VIRT - Virtu Announces Third Quarter 2023 Results | Benzinga
NEW YORK, Nov. 02, 2023 (GLOBE NEWSWIRE) -- Virtu Financial, Inc. (NASDAQ:VIRT), a leading provider of financial services and products that leverages cutting edge technology to deliver innovative, transparent trading solutions to its clients and liquidity to the global markets, today reported results for the third quarter ended September 30, 2023.
Third Quarter 2023:
- Net income of $117.6 million; Normalized Adjusted Net Income1 of $74.7 million
- Basic and diluted earnings per share of $0.63; Normalized Adjusted EPS1 of $0.45
- Total revenues of $630.2 million; Trading income, net, of $316.1 million; Net income Margin of 18.7%2
- Adjusted Net Trading Income1 of $298.0 million
- Adjusted EBITDA1 of $139.5 million; Adjusted EBITDA Margin1 of 46.8%
- Share buybacks of $48.8 million, or 2.7 million shares, under the Share Repurchase Program3
The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share. This dividend is payable on December 15, 2023 to shareholders of record as of December 1, 2023.
Note 1: Non-GAAP financial measures. Please see "Non-GAAP Financial Measures and Other Items" for more information.
Note 2: Calculated by dividing Net income by Total revenue
Note 3: Shares repurchased calculated on a settlement date basis.
Financial Results
Third Quarter 2023:
Total revenues increased 12.3% to $630.2 million for this quarter, compared to $561.0 million for the same period in 2022. Trading income, net, decreased to $316.1 million for the quarter compared to $397.4 million for the same period in 2022. Other, net increased to $76.1 million for this quarter compared to ($1.0) million for the same period in 2022. Net income totaled $117.6 million for this quarter, compared to net income of $79.9 million in the prior year quarter.
Basic and diluted earnings per share for this quarter were $0.63, compared to a basic earnings per share of $0.38 and diluted earnings per share of $0.37, for the same period in 2022.
Adjusted Net Trading Income decreased 10.0% to $298.0 million for this quarter, compared to $331.1 million for the same period in 2022. Adjusted EBITDA decreased 22.7% to $139.5 million for this quarter, compared to $180.6 million for the same period in 2022. Each of these metrics excludes Other, net.
Normalized Adjusted Net Income, removing one-time and non-cash items, decreased 30.0% to $74.7 million for this quarter, compared to $106.8 million for the same period in 2022.
Assuming all non-controlling interests had been exchanged for common stock, and the Company's Normalized Adjusted Net Income before income taxes was subject to corporation taxes, Normalized Adjusted EPS was $0.45 for this quarter, compared to $0.61 for the same period in 2022.
Operating Segment Information
The Company has two operating segments: Market Making and Execution Services; and one non-operating segment: Corporate.
Market Making principally consists of market making in the cash, futures and options markets across global equities, fixed income, currencies and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions.
Execution Services comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers. The Company also provides proprietary technology and infrastructure, workflow technology, and trading analytics services to select third parties. The segment also includes the results of the Company's capital markets business, in which the Company acts as an agent for issuers in connection with at-the-market offerings and buyback programs.
Corporate contains the Company's investments, principally in strategic trading-related opportunities, and maintains corporate overhead expenses.
The following tables show the trading income, net, total revenues and Adjusted Net Trading Income by segment for the three and nine months ended September 30, 2023 and 2022.
