Highlights

Flow Traders recorded Net Trading Income of €79.5m and Total Income of €76.2m in 2Q24, compared to €49.5m and €51.4m, respectively, in 2Q23.

Flow Traders’ ETP Value Traded increased 4% in 2Q24 when compared to the same period last year.

Total Operating Expenses were €55.2m in 2Q24, compared to €48.2m in 2Q23, with Fixed Operating Expenses of €44.9m in the quarter, compared to €45.0m in 2Q23 (including one-off expenses).

EBITDA was €21.1m in 2Q24, generating an EBITDA margin of 28%, compared to €3.2m and 6%, respectively, in 2Q23.

Net Profit was €12.8m in 2Q24, yielding a basic EPS of €0.30, compared to a Net Loss of -€4.3m and EPS of -€0.10 in 2Q23.

Trading capital stood at €624m at the end of 2Q24 and generated a 56% return on trading capital1 , compared to €609m and 52% in 1Q24.

Shareholders’ equity was €635m at the end of 2Q24, compared to €631m at the end of 1Q24.

Flow Traders employed 635 FTEs at the end of 2Q24, compared to 633 at the end of 1Q24.

Flow Traders has initiated a multi-layered trading capital expansion plan including a revision of its dividend policy.

Market Environment

Europe

Equity trading volumes in the quarter increased both year-over-year and quarter-over-quarter but remain below the levels seen in 2021 and 2022. Market volatility improved slightly this quarter compared to the prior quarter but remains below the same period a year ago and well below the levels seen in 2021 and 2022. Fixed Income trading volumes increased year-over-year but were flat-to-down on a quarter-onquarter basis depending on the MTF platform.

Americas

Equity trading volumes in the U.S. were mixed as NYSE saw declines both on a year-over-year and quarter-on-quarter basis, while Nasdaq saw a slight increase both on a year-over-year and quarteron-quarter basis. Market volatility in the U.S. was similar to Europe as the VIX saw a slight increase quarter-on-quarter but remains below the same period a year ago and well below the levels seen in 2021 and 2022. Fixed Income trading volumes in the U.S. were similar to Europe, increasing year-over-year but declined on a quarter-on-quarter basis. Market volatility declined both year-over-year and quarteron-quarter, and remains well below the levels seen in 2022.

Asia

Equity trading volumes in Asia were mixed across the region. Trading volumes declined on the Hong Kong and Tokyo Stock Exchanges both year-over-year and quarter-on-quarter while volumes increased significantly in China both year-over-year and quarter-on-quarter.

Digital Assets

Within Digital Assets, which trades across regions on a 24/7 basis, trading volumes in Bitcoin (the barometer of the industry) declined by double-digits quarter-on-quarter as the elevated initial fund flows into U.S. spot Bitcoin ETFs in the first quarter slowed significantly to flows more in-line with traditional ETFs in the second quarter. However, volumes were still elevated compared to the same period a year ago. Volatility in Digital Assets, as indicated by the BitVol index, was also down singledigits quarter-on-quarter but up by double-digits year-over-year.

Trading Capital Expansion Plan

In recent years, Flow Traders has successfully diversified its core trading model into diversified asset classes and geographies, which resulted in increased optionality for the business. The Board sees a significant range of emerging opportunities to accelerate growth for the firm, stemming from the investments it has made in these new markets and through diversifying its revenue streams. It believes now is the time to seize these opportunities and move the firm into a growth phase by meaningfully expanding its trading capital base, especially given the strong historical returns it has made on trading capital. In recent months, the firm has been exploring various options to achieve this expansion in trading capital. It has concluded that the most cost-effective way to expand the firm’s trading capital base is to retain additional earnings on the Company’s balance sheet, as part of a multi-layered trading capital expansion plan.

Mike Kuehnel, CEO

“Over the past 18 months, Flow Traders has made a concerted push into new markets, asset classes and geographies, with considerable success. Following the arrival of the newly constituted Board we have conducted a broad-ranging strategic review and concluded that we have a significant opportunity to capitalise on this period of development and move Flow Traders into a growth phase. A critical element of this development will be the expansion of our trading capital base, especially given the significant returns we have generated on trading capital historically.

Following a review of the various options to achieve this, we are implementing a wide-ranging trading capital expansion plan. As a first element of this we recently secured a €25 million bank term loan, and we are looking at several other ways to increase external financing.

We have also concluded that a central pillar of the plan, and the most cost-effective means of increasing our trading capital, is to increase the level of retained earnings in the business. Accordingly, we are suspending regular dividend payments until further notice, a move that will accelerate the expansion of the trading capital base and that the Board is confident will generate long-term value for the shareholders. We believe that the firm’s new trading capital expansion plan and the continued expansion of our diversified set of existing and newly emerging trading strategies will deliver significant returns and further strengthen Flow Traders’ role as a leading global trading firm, providing liquidity and efficiency across a wide range of financial markets.

Coming to the quarter, market activity remained muted as volatility declined across most major asset classes compared to the same period a year ago. Nevertheless, we continue to expand our relationships across both the TradFi and DeFi ecosystems and actively sought out innovative partnerships to continue to support the adoption of Digital Assets. Internally, we continue to focus on our automation and efficiency initiatives, and we are pleased to have received shareholder and regulatory approval for Owain’s nomination as our Chief Technology Officer and as an Executive Director of the Board.”

The full results  can be read here.

Source: Flow Traders