Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 28, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37352 | |
Entity Registrant Name | Virtu Financial, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 32-0420206 | |
Entity Address, Address Line One | 1633 Broadway | |
Entity Address, City or Town | New York, | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | 212 | |
Local Phone Number | 418-0100 | |
Title of 12(b) Security | Class A common stock, par value $0.00001 per share | |
Trading Symbol | VIRT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001592386 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 94,049,843 | |
Class C common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 8,817,088 | |
Class D common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 60,091,740 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 698,674 | $ 981,580 |
Cash restricted or segregated under regulations and other | 47,133 | 56,662 |
Securities borrowed | 1,665,179 | 1,187,674 |
Securities purchased under agreements to resell | 793,815 | 336,999 |
Receivables from broker-dealers and clearing organizations | 1,459,826 | 1,115,185 |
Trading assets, at fair value: | ||
Receivables from customers | 130,623 | 80,830 |
Property, equipment and capitalized software (net of accumulated depreciation of $341,375 and $460,763 as of June 30, 2023 and December 31, 2022, respectively) | 95,735 | 85,194 |
Operating lease right-of-use assets | 174,136 | 187,442 |
Goodwill | 1,148,926 | 1,148,926 |
Intangibles (net of accumulated amortization of $350,053 and $318,013 as of June 30, 2023 and December 31, 2022, respectively) | 289,440 | 321,480 |
Deferred tax assets | 134,549 | 146,801 |
Other assets ($73,435 and $78,965, at fair value, as of June 30, 2023 and December 31, 2022, respectively) | 299,348 | 303,916 |
Total assets | 13,389,684 | 10,583,241 |
Liabilities | ||
Short-term borrowings | 111,721 | 3,944 |
Securities loaned | 1,306,894 | 1,060,432 |
Securities sold under agreements to repurchase | 1,120,151 | 627,549 |
Payables to broker-dealers and clearing organizations | 848,277 | 273,843 |
Payables to customers | 39,740 | 46,525 |
Trading liabilities, at fair value: | ||
Financial instruments sold, not yet purchased | 5,812,887 | 4,196,974 |
Tax receivable agreement obligations | 215,542 | 238,758 |
Accounts payable, accrued expenses and other liabilities | 379,815 | 448,635 |
Operating lease liabilities | 224,086 | 239,202 |
Long-term borrowings | 1,778,270 | 1,795,952 |
Total liabilities | 11,837,383 | 8,931,814 |
Commitments and Contingencies (Note 14) | ||
Virtu Financial Inc. Stockholders' equity | ||
Treasury stock, at cost, 40,720,600 and 34,522,290 shares at June 30, 2023 and December 31, 2022, respectively | (1,071,784) | (954,637) |
Additional paid-in capital | 1,335,269 | 1,292,613 |
Retained earnings (accumulated deficit) | 980,481 | 972,317 |
Accumulated other comprehensive income (loss) | 31,132 | 31,604 |
Total Virtu Financial Inc. stockholders' equity | 1,275,100 | 1,341,899 |
Noncontrolling interest | 277,201 | 309,528 |
Total equity | 1,552,301 | 1,651,427 |
Total liabilities and equity | 13,389,684 | 10,583,241 |
Class A | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock | 1 | 1 |
Class B common stock | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock | 0 | 0 |
Class C common stock | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock | 0 | 0 |
Class D common stock | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock | 1 | 1 |
Not Pledged | ||
Trading assets, at fair value: | ||
Financial instruments owned | 5,155,084 | 3,667,481 |
Pledged | ||
Trading assets, at fair value: | ||
Financial instruments owned | $ 1,297,216 | $ 963,071 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accumulated depreciation | $ 341,375 | $ 460,763 |
Intangibles, accumulated amortization | 350,053 | 318,013 |
Fair value of other assets | $ 73,435 | $ 78,965 |
Treasury stock, shares (in shares) | 40,720,600 | 34,522,290 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 134,725,247 | 133,071,754 |
Common stock, shares outstanding (in shares) | 94,004,647 | 98,549,464 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Class C common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares issued (in shares) | 8,856,531 | 9,030,066 |
Common stock, shares outstanding (in shares) | 8,856,531 | 9,030,066 |
Class D common stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 60,091,740 | 60,091,740 |
Common stock, shares outstanding (in shares) | 60,091,740 | 60,091,740 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Trading income, net | $ 306,168 | $ 395,928 | $ 718,679 | $ 918,235 |
Interest and dividends income | 97,979 | 30,792 | $ 180,223 | $ 51,804 |
Revenue from contract with customer, product and service [Extensible Enumeration] | Commissions, Net and Technology Services [Member] | Commissions, Net and Technology Services [Member] | ||
Commissions, net and technology services | 109,504 | 136,340 | $ 230,948 | $ 290,995 |
Other, net | (6,797) | 41,678 | (2,617) | 44,966 |
Total revenue | 506,854 | 604,738 | 1,127,233 | 1,306,000 |
Operating Expenses: | ||||
Brokerage, exchange, clearance fees and payments for order flow, net | 122,471 | 156,986 | 267,993 | 307,366 |
Communication and data processing | 56,959 | 55,699 | 113,771 | 111,534 |
Employee compensation and payroll taxes | 95,557 | 98,604 | 198,994 | 202,084 |
Interest and dividends expense | 112,493 | 48,716 | 210,094 | 91,254 |
Operations and administrative | 25,491 | 13,577 | 49,790 | 38,792 |
Depreciation and amortization | 15,913 | 16,334 | 31,261 | 33,812 |
Amortization of purchased intangibles and acquired capitalized software | 16,020 | 16,277 | 32,040 | 32,757 |
Termination of office leases | (146) | 677 | (50) | 1,384 |
Debt issue cost related to debt refinancing, prepayment and commitment fees | 1,771 | 1,437 | 3,948 | 27,121 |
Transaction advisory fees and expenses | 8 | 558 | 23 | 980 |
Financing interest expense on long-term borrowings | 24,850 | 22,089 | 49,138 | 43,422 |
Total operating expenses | 471,387 | 430,954 | 957,002 | 890,506 |
Income before income taxes and noncontrolling interest | 35,467 | 173,784 | 170,231 | 415,494 |
Provision for income taxes | 5,923 | 24,888 | 30,605 | 66,674 |
Net income | 29,544 | 148,896 | 139,626 | 348,820 |
Noncontrolling interest | (12,842) | (63,729) | (65,044) | (151,397) |
Net income available for common stockholders | $ 16,702 | $ 85,167 | $ 74,582 | $ 197,423 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.16 | $ 0.78 | $ 0.73 | $ 1.78 |
Diluted (in dollars per share) | $ 0.16 | $ 0.78 | $ 0.73 | $ 1.77 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 94,973,489 | 104,960,826 | 96,376,926 | 107,133,079 |
Diluted (in shares) | 94,973,489 | 105,478,278 | 96,376,926 | 107,759,784 |
Net Income | $ 29,544 | $ 148,896 | $ 139,626 | $ 348,820 |
Other comprehensive income | ||||
Foreign exchange translation adjustment, net of taxes | 2,527 | (19,810) | 4,175 | (24,978) |
Net change in unrealized cash flow hedges gain (loss), net of taxes | 8,202 | 14,062 | (4,966) | 61,935 |
Comprehensive income | 40,273 | 143,148 | 138,835 | 385,777 |
Less: Comprehensive income attributable to noncontrolling interest | (17,189) | (60,173) | (64,724) | (164,332) |
Comprehensive income attributable to common stockholders | $ 23,084 | $ 82,975 | $ 74,111 | $ 221,445 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Total | Class A Common Stock | Class C Common Stock | Class D Common Stock | Total Virtu Financial Inc. Stockholders' Equity | Common Stock Class A Common Stock | Common Stock Class C Common Stock | Common Stock Class D Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interest |
Balance at beginning period (in shares) at Dec. 31, 2021 | 131,497,645 | 9,359,065 | 60,091,740 | ||||||||||
Balance at beginning of period at Dec. 31, 2021 | $ 1,863,618 | $ 1,549,388 | $ 1 | $ 0 | $ 1 | $ (494,075) | $ 1,223,119 | $ 830,538 | $ (10,196) | $ 314,230 | |||
Balance at beginning period (in shares) at Dec. 31, 2021 | (18,326,863) | ||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||
Share based compensation (in shares) | 1,669,030 | ||||||||||||
Share based compensation | 27,377 | 27,377 | 27,377 | ||||||||||
Repurchase of Class C common stock (in shares) | (234,269) | ||||||||||||
Repurchase of Class C common stock | (8,204) | (8,204) | (8,204) | ||||||||||
Treasury stock purchases (in shares) | (612,844) | (8,908,544) | |||||||||||
Treasury stock purchases | (305,565) | (305,565) | $ (287,211) | (18,354) | |||||||||
Stock options exercised (in shares) | 246,879 | ||||||||||||
Stock options exercised | 4,691 | 4,691 | 4,691 | ||||||||||
Net Income | 199,925 | 112,257 | 112,257 | 87,668 | |||||||||
Foreign exchange translation adjustment | (5,168) | (3,172) | (3,172) | (1,996) | |||||||||
Net change in unrealized cash flow hedges gains (losses) | 47,873 | 29,387 | 29,387 | 18,486 | |||||||||
Dividends ($0.24 per share of Class A common stock and participating Restricted Stock Units and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest | (125,805) | (27,054) | (27,054) | (98,751) | |||||||||
Issuance of common stock in connection with employee exchanges (in shares) | 71,641 | ||||||||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges (in shares) | (71,641) | ||||||||||||
Balance at end of period (in shares) at Mar. 31, 2022 | 132,872,351 | 9,053,155 | 60,091,740 | ||||||||||
Balance at end of period at Mar. 31, 2022 | 1,698,742 | 1,379,105 | $ 1 | $ 0 | $ 1 | $ (781,286) | 1,246,983 | 897,387 | 16,019 | 319,637 | |||
Balance at end of period (in shares) at Mar. 31, 2022 | (27,235,407) | ||||||||||||
Balance at beginning period (in shares) at Dec. 31, 2021 | 131,497,645 | 9,359,065 | 60,091,740 | ||||||||||
Balance at beginning of period at Dec. 31, 2021 | 1,863,618 | 1,549,388 | $ 1 | $ 0 | $ 1 | $ (494,075) | 1,223,119 | 830,538 | (10,196) | 314,230 | |||
Balance at beginning period (in shares) at Dec. 31, 2021 | (18,326,863) | ||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||
Net Income | 348,820 | ||||||||||||
Foreign exchange translation adjustment | (24,978) | ||||||||||||
Net change in unrealized cash flow hedges gains (losses) | 61,935 | ||||||||||||
Balance at end of period (in shares) at Jun. 30, 2022 | 132,915,640 | 9,030,066 | 60,091,740 | ||||||||||
Balance at end of period at Jun. 30, 2022 | 1,740,408 | 1,398,303 | $ 1 | $ 0 | $ 1 | $ (828,772) | 1,256,760 | 956,487 | 13,826 | 342,105 | |||
Balance at end of period (in shares) at Jun. 30, 2022 | (28,998,163) | ||||||||||||
Balance at beginning period (in shares) at Mar. 31, 2022 | 132,872,351 | 9,053,155 | 60,091,740 | ||||||||||
Balance at beginning of period at Mar. 31, 2022 | 1,698,742 | 1,379,105 | $ 1 | $ 0 | $ 1 | $ (781,286) | 1,246,983 | 897,387 | 16,019 | 319,637 | |||
Balance at beginning period (in shares) at Mar. 31, 2022 | (27,235,407) | ||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||
Share based compensation | 9,411 | 9,411 | 9,411 | ||||||||||
Repurchase of Class C common stock (in shares) | (1,800) | ||||||||||||
Repurchase of Class C common stock | (52) | (52) | (52) | ||||||||||
Treasury stock purchases (in shares) | (1,762,756) | ||||||||||||
Treasury stock purchases | (47,486) | (47,486) | $ (47,486) | ||||||||||
Stock options exercised (in shares) | 22,000 | ||||||||||||
Stock options exercised | 418 | 418 | 418 | ||||||||||
Net Income | 148,896 | 85,167 | 85,167 | 63,729 | |||||||||
Foreign exchange translation adjustment | (19,810) | (10,773) | (10,773) | (9,037) | |||||||||
Net change in unrealized cash flow hedges gains (losses) | 14,062 | 8,580 | 8,580 | 5,482 | |||||||||
Dividends ($0.24 per share of Class A common stock and participating Restricted Stock Units and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest | (102,973) | (26,067) | (26,067) | (76,906) | |||||||||
Issuance of common stock in connection with employee exchanges (in shares) | 21,289 | ||||||||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges (in shares) | (21,289) | ||||||||||||
Contributions from noncontrolling interests | 39,200 | 39,200 | |||||||||||
Balance at end of period (in shares) at Jun. 30, 2022 | 132,915,640 | 9,030,066 | 60,091,740 | ||||||||||
Balance at end of period at Jun. 30, 2022 | 1,740,408 | 1,398,303 | $ 1 | $ 0 | $ 1 | $ (828,772) | 1,256,760 | 956,487 | 13,826 | 342,105 | |||
Balance at end of period (in shares) at Jun. 30, 2022 | (28,998,163) | ||||||||||||
Balance at beginning period (in shares) at Dec. 31, 2022 | 98,549,464 | 9,030,066 | 60,091,740 | 133,071,754 | 9,030,066 | 60,091,740 | |||||||
Balance at beginning of period at Dec. 31, 2022 | $ 1,651,427 | 1,341,899 | $ 1 | $ 0 | $ 1 | $ (954,637) | 1,292,613 | 972,317 | 31,604 | 309,528 | |||
Balance at beginning period (in shares) at Dec. 31, 2022 | (34,522,290) | (34,522,290) | |||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||
Share based compensation (in shares) | 2,393,550 | ||||||||||||
Share based compensation | $ 31,030 | 31,030 | 31,030 | ||||||||||
Repurchase of Class C common stock (in shares) | (21,498) | ||||||||||||
Repurchase of Class C common stock | (424) | (424) | (424) | ||||||||||
Treasury stock purchases (in shares) | (902,947) | (3,932,499) | |||||||||||
Treasury stock purchases | (93,218) | (93,218) | $ (75,568) | (17,650) | |||||||||
Net Income | 110,083 | 57,881 | 57,881 | 52,202 | |||||||||
Foreign exchange translation adjustment | 1,648 | 980 | 980 | 668 | |||||||||
Net change in unrealized cash flow hedges gains (losses) | (13,168) | (7,834) | (7,834) | (5,334) | |||||||||
Dividends ($0.24 per share of Class A common stock and participating Restricted Stock Units and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest | (52,004) | (24,696) | (24,696) | (27,308) | |||||||||
Issuance of common stock in connection with employee exchanges (in shares) | 152,037 | ||||||||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges (in shares) | (152,037) | ||||||||||||
Balance at end of period (in shares) at Mar. 31, 2023 | 134,714,394 | 8,856,531 | 60,091,740 | ||||||||||
Balance at end of period at Mar. 31, 2023 | 1,635,374 | 1,305,618 | $ 1 | $ 0 | $ 1 | $ (1,030,205) | 1,323,219 | 987,852 | 24,750 | 329,756 | |||
Balance at end of period (in shares) at Mar. 31, 2023 | (38,454,789) | ||||||||||||
Balance at beginning period (in shares) at Dec. 31, 2022 | 98,549,464 | 9,030,066 | 60,091,740 | 133,071,754 | 9,030,066 | 60,091,740 | |||||||
Balance at beginning of period at Dec. 31, 2022 | $ 1,651,427 | 1,341,899 | $ 1 | $ 0 | $ 1 | $ (954,637) | 1,292,613 | 972,317 | 31,604 | 309,528 | |||
Balance at beginning period (in shares) at Dec. 31, 2022 | (34,522,290) | (34,522,290) | |||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||
Net Income | $ 139,626 | ||||||||||||
Foreign exchange translation adjustment | 4,175 | ||||||||||||
Net change in unrealized cash flow hedges gains (losses) | (4,966) | ||||||||||||
Balance at end of period (in shares) at Jun. 30, 2023 | 94,004,647 | 8,856,531 | 60,091,740 | 134,725,247 | 8,856,531 | 60,091,740 | |||||||
Balance at end of period at Jun. 30, 2023 | $ 1,552,301 | 1,275,100 | $ 1 | $ 0 | $ 1 | $ (1,071,784) | 1,335,269 | 980,481 | 31,132 | 277,201 | |||
Balance at end of period (in shares) at Jun. 30, 2023 | (40,720,600) | (40,720,600) | |||||||||||
Balance at beginning period (in shares) at Mar. 31, 2023 | 134,714,394 | 8,856,531 | 60,091,740 | ||||||||||
Balance at beginning of period at Mar. 31, 2023 | $ 1,635,374 | 1,305,618 | $ 1 | $ 0 | $ 1 | $ (1,030,205) | 1,323,219 | 987,852 | 24,750 | 329,756 | |||
Balance at beginning period (in shares) at Mar. 31, 2023 | (38,454,789) | ||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||
Share based compensation (in shares) | 20,000 | ||||||||||||
Share based compensation | 12,050 | 12,050 | 12,050 | ||||||||||
Treasury stock purchases (in shares) | (9,147) | (2,265,811) | |||||||||||
Treasury stock purchases | (41,744) | (41,744) | $ (41,579) | (165) | |||||||||
Net Income | 29,544 | 16,702 | 16,702 | 12,842 | |||||||||
Foreign exchange translation adjustment | 2,527 | 1,503 | 1,503 | 1,024 | |||||||||
Net change in unrealized cash flow hedges gains (losses) | 8,202 | 4,879 | 4,879 | 3,323 | |||||||||
Dividends ($0.24 per share of Class A common stock and participating Restricted Stock Units and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest | (93,652) | (23,908) | (23,908) | (69,744) | |||||||||
Contributions from noncontrolling interests | 39,200 | ||||||||||||
Balance at end of period (in shares) at Jun. 30, 2023 | 94,004,647 | 8,856,531 | 60,091,740 | 134,725,247 | 8,856,531 | 60,091,740 | |||||||
Balance at end of period at Jun. 30, 2023 | $ 1,552,301 | $ 1,275,100 | $ 1 | $ 0 | $ 1 | $ (1,071,784) | $ 1,335,269 | $ 980,481 | $ 31,132 | $ 277,201 | |||
Balance at end of period (in shares) at Jun. 30, 2023 | (40,720,600) | (40,720,600) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.24 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net Income | $ 139,626 | $ 348,820 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Depreciation and amortization | 31,261 | 33,812 |
Amortization of purchased intangibles and acquired capitalized software | 32,040 | 32,757 |
Debt issue cost related to debt refinancing and prepayment | 306 | 24,316 |
Amortization of debt issuance costs and deferred financing fees | 3,452 | 4,184 |
Termination of office leases | (50) | 1,384 |
Share-based compensation | 31,754 | 32,709 |
Deferred taxes | 13,165 | 16,604 |
Other | 2,742 | 5,335 |
Changes in operating assets and liabilities: | ||
Securities borrowed | (477,505) | (20,294) |
Securities purchased under agreements to resell | (456,816) | (3,313) |
Receivables from broker-dealers and clearing organizations | (350,768) | (392,821) |
Trading assets, at fair value | (1,821,748) | (923,766) |
Receivables from customers | (49,793) | (80,457) |
Operating lease right-of-use assets | 13,306 | 16,852 |
Other assets | 6,104 | (71,206) |
Securities loaned | 246,462 | (92,439) |
Securities sold under agreements to repurchase | 492,602 | (13,132) |
Payables to broker-dealers and clearing organizations | 574,434 | 195,306 |
Payables to customers | (6,785) | 51,970 |
Trading liabilities, at fair value | 1,615,913 | 960,450 |
Operating lease liabilities | (15,116) | (21,072) |
Accounts payable, accrued expenses and other liabilities | (50,970) | (48,377) |
Net cash (used in) provided by operating activities | (26,384) | 57,622 |
Cash flows from investing activities | ||
Development of capitalized software | (26,411) | (26,769) |
Acquisition of property and equipment | (21,865) | (14,246) |
Other investing activities | (6,860) | 45,018 |
Net cash (used in) provided by investing activities | (55,136) | 4,003 |
Cash flows from financing activities | ||
Dividends to stockholders and distributions from Virtu Financial to noncontrolling interest | (145,656) | (228,778) |
Repurchase of Class C common stock | (424) | (8,256) |
Purchase of treasury stock | (134,962) | (353,051) |
Stock options exercised | 0 | 5,109 |
Short-term borrowings, net | 111,056 | 94,945 |
Proceeds from long-term borrowings | 0 | 1,800,000 |
Repayment of long term borrowings | (18,000) | (1,599,774) |
Payment of tax receivable agreement obligations | (23,216) | (21,343) |
Debt issuance costs | (3,888) | (35,882) |
Contributions from noncontrolling interests | 0 | 39,200 |
Net cash used in financing activities | (215,090) | (307,830) |
Effect of exchange rate changes on cash and cash equivalents | 4,175 | (24,978) |
Net decrease in cash and cash equivalents | (292,435) | (271,183) |
Cash, cash equivalents, and restricted or segregated cash, beginning of period | 1,038,242 | 1,120,953 |
Cash, cash equivalents, and restricted or segregated cash, end of period | 745,807 | 849,770 |
Supplementary disclosure of cash flow information | ||
Cash paid for interest | 225,332 | 104,765 |
Cash paid for taxes | 15,345 | 86,495 |
Non-cash investing activities | ||