Total revenues by segment
(in thousands, unaudited)
| Three Months Ended September 30, 2023 |
| Three Months Ended September 30, 2022 |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Trading income, net |
| $ |
| 310,523 |
| $ |
| 5,562 |
| $ |
| — |
| $ |
| 316,085 |
| $ |
| 392,496 |
| $ |
| 4,887 |
| $ |
| — |
| $ |
| 397,383 |
| Commissions, net and technology services |
| 6,343 |
| 103,933 |
| — |
| 110,276 |
| 10,687 |
| 110,299 |
| — |
| 120,986 |
| Interest and dividends income |
| 124,803 |
| 2,890 |
| — |
| 127,693 |
| 43,446 |
| 185 |
| — |
| 43,631 |
| Other, net |
| 75,682 |
| 68 |
| 360 |
| 76,110 |
| 1,257 |
| 4,228 |
| (6,441 |
| ) |
| (956 |
| ) |
| Total Revenues |
| $ |
| 517,351 |
| $ |
| 112,453 |
| $ |
| 360 |
| $ |
| 630,164 |
| $ |
| 447,886 |
| $ |
| 119,599 |
| $ |
| (6,441 |
| ) |
| $ |
| 561,044 |
| Nine Months Ended September 30, 2023 |
| Nine Months Ended September 30, 2022 |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Trading income, net |
| $ |
| 1,021,179 |
| $ |
| 13,585 |
| $ |
| — |
| $ |
| 1,034,764 |
| $ |
| 1,299,117 |
| $ |
| 16,501 |
| $ |
| — |
| $ |
| 1,315,618 |
| Commissions, net and technology services |
| 22,677 |
| 318,546 |
| — |
| 341,223 |
| 30,881 |
| 381,100 |
| — |
| 411,981 |
| Interest and dividends income |
| 300,086 |
| 7,830 |
| — |
| 307,916 |
| 95,221 |
| 214 |
| — |
| 95,435 |
| Other, net |
| 77,580 |
| 84 |
| (4,171 |
| ) |
| 73,493 |
| 1,825 |
| 4,525 |
| 37,660 |
| 44,010 |
| Total Revenues |
| $ |
| 1,421,522 |
| $ |
| 340,045 |
| $ |
| (4,171 |
| ) |
| $ |
| 1,757,396 |
| $ |
| 1,427,044 |
| $ |
| 402,340 |
| $ |
| 37,660 |
| $ |
| 1,867,044 |
Reconciliation of trading income, net to Adjusted Net Trading Income by operating segment
(in thousands, unaudited)
| Three Months Ended September 30, 2023 |
| Three Months Ended September 30, 2022 |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Trading income, net |
| $ |
| 310,523 |
| $ |
| 5,562 |
| $ |
| — |
| $ |
| 316,085 |
| $ |
| 392,496 |
| $ |
| 4,887 |
| $ |
| — |
| $ |
| 397,383 |
| Commissions, net and technology services |
| 6,343 |
| 103,933 |
| — |
| 110,276 |
| 10,687 |
| 110,299 |
| — |
| 120,986 |
| Interest and dividends income |
| 124,803 |
| 2,890 |
| — |
| 127,693 |
| 43,446 |
| 185 |
| — |
| 43,631 |
| Brokerage, exchange, clearance fees and payments for order flow, net |
| (101,077 |
| ) |
| (22,168 |
| ) |
| — |
| (123,245 |
| ) |
| (147,346 |
| ) |
| (21,523 |
| ) |
| — |
| (168,869 |
| ) |
| Interest and dividends expense |
| (132,523 |
| ) |
| (279 |
| ) |
| — |
| (132,802 |
| ) |
| (61,019 |
| ) |
| (970 |
| ) |
| — |
| (61,989 |
| ) |
| Adjusted Net Trading Income |
| $ |
| 208,069 |
| $ |
| 89,938 |
| $ |
| — |
| $ |
| 298,007 |
| $ |
| 238,264 |
| $ |
| 92,878 |
| $ |
| — |
| $ |
| 331,142 |
| Nine Months Ended September 30, 2023 |
| Nine Months Ended September 30, 2022 |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Market Making |
| Execution Services |
| Corporate |
| Total |
| Trading income, net |
| $ |
| 1,021,179 |
| $ |
| 13,585 |
| $ |
| — |
| $ |
| 1,034,764 |
| $ |
| 1,299,117 |
| $ |
| 16,501 |
| $ |
| — |
| $ |
| 1,315,618 |
| Commissions, net and technology services |
| 22,677 |
| 318,546 |
| — |
| 341,223 |
| 30,881 |
| 381,100 |
| — |
| 411,981 |
| Interest and dividends income |
| 300,086 |
| 7,830 |
| — |
| 307,916 |
| 95,221 |
| 214 |
| — |
| 95,435 |
| Brokerage, exchange, clearance fees and payments for order flow, net |
| (323,868 |
| ) |
| (67,370 |
| ) |
| — |
| (391,238 |
| ) |
| (401,982 |
| ) |
| (74,253 |
| ) |
| — |
| (476,235 |
| ) |
| Interest and dividends expense |
| (340,954 |
| ) |
| (1,942 |
| ) |
| — |
| (342,896 |
| ) |
| (149,401 |
| ) |
| (3,842 |
| ) |
| — |
| (153,243 |
| ) |
| Adjusted Net Trading Income |
| $ |
| 679,120 |