Virtu Financial (Nasdaq:VIRT), an electronic market maker, has presented its financial report for the fourth quarter and the entire year of 2022, showing lower revenues and net trading income compared to the same period a year earlier.
Virtu Financial Reports Poor End of the Year
The total revenue generated by the financial services and products provider fell 43.6% year-over-year (YoY) to $274.1 in the fourth quarter, compared to $485.6 million reported a year earlier. On a quarterly basis, the company reported a decline, with revenues reaching $561 million in the third quarter. Terrible revenues negatively impacted its net income, which came in at $39.6 million, compared to $186 million in the prior year's quarter. In comparison, the net income in Q3 2022 reached $79.9 million.
"Adjusted Net Trading Income decreased 43.6% to $274.1 million for this quarter, compared to $485.6 million for the same period in 2021. Adjusted EBITDA decreased 61.8% to $125.4 million for this quarter, compared to $328.4 million for the same period in 2021," the company commented in the press release.
16% Lower Revenue in 2022 for Virtu Financial
In the individual quarters of 2022, Virtu Financial reported worsening conditions in almost every single period except for Q2 2022. It translated into an overall bad performance for the past year, with total revenues falling to $2,364.8 million YoY, or by 15.9%, from $2,881.5 million for 2021.
Net profit was almost half the amount in 2022, compared to the $827.2 million reported in 2021, dropping by 43% to $468.3 million. Earnings per share (EPS) were $2.45 compared to the $3.95 EPS reported a year earlier.
"Adjusted Net Trading Income decreased 23.2% to $1,467.6 million for this year, compared to $1,909.9 million for 2021. Adjusted EBITDA decreased 34.0% to $859.1 million for this year, compared to $1,301.2 million for 2021. Normalized Adjusted Net Income decreased 39.3% to $532.5 million for this year, compared to $876.6 million for 2021," the company added.
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Virtu Shares Reflect a Weaker Year
The Nasdaq-listed shares of Virtu Financial mirrored the company's deteriorating conditions in 2022, similar to stocks of many other companies in the technology sector. VIRT was down 30% in the past year and has lost 50% from its historic highs of nearly $39 per share.
Virtu's shares cost $20.49 before Wall Street opened on Thursday, but are presently slipping 3.6% to $19.75 in pre-session trading. These are some of the company's lowest levels since the pandemic lows of March 2020.
Other firms in the tech sector are facing problems as they are forced to lay off their employees. This week, cryptocurrency exchange Luno announced a 35% reduction in its workforce, while Robinhood cut 23% of its full-time positions in August due to challenging market conditions.
The activity of venture capital funds confirms the ongoing crisis in innovative industries. Funding for blockchain projects almost stopped in the second half of 2022, while support for the fintech industry shrank by 30% to $95 billion.
