusted Earnings per Share

Basic

0.14

$           

0.33

$           

0.15

$           

0.40

$           

Diluted

0.13

$           

0.29

$           

0.13

$           

0.35

$           

Net Income Margin %

9.6%

18.0%

4.1%

11.9%

Adjusted Net Income Margin %

10.9%

20.2%

6.5%

14.3%

Adjusted

EBITDA

&

Margin

Reconciliation

19

Note: Dollars in millions.

(1)

Non-recurring expenses relating to cost savings effected in Q2 2012.

(2)

Adjusted

EBITDA

Margin

calculated

as

Adjusted

EBITDA/Net

Revenue

(ex.

Interest

on

Note).

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

2012

2011

Net Revenue

45.7

$               

55.6

$               

78.9

$               

96.0

$               

Interest expense

0.2

0.1

0.4

0.3

Net Revenue (ex. Interest expense)

45.9

$               

55.7

$               

79.3

$               

96.3

$               

Net income

4.4

$                 

10.0

$               

3.2

$                 

11.4

$               

Plus: Depreciation & amortization

1.0

1.0

2.1

1.9

Plus: Purchase intangible amortization

1.0

2.0

2.9

3.7

Plus: Interest expense

0.2

0.1

0.4

0.3

Plus: Restructuring

(1)

0.6

-

0.6

-

Plus: Income tax expense

1.6

6.0

0.9

6.9

Adjusted EBITDA

8.8

$                 

19.1

$               

10.1

$               

24.2

$               

Adjusted EBITDA Margin %

(2)

19.2%

34.3%

12.7%

25.1%

Adjusted EPS (Diluted) Reconciliation

20

(1)

Net of tax.

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

2012

2011

GAAP Earnings per Share (Diluted)

0.11

$            

0.26

$            

0.08

$            

0.29

$            

Plus: Purchase intangible amortization

(1)

0.02

0.03

0.05

0.06

Adjusted Earnings per Share (Diluted)

0.13

$            

0.29

$            

0.13

$            

0.35

$            

Q2 & 1H 2012 Financial Summary

21

Note: Dollars in millions, except per share data.

(1)

See page 19 for a reconciliation of GAAP net income to EBITDA.

(2)

See page 18 for a reconciliation of GAAP net income to adjusted net income.

(3)

See page 20 for a reconciliation of GAAP EPS to adjusted EPS.

(4)

Adjusted

EBITDA

Margin

calculated

as

Adjusted

EBITDA/Net

Revenue

(ex.

Interest

on

Note).

3 Months Ended June 30,

6 Months Ended June 30,

'12 v '11 % Change

2012

2011

2012

2011

Q2

1H

Net Revenue

$45.7

$55.6

$78.9

$96.0

(18%)

(18%)

Interest Expense

0.2

0.1

0.4

0.3

100%

33%

Net Revenue (ex. Interest expense)

$45.9

$55.7

$79.3

$96.3

(18%)

(18%)

Operating Expenses

37.1

36.6

69.2

72.1

1%

(4%)

Adjusted EBITDA

(1)

$8.8

$19.1

$10.1

$24.2

(54%)

(58%)

GAAP Net Income

$4.4

$10.0

$3.2

$11.4

(56%)

(72%)

Adjusted Net Income

(2)

5.0

11.2

5.1

13.7

(55%)

(63%)

GAAP EPS (Diluted)

$0.11

$0.26

$0.08

$0.29

(58%)

(72%)

Adjusted EPS (Diluted)

(3)

0.13

0.29

0.13

0.35

(60%)

(62%)

Adjusted EBITDA Margin %

(1)(4)

19.2%

34.3%

12.7%

25.1%

(15 pts)

(12 pts)

Net Income Margin %

9.6%

18.0%

4.1%

11.9%

(8 pts)

(8 pts)

Adjusted Net Income Margin %

(2)

10.9%

20.2%

6.5%

14.3%

(9 pts)

(8 pts)

Q2 & 1H 2012 Operating Metrics

22

Note: Dollars in millions, except retail trading revenue per million.

(1)

Average calculated using excess net capital balance at each month-end during the relevant period.

