Actionable news
0
All posts from Actionable news
Actionable news in VIRT: Virtu Financial Inc,

Virtu Announces First Quarter 2016 Results

Virtu Financial, Inc. VIRT, -4.10% a leading technology-enabled market maker and liquidity provider to the global financial markets, today reported results for the first quarter ended March 31, 2016.

First Quarter Selected Results

First Quarter 2016:

  • Net Income of $51.4 million; Adjusted Net Income* of $58.9 million
  • GAAP Basic EPS of $0.27; Diluted EPS of $0.26; Normalized Adjusted EPS* of $0.31
  • Adjusted Net Trading Income* of $117.3 million
  • Adjusted EBITDA* of $81.1 million; Adjusted EBITDA Margin* of 67.9%
  • Quarterly cash dividend of $0.24 per share payable on June 15, 2016

* Non-GAAP financial measures. Please see "Non-GAAP Financial Measures and Other Items" for more information.

The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share. This dividend is payable on June 15, 2016 to shareholders of record as of June 1, 2016.

"Our business delivered impressive results in the first quarter of 2016 as the overall volume and volatility environment across our operations was generally positive," said Douglas Cifu, Chief Executive Officer of Virtu Financial.

GAAP Financial Results

Total revenues decreased 13.0% to $192.6 million for this quarter, compared to $221.5 million for the same period in 2015. Trading income, net, decreased 12.9% to $186.3 million for this quarter, compared to $213.9 million for the same period in 2015. Net income decreased 33.7% to $51.4 million for this quarter, compared to $77.4 million for the same period in 2015.

GAAP Basic and Diluted EPS for this quarter were $0.27 and $0.26, respectively.

Historical quarterly results from first quarter 2014 to date are available at http://ir.virtu.com.

Business Performance

For the first quarter of 2016, Adjusted Net Trading Income decreased 21.0% to $117.3 million for this quarter, compared to $148.4 million for the same period in 2015. Adjusted Net Income decreased 33.0% to $58.9 million for this quarter, compared to $87.9 million for the same period in 2015. Adjusted EBITDA decreased 23.8% to $81.1 million for this quarter, compared to $106.4 million for the same period in 2015. Assuming all non-controlling interests had been exchanged for common stock, and the Company's Normalized Adjusted Net Income before income taxes was subject to corporation taxation, Normalized Adjusted EPS would be $0.31 for this quarter.

Since our inception, we have sought to broadly diversify our market making across securities, asset classes and geographies, and as a result, for the quarter ended March 31, 2016, we achieved a diverse mix of Adjusted Net Trading Income results, with no one category constituting more than 31.8% of our total Adjusted Net Trading Income. Average daily Adjusted Net Trading Income was approximately $1.923 million for this quarter compared to $2.433 million for the same period in the previous year.

As of March 31, 2016, Virtu was connected to more than 230 unique market venues in 35 countries and made markets in over 12,000 financial instruments.

The following tables show our Adjusted Net Trading Income, average daily Adjusted Net Trading Income and percentage of Adjusted Net Trading Income by category for the three months ended March 31, 2016 and 2015, respectively.