Share-based and accrued incentive compensation to developers relating to capitalized software | $ 9,811 | $ 8,234 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization The accompanying Condensed Consolidated Financial Statements include the accounts and operations of Virtu Financial, Inc. (“VFI” or, collectively with its wholly owned or controlled subsidiaries, “Virtu” or the “Company”). VFI is a Delaware corporation whose primary asset is its ownership interest in Virtu Financial LLC (“Virtu Financial”). As of June 30, 2023, VFI owned approximately 58.9% of the membership interests of Virtu Financial. VFI is the sole managing member of Virtu Financial and operates and controls all of the businesses and affairs of Virtu Financial and its subsidiaries (the “Group”). The Company is a leading financial firm that leverages cutting edge technology to deliver liquidity to the global markets and innovative, transparent trading solutions to its clients. The Company provides deep liquidity in over 25,000 financial instruments, on over 235 venues, in 36 countries worldwide to help create more efficient markets. Leveraging its global market structure expertise and scaled, multi-asset infrastructure, the Company provides its clients with a robust product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. The Company’s product offerings allow its clients to trade on hundreds of venues in over 50 countries and across multiple asset classes, including global equities, Exchange-Traded Funds ("ETFs"), options, foreign exchange, futures, fixed income, cryptocurrencies, and other commodities. The Company’s integrated, multi-asset analytics platform provides a range of pre- and post-trade services, data products and compliance tools that its clients rely upon to invest, trade and manage risk across global markets. The Company has completed two significant acquisitions that have expanded and complemented Virtu Financial's original electronic trading and marking making business. On July 20, 2017, the Company completed the all-cash acquisition of KCG Holdings, Inc. (“KCG”) (the “Acquisition of KCG”). On March 1, 2019 (the “ITG Closing Date”), the Company completed the acquisition of Investment Technology Group, Inc. and its subsidiaries (“ITG”) in an all-cash transaction (the “ITG Acquisition”). Virtu Financial’s principal United States ("U.S.") subsidiary is Virtu Americas LLC (“VAL”), which is a U.S. broker-dealer. Other principal U.S. subsidiaries include Virtu Financial Global Markets LLC, a U.S. trading entity focused on futures and currencies; Virtu ITG Analytics LLC, a provider of pre- and post-trade analysis, fair value, and trade optimization services; and Virtu ITG Platforms LLC, a provider of workflow technology solutions and network connectivity services. Principal foreign subsidiaries include Virtu Financial Ireland Limited (“VFIL”) and Virtu Europe Trading Limited (“VETL”) (f/k/a Virtu ITG Europe Limited), each formed in Ireland; Virtu ITG UK Limited (“VIUK”), formed in the United Kingdom; Virtu Canada Corp (f/k/a Virtu ITG Canada Corp.), formed in Canada; Virtu Financial Asia Pty Ltd. and Virtu ITG Australia Limited, each formed in Australia; Virtu ITG Hong Kong Limited, formed in Hong Kong; and Virtu Financial Singapore Pte. Ltd. and Virtu ITG Singapore Pte. Ltd., each formed in Singapore, all of which are trading entities focused on asset classes in their respective geographic regions. The Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate. See Note 20 "Geographic Information and Business Segments" for a further discussion of the Company’s segments. Basis of Consolidation and Form of Presentation These Condensed Consolidated Financial Statements are presented in U.S. dollars, have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding financial reporting with respect to Form 10-Q and accounting standards generally accepted in the United States of America (“U.S. GAAP”) promulgated by the Financial Accounting Standards Board (“FASB”) in the Accounting Standards Codification (“ASC” or the “Codification”), and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with SEC rules and regulations. The Condensed Consolidated Financial Statements of the Company include its equity interests in Virtu Financial and its subsidiaries. As sole managing member of Virtu Financial, the Company exerts control over the Group’s operations. The Company consolidates Virtu Financial and its subsidiaries’ financial statements and records the interests in Virtu Financial that |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies For a detailed discussion of the Company's significant accounting policies, see Note 2 "Summary of Significant Accounting Policies" in our consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022. Accounting Pronouncements Recently Adopted Derivatives and Hedging - In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging - Fair Value Hedging - Portfolio Layer Method (Topic 815) . The ASU expands the scope of permissible hedging, and permits the use of different derivative structures as hedging instruments. The Company adopted this ASU on January 1, 2023 and it did not have a material impact on its condensed consolidated financial statements. Liabilities - Supplier Finance Programs - In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) . This ASU requires new quantitative and qualitative disclosure requirements for a buyer who enters into supplier financing programs. The Company adopted this ASU on January 1, 2023 and it did not have a material impact on its condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted as of June 30, 2023 Fair Value Measurement - In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 326) . The ASU clarifies the impact of contractual sale restrictions on the fair value of an equity security. Additionally, this ASU requires disclosure of the nature and remaining duration of the sale restriction. This ASU is effective for periods beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements. Leases - Common Control Arrangements - In March 2023, the FASB issued ASU 2023-01, Leases—Common Control Arrangements (Topic 842) . This ASU provides updated guidance for accounting for common control leases and leasehold improvements. This ASU is effective for periods beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements. Investments - Equity Method and Joint Ventures - In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323) . This ASU provides updated guidance for accounting for investments in tax credit structures. This ASU is effective for periods beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The below table contains a reconciliation of Net income before income taxes and noncontrolling interest to Net income available for common stockholders: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Income before income taxes and noncontrolling interest $ 35,467 $ 173,784 $ 170,231 $ 415,494 Provision for income taxes 5,923 24,888 30,605 66,674 Net income 29,544 148,896 139,626 348,820 Noncontrolling interest (12,842) (63,729) (65,044) (151,397) Net income available for common stockholders $ 16,702 $ 85,167 $ 74,582 $ 197,423 The calculation of basic and diluted earnings per share is presented below: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except for share or per share data) 2023 2022 2023 2022 Basic earnings per share: Net income available for common stockholders $ 16,702 $ 85,167 $ 74,582 $ 197,423 Less: Dividends and undistributed earnings allocated to participating securities (1,176) (3,305) (3,853) (7,164) Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities 15,526 81,862 70,729 190,259 Weighted average shares of common stock outstanding: Class A 94,973,489 104,960,826 96,376,926 107,133,079 Basic earnings per share $ 0.16 $ 0.78 $ 0.73 $ 1.78 Three Months Ended June 30, Six Months Ended June 30, (in thousands, except for share or per share data) 2023 2022 2023 2022 Diluted earnings per share: Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities $ 15,526 $ 81,862 $ 70,729 $ 190,259 Weighted average shares of common stock outstanding: Class A Issued and outstanding 94,973,489 104,960,826 96,376,926 107,133,079 Issuable pursuant to Amended and Restated 2015 Management Incentive Plan — 517,452 — 626,705 94,973,489 105,478,278 96,376,926 107,759,784 Diluted earnings per share (1) $ 0.16 $ 0.78 $ 0.73 $ 1.77 (1) The dilutive impact of unexercised stock options excludes from the computation of EPS 54,618 options for the three months ended June 30, 2023, and 17,647 options for the six months ended June 30, 2023 because inclusion of the options would have been anti-dilutive. |
Tax Receivable Agreements
Tax Receivable Agreements | 6 Months Ended |
Jun. 30, 2023 | |
Tax Receivable Agreements [Abstract] | |
Tax Receivable Agreements | Tax Receivable Agreements For a detailed discussion of the Company's tax receivable agreements, see Note 5 "Tax Receivable Agreements" in our consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022. For the purposes of the tax receivable agreements discussed above, the cash savings realized by the Company are computed by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been (i) no increase to the tax basis of the assets of Virtu Financial as a result of the purchase or exchange of Virtu Financial Units, (ii) no tax benefit from the tax basis in the intangible assets of Virtu Financial on the date of the IPO and (iii) no tax benefit as a result of the Net Operating Losses (“NOLs”) and other tax attributes of Virtu Financial. Subsequent adjustments of the tax receivable agreements obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within income before taxes and noncontrolling interests in the Condensed Consolidated Statements of Comprehensive Income. The Company made its first payment of $7.0 million in February 2017, and subsequent payments of $12.4 million in September 2018, $13.3 million in March 2020, $16.5 million in April 2021, $21.3 million in March 2022, and $23.3 million in April 2023. Tax receivable payments are expected to range from approximately $36.4 thousand to $22.0 million per year over the next 15 years. At June 30, 2023 and December 31, 2022, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $151.8 million and $162.1 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $215.5 million and $238.8 million for June 30, 2023 and December 31, 2022, respectively. The amounts recorded as of June 30, 2023 and December 31, 2022 are based on best estimates available at the respective dates and may be subject to change after the filing of the Company’s U.S. federal and state income tax returns for the years in which tax savings were realized. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company has two operating segments: (i) Market Making; and (ii) Execution Services; and one non-operating segment: Corporate. As of June 30, 2023 and December 31, 2022, the Company’s total amount of goodwill recorded was $1,148.9 million. No goodwill impairment was recognized during the three and six months ended June 30, 2023 and 2022. The following table presents the details of goodwill by segment as of June 30, 2023 and December 31, 2022: (in thousands) Market Making Execution Services Corporate Total Balance as of period-end $ 755,292 $ 393,634 $ — $ 1,148,926 As of June 30, 2023 and December 31, 2022, the Company's total amount of intangible assets recorded was $289.4 million and $321.5 million, respectively. Acquired intangible assets consisted of the following as of June 30, 2023 and December 31, 2022: As of June 30, 2023 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives Customer relationships $ 486,600 $ (213,907) $ 272,693 10 to 12 Technology 136,000 (125,853) 10,147 1 to 6 Favorable occupancy leases 5,895 (4,793) 1,102 3 to 15 Exchange memberships 3,998 — 3,998 Indefinite Trade name 3,600 (3,600) — 3 ETF issuer relationships 950 (950) — 9 ETF buyer relationships 950 (950) — 9 Other $ 1,500 $ — $ 1,500 Indefinite $ 639,493 $ (350,053) $ 289,440 As of December 31, 2022 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives Customer relationships $ 486,600 $ (189,986) $ 296,614 10 to 12 Technology 136,000 (118,119) 17,881 1 to 6 Favorable occupancy leases 5,895 (4,408) 1,487 3 to 15 Exchange memberships 3,998 — 3,998 Indefinite Trade name 3,600 (3,600) — 3 ETF issuer relationships 950 (950) — 9 ETF buyer relationships 950 (950) — 9 Other $ 1,500 $ — $ 1,500 Indefinite $ 639,493 $ (318,013) $ 321,480 Amortization expense relating to finite-lived intangible assets was approximately $16.0 million and $16.3 million for the three months ended June 30, 2023, and 2022, respectively, and $32.0 million, and $32.8 million for the six months ended June 30, 2023, and 2022, respectively. This is included in Amortization of purchased intangibles and acquired capitalized software in the accompanying Condensed Consolidated Statements of Comprehensive Income. The Company expects to record amortization expense as follows over the next five subsequent years: (in thousands) Remainder of 2023 $ 31,921 2024 50,845 2025 47,879 2026 47,879 2027 47,879 2028 47,879 |
Receivables from_Payables to Br
Receivables from/Payables to Broker-Dealers and Clearing Organizations | 6 Months Ended |
Jun. 30, 2023 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Receivables from/Payables to Broker-Dealers and Clearing Organizations | Receivables from/Payables to Broker-Dealers and Clearing Organizations The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at June 30, 2023 and December 31, 2022: (in thousands) June 30, 2023 December 31, 2022 Assets Due from prime brokers $ 966,509 $ 560,111 Deposits with clearing organizations 175,060 146,927 Net equity with futures commission merchants 106,101 137,312 Unsettled trades with clearing organizations 852 87,145 Securities failed to deliver 179,709 149,747 Commissions and fees 31,595 33,943 Total receivables from broker-dealers and clearing organizations $ 1,459,826 $ 1,115,185 Liabilities Due to prime brokers $ 501,100 $ 229,424 Net equity with futures commission merchants (1) (45,685) (32,381) Unsettled trades with clearing organizations 274,522 38 Securities failed to receive 113,734 70,576 Commissions and fees 4,606 6,186 Total payables to broker-dealers and clearing organizations $ 848,277 $ 273,843 (1) The Company presents its balances, including outstanding principal balances on all broker credit facilities, on a net-by-counterparty basis within receivables from and payables to broker-dealers and clearing organizations when the criteria for offsetting are met . Included as a deduction from “Due from prime brokers” and “Net equity with futures commission merchants” is the outstanding principal balance on all of the Company’s prime brokerage credit facilities (described in Note 8 "Borrowings") of approximately $140.6 million and $212.9 million as of June 30, 2023 and December 31, 2022, respectively. The loan proceeds from the credit facilities are available only to meet the initial margin requirements associated with the Company’s ordinary course futures and other trading positions, which are held in the Company’s trading accounts with an affiliate of the respective financial institutions. The credit facilities are fully collateralized by the Company’s trading accounts and deposit accounts with these financial institutions. “Securities failed to deliver” and “Securities failed to receive” include amounts with a clearing organization and other broker-dealers. |
Collateralized Transactions
Collateralized Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Collateralized Agreements [Abstract] | |
Collateralized Transactions | Collateralized Transactions The Company is permitted to sell or repledge securities received as collateral and use these securities to secure repurchase agreements, enter into securities lending transactions or deliver these securities to counterparties or clearing organizations to cover short positions. At June 30, 2023 and December 31, 2022, substantially all of the securities received as collateral have been repledged. The fair value of the collateralized transactions at June 30, 2023 and December 31, 2022 are summarized as follows: (in thousands) June 30, 2023 December 31, 2022 Securities received as collateral: Securities borrowed $ 1,631,134 $ 1,148,238 Securities purchased under agreements to resell 793,815 336,849 $ 2,424,949 $ 1,485,087 In the normal course of business, the Company pledges qualified securities with clearing organizations to satisfy daily margin and clearing fund requirements. Financial instruments owned and pledged, where the counterparty has the right to repledge, at June 30, 2023 and December 31, 2022 consisted of the following: (in thousands) June 30, 2023 December 31, 2022 Equities $ 1,285,503 $ 957,443 Exchange traded notes 11,713 5,628 $ 1,297,216 $ 963,071 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Short-term Borrowings, net The following summarizes the Company's short-term borrowing balances outstanding, net of related debt issuance costs, with each described in further detail below. June 30, 2023 (in thousands) Borrowing Outstanding Deferred Debt Issuance Cost Short-term Borrowings, net Broker-dealer credit facilities $ 115,000 $ (3,279) $ 111,721 $ 115,000 $ (3,279) $ 111,721 December 31, 2022 (in thousands) Borrowing Outstanding Deferred Debt Issuance Cost Short-term Borrowings, net Short-term bank loans 3,944 — 3,944 $ 3,944 $ — $ 3,944 Broker-Dealer Credit Facilities The Company is a party to two secured credit facilities with a financial institution to finance overnight securities positions purchased as part of its ordinary course broker-dealer market making activities. One of the facilities (the “Uncommitted Facility”) is provided on an uncommitted basis with an aggregate borrowing limit of $400 million, and is collateralized by VAL's trading and deposit account maintained at the financial institution. The second credit facility (the “Committed Facility”) with the same financial institution has a borrowing limit of $650 million. The Committed Facility consists of two borrowing bases: Borrowing Base A Loan is to be used to finance the purchase and settlement of securities; Borrowing Base B Loan is to be used to fund margin deposit with the National Securities Clearing Corporation. Borrowing Base A Loans are available up to $650 million and bear interest at the adjusted Secured Overnight Financing Rate ("SOFR") or base rate plus 1.25% per annum. Borrowing Base B Loans are subject to a sublimit of $300 million and bear interest at the adjusted SOFR or base rate plus 2.50% per annum. A commitment fee of 0.50% per annum on the average daily unused portion of this facility is payable quarterly in arrears. On May 25, 2022, Virtu Financial Singapore Pte. Ltd. entered into a revolving credit facility with a financial institution (the "Overdraft Facility") to provide a source of short-term financing. The facility has an aggregate borrowing limit of $10 million, and bears interest at the adjusted SOFR or base rate plus 3.5% per annum. On March 20, 2020, VAL entered into a Loan Agreement (the “Founder Member Loan Facility”) with TJMT Holdings LLC (the “Founder Member”), as lender and administrative agent, providing for unsecured term loans from time to time (the “Founder Member Loans”) in an aggregate original principal amount not to exceed $300 million. The Founder Member Loans were available to be borrowed in one or more borrowings on or after March 20, 2020 and prior to September 20, 2020 (the "Founder Member Loan Term"). The Founder Member Loan Facility Term expired as of September 20, 2020 without VAL having borrowed any Founder Member Loans at any time. The Founder Member is an affiliate of Mr. Vincent Viola, the Company’s founder and Chairman Emeritus. Upon the execution of and in consideration for the Lender’s (as defined in the Founder Member Loan Facility) commitments under the Founder Member Loan Facility, the Company delivered to the Founder Member a warrant to purchase shares of the Company’s Class A Common Stock. Terms of the warrant are set forth in further detail in Note 17 "Capital Structure". The following summarizes the Company’s broker-dealer credit facilities' carrying values, net of unamortized debt issuance costs, where applicable. These balances are included within Short-term borrowings on the Condensed Consolidated Statements of Financial Condition. At June 30, 2023 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 6.26% $ 400,000 $ 110,000 $ (3,279) $ 106,721 Committed facility 8.47% 650,000 — — — Overdraft facility 8.59% 10,000 5,000 — 5,000 $ 1,060,000 $ 115,000 $ (3,279) $ 111,721 At December 31, 2022 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 5.50% $ 400,000 $ — $ — $ — Committed facility 7.67% 650,000 — — — Overdraft facility 7.80% 10,000 — — — $ 1,060,000 $ — $ — $ — The following summarizes interest expense for the broker-dealer facilities. Interest expense is included within Interest and dividends expense in the accompanying Condensed Consolidated Statements of Comprehensive Income. Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Broker-dealer credit facilities: Uncommitted facility $ 1,987 $ 789 $ 3,547 $ 1,293 Committed facility — 23 — 38 $ 1,987 $ 812 $ 3,547 $ 1,331 Short-Term Bank Loans The Company’s international securities clearance and settlement activities are funded with operating cash or with short-term bank loans in the form of overdraft facilities. At June 30, 2023, there was no balance associated with international settlement activities outstanding under these facilities. At December 31, 2022, there was $3.9 million associated with international settlement activities outstanding under these facilities at a weighted average interest rate of approximately 3.8%. These short-term bank loan balances are included within Short-term borrowings on the Condensed Consolidated Statements of Financial Condition. Prime Brokerage Credit Facilities The Company maintains short-term credit facilities with various prime brokers and other financial institutions from which it receives execution or clearing services. The proceeds of these facilities are used to meet margin requirements associated with the products traded by the Company in the ordinary course, and amounts borrowed are collateralized by the Company’s trading accounts with the applicable financial institution. At June 30, 2023 (in thousands) Weighted Average Financing Borrowing Prime Brokerage Credit Facilities: Prime brokerage credit facilities (1) 7.87% $ 591,000 $ 140,644 $ 591,000 $ 140,644 At December 31, 2022 (in thousands) Weighted Average Financing Borrowing Prime Brokerage Credit Facilities: Prime brokerage credit facilities (1) 7.42% $ 591,000 $ 212,912 $ 591,000 $ 212,912 (1) Outstanding borrowings are included with Receivables from/Payables to broker-dealers and clearing organizations within the Condensed Consolidated Statements of Financial Condition. Interest expense in relation to the facilities was $3.6 million and $1.7 million for the three months ended June 30, 2023 and 2022, respectively, and $7.1 million and $3.3 million for the six months ended June 30, 2023 and 2022, respectively. Long-Term Borrowings The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable: At June 30, 2023 (in thousands) Maturity Interest Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: First Lien Term Loan Facility January 2029 8.19% $ 1,782,000 $ (3,526) $ (24,457) $ 1,754,017 SBI bonds January 2026 5.00% 24,253 — — 24,253 $ 1,806,253 $ (3,526) $ (24,457) $ 1,778,270 At December 31, 2022 (in thousands) Maturity Interest Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: First Lien Term Loan Facility January 2029 7.42% $ 1,800,000 $ (3,881) $ (26,858) $ 1,769,261 SBI bonds January 2026 5.00% 26,693 — (2) 26,691 $ 1,826,693 $ (3,881) $ (26,860) $ 1,795,952 Credit Agreements In connection with the ITG Acquisition, Virtu Financial, VFH, and Impala Borrower LLC (the "Acquisition Borrower") entered into a credit agreement, with the lenders party thereto, Jefferies Finance LLC, as administrative agent and Jefferies Finance LLC and RBC Capital Markets, as joint lead arrangers and joint bookrunners (the "Acquisition Credit Agreement"). On January 13, 2022 (the “Credit Agreement Closing Date”), Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”), entered into a credit agreement with the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc, Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp., as joint lead arrangers and bookrunners (the “Credit Agreement”). The Credit Agreement provides (i) a senior secured first lien term loan in an aggregate principal amount of $1,800.0 million, drawn in its entirety on the Credit Agreement Closing Date, the proceeds of which were used by VFH to repay all amounts outstanding under the Acquisition Credit Agreement, to pay fees and expenses in connection therewith, to fund share repurchases under the Company’s repurchase program, and for general corporate purposes, and (ii) a $250.0 million senior secured first lien revolving facility to VFH, with a $20.0 million letter of credit subfacility and a $20.0 million swingline subfacility. The term loan borrowings and revolver borrowings under the Credit Agreement bear interest at a per annum rate equal to, at the Company’s election, either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) an adjusted term SOFR rate with an interest period of one month plus 1.00% and (d)(1) in the case of term loan borrowings, 1.50% and (2) in the case of revolver borrowings, 1.00%, plus, (x) in the case of term loan borrowings, 2.00% and (y) in the case of revolver borrowings, 1.50%, or (ii) the greater of (a) an adjusted term SOFR rate for the interest period in effect and (b) (1) in the case of term loan borrowings, 0.50% and (2) in the case of revolver borrowings, 0.00%, plus, (x) in the case of term loan borrowings, 3.00% and (y) in the case of revolver borrowings, 2.50%. In addition, a commitment fee accrues at a rate of 0.50% per annum on the average daily unused amount of the revolving facility, with step-downs to 0.375% and 0.25% per annum based on VFH’s first lien leverage ratio, and is payable quarterly in arrears. The revolving facility under the Credit Agreement is subject to a springing net first lien leverage ratio test which may spring into effect as of the last day of a fiscal quarter if usage of the aggregate revolving commitments exceeds a specified level as of such date. VFH is also subject to contingent principal prepayments based on excess cash flow and certain other triggering events. Borrowings under the Credit Agreement are guaranteed by Virtu Financial and VFH’s material non-regulated domestic restricted subsidiaries and secured by substantially all of the assets of VFH and the guarantors, in each case, subject to certain exceptions. The Credit Agreement contains certain customary covenants and events of default, including relating to a change of control. If an event of default occurs and is continuing, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts outstanding under the Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Credit Agreement. Under the Credit Agreement, the term loans will mature on January 13, 2029. The term loans amortize in annual installments equal to 1.0% of the original aggregate principal amount of the term loans and the Company repaid $18.0 million on January 13, 2023. The revolving commitments will terminate on January 13, 2025. As of June 30, 2023, $1,782 million was outstanding under the term loans, and there were no amounts outstanding under the first lien revolving facility. In October 2019, the Company entered into a five-year $525 million floating-to-fixed interest rate swap agreement. In January 2020, the Company also entered into a five-year $1,000 million floating-to-fixed interest rate swap agreement. These two interest rate swaps met the criteria to be considered and were designated qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and they effectively fixed interest payment obligations on $525.0 million and $1,000 million of principal under the Acquisition First Lien Term Loan Facility at rates of 4.3% and 4.4% through September 2024 and January 2025, respectively, based on the interest rates set forth in the Acquisition Credit Agreement. In April 2021, each of the swap agreements described above was novated to another counterparty and amended in connection with such novation. The amendments included certain changes to collateral posting obligations, and also had the effect of increasing the effective fixed interest payment obligations to rates of 4.5%, with respect to the earlier maturing swap arrangement, and 4.6% with respect to the later maturing swap arrangement. In January 2022, in order to align the swap agreements with the Credit Agreement, the Company amended each of the swap agreements to align the floating rate term of such swap agreements to SOFR. The effective fixed interest payment obligations remained at 4.5%, with respect to the earlier maturing swap arrangement, and 4.6% with respect to the later maturing swap arrangement. SBI Bonds On July 25, 2016, VFH issued Japanese Yen Bonds (collectively the “SBI Bonds”) in the aggregate principal amount of ¥3.5 billion ($33.1 million at issuance date) to SBI Life Insurance Co., Ltd. and SBI Insurance Co., Ltd. The proceeds from the SBI Bonds were used to partially fund the investment in Japannext Co., Ltd. (as described in Note 9 "Financial Assets and Liabilities"). The SBI Bonds are guaranteed by Virtu Financial. The SBI Bonds are subject to fluctuations on the Japanese Yen currency rates relative to the Company’s reporting currency (U.S. Dollar) with the changes reflected in Other, net in the Condensed Consolidated Statements of Comprehensive Income. In December 2022, the maturity of the SBI Bonds was extended to 2026. The principal balance was ¥3.5 billion ($24.3 million) as of June 30, 2023 and ¥3.5 billion ($26.7 million) as of December 31, 2022. The Company had a gain of $2.1 million and a gain of $3.0 million for the three months ended June 30, 2023 and 2022, respectively, and a gain of $2.4 million, and a gain of $4.9 million, during the six months ended June 30, 2023 and 2022, respectively, due to changes in foreign currency rates. As of June 30, 2023, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows: (in thousands) June 30, 2023 Remainder of 2023 $ — 2024 18,000 2025 18,000 2026 42,253 2027 18,000 2028 18,000 Thereafter 1,692,000 Total principal of long-term borrowings $ 1,806,253 |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities | Financial Assets and Liabilities Financial Instruments Measured at Fair Value The fair value of equities, options, on-the-run U.S. government obligations and exchange traded notes is estimated using recently executed transactions and market price quotations in active markets and are categorized as Level 1 with the exception of inactively traded equities and certain other financial instruments, which are categorized as Level 2. The Company’s corporate bonds, derivative contracts and other U.S. and non-U.S. government obligations have been categorized as Level 2. Fair value of the Company’s derivative contracts is based on the indicative prices obtained from a number of banks and broker-dealers, as well as management’s own analyses. The indicative prices have been independently validated through the Company’s risk management systems, which are designed to check prices with information independently obtained from exchanges and venues where such financial instruments are listed or to compare prices of similar instruments with similar maturities for listed financial futures in foreign exchange. The Company prices certain financial instruments held for trading at fair value based on theoretical prices, which can differ from quoted market prices. The theoretical prices reflect price adjustments primarily caused by the fact that the Company continuously prices its financial instruments based on all available information. This information includes prices for identical and near-identical positions, as well as the prices for securities underlying the Company’s positions, on other exchanges that are open after the exchange on which the financial instruments is traded closes. The Company validates that all price adjustments can be substantiated with market inputs and checks the theoretical prices independently. Consequently, such financial instruments are classified as Level 2. Fair value measurements for those items measured on a recurring basis are summarized below as of June 30, 2023: June 30, 2023 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 781,837 $ 1,724,573 $ — $ — $ 2,506,410 U.S. and Non-U.S. government obligations 775,363 524,523 — — 1,299,886 Corporate Bonds — 1,323,402 — — 1,323,402 Exchange traded notes 57 12,989 — — 13,046 Currency forwards — 611,584 — (603,560) 8,024 Options 4,316 — — — 4,316 $ 1,561,573 $ 4,197,071 $ — $ (603,560) $ 5,155,084 Financial instruments owned, pledged as collateral: Equity securities $ 770,965 $ 514,538 $ — $ — $ 1,285,503 Exchange traded notes 6 11,707 — — 11,713 $ 770,971 $ 526,245 $ — $ — $ 1,297,216 Other Assets Equity investment $ — $ — $ 71,059 $ — $ 71,059 Exchange stock 2,376 — — — 2,376 $ 2,376 $ — $ 71,059 $ — $ 73,435 Receivables from broker dealers and clearing organizations: Interest rate swap $ — $ 81,141 $ — $ — $ 81,141 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 1,495,283 $ 1,428,486 $ — $ — $ 2,923,769 U.S. and Non-U.S. government obligations 55,665 1,581,936 — — 1,637,601 Corporate Bonds — 1,202,295 — — 1,202,295 Exchange traded notes 7 44,682 — — 44,689 Currency forwards — 657,348 (657,348) — Options 4,533 — 4,533 $ 1,555,488 $ 4,914,747 $ — $ (657,348) $ 5,812,887 Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2022: December 31, 2022 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 461,487 $ 1,545,116 $ — $ — $ 2,006,603 U.S. and Non-U.S. government obligations 251,708 575,946 — — 827,654 Corporate Bonds — 803,880 — — 803,880 Exchange traded notes 51 16,777 — — 16,828 Currency forwards — 500,553 — (493,237) 7,316 Options 5,200 — — — 5,200 $ 718,446 $ 3,442,272 $ — $ (493,237) $ 3,667,481 Financial instruments owned, pledged as collateral: Equity securities $ 552,641 $ 404,802 $ — $ — $ 957,443 Exchange traded notes 6 5,622 — — 5,628 $ 552,647 $ 410,424 $ — $ — $ 963,071 Other Assets Equity investment $ — $ — $ 76,613 $ — $ 76,613 Exchange stock 2,352 — — — 2,352 $ 2,352 $ — $ 76,613 $ — $ 78,965 Receivables from broker dealers and clearing organizations: Interest rate swap — 87,268 — — 87,268 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 1,146,701 $ 1,016,893 $ — $ — $ 2,163,594 U.S. and Non-U.S. government obligations 147,418 690,480 — — 837,898 Corporate Bonds — 1,183,394 — — 1,183,394 Exchange traded notes — 8,199 — — 8,199 Currency forwards — 497,799 — (497,799) — Options 3,889 — — — 3,889 $ 1,298,008 $ 3,396,765 $ — $ (497,799) $ 4,196,974 JNX Investment The Company has a minority investment (the “JNX Investment”) in Japannext Co., Ltd. (“JNX”), formerly known as SBI Japannext Co., Ltd., a proprietary trading system based in Tokyo. In connection with the JNX Investment, the Company issued the SBI Bonds (as described in Note 8 "Borrowings") and used the proceeds to partially finance the transaction. The JNX Investment is included within Level 3 of the fair value hierarchy. As of June 30, 2023 and December 31, 2022, the fair value of the JNX Investment was determined using a weighted average of valuations using 1) the discounted cash flow method, an income approach; 2) a market approach based on average enterprise value/EBITDA ratios of comparable companies; and to a lesser extent 3) a transaction approach based on transaction values of comparable companies. The fair value measurement is highly sensitive to significant changes in the unobservable inputs, and significant increases (decreases) in discount rate or decreases (increases) in enterprise value/EBITDA multiples would result in a significantly lower (higher) fair value measurement. The table below presents information on the valuation techniques, significant unobservable inputs and their ranges for the JNX Investment: June 30, 2023 (in thousands) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average Equity investment $ 71,059 Discounted cash flow Estimated revenue growth 0.8% - 6.4% 4.1 % Discount rate 15.5% - 15.5% 15.5 % Market Future enterprise value/ EBIDTA ratio 7.4x - 18.3x 11.4x December 31, 2022 (in thousands) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average Equity investment $ 76,613 Discounted cash flow Estimated revenue growth (5.7)% - 5.0% 3.1 % Discount rate 15.5% - 15.5% 15.5 % Market Future enterprise value/ EBIDTA ratio (1.2)x - 18.1x 12.2x Changes in the fair value of the JNX Investment are included within Other, net The following presents the changes in the Company's Level 3 financial instruments measured at fair value on a recurring basis: Three Months Ended June 30, 2023 (in thousands) Balance at March 31, 2023 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2023 Assets Other assets: Equity investment $ 79,726 $ — $ (8,667) $ — $ — $ 71,059 $ (8,667) Total $ 79,726 $ — $ (8,667) $ — $ — $ 71,059 $ (8,667) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Three Months Ended June 30, 2022 (in thousands) Balance at March 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2022 Assets Other assets: Equity investment $ 84,482 $ — $ (6,920) $ — $ — $ 77,562 $ (6,920) Total $ 84,482 $ — $ (6,920) $ — $ — $ 77,562 $ (6,920) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Six Months Ended June 30, 2023 (in thousands) Balance at December 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2023 Assets Other assets: Equity investment $ 76,613 $ — $ (5,554) $ — $ — $ 71,059 $ (5,554) Total $ 76,613 $ — $ (5,554) $ — $ — $ 71,059 $ (5,554) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Six Months Ended June 30, 2022 (in thousands) Balance at December 31, 2021 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2022 Assets Other assets: Equity investment $ 81,358 $ — $ (3,796) $ — $ — $ 77,562 $ (3,796) Total $ 81,358 $ — $ (3,796) $ — $ — $ 77,562 $ (3,796) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Financial Instruments Not Measured at Fair Value The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the Condensed Consolidated Statements of Financial Condition. The table below excludes non-financial assets and liabilities. The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximates fair value due to the relatively short-term nature of the underlying assets. The fair value of the Company’s long-term borrowings is based on quoted prices from the market for similar instruments, and is categorized as Level 2 in the fair value hierarchy. The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of June 30, 2023: June 30, 2023 Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 698,674 $ 698,674 $ 698,674 $ — $ — Cash restricted or segregated under regulations and other 47,133 47,133 47,133 — — Securities borrowed 1,665,179 1,665,179 — 1,665,179 — Securities purchased under agreements to resell 793,815 793,815 — 793,815 — Receivables from broker-dealers and clearing organizations 1,378,685 1,378,685 — 1,378,685 — Receivables from customers 130,623 130,623 — 130,623 — Other assets (1) 32,967 32,967 11,758 21,209 — Total Assets $ 4,747,076 $ 4,747,076 $ 757,565 $ 3,989,511 $ — Liabilities Short-term borrowings $ 111,721 $ 115,000 $ — $ 115,000 $ — Long-term borrowings 1,778,270 1,801,798 — 1,801,798 — Securities loaned 1,306,894 1,306,894 — 1,306,894 — Securities sold under agreements to repurchase 1,120,151 1,120,151 — 1,120,151 — Payables to broker-dealers and clearing organizations 848,277 848,277 — 848,277 — Payables to customers 39,740 39,740 — 39,740 — Other liabilities (2) 24,255 24,255 — 24,255 — Total Liabilities $ 5,229,308 $ 5,256,115 $ — $ 5,256,115 $ — (1) Includes cash collateral and deposits, and interest and dividends receivables. (2) Includes deposits, interest and dividends payable. The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2022: December 31, 2022 Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 981,580 $ 981,580 $ 981,580 $ — $ — Cash restricted or segregated under regulations and other 56,662 56,662 56,662 — — Securities borrowed 1,187,674 1,187,674 — 1,187,674 — Securities purchased under agreements to resell 336,999 336,999 — 336,999 — Receivables from broker-dealers and clearing organizations 1,027,917 1,027,917 — 1,027,917 — Receivables from customers 80,830 80,830 — 80,830 — Other assets (1) 30,579 30,579 — 30,579 — Total Assets $ 3,702,241 $ 3,702,241 $ 1,038,242 $ 2,663,999 $ — Liabilities Short-term borrowings 3,944 3,944 — 3,944 — Long-term borrowings 1,795,952 1,783,943 — 1,783,943 — Securities loaned 1,060,432 1,060,432 — 1,060,432 — Securities sold under agreements to repurchase 627,549 627,549 — 627,549 — Payables to broker dealer and clearing organizations 273,843 273,843 — 273,843 — Payables to customers 46,525 46,525 — 46,525 — Other liabilities (2) 23,776 23,776 — 23,776 — Total Liabilities $ 3,832,021 $ 3,820,012 $ — $ 3,820,012 $ — (1) Includes cash collateral and deposits, and interest and dividends receivables. (2) Includes deposits, interest and dividends payable. Offsetting of Financial Assets and Liabilities The Company does not net securities borrowed and securities loaned, or securities purchased under agreements to resell and securities sold under agreements to repurchase. These financial instruments are presented on a gross basis in the Condensed Consolidated Statements of Financial Condition. In the tables below, the amounts of financial instruments owned that are not offset in the Condensed Consolidated Statements of Financial Condition, but could be netted against financial liabilities with specific counterparties under legally enforceable master netting agreements in the event of default, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these financial instruments. The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of June 30, 2023 and December 31, 2022: June 30, 2023 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,665,179 $ — $ 1,665,179 $ (1,631,134) $ (6,261) $ 27,784 Securities purchased under agreements to resell 793,815 — 793,815 (793,815) — — Receivables from broker-dealers and clearing organizations: Interest rate swaps 81,141 — 81,141 — — 81,141 Trading assets, at fair value: Currency forwards 611,584 (603,560) 8,024 — — 8,024 Options 4,316 — 4,316 — (3,978) 338 Total $ 3,156,035 $ (603,560) $ 2,552,475 $ (2,424,949) $ (10,239) $ 117,287 Gross Amounts of Recognized Liabilities Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instruments Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,306,894 $ — $ 1,306,894 $ (1,287,973) $ (6,614) $ 12,307 Securities sold under agreements to repurchase 1,120,151 — 1,120,151 (1,120,151) — — Trading liabilities, at fair value: Currency forwards 657,348 (657,348) — — — — Options 4,533 — 4,533 — (3,978) 555 Total $ 3,088,926 $ (657,348) $ 2,431,578 $ (2,408,124) $ (10,592) $ 12,862 December 31, 2022 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,187,674 $ — $ 1,187,674 $ (1,148,238) $ (5,138) $ 34,298 Securities purchased under agreements to resell 336,999 — 336,999 (336,849) — 150 Receivables from broker-dealers and clearing organizations Interest rate swaps 87,268 — 87,268 — — 87,268 Trading assets, at fair value: Currency forwards 500,553 (493,237) 7,316 — — 7,316 Options 5,200 — 5,200 — (3,889) 1,311 Total $ 2,117,694 $ (493,237) $ 1,624,457 $ (1,485,087) $ (9,027) $ 130,343 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,060,432 $ — $ 1,060,432 $ (1,027,062) $ (9,100) $ 24,270 Securities sold under agreements to repurchase 627,549 — 627,549 (627,388) — 161 Trading liabilities, at fair value: Currency forwards 497,799 (497,799) — — — — Options 3,889 — 3,889 — (3,889) — Total $ 2,189,669 $ (497,799) $ 1,691,870 $ (1,654,450) $ (12,989) $ 24,431 The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged as of June 30, 2023 and December 31, 2022: June 30, 2023 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 61 - 90 Greater than 90 Total Securities sold under agreements to repurchase: Equity securities $ — $ 140,000 $ 150,000 $ 110,000 $ — $ 400,000 U.S. and Non-U.S. government obligations 720,151 — — — 720,151 Total $ 720,151 $ 140,000 $ 150,000 $ 110,000 $ — $ 1,120,151 Securities loaned: Equity securities $ 1,306,894 $ — $ — $ — $ — $ 1,306,894 Total $ 1,306,894 $ — $ — $ — $ — $ 1,306,894 December 31, 2022 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 61 - 90 Greater than 90 Total Securities sold under agreements to repurchase: Equity securities $ — $ 250,000 $ 100,000 $ 50,000 $ — $ 400,000 U.S. and Non-U.S. government obligations 227,549 — — — — 227,549 Total $ 227,549 $ 250,000 $ 100,000 $ 50,000 $ — $ 627,549 Securities loaned: Equity securities 1,060,432 — — — — 1,060,432 Total $ 1,060,432 $ — $ — $ — $ — $ 1,060,432 |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The fair value of the Company’s derivative instruments on a gross basis consisted of the following at June 30, 2023 and December 31, 2022: (in thousands) June 30, 2023 December 31, 2022 Derivatives Assets Financial Statement Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Receivables from broker-dealers and clearing organizations $ (304) $ 774,998 $ (575) $ 663,110 Commodity futures Receivables from broker-dealers and clearing organizations (3,636) 5,706,595 (31,007) 7,597,057 Currency futures Receivables from broker-dealers and clearing organizations (8,169) 3,226,865 (24,023) 7,460,531 Fixed income futures Receivables from broker-dealers and clearing organizations 9 24,469 (360) 30,292 Options Financial instruments owned 4,316 1,288,736 5,200 691,737 Currency forwards Financial instruments owned 611,584 44,930,685 500,553 30,286,330 Derivative instruments designated as hedging instruments: Interest rate swap Receivables from broker-dealers and clearing organizations 81,141 1,525,000 87,268 1,525,000 Derivatives Liabilities Financial Statement Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Payables to broker-dealers and clearing organizations $ (951) $ 1,303,263 $ 1,819 $ 3,238,651 Commodity futures Payables to broker-dealers and clearing organizations 358 35,234 597 39,046 Currency futures Payables to broker-dealers and clearing organizations (3,252) 566,817 8 6,386 Fixed income futures Payables to broker-dealers and clearing organizations (136) 149,069 (264) 123,043 Options Financial instruments sold, not yet purchased 4,533 1,245,988 3,889 742,531 Currency forwards Financial instruments sold, not yet purchased 657,348 44,953,567 497,799 30,284,952 Amounts included in receivables from and payables to broker-dealers and clearing organizations represent net variation margin on long and short futures contracts as well as amounts receivable or payable on interest rate swaps. The following table summarizes the net gain (loss) from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in total revenues, and from those designated as hedging instruments under ASC 815, which are initially recorded in other comprehensive income in the accompanying Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022. Three Months Ended June 30, Six Months Ended June 30, (in thousands) Financial Statements Location 2023 2022 2023 2022 Derivative instruments not designated as hedging instruments: Futures Trading income, net $ (4,449) $ 118,455 $ 120,017 $ 195,801 Currency forwards Trading income, net 16,750 (44,665) (46,187) (35,754) Options Trading income, net (1,510) 157 1,145 (938) Interest rate swap on term loan Other, net (469) (469) (932) (932) $ 10,322 $ 73,478 $ 74,043 $ 158,177 Derivative instruments designated as hedging instruments: Interest rate swaps (1) Other comprehensive income $ 9,514 $ 16,430 $ (5,879) $ 72,575 $ 9,514 $ 16,430 $ (5,879) $ 72,575 (1) The Company entered into a five-year $1,000 million floating-to-fixed interest rate swap agreement in the first quarter of 2020 and a five-year $525 million floating-to-fixed interest rate swap agreement in the fourth quarter of 2019. These two interest rate swaps met the criteria to be considered qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and as such, the mark-to-market gains (losses) on the instruments were deferred within Other comprehensive income on the Condensed Consolidated Statements of Comprehensive Income beginning in the first quarter of 2020. