Please ensure Javascript is enabled for purposes of website accessibility

Virtu Financial Finds More Success in Volatility

By Dave Kovaleski - May 11, 2020 at 12:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The high-frequency trader posted record revenue in Q1.

Virtu Financial (VIRT 1.86%) delivered strong earnings and record revenue in the first quarter, another solid report for a stock that's gained about 50% this year.

Virtu Financial is a high-frequency trading firm that quotes buy and sell prices for stocks, options, and various other securities and profits on the spread. The heightened volatility in the first quarter led to a spike in trading volume, which has, in turn, generated increased revenue.

Total revenue jumped 176% to $1 billion in the first quarter, compared to the same period in 2019. Net trading income accounted for most of that, up 211% to $802 million year over year. 

A man on his cell phone pointing at a computer screen filled with stock market data

Image source: Getty Images

Net income was $388 million in the first quarter, compared to a net loss of $13.6 million in the prior year's first quarter. Last year's quarter was hurt by higher expenses related to the acquisition of Investment Technology Group. Earnings per share in Q1 rose to $1.80 per share, up from a net loss per share of $0.07 in the first quarter of last year.

"Our record performance in the first quarter exemplifies the strength of our business model to handle unprecedented levels of market volumes and volatility and its long-term sustainability throughout all market environments," CEO Doug Cifu said. "While the long-term impact on markets and the global economy is not known, I am confident we will apply what we've learned thus far and emerge even stronger as a company and continue to deliver long term value to our clients and shareholders." 

The firm also posted its highest-ever adjusted EBITDA of $569.7 million in the quarter and had a record adjusted EBITDA Margin of 72.6%.

Further, the fintech company maintained a quarterly cash dividend of $0.24 per share, payable on June 15. 

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Virtu Financial, Inc. Stock Quote
Virtu Financial, Inc.
$25.24 (1.86%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.