As you may have seen, we have published our results early this morning. I am joined today by our CEO, Thomas Spitz, and our Co-Chief Trading Officer, Alex Kieft, who will take you through the results. After our prepared remarks, we will be happy to take any questions you may have. Before we begin, let me draw your attention to the disclaimer on page two. As always, this presentation is for information purpose only, and the results we will be discussing are unaudited. I will now hand over to Thomas for the update.
Thank you, Dick. Let me start with a high-level overview of our Q3 performance. The third quarter saw seasonally lower ETF market activity. We reported a net profit of EUR 6.4 million and a basic EPS of EUR 0.15 for the quarter. While year-to-date net profit was EUR 97.6 million with a basic EPS of EUR 2.22. Year-to-date, our ETF value traded increased 15% year-on-year, compared with 41% for the market, reflecting continued ETF market growth. During Q3 2026, our ETF value traded decreased 2% quarter-on-quarter compared with the market, which was down 6%. Year-to-date NTI reached EUR 388.2 million, up 7% year-on-year, driven by our traditional business, where NTI was up 26% year-on-year. The year-to-date return on trading capital was 47%. In Q3, we generated an NTI of EUR 84.5 million, down 43% quarter-on-quarter, equating to a 30% return on trading capital.
NTI in our traditional business was EUR 70.8 million, reflecting lower market volatility. In our digital asset business, NTI was EUR 13.8 million, as the operating environment of this activity remained challenging. Fixed operating expenses were EUR 180.2 million year-to-date, up 19% compared to year-to-date 2025, and in line with our guidance of EUR 235 million to EUR 245 million for the full year. In Q3, our fixed operating expenses were EUR 64.8 million, up 9% Q-on-Q. Year-to-date, EBITDA was EUR 153.4 million, up 2% year-on-year with a margin of 39%. EBITDA was EUR 17.5 million for Q3, equating to an EBITDA margin of 20%.
We ended the quarter with 630 FTEs, down from 641 at the end of Q2 2026. Overall, we continued to build out Flow Traders in line with our Horizon 2030 strategy, which is supported by a continued growth in our traditional business. I will now hand it over to Alex to walk you through the market environment and the regional performances.
Thank you, Thomas, and good morning, everyone. Let me start with the market environment. ETF assets under management reached a new record, over 21 trillion EUR. That's a 33% increase year-over-year, and it was driven by continued fund inflows and strong market performance. Activity, however, was lower. Value traded was down 6% quarter-on-quarter, and it's down 20% from the Q1 peak. Year-to-date, volumes are still up 41%. Volatility was also lower. The VIX was down 12% quarter-on-quarter and flat year-over-year. Velocity is down 10%, both quarter-on-quarter and year-on-year, which is typical when volatility is lower. All in all, it was a quieter market, but the market as a whole keeps growing, and the fundamentals remain strong. Moving to digital assets. Bitcoin is down 6% year-to-date and more than 33% from the October peak. The broader crypto market was largely in line with Bitcoin.
Digital asset ETF value traded rose a modest 7% quarter-on-quarter, but is still down 31% year-over-year. Tokenized assets, on the other hand, continued to see solid growth, 7% quarter-on-quarter and 62% year-over-year. While the broader crypto market remains subdued, we do see that the long-term trends remain intact. I'll now go to the regional performance of our traditional business. Year-to-date, NTI is up in all regions for our traditional business. However, on a quarterly basis, it is lower across all three regions. That's primarily driven by lower volatility, leading to fewer market dislocations. In Europe, we remain a leading liquidity provider both on and off exchange. Year-to-date, our NTI is up 31%, in line with the broader market volume growth. Quarterly, our volumes were down 8% versus the market down 14%.
Lower volatility led to fewer dislocations, and that's why our NTI was down more than just from the volumes that you would infer from just the volumes. Encouragingly, in Europe, our on-exchange market share was up due to continuous improvements to our pricing and risk models. In the U.S., our year-to-date NTI is still up 45%, primarily driven by the increase in market volumes and our ability to trade with the increase of trading capital. In Q3, our volume was up 8% versus the market down 10%. However, lower volatility weighed on our NTI. In APAC, the market is up 82% year-to-date, and our volumes are up 41%. NTI year-over-year is up seven. Q3, however, was different, as volumes and volatility were both markedly lower on a quarterly basis, so our NTI dropped 50% compared to a strong second quarter.
