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Virtu Financial (VIRT) Q2 Earnings Miss on Lower Volumes
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Virtu Financial, Inc. (VIRT - Free Report) reported second-quarter 2023 adjusted earnings per share (EPS) of 37 cents, which missed the Zacks Consensus Estimate by 7.5%. The bottom line dropped 49.3% year over year.
VIRT’s adjusted net trading income of $278.7 million in the second quarter missed the consensus mark by 4.1%. The top line declined 22% year over year.
The company’s results received a blow from lower pan-European volumes and declining bid offer spreads and retail participation. The results were partially offset by improved interest and dividend income.
Virtu Financial, Inc. Price, Consensus and EPS Surprise
Revenues from commissions, net and technology services declined 19.7% year over year to $109.5 million. The metric missed our estimate of $114.8 million. Interest and dividends income increased more than two-fold year over year in the second quarter to $98 million. The metric surpassed our estimate by 109.9%
Adjusted EBITDA amounted to $122 million, which fell 41.6% from the prior-year quarter. The adjusted EBITDA margin declined to 43.8% from 58.6% a year ago.
Total operating expenses of $471.4 million increased 9.4% from the year-ago figure. VIRT recorded increases in communication and data processing, interest and dividend and financing interest expense. This was partially offset by lower brokerage, exchange and clearance fees, payments for order flow and depreciation and amortization expenses.
Segmental Update
Market Making: The segment reported an adjusted net trading income of $193.2 million, which declined 23.9% from the prior-year figure. The metric missed our estimate by 5.9%. The declining bid offer spreads and participation rate of retail customers affected the quarterly results. Segmental total revenues fell 6.3% to $405.3 million in the second quarter of 2023. However, the metric beat our estimate by 5.4%.
Execution Services: The adjusted net trading income of the segment declined 17.5% to $85.5 million in the second quarter. Total revenues declined 16.7% in the quarter under review to $109.1 million. However, the metric beat our estimate by 2.5%. The results were affected by declining pan-European volumes in the second quarter.
Financial Update (as of Jun 30, 2023)
Virtu Financial exited the second quarter with cash and cash equivalents of $698.7 million, which declined from the 2022-end level of $982 million. Total assets of $13,389.7 million increased from $10,583 million at 2022-end.
Long-term borrowings, net, amounted to $1,778.3 million, down from the 2022-end figure of $1,796 million. Short-term borrowings, net, at the second-quarter end were $111.7 million, up from the 2022-end level of $4 million.
Total equity was $1,552.3 million, down from $1,651.4 at 2022-end.
Share Repurchase and Dividend Update
In the quarter under review, Virtu Financial (as part of its share repurchase program) bought back shares worth $42 million. It had $203.3 million remaining under its share buyback authorization for future purchases of Class A Common Stock shares and Virtu Financial Units.
Zacks Rank & Stocks to Consider
Virtu Financial currently has a Zacks Rank #3 (Hold).
WisdomTree’s bottom line outpaced estimates in one of the trailing four quarters, met twice and missed once. The average earnings surprise is 6.9%.
The Zacks Consensus Estimate for WT’s 2023 earnings indicates a 46.2% rise, while the same for revenues suggests 15.7% growth from the respective prior-year reported figures.
The bottom line of Moody’s Corporation outpaced estimates in three of the trailing four quarters, while it missed once, the average surprise being 9.3%.
The Zacks Consensus Estimate for MCO’s 2023 EPS is pegged at $9.92, while the same for revenues is pegged at $5.9 billion for 2023. The consensus mark for MCO’s 2023 earnings has moved 1.2% north in the past 30 days.
The bottom line of StoneX Group outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 20.5%. The consensus mark for SNEX’s 2023 earnings has moved 0.8% north in the past 30 days.
The Zacks Consensus Estimate for SNEX’s 2023 earnings indicates a 3.4% rise, while the same for revenues suggests 38.7% growth from the respective prior-year reported figures.
