Virtu Financial's Q1 Earnings Beat on Higher Commissions, Stock Up 2%

Shares of Virtu Financial, Inc. VIRT gained 1.8% since it reported first-quarter 2025 results on April 23. The quarterly results benefited on the back of higher 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. 

VIRT reported first-quarter adjusted earnings per share (EPS) of $1.30, which beat the Zacks Consensus Estimate by 9.2%. The bottom line soared 71.1% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Adjusted net trading income of $497.1 million advanced 35.5% year over year. The top line surpassed the consensus estimate by 4.7%.

Virtu Financial, Inc. Price, Consensus and EPS Surprise

Virtu Financial, Inc. price-consensus-eps-surprise-chart | Virtu Financial, Inc. Quote

Q1 Performance Details

Revenues from commissions, net and technology services rose 27.6% year over year to $151.3 million. The metric outpaced the Zacks Consensus Estimate and our model estimate of $139.2 million. Interest and dividend income of $109.1 million increased 2.9% year over year and beat the consensus mark and our estimate of $104.6 million.

Adjusted EBITDA was $319.9 million, which climbed 57.7% year over year and came higher than our estimate of $246.2 million. Adjusted EBITDA margin improved 910 basis points year over year to 64.4%. 

Total operating expenses escalated 22.1% year over year to $614.1 million, higher than our estimate of $555.6 million. The year-over-year increase was due to higher net brokerage, exchange, clearance fees and payments for order flow, employee compensation and payroll taxes, and interest and dividends expense.

Q1 Segmental Update

Market Making: Adjusted net trading income was $382 million in the first quarter, which climbed 39.6% year over year and outpaced our estimate of $303.2 million. The unit’s revenues climbed 32.7% year over year to $691.2 million, higher than the Zacks Consensus Estimate and our estimate of $588.5 million.

Execution Services: The unit recorded an adjusted net trading income of $115.1 million in the quarter under review, which advanced 23.5% year over year and surpassed our estimate of $111 million. Total revenues of $141 million rose 19.7% year over year and beat the consensus mark and our estimate of $134.7 million.

Financial Update (as of March 31, 2025)

Virtu Financial exited the first quarter with cash and cash equivalents of $723.7 million, which tumbled 17.1% from the 2024-end level. Total assets of $17.5 billion increased 14.2% 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 $112.1 million.

Total equity of $1.6 billion rose 5% from the 2024-end level.

Share Repurchase and Dividend Update

Virtu Financial bought back 1.3 million shares worth $48.1 million in the first quarter of 2025. It had a leftover capacity of $373.8 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 June 16, 2025, to shareholders of record as of May 30.

VIRT’s Zacks Rank

Virtu Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Finance Sector Releases

Of the other Finance sector players that have reported first-quarter results so far, the bottom-line results of American Express Company AXP, State Street Corporation STT and Synchrony Financial SYF beat the respective Zacks Consensus Estimate.

American Express reported first-quarter 2025 EPS of $3.64, which beat the Zacks Consensus Estimate by 5.5%. The bottom line climbed 9% year over year. Total revenues, net of interest expense, amounted to $16.97 billion, which missed the consensus estimate by 0.2%. The top line improved 7% year over year. Network volumes of $439.6 billion rose 5% year over year in the first quarter. Total interest income of $6.1 billion increased 6% year over year and beat the consensus mark by 1%. 

The U.S. Consumer Services segment’s pre-tax income of $1.7 billion improved 7% year over year in the first quarter. Total revenues, net of interest expenses, climbed 10% year over year to $8.2 billion. The Commercial Services segment recorded a pre-tax income of $836 million, which fell 5% year over year. The International Card Services segment reported a pre-tax income of $381 million, which jumped 51% year over year. Total revenues, net of interest expense, improved 8% year over year to $2.9 billion. 

State Street’s first-quarter 2025 earnings of $2.04 per share surpassed the Zacks Consensus Estimate of $1.98. The bottom line also increased 20.7% from the prior-year quarter. Net income available to common shareholders was $644 million, up 39.1% from the year-ago quarter. Total quarterly revenues of $3.28 billion increased 4.7% year over year. However, the top line missed the Zacks Consensus Estimate of $3.30 billion. NII was $714 million, down marginally year over year. 

The net interest margin (NIM) contracted 13 basis points year over year to 1%. Total fee revenues increased 6.1% year over year to $2.66 billion. Non-interest expenses were $2.45 billion, down 2.5% from the prior-year quarter. Excluding one-time costs incurred in last year's quarter, adjusted expenses rose 2.8%. Provision for credit losses was $12 million, down 55.6%. The Common Equity Tier 1 ratio was 11% as of March 31, 2025, compared with 11.1% in the corresponding period of 2024. AUM was $4.67 trillion, up 8.5% year over year, 

Synchrony Financial’s first-quarter 2025 adjusted EPS of $1.89 outpaced the Zacks Consensus Estimate by 16%. However, the bottom line declined 39.8% year over year.  Net interest income was $4.5 billion, which inched up 1.3% year over year. However, it missed the consensus mark by 1.8%. Retailer share arrangements of Synchrony advanced 17% year over year to $895 million in the first quarter. Total loan receivables of $99.6 billion slipped 2% year over year. Total deposits dipped 0.1% year over year to $83.4 billion.

Provision for credit losses was $1.5 billion, which tumbled 20.9% year over year. Synchrony’s purchase volume fell 4% year over year to $40.7 billion. Interest and fees on loans totaled $5.3 billion, which remained relatively flat year over year. Net interest margin improved 19 bps year over year to 14.74% in the first quarter. Average active accounts of 69.3 million slipped 3% year over year. Home & Auto period-end loan receivables decreased 6.6% year over year in the first quarter, while Digital period-end loan receivables inched up 0.1% year over year. 

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