In APAC, in China, we're still growing, and this quarter we saw a meaningful NTI contribution from China to our APAC revenues. APAC, in general, remains a core growth region for the firm. I'll now move to our digital assets business. I'll start with our European DA ETF. The market is down 35% year-to-date, broadly in line with the crypto downturn. Q3 was slightly better, with the market up 11% and our volumes up 21%. However, crypto ETFs are a useful proxy, but our NTI comes from a much wider range of products.
Therefore, even though volumes are up, our DA NTI is down 15% quarter-on-quarter and 46% year-on-year. The outlook remains intact. For example, tokenized real-world asset volumes are up 7% and 62% year-over-year, which is aligned with our investments in tokenization and 24/7 on-chain trading of our Horizon 2030 strategy. I'll now hand it back to Thomas, who will go over the financials.
Thank you, Alex. As shown in this slide, fixed operating expenses were EUR 180.2 million year-to-date, a 19% increase compared to year-to-date 2025, and are in line with our fixed operating expenses guidance for the full year 2026 of EUR 235 million to EUR 245 million. For full year 2026, we expect to end in the middle of our guided fixed operating expenses range. Our fixed operating expenses were EUR 64.8 million in Q3, up 9% quarter-on-quarter. These increases were primarily driven by ongoing technology investments, the addition of subject matter experts, and one-off expenses. The one-off expenses in Q3 amounted to roughly EUR 4 million regarding severances and related expenses. Our year-to-date EBITDA margin was 39%, down from 42% year-on-year, driven by increased fixed operating expenses. We ended the quarter with 630 FTEs, down 2% Q-on-Q, while continuing to make targeted additions to our teams.
Turning to capital. In Q3, our trading capital stood at EUR 1,137,000,000 compared to EUR 1,150,000,000 at the end of Q2, following a repayment of the RCF. On that trading capital base, we delivered an ROTC of 47% during the year-to-date. Shareholders' equity further strengthened to EUR 984 million at the end of Q3, an increase of 13% versus full year 2025. Return on equity was 14% for the year-to-date, compared to 16% in full year 2025.
Thank you, Thomas and Alex. That concludes our prepared remarks. We would now like to open the floor for questions. Operator, please go ahead.
Ladies and gentlemen, we are now ready to take your questions. You may enter the queue by pressing pound key five on your telephone keypad, or you may submit a written question via the form at the bottom of the player. The first question comes from Julian Dobrovolschi from ABN AMRO ODDO BHF. Please go ahead.
Hi. Good morning, gentlemen. Thanks for taking my questions. I have couple on two topics, revenue capture and trading capital. To begin with revenue capture first. EMEA volumes came slightly ahead of expectation, consensus expectation, but NTI was a pretty large miss. You also explained it, that is basically driven by revenue capture, which is an implied figure. I was just wondering why is that the case, and is it just really a matter of volatility and dislocation, or do you also see more competition in the market that makes you quote finer just to maintain and maybe even gain a bit of the volume? I think also market shares went a bit up in core ETF business in EMEA, so perhaps you quoting finer would be an explanation for revenue coming a bit down.
Then also related to that, the performance on revenue capture versus volume, it is a bit different in U.S. and APAC versus EMEA. Actually, in U.S. versus EMEA. Just wondering, why did U.S. revenue capture hold up so well while EMEA and APAC fell so large?
Yeah. Thank you, Julian. So indeed, our revenue capture in Europe was down quite a lot compared to the second quarter. One factor is indeed the decline in volatility leading to fewer market dislocations. Also, the products that are being traded, they matter. Some have a different revenue capture profile than others. So, in this quarter, we saw a bit less of the higher margin products being traded. In addition, we do indeed see a continuous It is a competitive market, so we also need to maintain market share, sometimes need to quote a bit tighter. You see that with us being a large share of the market, we do see that whenever we do something, our competition reacts, and it is always a bit of back and forth in terms of the spreads, but I think it was mainly driven by lower volatility.