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Virtu Financial (VIRT) Q2 Earnings Miss on Lower Volumes
Virtu Financial, Inc. (VIRT - Free Report) reported second-quarter 2023 adjusted earnings per share (EPS) of 37 cents, which missed the Zacks Consensus Estimate by 7.5%. The bottom line dropped 49.3% year over year.
VIRT’s adjusted net trading income of $278.7 million in the second quarter missed the consensus mark by 4.1%. The top line declined 22% year over year.
The company’s results received a blow from lower pan-European volumes and declining bid offer spreads and retail participation. The results were partially offset by improved interest and dividend income.
Virtu Financial, Inc. Price, Consensus and EPS Surprise
Virtu Financial, Inc. price-consensus-eps-surprise-chart | Virtu Financial, Inc. Quote
Q2 Performance
Revenues from commissions, net and technology services declined 19.7% year over year to $109.5 million. The metric missed our estimate of $114.8 million. Interest and dividends income increased more than two-fold year over year in the second quarter to $98 million. The metric surpassed our estimate by 109.9%
Adjusted EBITDA amounted to $122 million, which fell 41.6% from the prior-year quarter. The adjusted EBITDA margin declined to 43.8% from 58.6% a year ago.
Total operating expenses of $471.4 million increased 9.4% from the year-ago figure. VIRT recorded increases in communication and data processing, interest and dividend and financing interest expense. This was partially offset by lower brokerage, exchange and clearance fees, payments for order flow and depreciation and amortization expenses.
Segmental Update
Market Making: The segment reported an adjusted net trading income of $193.2 million, which declined 23.9% from the prior-year figure. The metric missed our estimate by 5.9%. The declining bid offer spreads and participation rate of retail customers affected the quarterly results. Segmental total revenues fell 6.3% to $405.3 million in the second quarter of 2023. However, the metric beat our estimate by 5.4%.
Execution Services: The adjusted net trading income of the segment declined 17.5% to $85.5 million in the second quarter. Total revenues declined 16.7% in the quarter under review to $109.1 million. However, the metric beat our estimate by 2.5%. The results were affected by declining pan-European volumes in the second quarter.
Financial Update (as of Jun 30, 2023)
Virtu Financial exited the second quarter with cash and cash equivalents of $698.7 million, which declined from the 2022-end level of $982 million. Total assets of $13,389.7 million increased from $10,583 million at 2022-end.
Long-term borrowings, net, amounted to $1,778.3 million, down from the 2022-end figure of $1,796 million. Short-term borrowings, net, at the second-quarter end were $111.7 million, up from the 2022-end level of $4 million.
Total equity was $1,552.3 million, down from $1,651.4 at 2022-end.
Share Repurchase and Dividend Update
In the quarter under review, Virtu Financial (as part of its share repurchase program) bought back shares worth $42 million. It had $203.3 million remaining under its share buyback authorization for future purchases of Class A Common Stock shares and Virtu Financial Units.
Zacks Rank & Stocks to Consider
Virtu Financial currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Finance space are WisdomTree, Inc. (WT - Free Report) , Moody's Corporation (MCO - Free Report) and StoneX Group Inc. (SNEX - Free Report) . Each of these companies presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
WisdomTree’s bottom line outpaced estimates in one of the trailing four quarters, met twice and missed once. The average earnings surprise is 6.9%.
The Zacks Consensus Estimate for WT’s 2023 earnings indicates a 46.2% rise, while the same for revenues suggests 15.7% growth from the respective prior-year reported figures.
The bottom line of Moody’s Corporation outpaced estimates in three of the trailing four quarters, while it missed once, the average surprise being 9.3%.
The Zacks Consensus Estimate for MCO’s 2023 EPS is pegged at $9.92, while the same for revenues is pegged at $5.9 billion for 2023. The consensus mark for MCO’s 2023 earnings has moved 1.2% north in the past 30 days.
The bottom line of StoneX Group outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 20.5%. The consensus mark for SNEX’s 2023 earnings has moved 0.8% north in the past 30 days.
The Zacks Consensus Estimate for SNEX’s 2023 earnings indicates a 3.4% rise, while the same for revenues suggests 38.7% growth from the respective prior-year reported figures.