Virtu Financial Reports 55% YoY Decline in Revenues for Q1

Tough market conditions and the acquisition of ITG dented the market maker's earnings

Market maker Virtu Financial published its financial results for the first quarter of 2015 this Friday.

The New York-based firm saw a drastic decline in revenues compared to the same period last year.

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According to results released by the firm, Virtu saw total revenues of $363 million in the first quarter of this year.

That was a 55.5 percent decrease on last year when the trading company reported revenues of $815.1 million.

That decline was down to significant decreases in Virtu’s execution services and market making business.

With regard to the latter, Virtu reported total revenues of $279.2 million for the last quarter, down from $432.5 million in the same period last year.

Execution services-based revenue saw a more precipitous decline, with revenues falling from $383.8 million in the first quarter of 2018 to $83.5 million for this year.

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As a result, the firm suffered losses of $13.6 million in the first quarter of 2019. Last year the market maker made $410 million in profit.

Not all bad

Those figures are, however, slightly misleading.

For one thing, the costs of Virtu’s $1 billion acquisition of Investment Technology Group (ITG) – which was completed on March 1st of this year – had to be integrated into its financial results.

Conversely, last year’s results were skewed by Virtu’s sale of BondPoint. The company made approximately $337.6 million from that deal.

Volatility has also been extremely low thus far in 2019, meaning that trading firms, both institutional and retail, have been reporting lower revenues.

That was something Douglas Cifu, Virtu’s chief executive officer, hinted at as he commented on his firm’s first quarter results.

“Our businesses performed well given the reduced opportunity set in the first quarter of 2019 and our execution services results were quite strong relative to the market environment,” said Cifu.

“Since closing the ITG acquisition on March 1st, we have worked diligently on integrating the comprehensive buyside and sellside solutions to serve our clients.”

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