Now in the U.S. and in APAC, in the U.S., it comes from a lower base. That is why I think in general, our revenue capture there is a bit more sticky, but from a lower number. APAC specifically in Q2, there was a lot of volatility also in Korea. That is subdued in Q3. In general, in Q3, we just saw a bit more of the plain vanilla ETFs and, therefore, also a lower margin per ETF traded, alongside the lower volatility and fewer dislocations.
Mm-hmm. Okay, clear. On trading capital, honestly, the return to trading capital, and I guess you would agree with me, it is quite scary, 30% in Q3, which is much below everything that you have reported until this quarter, also through the up and down cycles in the market. It is at 47% year- to- date, and you have a target of about percent over four quarters run rate. Just wondering, and I think you would explain it with the fact I think, indeed, there is a low NTI because of low volatility and fewer dislocations. Then the question is how realistic is really for you to get above 50% return target that you have in a normalized vol environment? So that is A.
Then B, you have also talked in the past about growing the balance sheet, which you are doing really well, and that is nice to see, but then you have been saying that you look to deploy this capital at attractive returns in the past. So how would that attractive return metric compare with 30% that you have realized in Q3? Then also from that, what is your real hurdle rate for deploying capital? What are you trying to usually aim for at the beginning of the quarter? That would be nice to know. Then part C of the trading capital is, just wondering how much of the drag, if there is any, comes from capital that was not really deployed in Q3, given the fact that you have perhaps seen fewer dislocations, i.e., fewer opportunities to deploy this at attractive returns.
Yeah. Thanks, Julian. I will start with your last part of the question. So indeed, we did see that in Q3, we had a bigger part that we could not directly deploy in trading strategies, so we used it to offset just the financing on our book. So I think that that is also how you should see it, that we now have a bigger balance sheet and throughout the cycle, we expect that we can use it often, but there will be periods of lower volatility where we cannot use everything. Obviously, we have doubled our available capital now in the course of two years, and there were quarters where we used everything, but where I think it is for us also an evolution whereby we develop new trading strategies where we can then deploy it that are slightly different from our ETF business.
I think in our ETF business, you will see that we are a bit market-dependent. We also react to the market. We provide liquidity, so if there's less activity, we also won't be able to fully utilize everything. I think that weighed a bit this quarter. But we still believe that long-term, we will be able, and especially in periods of higher volatility, that we'll be able to use all the capital and then generate also excess returns on those.
Thanks. May I come back to this? Can you give us a bit of a pro forma number? If you'd, let's say, look at only deployed capital, what would be the returns from that?
I think, Julian, maybe just going back, addressing that and also going back to your first question, I think what's important to understand is that, so the way we look at our capital base, and we understand that the 47% is in the spotlight also in relation to the target that we put forward on the 50% for 2030. I think what's important for people to realize is that as we, at least tried to explain during our Capital Markets Day as well, is that we are going through the motions to build out the capabilities that we need to deploy capital at greater scale. That's something that will take time, right?
But we're making good progress on that as we continue to invest in the teams, the technology, and also the trading strategies and the business that we need for that. In terms of what the normalized, I think your question is what is the normalized level of trading capital if we take out the trading of the not allocated? I don't think that's something we should comment on as of today.
Mm-hmm. Then part B of my question, if 50% is achievable in a normalized trading environment, again, you probably would say this is a long-term target. Would that, let's say, kind of imply that if, let's say, 2027 environment would kind of replicate the one of what we're seeing now, we should then expect returns of below 50? Would that make sense to think about?
Sorry, Julian, could you repeat the question? I couldn't fully hear it. Apologies.
Yeah. The part B of my question was if you can get 50% returns on trading capital, assuming the volatility remains muted and there are not enough dislocations.
I think part of that is also up to us to develop new trading strategies as we're doing, also as we outlay it in our Horizon 2030. So that's going to be part of the strategy as well. Then also optimizing our returns in our existing business to make sure we get to that target that we set out.
Clear. All right. Thank you.