Three Months Ended March 31,
Adjusted Net Trading Income: 2016 % of Total 2015 % of Total % Change
Category (in thousands, except percentages)
Americas Equities $ 37,278 31.8 % $ 29,132 19.6 % 28.0 %
EMEA Equities 13,710 11.7 % 17,399 11.7 % -21.2 %
APAC Equities 12,180 10.4 % 10,923 7.4 % 11.5 %
Global Commodities 30,347 25.9 % 34,654 23.4 % -12.4 %
Global Currencies 20,501 17.5 % 42,167 28.4 % -51.4 %
Options, Fixed Income and Other 8,713 7.4 % 9,198 6.2 % -5.3 %
Unallocated [1] (5,434 ) -4.7 % 4,935 3.3 % NM
Total Adjusted Net Trading Income $ 117,295 100.0 % $ 148,408 100.0 % -21.0 %
Three Months Ended March 31,
Average Daily Adjusted Net Trading Income: 2016 % of Total 2015 % of Total % Change
Category (in thousands, except percentages)
Americas Equities $ 611 31.8 % $ 478 19.6 % 28.0 %
EMEA Equities 225 11.7 % 285 11.7 % -21.2 %
APAC Equities 200 10.4 % 179 7.4 % 11.5 %
Global Commodities 497 25.9 % 568 23.4 % -12.4 %
Global Currencies 336 17.5 % 691 28.4 % -51.4 %
Options, Fixed Income and Other 143 7.4 % 151 6.2 % -5.3 %
Unallocated1 (89 ) -4.7 % 81 3.3 % NM
Total Adjusted Net Trading Income $ 1,923 100.0 % $ 2,433 100.0 % -21.0 %
Three Months Ended March 31,
Selected Market Metrics: 2016 2015 % Change
US Equities Average Daily Volume, in millions [2] 8,552 6,916 23.7 %
US Equities Average Daily Volume, in $ USD billions [2] $ 305.5 $ 285.6 7.0 %
EU Equities Average Daily Volume, in millions [2] 6,673 6,581 1.4 %
EU Equities Average Daily Volume, in EUR EUR billions [2] EUR 53.8 EUR 54.7 -1.6 %
TSE Equities Average Daily Volume, in millions [3] 2,911 2,707 7.5 %
TSE Equities Average Daily Volume, in � JPY billions [3] 2,914 2,807 3.8 %
CME Average Daily Energy Contracts [4] 2,535,521 2,140,644 18.4 %
CME Average Daily FX Contracts [4] 943,974 951,064 -0.7 %
OCC Average Daily Volume, in millions [5] 17.1 16.3 5.0 %
VIX (Average) [6] 20.49 16.57 23.6 %
VIX (High) [6] 27.59 22.39 23.2 %
VIX (Low) [6] 19.34 13.02 48.5 %
Trading Days (US) [7] 61 61
[1] Under our methodology for recording ''trading income, net'' in our condensed consolidated statements of comprehensive income, we recognize
revenues based on the exit price of assets in accordance with applicable U.S. GAAP rules, and when we calculate Adjusted Net Trading
Income for corresponding reporting periods, we start with trading income, net. By contrast, when we calculate Adjusted Net
Trading Income by category, we recognize revenues on a daily basis, and as a result prices used in recognizing revenues may differ.
Because we provide liquidity on a global basis, across asset classes and time zones, the timing of any particular daily Adjusted Net Trading
Income calculation can effectively defer or accelerate revenue from one day to another or one reporting period to another, as the case
may be. We do not allocate any resulting differences based on the timing of revenue recognition.
[2] Source: Bats Global Markets
[3] Source: Tokyo Stock Exchange
[4] Source: Chicago Mercantile Exchange Group
[5] Source: Options Clearing Corporation
[6] Source: Chicago Board Options Exchange
[7] Based on NYSE/NASDAQ trading calendar

Financial Condition

As of March 31, 2016, Virtu had $148.5 million in cash and cash equivalents, and total long-term debt outstanding in an aggregate principal amount of $498.5 million.

Non-GAAP Financial Measures and Other Items

To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), we use the following non-GAAP measures of financial performance:

  • "Adjusted Net Trading Income" which is the amount of revenue we generate from our market making activities, or trading income, net, plus interest and dividends income and expense, net, less direct costs associated with those revenues, including brokerage, exchange and clearance fees, net. Management believes that this measurement is useful for comparing general operating performance from period to period. Although we use Adjusted Net Trading Income as a financial measure to assess the performance of our business, the use of Adjusted Net Trading Income is limited because it does not include certain material costs that are necessary to operate our business. Our presentation of Adjusted Net Trading Income should not be construed as an indication that our future results will be unaffected by revenues or expenses that are not directly associated with our...

More