Virtu Ends Q1 with Poor Trading Demand, Revenue Drops 31%

Virtu Financial Inc. (Nasdaq: VIRT), an electronic market maker, released its first-quarter 2022 financials on Thursday, reporting a 30.7 percent decline in its total revenue. The overall figure came in at $701.3 million, which is much lower than the $1.01 billion generated in Q1 of the previous year.

The company highlighted dominating lower trading volume in the three months across the US capital markets as the reason for the slump in its revenue. It has been experiencing lower demand for its services for several quarters.

Virtu further detailed that its trading income declined by 35.7 percent to $522.3 million. From commissions and technology services, it netted $154.6 million, which is 19.3 percent lower than the previous year.

The company has two operating segments: market-making and execution services. While market-making brought in most of the revenue, execution services brought in $151.7 million.

Earnings Shrink

With the declining revenue, the company reported a net income of $199.9 million compared to $409.2 million generated in the prior year's quarter. It was a yearly decline of more than 51 percent. The normalized adjusted figure came in at $231.8 million.

The EBITDA for the three months came in at $322.6 million, which is lower than Q1 of 2021’s $545.8 million. The adjusted figure was $343.7 million, which was over 39 percent lower.

Virtu’s basic and diluted earnings per share for the quarter were at $0.99 and $0.98, respectively, while the normalized adjusted EPS was at $1.27.

Meanwhile, the company is in the middle of a major share buyback program. It already repurchased 25.2 million ordinary shares since the commencement of the program in November 2020. It still has around $488.4 million in the allocated proceeds left to continue the program.