Ladies and gentlemen, just as a reminder, if you have a question, you may register it by pressing pound key five on your telephone keypad to enter the queue. You may also submit written questions via the form at the bottom of the player. We will now take a moment to allow you to register your question. The next question comes from Reg Watson from ING. Please go ahead.
Morning, all. Just wanted to check in with you, come back on the revenue capture question that Julian had. What I have noticed is that in the last couple of quarters, you have taken share in terms of VT, but at the expense of revenue capture. I think I did ask this question last time around, and you said there were no explicit links between the two, but it is starting to look like a trend now after once it happens twice it is possibly a coincidence. If we see this in the fourth quarter, our revenue capture is weak, then presumably the link is that in order to gain or maintain share, you need to actually cut your margins.
Yeah. If you are a big percent of the market, there obviously is some link, but it is not that we actively try to buy share there. We continuously evaluate and we provide liquidity. We always compete per trade for the best price. We see that we can get a margin on the trade we will capture it. That indeed can imply that in periods of lower volatility or if there is a change in the market or a new competitor, that then it will be lower.
Yeah, and obviously it is something that we also are looking at on how to optimize it, and that can be either improving our pricing models, improving our risk, making sure that we improve our hedging so that we maintain a larger part of the edge that we do per trade. And that is all something that we are very actively working on, also being helped by the investments we are making on research and technology. That will also strengthen our core business, and we do that to support our revenue base.
But it feels like, from what you said, it feels like that revenue capture is just structurally shrinking. Because if I look, you make the observation that during periods of low volatility, the revenue capture is low. But if I look at the return on trading capital table at the bottom of page two on your release, you have average VIX in there, and there are periods of very similar vol in prior quarters where the return on trading capital was a lot higher, and that was only 12 months ago. If I look at any of the quarters in the prior 12 months, year-on-year. So these numbers paint a picture of diminishing returns for the industry and for Flow Traders as a whole. Is that a fair interpretation of that picture?
I think maybe to take that question, Reg, so if you, for instance, look at the numbers that we have on the table-
Yeah.
The number you are looking at, of course, return on trading capital is a mixed effect, right? It is the traditional and the digital business combined. If we look at other periods where we had lower volatility, then you can also see that some parts of the business have performed better. So I can see where you are coming from an aggregated point of view. In addition to that, I think your question also ties back to the question that Julian asked in terms of the deployment of capital. I think there are different elements that play into that, but I would not necessarily directly conclude exactly the same from the numbers.
I think what I am trying to get at is you have been very clear at your Capital Markets Day earlier this year that you do not expect a structural turnaround in Flow Traders' business model to be visible until the second half of next year. I just want to understand if we can expect a continuation of the trends that we see in that table at the bottom of page two, basically until second half of next year. I do not wish to judge you now, wish to give you time to actually make that change. Should we then say, "Well, this is business as usual until second half 2027?"
I will take this one. First of all, it is never business as usual for us. I think I commented that we are obviously disappointed with our performance this quarter. We never consider a quarter as business as usual. I think there is a couple of elements playing out at the same time. If you compare your Q3 2026 to Q3 2025, Q3 2026, you have a combined element, combined factors of much lower digital asset activity and low volatility. While if you go back one year ago, Q3 2025 was a very high quarter of activity for digital assets. If you refer again to your table at the bottom of page two, you will see that on the other hand, our traditional business has been pretty resilient, even though not at the level we like it to be.
For us, every quarter, we target to improve on the previous one. What we said in our Capital Markets Day, and still maintain it, is that for some of the structural changes we want to implement, especially in term of diversifying strategies, building up medium frequency trading, quantitative trading, this will have a longer ramp-up time than a couple of quarters. In the meantime, our job for the next few quarters is to do as much as we can with our current business model and the improvement that we bring quarter- on- quarter within the current market environment.
Okay, thanks, Thomas. Appreciate that.
Thank you, Reg. If there are no further questions, then I believe we can conclude the call for today. We appreciate your continued interest in Flow Traders and look forward to speaking with you again during our full year 2026 results. That concludes the call for today.
Thank you all. You may now disconnect.