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities A variable interest entity (“VIE”) is an entity that lacks one or more of the following characteristics: (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The Company will be considered to have a controlling financial interest and will consolidate a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company has interests in two joint ventures (“JV”) that build and maintain microwave communication networks in the U.S., Europe, and Asia. The Company and its JV partners each pay monthly fees for the use of the microwave communication networks in connection with their respective trading activities, and the JVs may sell excess bandwidth that is not utilized by the JV members to third parties. As of June 30, 2023, the Company held noncontrolling interests of 11.1% and 50.0%, respectively, in these JVs. The Company has an interest in a JV that offers derivatives trading technology and execution services to broker-dealers, professional traders and select hedge funds. As of June 30, 2023, the Company held approximately a 9.8% noncontrolling interest in this JV. The Company has an interest in a JV that operates a member-owned equities exchange with the goal of increasing competition and transparency, while reducing fixed costs and simplifying execution of equity trading in the U.S. As of June 30, 2023, the Company held approximately a 14.2% noncontrolling interest in this JV. In the second quarter of 2022, the Company invested in a JV that was formed for the purpose of developing and operating a cryptocurrency trading platform with the goal of increasing competition and transparency, while improving trading performance and reducing operational risk. As of June 30, 2023, the Company held approximately a 9.3% noncontrolling interest in this JV. The Company's five JVs noted above meet the criteria to be considered VIEs, which it does not consolidate. The Company records its interest in each JV under the equity method of accounting and records its investment in the JVs within Other assets and its amounts payable for communication services provided by the applicable JVs within Accounts payable, accrued expenses and other liabilities on the Statements of Financial Condition. The Company records its pro-rata share of each JV's earnings or losses within Other, net and fees related to the use of communication services provided by the JVs within Communications and data processing on the Condensed Consolidated Statements of Comprehensive Income. The Company’s exposure to the obligations of these VIEs is generally limited to its interests in each respective JV, which is the carrying value of the equity investment in each JV. The following table presents the Company’s nonconsolidated VIEs at June 30, 2023: Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 50,939 $ — $ 50,939 $ 264,860 The following table presents the Company’s nonconsolidated VIEs at December 31, 2022: Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 43,589 $ — $ 43,589 $ 239,682 During the second quarter of 2022, the Company formed a JV to support the growth and expansion of a multi-asset request-for-quote communication platform. As of June 30, 2023, the Company held a 51% controlling interest in this entity. This JV meets the criteria to be considered a VIE, and based on the standard for control set forth above, the Company consolidates this entity and records the interest that the Company does not own as noncontrolling interest in the Condensed Consolidated Financial Statements. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Revenues from Contracts with Customers For more information on revenue recognition and the nature of services provided, see Note 2 "Summary of Significant Accounting Policies" and Note 13 "Revenues from Contracts with Customers" to the Consolidated Financial Statements of the Company's 2022 Annual Report on Form 10-K. Disaggregation of Revenues The following tables present the Company’s revenue from contracts with customers disaggregated by service, and timing of revenue recognition, reconciled to the Company’s segments, for the three and six months ended June 30, 2023, and 2022: Three Months Ended June 30, 2023 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 6,634 $ 69,993 $ — $ 76,627 Workflow technology — 22,576 — 22,576 Analytics — 10,301 — 10,301 Total revenue from contracts with customers 6,634 102,870 — 109,504 Other sources of revenue 398,616 6,246 (7,512) 397,350 Total revenues $ 405,250 $ 109,116 $ (7,512) $ 506,854 Timing of revenue recognition: Services transferred at a point in time $ 405,250 $ 90,940 $ (7,512) $ 488,678 Services transferred over time — 18,176 — 18,176 Total revenues $ 405,250 $ 109,116 $ (7,512) $ 506,854 Three Months Ended June 30, 2022 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 11,145 $ 90,998 $ — $ 102,143 Workflow technology — 24,334 — 24,334 Analytics — 9,863 — 9,863 Total revenue from contracts with customers 11,145 125,195 — 136,340 Other sources of revenue 421,450 5,802 41,146 468,398 Total revenues $ 432,595 $ 130,997 $ 41,146 $ 604,738 Timing of revenue recognition: Services transferred at a point in time $ 432,595 $ 112,989 $ 41,146 $ 586,730 Services transferred over time — 18,008 — 18,008 Total revenues $ 432,595 $ 130,997 $ 41,146 $ 604,738 Six Months Ended June 30, 2023 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 16,334 $ 147,251 $ — $ 163,585 Workflow technology — 47,532 — 47,532 Analytics — 19,831 — 19,831 Total revenue from contracts with customers 16,334 214,614 — 230,948 Other sources of revenue 887,835 12,979 (4,529) 896,285 Total revenues $ 904,169 $ 227,593 $ (4,529) $ 1,127,233 Timing of revenue recognition: Services transferred at a point in time $ 904,169 $ 191,419 $ (4,529) $ 1,091,059 Services transferred over time — 36,174 — 36,174 Total revenues $ 904,169 $ 227,593 $ (4,529) $ 1,127,233 Six Months Ended June 30, 2022 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 20,194 $ 199,187 $ — $ 219,381 Workflow technology — 51,270 — 51,270 Analytics — 20,344 20,344 Total revenue from contracts with customers 20,194 270,801 — 290,995 Other sources of revenue 958,964 11,941 44,100 1,015,005 Total revenues $ 979,158 $ 282,742 $ 44,100 $ 1,306,000 Timing of revenue recognition: Services transferred at a point in time $ 979,158 $ 246,303 $ 44,100 $ 1,269,561 Services transferred over time — 36,439 — 36,439 Total revenues $ 979,158 $ 282,742 $ 44,100 $ 1,306,000 Remaining Performance Obligations and Revenue Recognized from Past Performance Obligations As of June 30, 2023 and 2022, the aggregate amount of the transaction price allocated to the performance obligations relating to workflow technology and analytics revenues that are unsatisfied (or partially unsatisfied) was not material. Contract Assets and Contract Liabilities The timing of the revenue recognition may differ from the timing of payment from customers. The Company records a receivable when revenue is recognized prior to payment, and when the Company has an unconditional right to payment. The Company records a contract liability when payment is received prior to the time at which the satisfaction of the service obligation occurs. Receivables related to revenues from contracts with customers amounted to $55.8 million and $56.1 million as of June 30, 2023 and December 31, 2022, respectively. The Company did not identify any contract assets. There were no impairment losses on receivables as of June 30, 2023. Deferred revenue primarily relates to deferred commissions allocated to analytics products and subscription fees billed in advance of satisfying the performance obligations. Deferred revenue related to contracts with customers was $14.0 million and $9.6 million as of June 30, 2023 and December 31, 2022, respectively. The Company recognized the full amount of revenue during the six months ended June 30, 2023 and 2022, that had been recorded as deferred revenue in the respective prior year. The Company has not identified any costs to obtain or fulfill its contracts under ASC 606. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to U.S. federal, state and local income tax at the rate applicable to corporations less the rate attributable to the noncontrolling interest in Virtu Financial. These noncontrolling interests are subject to U.S. taxation as partnerships. Accordingly, for the three and six months ended June 30, 2023 and 2022, the income attributable to these noncontrolling interests was reported in the Condensed Consolidated Statements of Comprehensive Income, but the related U.S. income tax expense attributable to these noncontrolling interests was not reported by the Company as it is the obligation of the individual partners. The Company’s non-U.S. subsidiaries are subject to foreign income taxes in the jurisdictions in which they operate. The Company’s provisions for income taxes and effective tax rates were $5.9 million, and 16.7%, and $24.9 million, and 14.3% for the three months ended June 30, 2023 and 2022, respectively and $30.6 million, and 18.0%, and $66.7 million, and 16.0% for the six months ended June 30, 2023 and 2022, respectively. Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation. Included in Other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2023 and December 31, 2022 are current income tax receivables of $48.3 million and $54.1 million, respectively. The balances at June 30, 2023 and December 31, 2022 primarily comprised income tax benefits due to the Company from federal, state, local, and foreign tax jurisdictions based on income before taxes. Included in Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition at June 30, 2023 and December 31, 2022 are current tax liabilities of $9.3 million and $13.4 million, respectively. The balances at June 30, 2023 and December 31, 2022 primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes. Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the IPO (see Note 4 "Tax Receivable Agreements"), the Acquisition of KCG and the ITG Acquisition, differences in the valuation of financial assets and liabilities, and other temporary differences arising from the deductibility of compensation, depreciation, and other expenses in different time periods for book and income tax return purposes. There are no expiration dates on the deferred tax assets. The provisions of ASC 740 require that carrying amounts of deferred tax assets be reduced by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically with appropriate consideration given to all positive and negative evidence related to the realization of the deferred tax assets. At June 30, 2023 and December 31, 2022, the Company did not have any U.S. federal net operating loss carryforwards and therefore the Company did not record a deferred tax asset related to federal net operating loss carryforwards. At June 30, 2023 and December 31, 2022, the Company recorded deferred income taxes related to state and local net operating losses of $0.4 million. These net operating losses will begin to expire in 2039. The Company did not record a valuation allowance against this deferred tax asset. As a result of the ITG Acquisition, the Company had non-U.S. net operating losses of $66.9 million and $64.6 million at June 30, 2023 and December 31, 2022, respectively, and recorded a related deferred tax asset of $12.8 million and $12.4 million, respectively. A valuation allowance of $12.8 million and $12.4 million was recorded against this deferred tax asset at June 30, 2023 and December 31, 2022, respectively as it is more likely than not that a substantial portion of this deferred tax asset will not be realized. As a result of the Acquisition of KCG, the Company had non-U.S. net operating losses at June 30, 2023 and December 31, 2022 of $239.3 million, and recorded a related deferred tax asset of $44.9 million in both years. A full valuation allowance was also recorded against this deferred tax asset at both June 30, 2023 and December 31, 2022 as it is more likely than not that this deferred tax asset will not be realized. No valuation allowance against the remaining deferred taxes was recorded as of June 30, 2023 and December 31, 2022 because it is more likely than not that these deferred tax assets will be fully realized. The Company is subject to taxation in U.S. federal, state, local and foreign jurisdictions. As of June 30, 2023, the Company’s tax years for 2015 through 2021 and 2016 through 2021 were subject to examination by U.S. and non-U.S. tax authorities, respectively. As a result of the ITG Acquisition and the Acquisition of KCG, the Company assumed any ITG and KCG tax exposures. In addition, the Company is subject to state and local income tax examinations in various jurisdictions for the tax years 2013 through 2021. The final outcome of these examinations is not yet determinable. However, the Company anticipates that adjustments related to these examinations, if any, will not result in a material change to its financial condition, results of operations and cash flows. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income or loss before income taxes and noncontrolling interest. Penalties, if any, are recorded in Operations and administrative expense and interest received or paid is recorded in Other, net or Operations and administrative expense in the Condensed Consolidated Statements of Comprehensive Income, respectively. The Company had $6.8 million of unrecognized tax benefits as of June 30, 2023, all of which would affect the Company’s effective tax rate if recognized. The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of June 30, 2023. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Legal and Regulatory Proceedings In the ordinary course of business, the nature of the Company’s business subjects it to claims, lawsuits, regulatory examinations or investigations and other proceedings, any of which could result in the imposition of fines, penalties or other sanctions against the Company. The Company and its subsidiaries are subject to several of these matters at the present time, including, among others, a matter in which the Company has been responding to requests for information from the U.S. Securities and Exchange Commission in connection with an investigation of aspects of the Company’s internal information access barriers. The Company has continued to cooperate with this civil investigation and engaged in settlement discussions. The Company has been unable to reach a settlement and, consistent with its previous disclosure, has received a Wells Notice from the SEC, to which it has responded. The Company expects the SEC to file an action against the Company alleging violations of federal securities laws with respect to the Company’s information barriers policies and procedures for a specified time period in and around January 2018 to April 2019 and related statements made by the Company during such period. The Company believes it would have meritorious defenses in the event of such an action and intends to defend itself vigorously. Specifically, the Company would plan to assert, among other defenses, that it maintained reasonable policies, procedures and controls to protect data during the period consistent with applicable law, that related statements made to clients and investors were true and accurate, and that the statute of limitations has expired with respect to certain claims. In a matter related to the SEC investigation noted above, on May 19, 2023, the Company and certain of its current and former executive officers were named as defendants in Hiebert v. Virtu Financial, Inc., No. 23-cv-03770. The complaint was filed by a purported stockholder in the Eastern District of New York on behalf of a putative class and asserts that the Company made materially false and misleading statements and omissions in its public filings in violation of federal securities laws. The Company also received a request for information pursuant to Section 220 of the Delaware General Corporation Law from counsel for a purported stockholder. The Company believes it has meritorious defenses against pending or contemplated claims that its public disclosures in relation to the SEC investigation were inadequate or misleading. The Company maintains that such disclosures were true and accurate and compliant with applicable law and will defend itself vigorously. On November 30, 2020, the Company was named as a defendant in In re United States Oil Fund, LP Securities Litigation , No. 20-cv-4740. The consolidated amended complaint was filed in federal district court in New York on behalf of a putative class, and asserts claims against the Company and numerous other financial institutions under Section 11 of the Securities Act of 1933 in connection with trading in United States Oil Fund, LP, a crude oil ETF. The complaint also names the ETF, its sponsor, and related individuals as defendants. The complaint did not specify the amount of alleged damages. Defendants moved to dismiss the consolidated amended complaint on January 29, 2021; the motion is fully briefed and pending before the court. The Company believes that the claims are without merit and is defending itself vigorously. On March 7, 2022, the Company was named as a defendant in Iron Workers Local No. 55 Pension Fund v. Virtu Financial, Inc. , No. 2022-0211-PAF pending in the Court of Chancery of the State of Delaware. The complaint, filed by a purported stockholder, seeks to compel the inspection of certain Company books and records pursuant to Section 220 of the Delaware General Corporation Law. The complaint alleges that the stockholder seeks Company information to investigate (a) whether wrongdoing or mismanagement occurred in connection with distributions made to the partners of Virtu Financial pursuant to the Company’s Up-C corporate structure; (b) the independence and disinterestedness of the Company’s directors and/or officers and whether the directors breached their fiduciary duties; and (c) potential damages relating thereto. The Company believes that the claims are without merit and is defending itself vigorously. On October 17, 2022, the Company’s subsidiary, along with several other parties, was named as a defendant in Mallinckrodt PLC, et al. (Reorganized Debtors); Opioid Master Disbursement Trust II v. Argos Capital Appreciation Master Fund LP et al No. 20-12522. The complaint alleges that Mallinckrodt PLC engaged in a share repurchase program from 2015 through 2018 pursuant to which it repurchased its own shares in various open market transactions, a period during which it was allegedly insolvent. The plaintiff is seeking to unwind the transactions consummated under the program, alleging such transactions constituted fraudulent transfers by the debtor. The Company believes that the claims are without merit and is defending itself vigorously. On December 1, 2022, the Company’s subsidiary, along with several other parties, was named as a defendant in Northwest Biotherapeutics, Inc. v. Canaccord Genuity LLC, et al No. 1:22-cv-10185. The complaint alleges that defendants engaged in market manipulation in the plaintiff’s stock during a period from 2018 to 2022. The complaint did not specify the amount of alleged damages. The Company believes that the claims are without merit and is defending itself vigorously. