Virtu Financial Q4 Earnings Beat Estimates on Strong Market Making

Virtu Financial, Inc. VIRT reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.14, which outpaced the Zacks Consensus Estimate by 32.6%. The bottom line jumped more than four-fold year over year.See the Zacks Earnings Calendar to stay ahead of market-making news. Adjusted net trading income improved more than 75% year over year to $457.7 million in the quarter under review. It beat the consensus estimate by 14.7%.The strong fourth-quarter results were aided by a strong revenue contribution from the Market Making segment and Execution Services segment. Higher net trading income and commissions supported these two segments. However, the upside was partly offset by an elevated overall expense level.Virtu Financial, Inc. Price, Consensus and EPS Surprise Virtu Financial, Inc. price-consensus-eps-surprise-chart | Virtu Financial, Inc. QuoteQ4 Performance DetailsRevenues from commissions, net and technology services amounted to $140.5 million, rising 22.8% year over year. The metric beat the consensus mark and our model estimate of $127.4 million. Interest and dividend income of $123.8 million fell from $154.7 million a year ago and fell short of the consensus mark and our estimate of $146 million.Adjusted EBITDA jumped to $283.5 million in the quarter under review from $99 million a year ago and surpassed our model estimate of $175.8 million. Adjusted EBITDA margin of 57.5% improved 2,400 basis points year over year.Total operating expenses increased to $631.7 million from $519.2 million in the year-ago quarter, higher than our estimate of $526.1 million. The year-over-year rise was due to higher net brokerage, exchange, clearance fees and payments for order flow, employee compensation and payroll taxes, and operations and administrative.Q4 Segmental UpdateMarket Making: Adjusted net trading income was $347.9 million in the fourth quarter, up 107.7% year over year and surpassed our estimate of $236.9 million. The segment’s revenues rose 67.5% year over year to $706.5 million, higher than the Zacks Consensus Estimate and our estimate of $502.6 million.Execution Services: The unit recorded an adjusted net trading income of $109.8 million in the quarter under review, which grew 17.6% year over year. Also, the metric beat our estimate of $101.5 million. Total revenues of $136.7 million grew 28.3% year over year and surpassed the consensus mark and our estimate of $127.4 million.Financial Update (as of Dec. 31, 2024)Virtu Financial exited the fourth quarter with cash and cash equivalents of $872.5 million, which rose from the 2023-end level of $820.4 million. Total assets of $15.3 billion increased from the $14.5 billion figure at 2023-end.Long-term borrowings, net, amounted to $1.74 billion, up marginally from the 2023-end level of $1.73 billion. Short-term borrowings totaled $38.5 million.Total equity of $1.49 billion increased from the $1.41 billion level at 2023-end.Share Repurchase and Dividend UpdateAs part of the share repurchase program, Virtu Financial bought back 1.7 million shares worth $57.1 million in the fourth quarter of 2024. It had a leftover capacity of $423.8 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 March 17, 2024, to shareholders of record as of Feb. 28.VIRT’s Zacks RankVIRT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Performance of Other Finance Sector PlayersHere are some other Finance sector players that have reported fourth-quarter results so far. The bottom-line results of Discover Financial Services DFS, American Express Company AXP and Synchrony Financial SYF beat the respective Zacks Consensus Estimate.Discover Financial reported fourth-quarter 2024 adjusted EPS of $5.11, which comfortably beat the Zacks Consensus Estimate of $3.17. Also, the bottom line jumped more than three-fold year over year. Discover Financial's revenues, net of interest expenses, rose 13.9% year over year to $4.8 billion. The top line also beat the consensus mark by 8.4%.American Express reported fourth-quarter 2024 EPS of $3.04, which beat the Zacks Consensus Estimate by a whisker. The bottom line climbed 16% year over year. Total revenues net of interest expense amounted to $17.2 billion, which also beat the Zacks Consensus Estimate by a whisker. The top line improved 8.7% year over year in the quarter under review.Synchrony Financial reported fourth-quarter 2024 adjusted EPS of $1.91, which beat the Zacks Consensus Estimate of $1.90. The bottom line also increased from $1.03 per share a year ago. Net interest income improved 2.7% year over year to $4.6 billion in the fourth quarter. However, it missed the consensus mark by a whisker.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 Discover Financial Services (DFS): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report Synchrony Financial (SYF): Free Stock Analysis Report Virtu Financial, Inc. 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