Virtu Financial (NASDAQ: VIRT), an electronic market maker, has announced its financial results for the first quarter of 2023. The company reported a total revenue of $610.5 million, increasing by 22.6% compared to the previous three-month period. However, the year-over-year (YoY) metrics were 12.9% lower.

Virtu Financial Reports Higher Revenue and Income in Q1 2023

In the first quarter of 2023, Virtu Financial generated a net trading income of $411.5 million. The company's adjusted net trading income amounted to $373.1 million, and the adjusted EBITDA was $207.5 million, with an adjusted EBITDA margin of 55.6%. Furthermore, under the Share Repurchase Program, the company conducted share buybacks totaling $75.6 million, or 3.9 million shares.

When comparing Virtu Financials' performance in Q1 2023 to Q4 2022, the company experienced an increase of 31.3% in net trading revenue. The adjusted net trading income per day rose by 38%, which comprised an increase of 53% in market-making adjusted net trading income per day and an increase of 8% in execution services adjusted net trading income per day.

As of 31 March 2023, Virtu Financial reported having $809.2 million in cash, cash equivalents, and restricted cash. The company's total long-term debt outstanding in an aggregate principal amount was $1,808.3 million.

In addition, the Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share.

Worse Results for Virtu than a Year Ago

Although the quarterly results were significantly better compared to Q4 2022, the same period a year earlier showed an evident decline in total revenue and net trading income. Total revenue in Q1 2022 came in at $701.3 million, mainly due to better results in the Market Making division, which amounted to $545.56 million compared to $489 million last quarter.

Adjusted net trading income ranked at more than $505 million a year earlier, nearly double the currently reported results. On the other hand, the final net income was almost $200 million compared to the $110 million reported today. Thus, trading income contracted 21% YoY and total revenues reduced 12.9%.

Three months ago, Virtu presented its financial report for the fourth quarter and the entire year of 2022, also showing lower revenues and net trading income compared to the same period a year earlier.

In the fourth quarter, the financial services and products provider saw a decrease of 43.6% YoY in total revenue, dropping from $485.6 million to $274.1 million. In addition, the company experienced a quarterly decline, with revenues falling from $561 million in the third quarter. The weak revenue performance had a negative impact on the net income, which came in at $39.6 million in Q4 2022, compared to $186 million in the same quarter of the previous year. In contrast, the net income in Q3 2022 was $79.9 million.

In addition, the company has launched a lawsuit against the Securities and Exchange Commission (SEC), which oversees the securities market in the United States. The lawsuit is based on the Freedom of Information Act (FOIA). It aims to compel the federal regulator to provide information about its rulemaking process and the interaction of 'interested parties' with SEC's Chair, Gary Gensler.