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, particularly in regulatory examinations or investigations or other proceedings in which substantial or indeterminate judgments, settlements, disgorgements, restitution, penalties, injunctions, damages or fines are sought, or where such matters are in the early stages, the Company cannot estimate losses or ranges of losses for such matters where there is only a reasonable possibility that a loss may be incurred, and utilizes its judgment in accordance with applicable accounting standards in booking any associated estimated liability. It is not presently possible to determine the ultimate exposure to these matters and it is possible that the resolution of the outstanding matters will significantly exceed any estimated liabilities accrued by the Company. In addition, there are numerous factors that result in a greater degree of complexity in class-action lawsuits as compared to other types of litigation. There can be no assurance that these various legal proceedings will not significantly exceed any estimated liability accrued by the Company or have a material adverse effect on the Company’s results of operations in any future period, and a material judgment, fine or sanction could have a material adverse impact on the Company’s financial condition, results of operations and cash flows. However, it is the opinion of management, after consultation with legal counsel that, based on information currently available, the ultimate outcome of these matters will not have a material adverse impact on the business, financial condition or operating results of the Company, although they might be material to the operating results for any particular reporting period. The Company carries directors’ and officers’ liability insurance coverage and other insurance coverage for potential claims, including securities actions, against the Company and its respective directors and officers. Other Legal and Regulatory Matters The Company owns subsidiaries including regulated entities that are subject to extensive oversight under federal, state and applicable international laws as well as self-regulatory organization (“SRO”) rules. Changes in market structure and the need to remain competitive require constant changes to the Company's systems, order routing and order handling procedures. The Company makes these changes while continuously endeavoring to comply with many complex laws and rules. Compliance, surveillance and trading issues common in the securities industry are monitored by, reported to, and/or reviewed in the ordinary course of business by the Company's regulators in the U.S. and abroad. As a major order flow execution destination, the Company is named from time to time in, or is asked to respond to a number of regulatory matters brought by U.S. regulators, foreign regulators, SROs, as well as actions brought by private plaintiffs, which arise from its business activities. There has recently been an increased focus by regulators on Anti-Money Laundering and sanctions compliance by broker-dealers and similar entities, as well as an enhanced interest on suspicious activity reporting and transactions involving microcap and low-priced securities. In addition, there has been increased regulatory, congressional and media scrutiny of U.S. equities market structure, the retail trading environment in the U.S., wholesale market making and the relationships between retail broker-dealers and market making firms including, but not limited to, payment for order flow arrangements, other remuneration arrangements such as profit-sharing relationships and exchange fee and rebate structures, alternative trading systems and off-exchange trading more generally, high frequency trading, short selling, market fragmentation, colocation, and access to market data feeds. Specifically, in 2022 the SEC proposed several rule changes focused on equity market structure reform. These proposals include, but are not limited to, (i) Proposed Rule 615 of Regulation NMS, which proposes to dramatically change U.S. equities market structure, the routing, handling and potentially the amount, character and cost of retail order flow, (ii) Regulation Best Execution, which would impose best execution requirements on broker-dealers which would be distinct from, but overlapping with, FINRA’s existing best execution rule (Rule 5310), (iii) proposed rule amendments to minimum pricing increments under Rule 612 or Regulation NMS, access fee caps under Rule 610 of Regulation NMS, acceleration of the implementation of certain Market Data Infrastructure Rules, and amendment to the odd-lot information definition adopted under the MDI rules (collectively referred to as the “tick size, access fees and infostructure rule proposals”), and (iv) amendments to Rule 605 of Regulation NMS, along with a series of amendments to the definition of Exchange and Alternative Trading Systems (ATS), which would expand the scope of exchange and ATS registration and compliance requirements. Further, in 2023, the SEC proposed amendments to expand and update Regulation Systems Compliance and Integrity (SCI) and has indicated that additional rule proposals may be forthcoming. If adopted, these or other potential rule changes could adversely affect the Company’s business or the Company’s industry. As indicated above, from time to time, the Company is the subject of requests for information and documents from the SEC, the Financial Industry Regulatory Authority ("FINRA"), state attorneys general, and other regulators and governmental authorities. It is the Company's practice to cooperate and comply with the requests for information and documents. As indicated above, the Company is currently the subject of various regulatory reviews and investigations by state, federal and foreign regulators and SROs, including the SEC and FINRA. In some instances, these matters may result in a disciplinary action and/or a civil or administrative action. Representations and Warranties; Indemnification Arrangements In the normal course of its operations, the Company enters into contracts that contain a variety of representations and warranties in addition to indemnification obligations, including indemnification obligations in connection with the Acquisition of KCG and the ITG Acquisition. The Company's maximum exposure under these arrangements is currently unknown, as any such exposure could relate to claims not yet brought or events which have not yet occurred. For example, in November 2013, KCG sold Urban Financial of America, LLC (“Urban”), the reverse mortgage origination and securitization business previously owned by Knight Capital Group, Inc., to an investor group now known as Finance of America Reverse, LLC (“FAR”). Pursuant to the terms of the Stock Purchase Agreement between KCG and FAR, Virtu has certain continuing obligations related to KCG's prior ownership of Urban. Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and general indemnifications. The Company has also provided general indemnifications to its managers, officers, directors, employees, and agents against expenses, legal fees, judgments, fines, settlements, and other amounts actually and reasonably incurred by such persons under certain circumstances as more fully disclosed in its operating agreement. The overall maximum amount of the obligations (if any) cannot reasonably be estimated as it will depend on the facts and circumstances that give rise to any future claims. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company primarily enters into lessee arrangements for corporate office space, data centers, and technology equipment. For more information on lease accounting, see Note 2 "Summary of Significant Accounting Policies" and Note 16 "Leases" to the Consolidated Financial Statements of the Company's 2022 Annual Report on Form 10-K Lease assets and liabilities are summarized as follows: (in thousands) Financial Statement Location June 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets Operating lease right-of-use assets $ 174,136 $ 187,442 Operating lease liabilities Operating lease liabilities 224,086 239,202 Finance leases Property and equipment, at cost Property, equipment, and capitalized software, net 36,343 27,908 Accumulated depreciation Property, equipment, and capitalized software, net (12,985) (12,736) Finance lease liabilities Accounts payable, accrued expenses, and other liabilities 23,682 15,323 Weighted average remaining lease term and discount rate are as follows: June 30, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 6.10 years 6.21 years Finance leases 3.1 years 2.84 years Weighted average discount rate Operating leases 5.51 % 5.43 % Finance leases 4.36 % 3.92 % The components of lease expense are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Operating lease cost: Fixed $ 19,487 $ 18,426 $ 38,365 $ 36,494 Variable 1,292 1,349 3,056 3,245 Total Operating lease cost $ 20,779 $ 19,775 $ 41,421 $ 39,739 Sublease income 4,917 4,923 9,806 9,846 Finance lease cost: Amortization of ROU Asset $ 2,428 $ 1,986 $ 4,552 $ 3,894 Interest on lease liabilities 312 96 520 174 Total Finance lease cost $ 2,740 $ 2,082 $ 5,072 $ 4,068 Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2023, are as follows: (in thousands) Operating Leases Finance Leases 2023 $ 36,932 $ 4,607 2024 46,498 8,385 2025 38,395 4,798 2026 35,241 4,020 2027 29,117 3,930 2028 and thereafter 81,452 490 Total lease payments $ 267,635 $ 26,230 Less imputed interest (43,549) (2,548) Total lease liability $ 224,086 $ 23,682 |
Leases | Leases The Company primarily enters into lessee arrangements for corporate office space, data centers, and technology equipment. For more information on lease accounting, see Note 2 "Summary of Significant Accounting Policies" and Note 16 "Leases" to the Consolidated Financial Statements of the Company's 2022 Annual Report on Form 10-K Lease assets and liabilities are summarized as follows: (in thousands) Financial Statement Location June 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets Operating lease right-of-use assets $ 174,136 $ 187,442 Operating lease liabilities Operating lease liabilities 224,086 239,202 Finance leases Property and equipment, at cost Property, equipment, and capitalized software, net 36,343 27,908 Accumulated depreciation Property, equipment, and capitalized software, net (12,985) (12,736) Finance lease liabilities Accounts payable, accrued expenses, and other liabilities 23,682 15,323 Weighted average remaining lease term and discount rate are as follows: June 30, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 6.10 years 6.21 years Finance leases 3.1 years 2.84 years Weighted average discount rate Operating leases 5.51 % 5.43 % Finance leases 4.36 % 3.92 % The components of lease expense are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Operating lease cost: Fixed $ 19,487 $ 18,426 $ 38,365 $ 36,494 Variable 1,292 1,349 3,056 3,245 Total Operating lease cost $ 20,779 $ 19,775 $ 41,421 $ 39,739 Sublease income 4,917 4,923 9,806 9,846 Finance lease cost: Amortization of ROU Asset $ 2,428 $ 1,986 $ 4,552 $ 3,894 Interest on lease liabilities 312 96 520 174 Total Finance lease cost $ 2,740 $ 2,082 $ 5,072 $ 4,068 Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2023, are as follows: (in thousands) Operating Leases Finance Leases 2023 $ 36,932 $ 4,607 2024 46,498 8,385 2025 38,395 4,798 2026 35,241 4,020 2027 29,117 3,930 2028 and thereafter 81,452 490 Total lease payments $ 267,635 $ 26,230 Less imputed interest (43,549) (2,548) Total lease liability $ 224,086 $ 23,682 |
Cash
Cash | 6 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash | Cash The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Condensed Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows. (in thousands) June 30, 2023 December 31, 2022 Cash and cash equivalents $ 698,674 $ 981,580 Cash restricted or segregated under regulations and other 47,133 56,662 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 745,807 $ 1,038,242 |
Capital Structure
Capital Structure | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Capital Structure | Capital Structure The Company has four classes of authorized common stock. The Class A Common Stock and the Class C Common Stock have one vote per share. The Class B Common Stock and the Class D Common Stock have 10 votes per share. Shares of the Company’s common stock generally vote together as a single class on all matters submitted to a vote of the Company’s stockholders. The Founder Member controls approximately 85.8% of the combined voting power of our common stock as a result of its ownership of our Class A, Class C and Class D Common Stock. The Company holds approximately a 58.9% interest in Virtu Financial at June 30, 2023. During the period prior to the Company's IPO and certain reorganization transactions consummated in connection with the IPO, Class A-2 profits interests and Class B interests in Virtu Financial were issued to Employee Holdco (as defined below) on behalf of certain key employees and stakeholders. In connection with these reorganization transactions, all Class A-2 profits interests and Class B interests were reclassified into Virtu Financial Units. As of June 30, 2023 and December 31, 2022, there were 4,289,305 and 4,462,840 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 173,535 and 328,999 of such Virtu Financial Units and corresponding Class C Common Stock were exchanged into Class A Common Stock, forfeited or repurchased during the six months ended June 30, 2023, and 2022, respectively. Amended and Restated 2015 Management Incentive Plan The Company’s Board of Directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the IPO, and was subsequently amended and restated following receipt of approval from the Company’s stockholders on June 30, 2017, June 5, 2020 and June 2, 2022. The Amended and Restated 2015 Management Incentive Plan provides for the grant of stock options, restricted stock units, and other awards based on an aggregate of 26,000,000 shares of Class A Common Stock, subject to additional sublimits, including limits on the total option grant to any one participant in a single year and the total performance award to any one participant in a single year. On November 13, 2020, the Company amended its form award agreement for the issuance of RSUs to provide for the continued vesting of outstanding RSU awards upon the occurrence of a qualified retirement (the "RSU Amendment"). A qualified retirement generally means a voluntary resignation by the participant (i) after five years of service, (ii) the participant attaining the age of 50 and (iii) the sum of the participant's age and service at the time of termination equaling or exceeding 65. Continued vesting is subject to the participant entering into a 2 year non-compete. The RSU Amendment was authorized and approved by the Compensation Committee of the Company's Board of Directors. As a result of the RSU Amendment, currently issued and outstanding RSUs held by the Company's employees, including its executive officers, shall be deemed to be subject to the amended terms of the form award agreement, and any future RSU awards shall also be governed by such amended terms. Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and the Assumed Awards. As of the ITG Closing Date, the aggregate number of shares of Class A Common Stock subject to such Assumed Awards was 2,497,028 and the aggregate number of shares of Class A Common Stock that remained issuable pursuant to the Amended and Restated ITG 2007 Equity Plan was 1,230,406. Share Repurchase Program On November 6, 2020, the Company's Board of Directors authorized a share repurchase program of up to $100.0 million in Class A common stock and Virtu Financial Units by December 31, 2021. On February 11, 2021, the Company's Board of Directors authorized the expansion of the program by an additional $70 million in Class A Common Stock and Virtu Financial Units. On May 4, 2021, the Company's Board of Directors authorized the expansion of the Company's share repurchase program, increasing the total authorized amount by an additional $300 million in Class A Common Stock and Virtu Financial Units and extending the duration of the program through May 4, 2022. On November 3, 2021 the Company's Board of Directors authorized another expansion of the program by an additional $750 million to $1,220 million and extending the duration of the program through November 3, 2023. The share repurchase program authorizes the Company to repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means. Repurchases are also permitted to be made under Rule 10b5-1 plans. The timing and amount of repurchase transactions are determined by the Company's management based on its evaluation of market conditions, share price, cash sources, legal requirements and other factors. From the inception of the program through June 30, 2023, the Company repurchased approximately 38.5 million shares of Class A Common Stock and Virtu Financial Units for approximately $1,016.7 million. As of June 30, 2023, the Company has approximately $203.3 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program. Employee Exchanges During the six months ended June 30, 2023, and 2022, pursuant to the exchange agreement by and among the Company, Virtu Financial and holders of Virtu Financial Units, certain current and former employees elected to exchange 152,037, and 92,930 units, respectively in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one-for-one basis for shares of Class A Common Stock. Warrant Issuance On March 20, 2020, in connection with and in consideration of the Founder Member’s commitments under the Founder Member Loan Facility (as described in Note 8 "Borrowings"), the Company delivered to the Founder Member a warrant (the “Warrant”) to purchase shares of the Company’s Class A Common Stock. Pursuant to the Warrant, the Founder Member was entitled to purchase up to 3,000,000 shares of Class A Common Stock on or after May 22, 2020 up to and including January 15, 2022. The Founder Member Loan Facility Term expired on September 20, 2020 without the Company having borrowed any Founder Member Loans thereunder (as described in Note 8 "Borrowings"). The exercise price per share of the Class A Common Stock issuable pursuant to the Warrant was $22.98, which in accordance with the terms of the Warrant, is equal to the average of the volume weighted average prices of the Class A Common Stock for the ten (10) trading days following May 7, 2020, the date on which the Company publicly announced its earnings results for the first quarter of 2020. On December 17, 2021, the Founder Member exercised in full the Warrant to purchase 3,000,000 shares of the Company's Class A Common Stock. The Warrant and Class A Common Stock issued pursuant to the Warrant were offered, issued and sold, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), set forth under Section 4(a)(2) of the Securities Act relating to sales by an issuer not involving any public offering. Upon issuance, the fair value of the Warrant was determined using a Black-Scholes-Merton model, and was recorded as a debt issuance cost within Other assets on the Condensed Consolidated Statements of Financial Condition and as an increase to Additional paid-in capital on the Condensed Consolidated Statements of Changes in Equity. The balance was amortized on a straight-line basis from March 20, 2020 through September 20, 2020, the date on which the Founder Member Loan Facility expired, and recorded as expense within Debt issue cost related to debt refinancing, prepayment and commitment fees in the Condensed Consolidated Statements of Comprehensive Income. Accumulated Other Comprehensive Income The following table presents the changes in Other Comprehensive Income for the three and six months ended June 30, 2023, and 2022: Three Months Ended June 30, 2023 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ 37,091 $ 12,414 $ (7,535) $ 41,970 Foreign exchange translation adjustment (12,341) 1,503 — (10,838) Total $ 24,750 $ 13,917 $ (7,535) $ 31,132 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Condensed Consolidated Statements of Comprehensive Income. As of June 30, 2023, the Company expects approximately $30.1 million to be reclassified from AOCI into earnings over the next 12 months. The timing of the reclassification is based on the interest payment schedule of the long-term borrowings. Three Months Ended June 30, 2022 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ 18,906 $ 6,391 $ 2,189 $ 27,486 Foreign exchange translation adjustment (2,887) (10,773) — (13,660) Total $ 16,019 $ (4,382) $ 2,189 $ 13,826 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income. Six Months Ended June 30, 2023 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ 44,925 $ 11,025 $ (13,980) $ 41,970 Foreign exchange translation adjustment (13,321) 2,483 — (10,838) Total $ 31,604 $ 13,508 $ (13,980) $ 31,132 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income. As of June 30, 2023, the Company expects approximately $30.1 million to be reclassified from AOCI into earnings over the next 12 months. The timing of the reclassification is based on the interest payment schedule of the long-term borrowings. Six Months Ended June 30, 2022 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ (10,481) $ 32,797 $ 5,170 $ 27,486 Foreign exchange translation adjustment 285 (13,945) — (13,660) Total $ (10,196) $ 18,852 $ 5,170 $ 13,826 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based CompensationPursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 17 "Capital Structure", and in connection with the IPO, non-qualified stock options to purchase shares of Class A Common Stock were granted, each of which vests in equal annual installments over a period of four years from grant date and expires not later than 10 years from the date of grant. The following table summarizes activity related to stock options for the six months ended June 30, 2023 and 2022: Options Outstanding Options Exercisable Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Number of Options Weighted Average Exercise Price At December 31, 2021 1,795,655 $ 19.00 3.24 1,795,655 $ 19.00 Granted — — — — — Exercised (268,879) 19.00 — (268,879) 19.00 Forfeited or expired (5,000) — — (5,000) — At June 30, 2022 1,521,776 $ 19.00 2.74 1,521,776 $ 19.00 At December 31, 2022 1,521,776 $ 19.00 2.24 1,521,776 $ 19.00 Granted — — — — — Exercised — — — — — Forfeited or expired (10,000) — — — — At June 30, 2023 1,511,776 $ 19.00 1.74 1,521,776 $ 19.00 The expected life was determined based on an average of vesting and contractual period. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined based on historical volatilities of comparable companies. The expected dividend yield was determined based on estimated future dividend payments divided by the IPO stock price. Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and certain stock option awards, restricted stock unit awards, deferred stock unit awards and performance stock unit awards granted thereunder (" the Assumed Awards"). The Assumed Awards are subject to the same terms and conditions that were applicable to them under the Amended and Restated ITG 2007 Equity Plan, except that (i) the Assumed Awards relate to shares of the Company’s Class A Common Stock, (ii) the number of shares of Class A Common Stock subject to the Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as defined in the ITG Merger Agreement) and (iii) the performance share unit awards were converted into service-based vesting restricted stock unit awards that were no longer subject to any performance based vesting conditions. Class A Common Stock, Restricted Stock Units and Restricted Stock Awards Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 17 "Capital Structure", subsequent to the IPO, shares of immediately vested Class A Common Stock, restricted stock units ("RSUs") and restricted stock awards ("RSAs") were granted, with RSUs and RSAs vesting over a period of up to 4 years. The fair value of the Class A Common Stock and RSUs was determined based on a volume weighted average price and the expense is recognized on a straight-line basis over the vesting period. The fair value of the RSAs was determined based on the closing price as of the date of grant and the expense is recognized from the date that achievement of the performance target becomes probable through the remainder of the vesting period. Performance targets are based on the Company's adjusted EBITDA for certain future periods. For the six months ended June 30, 2023 and 2022, respectively, there were 868,315, and 580,710 shares of immediately vested Class A Common Stock granted as part of year-end compensation. In addition, the Company accrued compensation expense of $6.1 million and $9.6 million for the three months ended June 30, 2023 and 2022, respectively, and $12.0 million, and $15.5 million for the six months ended June 30, 2023 and 2022, respectively, related to immediately vested Class A Common Stock expected to be awarded as part of year-end incentive compensation, which was included in Employee compensation and payroll taxes on the Condensed Consolidated Statements of Comprehensive Income and Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition. The following table summarizes activity related to RSUs (including the Assumed Awards) and RSAs for the six months ended June 30, 2023, and 2022: Number of RSUs and RSAs Weighted At December 31, 2021 3,224,447 $ 24.30 Granted 2,951,863 30.03 Forfeited (322,220) 25.47 Vested (1,669,030) 25.07 At June 30, 2022 4,185,060 $ 27.94 At December 31, 2022 3,954,833 $ 28.13 Granted (1) 3,473,137 19.40 Forfeited (139,609) 27.48 Vested (2,413,550) 23.59 At June 30, 2023 4,874,811 $ 24.18 (1) Excluded in the number of RSUs and RSAs are 37,500 participating RSAs where the grant date has not been achieved because the performance conditions have not been met. The Company recognized $10.1 million and $9.5 million for the three months ended June 30, 2023 and 2022, respectively, and $20.2 million, and $18.1 million for the six months ended June 30, 2023 and 2022, respectively, of compensation expense in relation to RSUs. As of June 30, 2023 and December 31, 2022, total unrecognized share-based compensation expense related to unvested RSUs was $74.7 million and $54.6 million, respectively, and this amount is to be recognized over a weighted average period of 1.3 and 0.9 years, respectively. Awards in which the specific performance conditions have not been met are not included in unrecognized share-based compensation expense. On November 13, 2020, the Company adopted the Virtu Financial, Inc. Deferred Compensation Plan (the "DCP"). The DCP permits eligible executive officers and other employees to defer cash or equity-based compensation beginning in the calendar year ending December 31, 2021, subject to certain limitations and restrictions. Deferrals of cash compensation may also be directed to notional investments in certain of the employee investment opportunities. |
Regulatory Requirement
Regulatory Requirement | 6 Months Ended |
Jun. 30, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Regulatory Requirement | Regulatory Requirement U.S. Subsidiary The Company's U.S. broker-dealer subsidiaries VAL and RFQ-Hub Americas LLC ("RAL"), are subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital as detailed in the table below. RAL became a U.S. broker-dealer in June 2023. Pursuant to New York Stock Exchange ("NYSE") rules, VAL was also required to maintain $1.0 million of capital in connection with the operation of its designated market maker (“DMM”) business as of June 30, 2023. The required amount is determined under the exchange rules as the greater of (i) $1 million or (ii) $75,000 for every 0.1% of NYSE transaction dollar volume in each of the securities for which the Company is registered as the DMM. The regulatory capital and regulatory capital requirements of the Company's U.S. subsidiaries as of June 30, 2023 was as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 455,763 $ 1,577 $ 454,186 RFQ-Hub Americas LLC 2,111 5 2,106 As of June 30, 2023, VAL had $40.9 million of cash in special reserve bank accounts for the benefit of customers pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements, and $5.9 million of cash in reserve bank accounts for the benefit of proprietary accounts of brokers. The balances are included within Cash restricted or segregated under regulations and other on the Condensed Consolidated Statements of Financial Condition. The regulatory capital and regulatory capital requirements of the Company's U.S. subsidiaries as of December 31, 2022 was as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 554,550 $ 1,000 $ 553,550 As of December 31, 2022, VAL had $50.2 million of cash in special reserve bank accounts for the benefit of customers pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements, and $5.8 million of cash in reserve bank accounts for the benefit of proprietary accounts of brokers. Foreign Subsidiaries The Company’s foreign subsidiaries are subject to regulatory capital requirements set by local regulatory bodies, including the Canadian Investment Regulatory Organization ("CIRO"), the Central Bank of Ireland ("CBI"), the Financial Conduct Authority ("FCA") in the United Kingdom, the Australian Securities and Investments Commission ("ASIC"), the Securities and Futures Commission in Hong Kong ("SFC"), and the Monetary Authority of Singapore ("MAS"). The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of June 30, 2023 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Canada Virtu Canada Corp (1) $ 11,516 $ 189 $ 11,327 Virtu Financial Canada ULC 2,682 189 2,493 Ireland Virtu Europe Trading Limited (1) 119,962 27,176 92,786 Virtu Financial Ireland Limited (1) 90,589 51,497 39,092 United Kingdom Virtu ITG UK Limited (1) 1,477 953 524 Asia Pacific Virtu ITG Australia Limited 22,986 7,452 15,534 Virtu ITG Hong Kong Limited 2,340 556 1,784 Virtu ITG Singapore Pte Limited 690 87 603 Virtu Financial Singapore Pte. Ltd. 126,025 69,227 56,798 (1) Preliminary As of June 30, 2023, Virtu Europe Trading Limited had $0.1 million of segregated funds on deposit for trade clearing and settlement activity, and Virtu ITG Hong Kong Ltd. had $30 thousand of segregated balances under a collateral account control agreement for the benefit of certain customers. The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of December 31, 2022 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Canada Virtu ITG Canada Corp $ 14,248 $ 184 $ 14,064 Virtu Financial Canada ULC 2,663 184 2,479 Ireland Virtu Europe Trading Limited 78,834 28,502 50,332 Virtu Financial Ireland Limited 89,853 39,768 50,085 United Kingdom Virtu ITG UK Limited 1,405 906 499 Asia Pacific Virtu ITG Australia Limited 30,027 3,115 26,912 Virtu ITG Hong Kong Limited 1,683 497 1,186 Virtu ITG Singapore Pte Limited 1,147 91 1,056 Virtu Financial Singapore Pte. Ltd. 121,166 46,025 75,141 |
Geographic Information and Busi
Geographic Information and Business Segments | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Geographic Information and Business Segments | Geographic Information and Business Segments The Company operates its business in the U.S. and internationally, primarily in Europe, Asia and Canada. Significant transactions and balances between geographic regions occur primarily as a result of certain of the Company’s subsidiaries incurring operating expenses such as employee compensation, communications and data processing and other overhead costs, for the purpose of providing execution, clearing and other support services to affiliates. Charges for transactions between regions are designed to approximate full costs. Intra-region income and expenses and related balances have been eliminated in the geographic information presented below to accurately reflect the external business conducted in each geographical region. The revenues are attributed to countries based on the locations of the subsidiaries. The following table presents total revenues by geographic area for the three and six months ended June 30, 2023, and 2022 : Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Revenues: United States $ 415,338 $ 485,744 $ 937,966 $ 1,035,193 Ireland 47,493 58,072 101,452 136,030 Singapore 28,079 31,043 54,297 77,320 Canada 7,782 21,514 16,498 38,711 Australia 7,215 7,347 13,855 16,268 Others 947 1,018 3,165 2,478 Total revenues $ 506,854 $ 604,738 $ 1,127,233 $ 1,306,000 The Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate. The Market Making segment principally consists of market making in the cash, futures, and options markets across global equities, fixed income, currencies, and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker-dealers, banks and institutions. The Company engages in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, Electronic Communications Networks ("ECNs") and alternative trading systems ("ATSs"). The Company is an active participant on all major global equity and futures exchanges and also trades on substantially all domestic electronic options exchanges. As a complement to electronic market making, the cash trading business handles specialized orders and also transacts on the OTC Link ATS operated by OTC Markets Group Inc. The Execution Services segment comprises client-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker-dealers. The Company earns commissions and commission equivalents as an agent on behalf of clients as well as between principals to transactions; in addition, the Company will commit capital on behalf of clients as needed. Client-based, execution-only trading in the segment is done primarily through a variety of access points including: (i) algorithmic trading and order routing in global equities and options; (ii) institutional sales traders who offer portfolio trading and single stock sales trading which provides execution expertise for program, block and riskless principal trades in global equities and ETFs; and (iii) matching of client conditional orders in POSIT Alert and client orders in the Company's ATSs, including Virtu MatchIt, and POSIT. The Execution Services segment also includes revenues derived from providing (a) proprietary risk management and trading infrastructure technology to select third parties for a service fee, (b) workflow technology, the Company’s integrated, broker-neutral trading tools delivered across the globe including trade order and execution management and order management software applications and network connectivity and (c) trading analytics, including (1) tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance, (2) portfolio construction and optimization decisions and (3) securities valuation. The segment also includes the results of the Company's capital markets business, in which the Company acts as an agent for issuers in connection with at-the-market offerings and buyback programs. The Corporate segment contains the Company's investments, principally in strategic trading-related opportunities and maintains corporate overhead expenses and all other income and expenses that are not attributable to the Company's other segments. Management evaluates the performance of its segments on a pre-tax basis. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the three months ended June 30, 2023, and 2022 are summarized in the following table: (in thousands) Market Execution Corporate Consolidated 2023: Total revenue $ 405,250 $ 109,116 $ (7,512) $ 506,854 Income before income taxes and noncontrolling interest 43,741 (115) (8,159) 35,467 2022: Total revenue 432,595 130,997 41,146 604,738 Income (loss) before income taxes and noncontrolling interest 125,446 7,887 40,451 173,784 The Company's Pre-tax earnings by segment for the six months ended June 30, 2023, and 2022 are summarized in the following table: (in thousands) Market Making Execution Services Corporate Consolidated Total 2023 Total revenue $ 904,169 $ 227,593 $ (4,529) $ 1,127,233 Income before income taxes and noncontrolling interest 167,850 8,898 (6,517) 170,231 2022 Total revenue 979,158 282,742 44,100 1,306,000 Income before income taxes and noncontrolling interest 349,668 23,013 42,813 415,494 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company incurs expenses and maintains balances with its affiliates in the ordinary course of business. As of June 30, 2023, and December 31, 2022 the Company had net payables to its affiliates of $1.8 million and receivables from its affiliates of $0.5 million, respectively. The Company has held a minority interest in JNX since 2016 (see Note 9 "Financial Assets and Liabilities"). The Company pays exchange fees to JNX for the trading activities conducted on its proprietary trading system. The Company paid $3.4 million and $3.7 million for the three months ended June 30, 2023 and 2022, respectively, and $5.9 million and $7.5 million for the six months ended June 30, 2023 and 2022, respectively, to JNX for these trading activities. The Company pays monthly use fees to two JVs in which it holds interests (see Note 11 "Variable Interest Entities"). These monthly fees are for the use of microwave communication networks operated by each of these JVs and are recorded within Communications and data processing on the Condensed Consolidated Statements of Comprehensive Income. The Company made payments to these JVs of $6.3 million and $5.5 million for the three months ended June 30, 2023 and 2022, respectively, and $12.6 million and $10.9 million for the six months ended June 30, 2023 and 2022, respectively. The Company has an interest in Members Exchange, a member-owned equities exchange. The Company pays regulatory and transaction fees and receives rebates from trading activities. The Company made payments of $0.1 million and received rebates of $6.2 million for the three months ended June 30, 2023 and 2022, respectively, and the Company made payments of $0.2 million and received rebates of $12.8 million for the six months ended June 30, 2023 and 2022, respectively. In the second quarter of 2022, the Company formed a JV to support the growth and expansion of a multi-asset request-for-quote communication platform. The Company consolidates this JV, and recorded noncontrolling interest of $39.2 million in the condensed consolidated statement of changes in equity as of June 30, 2022. Refer to Note 11 "Variable Interest Entities" for further details. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated subsequent events for adjustment to or disclosure in its Condensed Consolidated Financial Statements through the date of this report, and has not identified any recordable or disclosable events, not otherwise reported in these Condensed Consolidated Financial Statements or the notes thereto, except for the following: On July 26, 2023, the Company’s Board of Directors declared a dividend of $0.24 per share of Class A Common Stock and Class B Common Stock and per participating Restricted Stock Unit and Restricted Stock Award that will be paid on September 15, 2023 to holders of record as of September 1, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Accounting Pronouncements, Recently Adopted and Not Yet Adopted | Accounting Pronouncements Recently Adopted Derivatives and Hedging - In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging - Fair Value Hedging - Portfolio Layer Method (Topic 815) . The ASU expands the scope of permissible hedging, and permits the use of different derivative structures as hedging instruments. The Company adopted this ASU on January 1, 2023 and it did not have a material impact on its condensed consolidated financial statements. Liabilities - Supplier Finance Programs - In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) . This ASU requires new quantitative and qualitative disclosure requirements for a buyer who enters into supplier financing programs. The Company adopted this ASU on January 1, 2023 and it did not have a material impact on its condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted as of June 30, 2023 Fair Value Measurement - In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 326) . The ASU clarifies the impact of contractual sale restrictions on the fair value of an equity security. Additionally, this ASU requires disclosure of the nature and remaining duration of the sale restriction. This ASU is effective for periods beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements. Leases - Common Control Arrangements - In March 2023, the FASB issued ASU 2023-01, Leases—Common Control Arrangements (Topic 842) . This ASU provides updated guidance for accounting for common control leases and leasehold improvements. This ASU is effective for periods beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements. Investments - Equity Method and Joint Ventures - In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323) . This ASU provides updated guidance for accounting for investments in tax credit structures. This ASU is effective for periods beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of net income before noncontrolling interest to net income available for common stockholders | The below table contains a reconciliation of Net income before income taxes and noncontrolling interest to Net income available for common stockholders: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Income before income taxes and noncontrolling interest $ 35,467 $ 173,784 $ 170,231 $ 415,494 Provision for income taxes 5,923 24,888 30,605 66,674 Net income 29,544 148,896 139,626 348,820 Noncontrolling interest (12,842) (63,729) (65,044) (151,397) Net income available for common stockholders $ 16,702 $ 85,167 $ 74,582 $ 197,423 |
Schedule of basic earnings per share | The calculation of basic and diluted earnings per share is presented below: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except for share or per share data) 2023 2022 2023 2022 Basic earnings per share: Net income available for common stockholders $ 16,702 $ 85,167 $ 74,582 $ 197,423 Less: Dividends and undistributed earnings allocated to participating securities (1,176) (3,305) (3,853) (7,164) Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities 15,526 81,862 70,729 190,259 Weighted average shares of common stock outstanding: Class A 94,973,489 104,960,826 96,376,926 107,133,079 Basic earnings per share $ 0.16 $ 0.78 $ 0.73 $ 1.78 |
Schedule of diluted earnings per share | Three Months Ended June 30, Six Months Ended June 30, (in thousands, except for share or per share data) 2023 2022 2023 2022 Diluted earnings per share: Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities $ 15,526 $ 81,862 $ 70,729 $ 190,259 Weighted average shares of common stock outstanding: Class A Issued and outstanding 94,973,489 104,960,826 96,376,926 107,133,079 Issuable pursuant to Amended and Restated 2015 Management Incentive Plan — 517,452 — 626,705 94,973,489 105,478,278 96,376,926 107,759,784 Diluted earnings per share (1) $ 0.16 $ 0.78 $ 0.73 $ 1.77 (1) The dilutive impact of unexercised stock options excludes from the computation of EPS 54,618 options for the three months ended June 30, 2023, and 17,647 options for the six months ended June 30, 2023 because inclusion of the options would have been anti-dilutive. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by segment | The following table presents the details of goodwill by segment as of June 30, 2023 and December 31, 2022: (in thousands) Market Making Execution Services Corporate Total Balance as of period-end $ 755,292 $ 393,634 $ — $ 1,148,926 |
Schedule of acquired intangible assets | Acquired intangible assets consisted of the following as of June 30, 2023 and December 31, 2022: As of June 30, 2023 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives Customer relationships $ 486,600 $ (213,907) $ 272,693 10 to 12 Technology 136,000 (125,853) 10,147 1 to 6 Favorable occupancy leases 5,895 (4,793) 1,102 3 to 15 Exchange memberships 3,998 — 3,998 Indefinite Trade name 3,600 (3,600) — 3 ETF issuer relationships 950 (950) — 9 ETF buyer relationships 950 (950) — 9 Other $ 1,500 $ — $ 1,500 Indefinite $ 639,493 $ (350,053) $ 289,440 As of December 31, 2022 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives Customer relationships $ 486,600 $ (189,986) $ 296,614 10 to 12 Technology 136,000 (118,119) 17,881 1 to 6 Favorable occupancy leases 5,895 (4,408) 1,487 3 to 15 Exchange memberships 3,998 — 3,998 Indefinite Trade name 3,600 (3,600) — 3 ETF issuer relationships 950 (950) — 9 ETF buyer relationships 950 (950) — 9 Other $ 1,500 $ — $ 1,500 Indefinite $ 639,493 $ (318,013) $ 321,480 |
Schedule of finite-lived intangible assets, future amortization expense | The Company expects to record amortization expense as follows over the next five subsequent years: (in thousands) Remainder of 2023 $ 31,921 2024 50,845 2025 47,879 2026 47,879 2027 47,879 2028 47,879 |
Receivables from_Payables to _2
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Summary of receivables from and payables to brokers-dealers and clearing organizations | The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at June 30, 2023 and December 31, 2022: (in thousands) June 30, 2023 December 31, 2022 Assets Due from prime brokers $ 966,509 $ 560,111 Deposits with clearing organizations 175,060 146,927 Net equity with futures commission merchants 106,101 137,312 Unsettled trades with clearing organizations 852 87,145 Securities failed to deliver 179,709 149,747 Commissions and fees 31,595 33,943 Total receivables from broker-dealers and clearing organizations $ 1,459,826 $ 1,115,185 Liabilities Due to prime brokers $ 501,100 $ 229,424 Net equity with futures commission merchants (1) (45,685) (32,381) Unsettled trades with clearing organizations 274,522 38 Securities failed to receive 113,734 70,576 Commissions and fees 4,606 6,186 Total payables to broker-dealers and clearing organizations $ 848,277 $ 273,843 (1) The Company presents its balances, including outstanding principal balances on all broker credit facilities, on a net-by-counterparty basis within receivables from and payables to broker-dealers and clearing organizations when the criteria for offsetting are met . |
