Flow Traders’ EBITDA Falls 72% to €17.5 Million in Third Quarter
Key Facts
Flow Traders reported on Oct. 29 unaudited trading results showing EBITDA fell 72% to €17.5 million in the third quarter, from €63.6 million in the second quarter. The company said the decline came amid lower market activity, with the EBITDA margin falling to 20% from 43% in the previous period. Net trading income also fell to €84.5 million, down 43% quarter on quarter, while total income dropped 41% to €86.4 million. The figures put third-quarter performance under pressure from weaker activity and volatility, while the company’s announcement did not include a comparison with analyst estimates. Net profit also fell 84% to €6.4 million from €40.8 million in the second quarter.
The company attributed part of the weaker trading environment to lower volatility during the quarter. The average VIX, which measures expected volatility in U.S. stocks, was 16.0 in the third quarter, compared with 18.3 in the second quarter and 20.3 in the first quarter. Flow Traders said lower volatility “affected the trading environment.” This came during a period the company described as having lower market activity, alongside declines in trading income and profitability. The revenue contraction weighed on the margin, which fell to 20% after reaching 43% in the previous quarter.
The decline extended to the company’s traditional business and digital assets, with a larger drop in traditional activity. Traditional net trading income fell 46% to €70.8 million in the third quarter, from €131.7 million in the second quarter. In digital assets, net trading income fell 15% to €13.8 million, compared with €16.1 million in the previous period. Income therefore declined in both businesses, although the quarterly drop in traditional activity was steeper. These figures break down the overall decline in net trading income to €84.5 million.
Cost pressures increased as income declined: fixed operating expenses rose 9% quarter on quarter to €64.8 million, from €59.3 million. For the first nine months, the company said these expenses increased 19% compared with the same period a year earlier. It attributed the annual increase to higher technology expenses, the addition of specialist staff and one-off expenses. The rise in fixed costs coincided with lower total income, narrowing the scope for profit in the quarter. Basic earnings per share also fell to €0.15, while diluted earnings per share came to €0.14.
For the year, Flow Traders expects fixed operating expenses in 2026 to range from €235 million to €245 million. It said the range reflects continued investment in technology, adding talent to support growth initiatives, and one-off expenses. The guidance puts the annual spending trajectory at the center of attention for upcoming results, after fixed expenses rose during the quarter and year to date. The company set Feb. 11, 2027, as the provisional date for reporting fourth-quarter and full-year 2026 results. That update will provide a broader reading of the year’s performance and expenses following the third-quarter results.
Flow Traders shares fell 9.5% on Thursday after the third-quarter results were announced, according to Investing.com. The stock’s decline came on the day the company published its trading update, which showed quarterly decreases in EBITDA, net trading income and net profit. The official announcement did not estimate the gap between results and analyst expectations, so the confirmed comparison in its figures remains between the third and second quarters. The company focused its explanation on lower market activity and volatility, alongside developments in trading income and costs. The next financial results are scheduled for the provisional date set in February.