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TradeStation Group, Inc. Q1 2010 Earnings Call Transcript

TradeStation Group, Inc. Q1 2010 Earnings Call Transcript

TradeStation Group, Inc.




Q1 2010 Earnings Call Transcript

April 22, 2010 11:00 am ET


David Fleischman – CFO, VP, Finance and Treasurer

Salomon Sredni – Chairman and CEO


Mike Vinciquerra – BMO Capital Markets

Patrick O'Shaughnessy – Raymond James & Associates

Christopher Donat – Sandler O’Neill & Partners

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Edward Ditmire – Macquarie

Niamh Alexander – Keefe, Bruyette & Woods

Mickey Schleien – Ladenburg Thalmann

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» TradeStation Group, Inc. Q1 2008 Earnings Call Transcript

Good morning. My name is Louisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the TradeStation Group first quarter 2010 conference call.

All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator instructions) Thank you.

Mr David Fleischmann, you may begin your conference.

David Fleischman

Thank you Louise. Good morning and welcome to the TradeStation Group first quarter 2010 conference call.

Today’s conference call is being broadcast live over the Internet and will be archived for the next 90 days at We would like to thank all of our listeners, including shareholders, customers, and analysts for joining us this morning. My name is David Fleischmann, Chief Financial Officer of TradeStation Group. Here with me today is Salomon Sredni, our Chairman of the Board and Chief Executive Officer.

By now, you should have seen our financial results released this morning. If you have not, they are available at our company Web site, in the Investors Relations section. Also, if you are accessing this call through our Web site, please note that some of the prepared comments you are about to hear are accompanied by graphs and charts, and we invite you to view them as you listen.

Before we start, I would like to emphasize that this conference call will include statements that are forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act. All forward-looking statements are based on current expectations and beliefs, and actual results may differ materially from the results suggested in this conference call.

Factors that may cause or contribute to such differences include those set forth in today’s earnings release, other press releases recently issued, and in the company’s filings with the Securities and Exchange Commission. Please note that the company undertakes no obligation to update any information presented in this conference call.

With that said, it is my pleasure to hand over the call to Salomon Sredni, Chairman of the Board and Chief Executive Officer of TradeStation Group.

Salomon Sredni

Thank you David and good morning everyone. Given the current environment, the 2010 first quarter was another one of solid performance by TradeStation. We once again demonstrated the strength, resiliency, and diversity of our product offering, client base and business model.

It is important here to note that over the last eight years, through both good times and bad in our economy and industry, and all of the ups and downs, TradeStation has continued to grow and be profitable. Despite a continuing tough environment, we generated a 7% increase in our brokerage accounts base year over year and reached record client assets of over $2.1 billion.

In a recent USA Today article on the online brokerage industry, TradeStation was recognized as measured by client trading volume as the seventh largest online brokerage firm in the US. And we have managed this eight-year accomplishment over the past several years buying back over 50 million of our own stock, which is continuing while we maintain no debt.

Let me share with you some of the metrics underlying our first quarter results. DARTs in the 2010 first quarter were over 80,000 indicating a robust level of activity during what is obviously a charging environment for the individual trader market. Please keep in perspective that our DARTs were produced by roughly an average of just 46,000 accounts, a powerful indicator of the leverage of our active trader business model. That is obviously a small fraction of the number of accounts our larger competitors require to produce that many trades. We attribute our strong DART results once again to the strength and diversity of our service offering across various asset classes and the robustness of our business model.

As I stated in earlier calls, our customer base is an important part of our overall growth strategy. We grew to over 47,000 accounts in the first quarter, a record total and a 7% increase in the size of our customer base year over year. Since we released the TradeStation brokerage platform in the third quarter of 2001, we have increased our TradeStation customer account base every quarter, 34 consecutive quarters of record total TradeStation brokerage accounts.

Our brokerage account metrics are once again among the very best in the industry. During the 2010 first quarter, on an annualized basis, our average account traded 434 times and produced over $2,650 in revenue, both substantially higher than the resource produced by the majority of our competitors. Again the (inaudible) client base was clearly demonstrated.

At this point, I would like to turn the call back to David who will review our first quarter 2010 performance from a financial perspective, and I will come back after that to review some more points. David?

David Fleischman

Thank you Sal. For those of you listening through our TradeStation Web site, we again invite you to view the graphs and charts accompanying my comments.

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