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Virtu Financial Finds More Success in Volatility

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

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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. 

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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.

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Virtu Financial, Inc. Stock Quote
Virtu Financial, Inc.
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