Virtu Financial Inc (NASDAQ:VIRT) has today reported results for the first quarter ended March 31, 2015.
The firm. which provides liquidity to financial markets participants and is also a market maker in its own right, completed its initial public offering (IPO) on the New York Stock Exchange on April 15 this year, hence this is its first compulsory report containing operating metrics.
First Quarter Financial Highlights*
- GAAP Pre-tax income of $80.2 million, up 60.8%
- Adjusted Net Trading Income** of $148.4 million, up 40.2%
- Adjusted Net Income** of $87.9 million, up 57.3%
- Adjusted EBITDA** of $106.4 million, up 50.2%
- 70.5% Adjusted EBITDA Margin**, up from 65.4%
- Average Daily Adjusted Net Trading Income** of $2.433 million, up 40.2%
* All comparisons versus first quarter 2014.
** Non-GAAP financial measures. Please see “Non-GAAP Financial Measures and Other Items” for more information on these measures.
“We benefited from our diversity and were able to realize $148.4 million in Adjusted Net Trading Income due to increased volumes and volatility across our business, with particularly strong performance in Global Commodities and Global Currencies,” said Douglas Cifu, Chief Executive Officer of Virtu Financial. “Given our fixed cost platform this activity translated into increased profitability and margins. Our Adjusted EBITDA margin was 70.5% for the first quarter.”
GAAP Financial Results
Total revenues increased 27.8% to $221.5 million for this quarter, compared to $173.3 million for the same period in 2014. Trading income, net, increased 29.5% to $213.9 million for this quarter, compared to $165.2 million for the same period in 2014.
GAAP Pre-tax income increased 60.8% to $80.2 million for this quarter, compared to $49.9 million for the same period in 2014. GAAP net income on a non-comprehensive basis, which excludes the effect of changes in the U.S. dollar value of the company’s non-U.S. subsidiaries, increased 58.4% to $77.4 million for this quarter, compared to $48.9 million for the same period in 2014. GAAP net income on a comprehensive basis increased 48.8% to $72.8 million for this quarter, compared to $48.9 million for the same period in 2014.
Adjusted Net Trading Income increased 40.2% to $148.4 million for this quarter, compared to $105.8 million for the same period in 2014. Adjusted Net Income increased 57.3% to $87.9 million for this quarter, compared to $55.8 million for the same period in 2014. Adjusted EBITDA increased 50.2% to $106.4 million for this quarter, compared to $70.8 million for the same period in 2014.
Since the firm’s inception, Virtu states that it has sought to broadly diversify our market making across securities, asset classes and geographies, and as a result, for the quarter ended March 31, 2015, the company achieved a diverse mix of Adjusted Net Trading Income results, with no one category constituting more than 28.4% of total Adjusted Net Trading Income. Daily Adjusted Net Trading Income was approximately $2.433 million for this quarter compared to $1.735 million for the same period in the previous year.
The increase in Adjusted Net Trading Income this quarter, in comparison to the same period in the previous year, was primarily driven by increased market volumes and volatility in the Global Commodities and Global Currencies instruments which the company makes markets in, as well as strong performance from EMEA Equities, Americas Equities, and improved performance from APAC Equities trading relative to the market benchmark volumes.
Adjusted Net Trading Income
Virtu states that its total Adjusted Net Trading Income is the primary metric used by management in evaluating performance, making strategic decisions and allocating resources, and the primary factor influencing Adjusted Net Trading Income is volume levels.
Adjusted Net Trading Income provides an indicator of the performance of our market making activities that is not affected by revenues or expenses that are not directly associated with such activities.
Rather than analyzing these components of its operating results individually, Virtu generally views them on an aggregate basis in the context of Adjusted Net Trading Income.
The following table shows Virtu’s Adjusted Net Trading Income, average daily Adjusted Net Trading Income and percentage of Adjusted Net Trading Income by category for the quarters ended March 31, 2015 and 2014.
For the official announcement from Virtu, click here.