2nd Quarter

1st Half

'12 v '11 % Change

2012

2011

2012

2011

Q2

1H

For Period Ending June 30,

Total Trading Volume (billions)

$783.3

$454.6

$1,636.4

$967.1

72%

69%

Retail

340.8

357.2

725.9

759.7

(5%)

(4%)

Institutional

442.5

97.4

910.5

207.4

354%

339%

Traded Retail Accounts (Period)

36,660

36,868

45,349

47,395

(1%)

(4%)

Traded Retail Accounts (Last 12 Months)

61,746

65,463

61,746

65,463

(6%)

(6%)

New Retail Accounts

6,862

8,004

13,734

16,914

(14%)

(19%)

Trades

8,976,010

9,363,640

18,267,732

18,389,468

(4%)

(1%)

Retail Trading Revenue per Million

$119.8

$151.4

$97.8

$123.6

(21%)

(21%)

Average Excess Net Capital

(1)

$56.3

$60.5

$60.7

$52.8

(7%)

15%

As of June 30,

Funded Retail Accounts

74,621

78,395

74,621

78,395

(5%)

(5%)

Client Assets

$320.2

$293.1

$320.2

$293.1

9%

9%

Q2 & 1H 2012 Operating Metrics

(1)

(cont.)

23

Note:  Trading volume in billions.  Client assets in millions.

(1)

Definitions for all our operating metrics are available in the appendix to this presentation.

(2)

For periods ending June 30.

(3)

As of June 30.

Q2

1

Half

$357

$341

$760

$726

$97

$442

$207

$910

$455

$783

$967

$1,636

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2011

2012

2011

2012

Total Trading Volume

(2)

Retail

Institutional

65,463

61,746

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2011

2012

Traded Retail Accounts (Last 12 Months)

(2)

78,395

74,621

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2011

2012

Funded Retail Accounts

(3)

$293.1

$320.2

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

2011

2012

Client Assets

(3)

st

Monthly

Operating

Metrics

(1)

24

Note:  Dollars in millions.

(1)

Definitions for all our operating metrics are available in the appendix to this presentation.

(2)

As of period ended.

(3)

For period ended.

Funded

New Retail

Client

Month

Retail Accts.

(2)

Accounts

(3)

Assets

(2)

Jul 2011

78,082

2,350

$283.4

Aug 2011

77,140

2,886

303.7

Sep 2011

77,013

2,616

286.4

Oct 2011

76,496

2,372

311.8

Nov 2011

76,647

2,330

319.3

Dec 2011

76,485

2,195

310.4

Jan 2012

76,847

2,145

313.6

Feb 2012

75,904

2,371

320.2

Mar 2012

73,844

2,356

325.9

Apr 2012

73,996

2,260

332.4

May 2012

74,452

2,463

300.5

June 2012

74,621

2,139

320.2

Quarterly Operating Metrics

(1)

25

Note: For period ended.  Volume in billions.  Net deposits in millions.

(1)

Definitions for all our operating metrics are available in the appendix to this presentation.

Volume

Traded Retail

Quarter

Retail

Institutional

Accts. (Period)

Trades

Q3 11

$447.9

$260.0

36,927

10,949,800

Q4 11

366.4

386.4

34,019

9,852,951

Q1 12

385.1

468.0

36,041

9,291,722

Q2 12

340.8

442.5

36,660

8,976,010

Definition of Metrics

•

Total Trading Volume

–

Represents the U.S. dollar equivalent of notional amounts traded

•

Traded Retail Accounts

–

Retail accounts who executed a transaction during a given period

•

Funded Retail Accounts

–

Retail accounts who maintain a cash balance

•

Active Account Yield

–

Represents the percentage of average funded retail accounts who executed a transaction during a given period

•

Client Assets

–

Represents amounts due to clients, including customer deposits and unrealized gains or losses arising from open

positions

•

New Retail Accounts

–

The number of customer accounts that have initially opened and funded their accounts

•

Net Deposits from Retail Customers

–

Represents

customers’

deposits

less

withdrawals

for

a

given

period

•

Trades

–

The

number

of

transactions

retail

customers

have

completed

for

a

given

period

•

Retail Trading Revenue per Million

–

The revenue we realize from our forex, CFDs and metals trading activities per one million of U.S. dollar-equivalent

trading volume

•

Excess Net Capital

–

Represents the excess funds held over the regulatory minimum capital requirements, as defined by the regulatory

bodies that regulate our operating subsidiaries

26

2

nd

Quarter 2012

Financial and Operating Results

July 31, 2012