Citadel Securities revenue reaches US$2.3 billion in first quarter

CITADEL Securities generated US$2.3 billion of net trading revenue in the first three months of 2024, setting the market-making firm up for a potentially record year as it expands in new assets classes and geographies.

The trading haul is among a litany of financial markers recently disclosed to debt investors. The first quarter result, which was up 68 per cent from the prior year, sets the firm on a trajectory to reach unprecedented revenue in 2024, according to sources with knowledge of the matter. The firm posted about US$6.3 billion in net trading revenue last year, down from a record of around US$7.5 billion in 2022, said the sources, asking not to be identified as disclosing private information.

A representative for Citadel Securities declined to comment.

Founded by billionaire Ken Griffin, Citadel Securities matches buyers and sellers in the equity and fixed-income markets. The trading firm generates billions using algorithms to capture and profit from tiny differences in prices. It serves asset managers, banks, broker-dealers, hedge funds, government agencies and public pension programmes.

The results offer a rare glimpse into the privately held firm, which has steadily expanded its market-making capabilities, most recently in corporate bonds. Citadel Securities posted a 54 per cent margin for the first quarter, up from 42 per cent in the prior quarter, and 40 per cent in the same period a year earlier, the sources said. Competitor Jane Street generated US$10.6 billion in net trading revenue last year, Bloomberg previously reported.

Chief executive officer Peng Zhao last week said his firm is running at “a record pace” as it benefits from its expansion into new product offerings and geographies. “We had a very strong first quarter,” Zhao said at the Bloomberg Sell-Side Leaders Forum.

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The firm brought in about US$1.26 billion of earnings before interest, taxes, depreciation and amortisation during the first quarter, up from US$551 million in the same period a year earlier, the sources said. Full-year earnings were about US$2.76 billion in 2023, with the firm pulling in US$725 million in the final three months of last year.

Citadel Securities came into prominence in the era of meme stocks, and is responsible for about a third of all US retail stock trades. It’s ramping up its presence across fixed income beyond interest-rate swaps and Treasuries to serve institutional investors in corporate debt trading, starting with investment grade bonds. BLOOMBERG