Collateralized Transactions (Ta
Collateralized Transactions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Collateralized Agreements [Abstract] | |
Summary of the fair value of collateralized transactions | The fair value of the collateralized transactions at June 30, 2023 and December 31, 2022 are summarized as follows: (in thousands) June 30, 2023 December 31, 2022 Securities received as collateral: Securities borrowed $ 1,631,134 $ 1,148,238 Securities purchased under agreements to resell 793,815 336,849 $ 2,424,949 $ 1,485,087 |
Schedule of financial instruments owned and pledged, where counterparty has right to repledge | Financial instruments owned and pledged, where the counterparty has the right to repledge, at June 30, 2023 and December 31, 2022 consisted of the following: (in thousands) June 30, 2023 December 31, 2022 Equities $ 1,285,503 $ 957,443 Exchange traded notes 11,713 5,628 $ 1,297,216 $ 963,071 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Instrument [Line Items] | |
Schedule of short-term debt | The following summarizes the Company's short-term borrowing balances outstanding, net of related debt issuance costs, with each described in further detail below. June 30, 2023 (in thousands) Borrowing Outstanding Deferred Debt Issuance Cost Short-term Borrowings, net Broker-dealer credit facilities $ 115,000 $ (3,279) $ 111,721 $ 115,000 $ (3,279) $ 111,721 December 31, 2022 (in thousands) Borrowing Outstanding Deferred Debt Issuance Cost Short-term Borrowings, net Short-term bank loans 3,944 — 3,944 $ 3,944 $ — $ 3,944 |
Outstanding borrowings and financing capacity or unused available capacity under the company’s borrowing arrangements | The following summarizes the Company’s broker-dealer credit facilities' carrying values, net of unamortized debt issuance costs, where applicable. These balances are included within Short-term borrowings on the Condensed Consolidated Statements of Financial Condition. At June 30, 2023 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 6.26% $ 400,000 $ 110,000 $ (3,279) $ 106,721 Committed facility 8.47% 650,000 — — — Overdraft facility 8.59% 10,000 5,000 — 5,000 $ 1,060,000 $ 115,000 $ (3,279) $ 111,721 At December 31, 2022 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 5.50% $ 400,000 $ — $ — $ — Committed facility 7.67% 650,000 — — — Overdraft facility 7.80% 10,000 — — — $ 1,060,000 $ — $ — $ — |
Schedule of interest expense on debt | The following summarizes interest expense for the broker-dealer facilities. Interest expense is included within Interest and dividends expense in the accompanying Condensed Consolidated Statements of Comprehensive Income. Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Broker-dealer credit facilities: Uncommitted facility $ 1,987 $ 789 $ 3,547 $ 1,293 Committed facility — 23 — 38 $ 1,987 $ 812 $ 3,547 $ 1,331 |
Schedule of aggregate future required principal payments based on terms of loan | As of June 30, 2023, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows: (in thousands) June 30, 2023 Remainder of 2023 $ — 2024 18,000 2025 18,000 2026 42,253 2027 18,000 2028 18,000 Thereafter 1,692,000 Total principal of long-term borrowings $ 1,806,253 |
Short-Term Credit Facilities | |
Debt Instrument [Line Items] | |
Schedule of reconciliation of the senior secured credit facility | The proceeds of these facilities are used to meet margin requirements associated with the products traded by the Company in the ordinary course, and amounts borrowed are collateralized by the Company’s trading accounts with the applicable financial institution. At June 30, 2023 (in thousands) Weighted Average Financing Borrowing Prime Brokerage Credit Facilities: Prime brokerage credit facilities (1) 7.87% $ 591,000 $ 140,644 $ 591,000 $ 140,644 At December 31, 2022 (in thousands) Weighted Average Financing Borrowing Prime Brokerage Credit Facilities: Prime brokerage credit facilities (1) 7.42% $ 591,000 $ 212,912 $ 591,000 $ 212,912 (1) Outstanding borrowings are included with Receivables from/Payables to broker-dealers and clearing organizations within the Condensed Consolidated Statements of Financial Condition. |
Senior Secured Credit Facility | |
Debt Instrument [Line Items] | |
Schedule of reconciliation of the senior secured credit facility | The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable: At June 30, 2023 (in thousands) Maturity Interest Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: First Lien Term Loan Facility January 2029 8.19% $ 1,782,000 $ (3,526) $ (24,457) $ 1,754,017 SBI bonds January 2026 5.00% 24,253 — — 24,253 $ 1,806,253 $ (3,526) $ (24,457) $ 1,778,270 At December 31, 2022 (in thousands) Maturity Interest Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: First Lien Term Loan Facility January 2029 7.42% $ 1,800,000 $ (3,881) $ (26,858) $ 1,769,261 SBI bonds January 2026 5.00% 26,693 — (2) 26,691 $ 1,826,693 $ (3,881) $ (26,860) $ 1,795,952 |
Financial Assets and Liabilit_2
Financial Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value measurements measured on a recurring basis | Fair value measurements for those items measured on a recurring basis are summarized below as of June 30, 2023: June 30, 2023 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 781,837 $ 1,724,573 $ — $ — $ 2,506,410 U.S. and Non-U.S. government obligations 775,363 524,523 — — 1,299,886 Corporate Bonds — 1,323,402 — — 1,323,402 Exchange traded notes 57 12,989 — — 13,046 Currency forwards — 611,584 — (603,560) 8,024 Options 4,316 — — — 4,316 $ 1,561,573 $ 4,197,071 $ — $ (603,560) $ 5,155,084 Financial instruments owned, pledged as collateral: Equity securities $ 770,965 $ 514,538 $ — $ — $ 1,285,503 Exchange traded notes 6 11,707 — — 11,713 $ 770,971 $ 526,245 $ — $ — $ 1,297,216 Other Assets Equity investment $ — $ — $ 71,059 $ — $ 71,059 Exchange stock 2,376 — — — 2,376 $ 2,376 $ — $ 71,059 $ — $ 73,435 Receivables from broker dealers and clearing organizations: Interest rate swap $ — $ 81,141 $ — $ — $ 81,141 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 1,495,283 $ 1,428,486 $ — $ — $ 2,923,769 U.S. and Non-U.S. government obligations 55,665 1,581,936 — — 1,637,601 Corporate Bonds — 1,202,295 — — 1,202,295 Exchange traded notes 7 44,682 — — 44,689 Currency forwards — 657,348 (657,348) — Options 4,533 — 4,533 $ 1,555,488 $ 4,914,747 $ — $ (657,348) $ 5,812,887 Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2022: December 31, 2022 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 461,487 $ 1,545,116 $ — $ — $ 2,006,603 U.S. and Non-U.S. government obligations 251,708 575,946 — — 827,654 Corporate Bonds — 803,880 — — 803,880 Exchange traded notes 51 16,777 — — 16,828 Currency forwards — 500,553 — (493,237) 7,316 Options 5,200 — — — 5,200 $ 718,446 $ 3,442,272 $ — $ (493,237) $ 3,667,481 Financial instruments owned, pledged as collateral: Equity securities $ 552,641 $ 404,802 $ — $ — $ 957,443 Exchange traded notes 6 5,622 — — 5,628 $ 552,647 $ 410,424 $ — $ — $ 963,071 Other Assets Equity investment $ — $ — $ 76,613 $ — $ 76,613 Exchange stock 2,352 — — — 2,352 $ 2,352 $ — $ 76,613 $ — $ 78,965 Receivables from broker dealers and clearing organizations: Interest rate swap — 87,268 — — 87,268 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 1,146,701 $ 1,016,893 $ — $ — $ 2,163,594 U.S. and Non-U.S. government obligations 147,418 690,480 — — 837,898 Corporate Bonds — 1,183,394 — — 1,183,394 Exchange traded notes — 8,199 — — 8,199 Currency forwards — 497,799 — (497,799) — Options 3,889 — — — 3,889 $ 1,298,008 $ 3,396,765 $ — $ (497,799) $ 4,196,974 The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of June 30, 2023: June 30, 2023 Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 698,674 $ 698,674 $ 698,674 $ — $ — Cash restricted or segregated under regulations and other 47,133 47,133 47,133 — — Securities borrowed 1,665,179 1,665,179 — 1,665,179 — Securities purchased under agreements to resell 793,815 793,815 — 793,815 — Receivables from broker-dealers and clearing organizations 1,378,685 1,378,685 — 1,378,685 — Receivables from customers 130,623 130,623 — 130,623 — Other assets (1) 32,967 32,967 11,758 21,209 — Total Assets $ 4,747,076 $ 4,747,076 $ 757,565 $ 3,989,511 $ — Liabilities Short-term borrowings $ 111,721 $ 115,000 $ — $ 115,000 $ — Long-term borrowings 1,778,270 1,801,798 — 1,801,798 — Securities loaned 1,306,894 1,306,894 — 1,306,894 — Securities sold under agreements to repurchase 1,120,151 1,120,151 — 1,120,151 — Payables to broker-dealers and clearing organizations 848,277 848,277 — 848,277 — Payables to customers 39,740 39,740 — 39,740 — Other liabilities (2) 24,255 24,255 — 24,255 — Total Liabilities $ 5,229,308 $ 5,256,115 $ — $ 5,256,115 $ — (1) Includes cash collateral and deposits, and interest and dividends receivables. (2) Includes deposits, interest and dividends payable. The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2022: December 31, 2022 Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 981,580 $ 981,580 $ 981,580 $ — $ — Cash restricted or segregated under regulations and other 56,662 56,662 56,662 — — Securities borrowed 1,187,674 1,187,674 — 1,187,674 — Securities purchased under agreements to resell 336,999 336,999 — 336,999 — Receivables from broker-dealers and clearing organizations 1,027,917 1,027,917 — 1,027,917 — Receivables from customers 80,830 80,830 — 80,830 — Other assets (1) 30,579 30,579 — 30,579 — Total Assets $ 3,702,241 $ 3,702,241 $ 1,038,242 $ 2,663,999 $ — Liabilities Short-term borrowings 3,944 3,944 — 3,944 — Long-term borrowings 1,795,952 1,783,943 — 1,783,943 — Securities loaned 1,060,432 1,060,432 — 1,060,432 — Securities sold under agreements to repurchase 627,549 627,549 — 627,549 — Payables to broker dealer and clearing organizations 273,843 273,843 — 273,843 — Payables to customers 46,525 46,525 — 46,525 — Other liabilities (2) 23,776 23,776 — 23,776 — Total Liabilities $ 3,832,021 $ 3,820,012 $ — $ 3,820,012 $ — (1) Includes cash collateral and deposits, and interest and dividends receivables. (2) Includes deposits, interest and dividends payable. |
Fair value measurement inputs and valuation techniques | The table below presents information on the valuation techniques, significant unobservable inputs and their ranges for the JNX Investment: June 30, 2023 (in thousands) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average Equity investment $ 71,059 Discounted cash flow Estimated revenue growth 0.8% - 6.4% 4.1 % Discount rate 15.5% - 15.5% 15.5 % Market Future enterprise value/ EBIDTA ratio 7.4x - 18.3x 11.4x December 31, 2022 (in thousands) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average Equity investment $ 76,613 Discounted cash flow Estimated revenue growth (5.7)% - 5.0% 3.1 % Discount rate 15.5% - 15.5% 15.5 % Market Future enterprise value/ EBIDTA ratio (1.2)x - 18.1x 12.2x |
Summary of changes in Level 3 financial instruments measured at fair value on a recurring basis | The following presents the changes in the Company's Level 3 financial instruments measured at fair value on a recurring basis: Three Months Ended June 30, 2023 (in thousands) Balance at March 31, 2023 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2023 Assets Other assets: Equity investment $ 79,726 $ — $ (8,667) $ — $ — $ 71,059 $ (8,667) Total $ 79,726 $ — $ (8,667) $ — $ — $ 71,059 $ (8,667) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Three Months Ended June 30, 2022 (in thousands) Balance at March 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2022 Assets Other assets: Equity investment $ 84,482 $ — $ (6,920) $ — $ — $ 77,562 $ (6,920) Total $ 84,482 $ — $ (6,920) $ — $ — $ 77,562 $ (6,920) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Six Months Ended June 30, 2023 (in thousands) Balance at December 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2023 Assets Other assets: Equity investment $ 76,613 $ — $ (5,554) $ — $ — $ 71,059 $ (5,554) Total $ 76,613 $ — $ (5,554) $ — $ — $ 71,059 $ (5,554) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. Six Months Ended June 30, 2022 (in thousands) Balance at December 31, 2021 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2022 Assets Other assets: Equity investment $ 81,358 $ — $ (3,796) $ — $ — $ 77,562 $ (3,796) Total $ 81,358 $ — $ (3,796) $ — $ — $ 77,562 $ (3,796) (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. |
Summary of netting of certain financial assets | The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of June 30, 2023 and December 31, 2022: June 30, 2023 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,665,179 $ — $ 1,665,179 $ (1,631,134) $ (6,261) $ 27,784 Securities purchased under agreements to resell 793,815 — 793,815 (793,815) — — Receivables from broker-dealers and clearing organizations: Interest rate swaps 81,141 — 81,141 — — 81,141 Trading assets, at fair value: Currency forwards 611,584 (603,560) 8,024 — — 8,024 Options 4,316 — 4,316 — (3,978) 338 Total $ 3,156,035 $ (603,560) $ 2,552,475 $ (2,424,949) $ (10,239) $ 117,287 Gross Amounts of Recognized Liabilities Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instruments Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,306,894 $ — $ 1,306,894 $ (1,287,973) $ (6,614) $ 12,307 Securities sold under agreements to repurchase 1,120,151 — 1,120,151 (1,120,151) — — Trading liabilities, at fair value: Currency forwards 657,348 (657,348) — — — — Options 4,533 — 4,533 — (3,978) 555 Total $ 3,088,926 $ (657,348) $ 2,431,578 $ (2,408,124) $ (10,592) $ 12,862 December 31, 2022 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,187,674 $ — $ 1,187,674 $ (1,148,238) $ (5,138) $ 34,298 Securities purchased under agreements to resell 336,999 — 336,999 (336,849) — 150 Receivables from broker-dealers and clearing organizations Interest rate swaps 87,268 — 87,268 — — 87,268 Trading assets, at fair value: Currency forwards 500,553 (493,237) 7,316 — — 7,316 Options 5,200 — 5,200 — (3,889) 1,311 Total $ 2,117,694 $ (493,237) $ 1,624,457 $ (1,485,087) $ (9,027) $ 130,343 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,060,432 $ — $ 1,060,432 $ (1,027,062) $ (9,100) $ 24,270 Securities sold under agreements to repurchase 627,549 — 627,549 (627,388) — 161 Trading liabilities, at fair value: Currency forwards 497,799 (497,799) — — — — Options 3,889 — 3,889 — (3,889) — Total $ 2,189,669 $ (497,799) $ 1,691,870 $ (1,654,450) $ (12,989) $ 24,431 |
Summary of netting of certain financial liabilities | The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of June 30, 2023 and December 31, 2022: June 30, 2023 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,665,179 $ — $ 1,665,179 $ (1,631,134) $ (6,261) $ 27,784 Securities purchased under agreements to resell 793,815 — 793,815 (793,815) — — Receivables from broker-dealers and clearing organizations: Interest rate swaps 81,141 — 81,141 — — 81,141 Trading assets, at fair value: Currency forwards 611,584 (603,560) 8,024 — — 8,024 Options 4,316 — 4,316 — (3,978) 338 Total $ 3,156,035 $ (603,560) $ 2,552,475 $ (2,424,949) $ (10,239) $ 117,287 Gross Amounts of Recognized Liabilities Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instruments Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,306,894 $ — $ 1,306,894 $ (1,287,973) $ (6,614) $ 12,307 Securities sold under agreements to repurchase 1,120,151 — 1,120,151 (1,120,151) — — Trading liabilities, at fair value: Currency forwards 657,348 (657,348) — — — — Options 4,533 — 4,533 — (3,978) 555 Total $ 3,088,926 $ (657,348) $ 2,431,578 $ (2,408,124) $ (10,592) $ 12,862 December 31, 2022 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,187,674 $ — $ 1,187,674 $ (1,148,238) $ (5,138) $ 34,298 Securities purchased under agreements to resell 336,999 — 336,999 (336,849) — 150 Receivables from broker-dealers and clearing organizations Interest rate swaps 87,268 — 87,268 — — 87,268 Trading assets, at fair value: Currency forwards 500,553 (493,237) 7,316 — — 7,316 Options 5,200 — 5,200 — (3,889) 1,311 Total $ 2,117,694 $ (493,237) $ 1,624,457 $ (1,485,087) $ (9,027) $ 130,343 Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition (in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,060,432 $ — $ 1,060,432 $ (1,027,062) $ (9,100) $ 24,270 Securities sold under agreements to repurchase 627,549 — 627,549 (627,388) — 161 Trading liabilities, at fair value: Currency forwards 497,799 (497,799) — — — — Options 3,889 — 3,889 — (3,889) — Total $ 2,189,669 $ (497,799) $ 1,691,870 $ (1,654,450) $ (12,989) $ 24,431 |
Summary of gross obligations for repurchase agreement and securities borrowed transactions by remaining contractual maturity and class of collateral pledged | The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged as of June 30, 2023 and December 31, 2022: June 30, 2023 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 61 - 90 Greater than 90 Total Securities sold under agreements to repurchase: Equity securities $ — $ 140,000 $ 150,000 $ 110,000 $ — $ 400,000 U.S. and Non-U.S. government obligations 720,151 — — — 720,151 Total $ 720,151 $ 140,000 $ 150,000 $ 110,000 $ — $ 1,120,151 Securities loaned: Equity securities $ 1,306,894 $ — $ — $ — $ — $ 1,306,894 Total $ 1,306,894 $ — $ — $ — $ — $ 1,306,894 December 31, 2022 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 61 - 90 Greater than 90 Total Securities sold under agreements to repurchase: Equity securities $ — $ 250,000 $ 100,000 $ 50,000 $ — $ 400,000 U.S. and Non-U.S. government obligations 227,549 — — — — 227,549 Total $ 227,549 $ 250,000 $ 100,000 $ 50,000 $ — $ 627,549 Securities loaned: Equity securities 1,060,432 — — — — 1,060,432 Total $ 1,060,432 $ — $ — $ — $ — $ 1,060,432 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative instruments on a gross basis | The fair value of the Company’s derivative instruments on a gross basis consisted of the following at June 30, 2023 and December 31, 2022: (in thousands) June 30, 2023 December 31, 2022 Derivatives Assets Financial Statement Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Receivables from broker-dealers and clearing organizations $ (304) $ 774,998 $ (575) $ 663,110 Commodity futures Receivables from broker-dealers and clearing organizations (3,636) 5,706,595 (31,007) 7,597,057 Currency futures Receivables from broker-dealers and clearing organizations (8,169) 3,226,865 (24,023) 7,460,531 Fixed income futures Receivables from broker-dealers and clearing organizations 9 24,469 (360) 30,292 Options Financial instruments owned 4,316 1,288,736 5,200 691,737 Currency forwards Financial instruments owned 611,584 44,930,685 500,553 30,286,330 Derivative instruments designated as hedging instruments: Interest rate swap Receivables from broker-dealers and clearing organizations 81,141 1,525,000 87,268 1,525,000 Derivatives Liabilities Financial Statement Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Payables to broker-dealers and clearing organizations $ (951) $ 1,303,263 $ 1,819 $ 3,238,651 Commodity futures Payables to broker-dealers and clearing organizations 358 35,234 597 39,046 Currency futures Payables to broker-dealers and clearing organizations (3,252) 566,817 8 6,386 Fixed income futures Payables to broker-dealers and clearing organizations (136) 149,069 (264) 123,043 Options Financial instruments sold, not yet purchased 4,533 1,245,988 3,889 742,531 Currency forwards Financial instruments sold, not yet purchased 657,348 44,953,567 497,799 30,284,952 |
