Virtu Financial reports healthy financial results for Q2 2022
US electronic market maker Virtu Financial has reported its fiscal results for the second quarter of 2022, which topped Wall Street expectations for earnings and revenue.
The Nasdaq-listed financial services provider reported second-quarter earnings of $148.9 million on revenue of $604.7 million. Q2 revenue was 36 percent higher from $108.9 million compared to the same quarter of 2021.
Total revenues increased 10.2% for this quarter, compared to $549.0 million for Q2 2021. Net trading income ticked up to $395.9 million from $384.8 million for the same period a year ago.
On an adjusted basis, net income was $129.9 million. Adjusted EBITDA also increased 6.1% to $209.3 million for this quarter, compared to $197.3 million in 2021.Basic and diluted earnings per share were both $0.78, compared to $0.51 and $0.50, respectively, for the same period in 2021.
Virtu makes markets over 25,000 financial instruments, at over 235 venues, in 36 countries worldwide, continuously quoting buy and sell prices for others to trade against, profiting off the bid-offer spread, using high-frequency trading (HFT) strategies.
In 2017, Virtu Financial acquired rival KCG Holdings Inc. for $1.4 billion in cash, as tough market conditions forced high-frequency traders to consolidate and rethink business strategies. The combined entity created a giant HFT firm responsible for around 20 percent of the volume in US equities.
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. Meanwhile, execution services comprise agency-based trading and trading venues, offering execution services in 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.
Virtu Financial made headline last month when it teamed up with Ken Griffin’s Citadel Securities alongside other Wall Street brokers to launch a cryptocurrency trading ecosystem. Fidelity Investments and Charles Schwab are also among the participants developing the combined crypto offering.
The alliance would allow retail brokerages to provide crypto-executions to their consumers. However, the initiative is still in its early development phase and the partners are watching regulatory reactions.
Virtu Financial has been looking to expand its crypto footprint, eyeing a role as a wholesaler for large institutions and brokers. The multibillion-dollar market-making firm has staked out an ambitious roadmap for its involvement in the crypto market. Virtu has been also advocating for crypto firms during meetings with regulators.
The firm has been market-making on top crypto exchanges, including Coinbase and Gemini, for some time and also made markets for financial products tied to crypto.