Flow Traders’ third-quarter earnings fall as trading activity eases

Market maker Flow Traders recorded a sharp sequential decline in profitability for the three months to September as it encountered less favourable trading conditions. Its unaudited results, released on 29 October, show quarterly net trading income of €84.5 million, down 43% from €147.8 million in the second quarter. EBITDA fell 72%, from €63.6 million to €17.5 million, and net profit decreased 84%, from €40.8 million to €6.4 million.[1]

The results illustrate the sensitivity of electronic market making to trading conditions. A firm's activity can remain substantial even when the opportunities to capture spreads or hedge inventory profitably narrow. Flow Traders described the period as one of subdued activity and lower volatility. That is its explanation of the environment; the earnings data by themselves do not isolate the effect of spreads, trading volumes and risk-taking decisions.[1]

The largest sequential reversal was in the traditional business, which generated €70.8 million of Q3 net trading income against €131.7 million a quarter earlier. Digital-asset NTI declined to €13.8 million from €16.1 million. Fixed operating expenses rose from €59.3 million to €64.8 million, although total operating expenses fell to €68.9 million from €83.8 million as variable employee expenses declined. EBITDA of €17.5 million divided by total income of €86.4 million gives a margin of about 20.3%, consistent with the company's rounded 20% figure. Net trading income is not the denominator for that margin.[1]

It would be misleading to extrapolate that three-month collapse across the full year. In the first nine months of 2026, Flow Traders earned €388.2 million in net trading income, 7% above the comparable 2025 period. Traditional market-making NTI advanced 26% to €336.4 million, whereas digital-asset NTI fell 46% to €51.7 million. The two businesses therefore contributed very different year-to-date trends.[1]

The firm traded €553 billion of ETF value in Q3, 2% less than in Q2, while it says the comparable wider ETF market traded 6% less. Across the first nine months, its ETF traded value rose 15% to €1.699 trillion. These figures are activity measures, not income or profitability, and should not be equated with assets owned by Flow Traders or profits generated on that notional volume.[1]

Trading capital stood at €1.137 billion at the end of September, against €1.150 billion three months earlier and €848 million a year earlier. Return on trading capital for Q3 was 30%, compared with 53% in Q2; the stated metric is an annualised performance measure rather than a 30% realised gain over three months. The company reported 630 full-time-equivalent employees at quarter-end.[1]

The release shows why ETF turnover alone is a poor guide to a market maker's earnings. Flow Traders' quarterly ETF value traded fell only 2%, while net trading income fell 43%; operating costs and the revenue earned from each trading environment also mattered. The figures are unaudited, and the company attributes the weaker quarter to lower activity and volatility.[1]

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