It has been about a month since the last earnings report for Virtu Financial (VIRT). Shares have lost about 4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Virtu Financial due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Virtu Financial, Inc. before we dive into how investors and analysts have reacted as of late.
Virtu Financial's Q2 Earnings Beat Estimates on Strong Market Making
Virtu Financial reported second-quarter adjusted earnings per share (EPS) of $1.53, which beat the Zacks Consensus Estimate by 12.5%. The bottom line soared 84.3% year over year.
Adjusted net trading income of $567.7 million advanced 47.4% year over year. The top line surpassed the consensus estimate by 9.4%.
The strong quarterly results benefited from the improved commissions and technology services revenues. Strong performance in both the Market Making and Execution Services segments, driven by increased trading activity, also contributed to the upside. However, the upside was partly offset by an elevated expense level.
Virtu Financial’s Q2 Performance Details
Revenues from commissions, net and technology services rose 22% year over year to $153.9 million. The metric beat the Zacks Consensus Estimate and our model estimate of $144.1 million. Interest and dividend income of $128.4 million increased 19.9% year over year and beat the consensus mark and our estimate of $109.4 million.
Adjusted EBITDA was $369.4 million, which climbed 69.8% year over year and came higher than our estimate of $234.2 million. Adjusted EBITDA margin improved 860 basis points year over year to 65.1%.
Total operating expenses escalated 21.4% year over year to $652.6 million, higher than our estimate of $584.3 million. The year-over-year increase was due to higher net brokerage, exchange and clearance fees, payments for order flow, communication and data processing costs, employee compensation and payroll taxes, as well as interest and dividends expense.
Q2 Segmental Update
Market Making: Adjusted net trading income was $451.5 million in the second quarter, which climbed 58.1% year over year and topped our estimate of $307.9 million. The unit’s revenues climbed 38.1% year over year to $786.6 million, higher than the Zacks Consensus Estimate and our estimate of $593.3 million.
Execution Services: The unit recorded an adjusted net trading income of $116.3 million in the quarter under review, which advanced 16.8% year over year and surpassed our estimate of $104.6 million. Total revenues of $214.5 million rose 68.8% year over year and beat the consensus mark and our estimate of $133.2 million.
Financial Update (As of June 30, 2025)
Virtu Financial exited the second quarter with cash and cash equivalents of $752.1 million, which tumbled 13.8% from the 2024-end level. Total assets of $19.3 billion increased 25.5% from the figure at 2024-end.
Long-term borrowings, net, amounted to $1.7 billion, which inched up marginally from the figure as of Dec. 31, 2024. Short-term borrowings totaled $251.8 million.
Total equity of $1.6 billion rose 9.8% from the 2024-end level.
Share Repurchase & Dividend Update
Virtu Financial bought back 1.7 million shares worth $66.3 million in the second quarter of 2025. It had a leftover capacity of $302.8 million under its buyback authorization for future purchases.
VIRT announced a cash dividend of 24 cents per share. The dividend will be paid out on Sept. 15, 2025, to its shareholders of record as of Sept. 1.
How Have Estimates Been Moving Since Then?
Investors have witnessed a upward trend in fresh estimates over the past two months.
VGM Scores
At this time, Virtu Financial has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Virtu Financial has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Virtu Financial is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, SoFi Technologies, Inc. (SOFI), a stock from the same industry, has gained 15.3%. The company reported its results for the quarter ended June 2025 more than a month ago.
SoFi Technologies reported revenues of $858.23 million in the last reported quarter, representing a year-over-year change of +43.8%. EPS of $0.08 for the same period compares with $0.01 a year ago.
For the current quarter, SoFi Technologies is expected to post earnings of $0.08 per share, indicating a change of +60% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for SoFi Technologies. Also, the stock has a VGM Score of F.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Virtu Financial, Inc. (VIRT): Free Stock Analysis Report SoFi Technologies, Inc. (SOFI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