Schedule of net gain (loss) from derivative instruments not designated as hedging instruments | The following table summarizes the net gain (loss) from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in total revenues, and from those designated as hedging instruments under ASC 815, which are initially recorded in other comprehensive income in the accompanying Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022. Three Months Ended June 30, Six Months Ended June 30, (in thousands) Financial Statements Location 2023 2022 2023 2022 Derivative instruments not designated as hedging instruments: Futures Trading income, net $ (4,449) $ 118,455 $ 120,017 $ 195,801 Currency forwards Trading income, net 16,750 (44,665) (46,187) (35,754) Options Trading income, net (1,510) 157 1,145 (938) Interest rate swap on term loan Other, net (469) (469) (932) (932) $ 10,322 $ 73,478 $ 74,043 $ 158,177 Derivative instruments designated as hedging instruments: Interest rate swaps (1) Other comprehensive income $ 9,514 $ 16,430 $ (5,879) $ 72,575 $ 9,514 $ 16,430 $ (5,879) $ 72,575 (1) The Company entered into a five-year $1,000 million floating-to-fixed interest rate swap agreement in the first quarter of 2020 and a five-year $525 million floating-to-fixed interest rate swap agreement in the fourth quarter of 2019. These two interest rate swaps met the criteria to be considered qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and as such, the mark-to-market gains (losses) on the instruments were deferred within Other comprehensive income on the Condensed Consolidated Statements of Comprehensive Income beginning in the first quarter of 2020. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of nonconsolidated VIE | The following table presents the Company’s nonconsolidated VIEs at June 30, 2023: Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 50,939 $ — $ 50,939 $ 264,860 The following table presents the Company’s nonconsolidated VIEs at December 31, 2022: Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 43,589 $ — $ 43,589 $ 239,682 |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following tables present the Company’s revenue from contracts with customers disaggregated by service, and timing of revenue recognition, reconciled to the Company’s segments, for the three and six months ended June 30, 2023, and 2022: Three Months Ended June 30, 2023 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 6,634 $ 69,993 $ — $ 76,627 Workflow technology — 22,576 — 22,576 Analytics — 10,301 — 10,301 Total revenue from contracts with customers 6,634 102,870 — 109,504 Other sources of revenue 398,616 6,246 (7,512) 397,350 Total revenues $ 405,250 $ 109,116 $ (7,512) $ 506,854 Timing of revenue recognition: Services transferred at a point in time $ 405,250 $ 90,940 $ (7,512) $ 488,678 Services transferred over time — 18,176 — 18,176 Total revenues $ 405,250 $ 109,116 $ (7,512) $ 506,854 Three Months Ended June 30, 2022 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 11,145 $ 90,998 $ — $ 102,143 Workflow technology — 24,334 — 24,334 Analytics — 9,863 — 9,863 Total revenue from contracts with customers 11,145 125,195 — 136,340 Other sources of revenue 421,450 5,802 41,146 468,398 Total revenues $ 432,595 $ 130,997 $ 41,146 $ 604,738 Timing of revenue recognition: Services transferred at a point in time $ 432,595 $ 112,989 $ 41,146 $ 586,730 Services transferred over time — 18,008 — 18,008 Total revenues $ 432,595 $ 130,997 $ 41,146 $ 604,738 Six Months Ended June 30, 2023 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 16,334 $ 147,251 $ — $ 163,585 Workflow technology — 47,532 — 47,532 Analytics — 19,831 — 19,831 Total revenue from contracts with customers 16,334 214,614 — 230,948 Other sources of revenue 887,835 12,979 (4,529) 896,285 Total revenues $ 904,169 $ 227,593 $ (4,529) $ 1,127,233 Timing of revenue recognition: Services transferred at a point in time $ 904,169 $ 191,419 $ (4,529) $ 1,091,059 Services transferred over time — 36,174 — 36,174 Total revenues $ 904,169 $ 227,593 $ (4,529) $ 1,127,233 Six Months Ended June 30, 2022 (in thousands) Market Making Execution Services Corporate Total Revenues from contracts with customers: Commissions, net $ 20,194 $ 199,187 $ — $ 219,381 Workflow technology — 51,270 — 51,270 Analytics — 20,344 20,344 Total revenue from contracts with customers 20,194 270,801 — 290,995 Other sources of revenue 958,964 11,941 44,100 1,015,005 Total revenues $ 979,158 $ 282,742 $ 44,100 $ 1,306,000 Timing of revenue recognition: Services transferred at a point in time $ 979,158 $ 246,303 $ 44,100 $ 1,269,561 Services transferred over time — 36,439 — 36,439 Total revenues $ 979,158 $ 282,742 $ 44,100 $ 1,306,000 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Lease assets and liabilities | Lease assets and liabilities are summarized as follows: (in thousands) Financial Statement Location June 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets Operating lease right-of-use assets $ 174,136 $ 187,442 Operating lease liabilities Operating lease liabilities 224,086 239,202 Finance leases Property and equipment, at cost Property, equipment, and capitalized software, net 36,343 27,908 Accumulated depreciation Property, equipment, and capitalized software, net (12,985) (12,736) Finance lease liabilities Accounts payable, accrued expenses, and other liabilities 23,682 15,323 |
Lease term, discount rate and components of lease expense | Weighted average remaining lease term and discount rate are as follows: June 30, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 6.10 years 6.21 years Finance leases 3.1 years 2.84 years Weighted average discount rate Operating leases 5.51 % 5.43 % Finance leases 4.36 % 3.92 % The components of lease expense are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Operating lease cost: Fixed $ 19,487 $ 18,426 $ 38,365 $ 36,494 Variable 1,292 1,349 3,056 3,245 Total Operating lease cost $ 20,779 $ 19,775 $ 41,421 $ 39,739 Sublease income 4,917 4,923 9,806 9,846 Finance lease cost: Amortization of ROU Asset $ 2,428 $ 1,986 $ 4,552 $ 3,894 Interest on lease liabilities 312 96 520 174 Total Finance lease cost $ 2,740 $ 2,082 $ 5,072 $ 4,068 |
Future minimum lease payments under operating leases | Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2023, are as follows: (in thousands) Operating Leases Finance Leases 2023 $ 36,932 $ 4,607 2024 46,498 8,385 2025 38,395 4,798 2026 35,241 4,020 2027 29,117 3,930 2028 and thereafter 81,452 490 Total lease payments $ 267,635 $ 26,230 Less imputed interest (43,549) (2,548) Total lease liability $ 224,086 $ 23,682 |
Future minimum lease payments under finance leases | Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2023, are as follows: (in thousands) Operating Leases Finance Leases 2023 $ 36,932 $ 4,607 2024 46,498 8,385 2025 38,395 4,798 2026 35,241 4,020 2027 29,117 3,930 2028 and thereafter 81,452 490 Total lease payments $ 267,635 $ 26,230 Less imputed interest (43,549) (2,548) Total lease liability $ 224,086 $ 23,682 |
Cash (Tables)
Cash (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Reconciliation of cash and cash equivalents | The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Condensed Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows. (in thousands) June 30, 2023 December 31, 2022 Cash and cash equivalents $ 698,674 $ 981,580 Cash restricted or segregated under regulations and other 47,133 56,662 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 745,807 $ 1,038,242 |
Restrictions on segregated cash | The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Condensed Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows. (in thousands) June 30, 2023 December 31, 2022 Cash and cash equivalents $ 698,674 $ 981,580 Cash restricted or segregated under regulations and other 47,133 56,662 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 745,807 $ 1,038,242 |
Capital Structure (Tables)
Capital Structure (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table presents the changes in Other Comprehensive Income for the three and six months ended June 30, 2023, and 2022: Three Months Ended June 30, 2023 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ 37,091 $ 12,414 $ (7,535) $ 41,970 Foreign exchange translation adjustment (12,341) 1,503 — (10,838) Total $ 24,750 $ 13,917 $ (7,535) $ 31,132 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Condensed Consolidated Statements of Comprehensive Income. As of June 30, 2023, the Company expects approximately $30.1 million to be reclassified from AOCI into earnings over the next 12 months. The timing of the reclassification is based on the interest payment schedule of the long-term borrowings. Three Months Ended June 30, 2022 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ 18,906 $ 6,391 $ 2,189 $ 27,486 Foreign exchange translation adjustment (2,887) (10,773) — (13,660) Total $ 16,019 $ (4,382) $ 2,189 $ 13,826 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income. Six Months Ended June 30, 2023 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ 44,925 $ 11,025 $ (13,980) $ 41,970 Foreign exchange translation adjustment (13,321) 2,483 — (10,838) Total $ 31,604 $ 13,508 $ (13,980) $ 31,132 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income. As of June 30, 2023, the Company expects approximately $30.1 million to be reclassified from AOCI into earnings over the next 12 months. The timing of the reclassification is based on the interest payment schedule of the long-term borrowings. Six Months Ended June 30, 2022 (in thousands) AOCI Beginning Balance Amounts recorded Amounts reclassified from AOCI to income AOCI Ending Balance Net change in unrealized cash flow hedges gains (losses) (1) $ (10,481) $ 32,797 $ 5,170 $ 27,486 Foreign exchange translation adjustment 285 (13,945) — (13,660) Total $ (10,196) $ 18,852 $ 5,170 $ 13,826 (1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock options activity | The following table summarizes activity related to stock options for the six months ended June 30, 2023 and 2022: Options Outstanding Options Exercisable Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Number of Options Weighted Average Exercise Price At December 31, 2021 1,795,655 $ 19.00 3.24 1,795,655 $ 19.00 Granted — — — — — Exercised (268,879) 19.00 — (268,879) 19.00 Forfeited or expired (5,000) — — (5,000) — At June 30, 2022 1,521,776 $ 19.00 2.74 1,521,776 $ 19.00 At December 31, 2022 1,521,776 $ 19.00 2.24 1,521,776 $ 19.00 Granted — — — — — Exercised — — — — — Forfeited or expired (10,000) — — — — At June 30, 2023 1,511,776 $ 19.00 1.74 1,521,776 $ 19.00 |
Schedule of activity related to restricted stock units | The following table summarizes activity related to RSUs (including the Assumed Awards) and RSAs for the six months ended June 30, 2023, and 2022: Number of RSUs and RSAs Weighted At December 31, 2021 3,224,447 $ 24.30 Granted 2,951,863 30.03 Forfeited (322,220) 25.47 Vested (1,669,030) 25.07 At June 30, 2022 4,185,060 $ 27.94 At December 31, 2022 3,954,833 $ 28.13 Granted (1) 3,473,137 19.40 Forfeited (139,609) 27.48 Vested (2,413,550) 23.59 At June 30, 2023 4,874,811 $ 24.18 (1) Excluded in the number of RSUs and RSAs are 37,500 participating RSAs where the grant date has not been achieved because the performance conditions have not been met. |
Regulatory Requirement (Tables)
Regulatory Requirement (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of regulatory capital and regulatory capital requirements | The regulatory capital and regulatory capital requirements of the Company's U.S. subsidiaries as of June 30, 2023 was as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 455,763 $ 1,577 $ 454,186 RFQ-Hub Americas LLC 2,111 5 2,106 (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 554,550 $ 1,000 $ 553,550 The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of June 30, 2023 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Canada Virtu Canada Corp (1) $ 11,516 $ 189 $ 11,327 Virtu Financial Canada ULC 2,682 189 2,493 Ireland Virtu Europe Trading Limited (1) 119,962 27,176 92,786 Virtu Financial Ireland Limited (1) 90,589 51,497 39,092 United Kingdom Virtu ITG UK Limited (1) 1,477 953 524 Asia Pacific Virtu ITG Australia Limited 22,986 7,452 15,534 Virtu ITG Hong Kong Limited 2,340 556 1,784 Virtu ITG Singapore Pte Limited 690 87 603 Virtu Financial Singapore Pte. Ltd. 126,025 69,227 56,798 (1) Preliminary The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of December 31, 2022 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Canada Virtu ITG Canada Corp $ 14,248 $ 184 $ 14,064 Virtu Financial Canada ULC 2,663 184 2,479 Ireland Virtu Europe Trading Limited 78,834 28,502 50,332 Virtu Financial Ireland Limited 89,853 39,768 50,085 United Kingdom Virtu ITG UK Limited 1,405 906 499 Asia Pacific Virtu ITG Australia Limited 30,027 3,115 26,912 Virtu ITG Hong Kong Limited 1,683 497 1,186 Virtu ITG Singapore Pte Limited 1,147 91 1,056 Virtu Financial Singapore Pte. Ltd. 121,166 46,025 75,141 |
Geographic Information and Bu_2
Geographic Information and Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of total revenues by geographic area | The following table presents total revenues by geographic area for the three and six months ended June 30, 2023, and 2022: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Revenues: United States $ 415,338 $ 485,744 $ 937,966 $ 1,035,193 Ireland 47,493 58,072 101,452 136,030 Singapore 28,079 31,043 54,297 77,320 Canada 7,782 21,514 16,498 38,711 Australia 7,215 7,347 13,855 16,268 Others 947 1,018 3,165 2,478 Total revenues $ 506,854 $ 604,738 $ 1,127,233 $ 1,306,000 |
Schedule of revenues, income (loss) before income taxes (“Pre-tax earnings”) and total assets by segment | The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the three months ended June 30, 2023, and 2022 are summarized in the following table: (in thousands) Market Execution Corporate Consolidated 2023: Total revenue $ 405,250 $ 109,116 $ (7,512) $ 506,854 Income before income taxes and noncontrolling interest 43,741 (115) (8,159) 35,467 2022: Total revenue 432,595 130,997 41,146 604,738 Income (loss) before income taxes and noncontrolling interest 125,446 7,887 40,451 173,784 The Company's Pre-tax earnings by segment for the six months ended June 30, 2023, and 2022 are summarized in the following table: (in thousands) Market Making Execution Services Corporate Consolidated Total 2023 Total revenue $ 904,169 $ 227,593 $ (4,529) $ 1,127,233 Income before income taxes and noncontrolling interest 167,850 8,898 (6,517) 170,231 2022 Total revenue 979,158 282,742 44,100 1,306,000 Income before income taxes and noncontrolling interest 349,668 23,013 42,813 415,494 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) instrument in Thousands | 6 Months Ended |
Jun. 30, 2023 segment instrument country acquisition venue | |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |
Number of financial instruments | instrument | 25 |
Number of venues | venue | 235 |
Number of countries in which entity operates | country | 36 |
Company’s product offering in number of counties (over) | country | 50 |
Number of significant acquisitions | acquisition | 2 |
Number of operating segments | segment | 2 |
Number of non-operating segments | segment | 1 |
Virtu Financial | |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |
Ownership interest | 58.90% |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||
Income before income taxes and noncontrolling interest | $ 35,467 | $ 173,784 | $ 170,231 | $ 415,494 | ||
Provision for income taxes | 5,923 | 24,888 | 30,605 | 66,674 | ||
Net income | 29,544 | $ 110,083 | 148,896 | $ 199,925 | 139,626 | 348,820 |
Noncontrolling interest | (12,842) | (63,729) | (65,044) | (151,397) | ||
Net income available for common stockholders | $ 16,702 | $ 85,167 | $ 74,582 | $ 197,423 |
Earnings per Share - Basic (Det
Earnings per Share - Basic (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Basic earnings per share: | ||||
Net income available for common stockholders | $ 16,702 | $ 85,167 | $ 74,582 | $ 197,423 |
Less: Dividends and undistributed earnings allocated to participating securities | (1,176) | (3,305) | (3,853) | (7,164) |
Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities | $ 15,526 | $ 81,862 | $ 70,729 | $ 190,259 |
Weighted average shares of common stock outstanding: | ||||
Class A (in shares) | 94,973,489 | 104,960,826 | 96,376,926 | 107,133,079 |
Basic earnings per share (in dollars per share) | $ 0.16 | $ 0.78 | $ 0.73 | $ 1.78 |
Class A | ||||
Weighted average shares of common stock outstanding: | ||||
Class A (in shares) | 94,973,489 | 104,960,826 | 96,376,926 | 107,133,079 |
Earnings per Share - Diluted (D
Earnings per Share - Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Diluted earnings per share: | ||||
Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities | $ 15,526 | $ 81,862 | $ 70,729 | $ 190,259 |
Weighted average shares of common stock outstanding: | ||||
Issued and outstanding (in shares) | 94,973,489 | 104,960,826 | 96,376,926 | 107,133,079 |
Weighted average shares of common stock outstanding (in shares) | 94,973,489 | 105,478,278 | 96,376,926 | 107,759,784 |
Diluted earnings per share (in dollars per share) | $ 0.16 | $ 0.78 | $ 0.73 | $ 1.77 |
Options | ||||
Weighted average shares of common stock outstanding: | ||||
Dilutive impact excluded from computation of earnings per share (in shares) | 54,618 | 17,647 | ||
Class A | ||||
Weighted average shares of common stock outstanding: | ||||
Issued and outstanding (in shares) | 94,973,489 | 104,960,826 | 96,376,926 | 107,133,079 |
Issuable pursuant to Amended and Restated 2015 Management Incentive Plan (in shares) | 0 | 517,452 | 0 | 626,705 |
Weighted average shares of common stock outstanding (in shares) | 94,973,489 | 105,478,278 | 96,376,926 | 107,759,784 |
Tax Receivable Agreements (Deta
Tax Receivable Agreements (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Apr. 30, 2023 | Mar. 31, 2022 | Apr. 30, 2021 | Mar. 31, 2020 | Sep. 30, 2018 | Feb. 28, 2017 | Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||||
First payment made | $ 23,300,000 | $ 21,300,000 | $ 16,500,000 | $ 13,300,000 | $ 12,400,000 | $ 7,000,000 | ||
Minimum tax receivable agreement obligation over the agreed period | $ 36,400 | |||||||
Maximum tax receivable agreement obligation over the agreed period | $ 22,000,000 | |||||||
Period over which the obligations are to be settled | 15 years | 15 years | ||||||
Deferred tax assets | $ 162,100,000 | |||||||
Tax receivable agreement obligations | $ 215,542,000 | $ 238,758,000 | ||||||
SBI bonds | VFH | ||||||||
Debt Instrument [Line Items] | ||||||||
Deferred tax assets | $ 151,800,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Number of operating segments | segment | 2 | ||||
Number of non-operating segments | segment | 1 | ||||
Goodwill | $ 1,148,926,000 | $ 1,148,926,000 | $ 1,148,926,000 | ||
Goodwill impairment | 0 | $ 0 | |||
Intangible assets | 289,440,000 | 289,440,000 | $ 321,480,000 | ||
Amortization expense relating to finite-lived intangible assets | $ 16,020,000 | $ 16,277,000 | $ 32,040,000 | $ 32,757,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Goodwill | $ 1,148,926 | $ 1,148,926 |
Operating Segments | Market Making | ||
Goodwill [Line Items] | ||
Goodwill | 755,292 | 755,292 |
Operating Segments | Execution Services | ||
Goodwill [Line Items] | ||
Goodwill | 393,634 | 393,634 |
Corporate | ||
Goodwill [Line Items] | ||
Goodwill | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Acquired Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (350,053) | $ (318,013) |
Gross Carrying Amount | 639,493 | 639,493 |
Net Carrying Amount | 289,440 | 321,480 |
Exchange memberships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,998 | 3,998 |
Other | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,500 | 1,500 |
Customer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | 486,600 | 486,600 |
Accumulated Amortization | (213,907) | (189,986) |
Net Carrying Amount | $ 272,693 | $ 296,614 |
Customer relationships | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 10 years | 10 years |
Customer relationships | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 12 years | 12 years |
Technology | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 136,000 | $ 136,000 |
Accumulated Amortization | (125,853) | (118,119) |
Net Carrying Amount | $ 10,147 | $ 17,881 |
Technology | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 1 year | 1 year |
Technology | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 6 years | 6 years |
Favorable occupancy leases | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,895 | $ 5,895 |
Accumulated Amortization | (4,793) | (4,408) |
Net Carrying Amount | $ 1,102 | $ 1,487 |
Favorable occupancy leases | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 3 years | 3 years |
Favorable occupancy leases | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 15 years | 15 years |
Trade name | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,600 | $ 3,600 |
Accumulated Amortization | (3,600) | (3,600) |
Net Carrying Amount | $ 0 | $ 0 |
Useful Lives (Years) | 3 years | 3 years |
ETF issuer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 950 | $ 950 |
Accumulated Amortization | (950) | (950) |
Net Carrying Amount | $ 0 | $ 0 |
Useful Lives (Years) | 9 years | 9 years |
ETF buyer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 950 | $ 950 |
Accumulated Amortization | (950) | (950) |
Net Carrying Amount | $ 0 | $ 0 |
Useful Lives (Years) | 9 years | 9 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expects Amortization Expense (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2023 | $ 31,921 |
2024 | 50,845 |
2025 | 47,879 |
2026 | 47,879 |
2027 | 47,879 |
2028 | $ 47,879 |
Receivables from_Payables to _3
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Due from prime brokers | $ 966,509 | $ 560,111 |
Deposits with clearing organizations | 175,060 | 146,927 |
Net equity with futures commission merchants | 106,101 | 137,312 |
Unsettled trades with clearing organizations | 852 | 87,145 |
Securities failed to deliver | 179,709 | 149,747 |
Commissions and fees | 31,595 | 33,943 |
Total receivables from broker-dealers and clearing organizations | 1,459,826 | 1,115,185 |
Liabilities | ||
Due to prime brokers | 501,100 | 229,424 |
Net equity with futures commission merchants | (45,685) | (32,381) |
Unsettled trades with clearing organizations | 274,522 | 38 |
Securities failed to receive | 113,734 | 70,576 |
Commissions and fees | 4,606 | 6,186 |
Total payables to broker-dealers and clearing organizations | 848,277 | 273,843 |
Outstanding principal balance | $ 140,600 | $ 212,900 |
Collateralized Transactions (De
Collateralized Transactions (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Securities received as collateral: | ||
Securities borrowed | $ 1,631,134 | $ 1,148,238 |
Securities purchased under agreements to resell | 793,815 | 336,849 |
Securities received as collateral | 2,424,949 | 1,485,087 |
Pledged | ||
Securities received as collateral: | ||
Financial instruments owned | 1,297,216 | 963,071 |
Equities | Pledged | ||
Securities received as collateral: | ||
Financial instruments owned | 1,285,503 | 957,443 |
Exchange traded notes | Pledged | ||
Securities received as collateral: | ||
Financial instruments owned | $ 11,713 | $ 5,628 |
Borrowings - Short-term Borrowi
Borrowings - Short-term Borrowings, net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Short-term Debt [Line Items] | ||
Deferred Debt Issuance Cost | $ (24,457) | $ (26,860) |
Short-term bank loans | ||
Short-term Debt [Line Items] | ||
Borrowing Outstanding | 3,944 | |
Deferred Debt Issuance Cost | 0 | |
Short-term Borrowings, net | 3,944 | |
Loans Payable | ||
Short-term Debt [Line Items] | ||
Borrowing Outstanding | 115,000 | 3,944 |
Deferred Debt Issuance Cost | (3,279) | 0 |
Short-term Borrowings, net | 111,721 | 3,944 |
Broker-dealer credit facilities | ||
Short-term Debt [Line Items] | ||
Borrowing Outstanding | 115,000 | |
Deferred Debt Issuance Cost | (3,279) | $ 0 |
Short-term Borrowings, net | $ 111,721 |
Borrowings - Broker-Dealer Cred
Borrowings - Broker-Dealer Credit Facilities (Details) | 6 Months Ended | |||
May 25, 2022 USD ($) | Jun. 30, 2023 USD ($) instrument base | Dec. 31, 2022 USD ($) | Mar. 20, 2020 USD ($) | |
Line of Credit Facility [Line Items] | ||||
Number of borrowing bases | base | 2 | |||
Outstanding principal amount | $ 1,806,253,000 | $ 1,826,693,000 | ||
Commitment fee (as a percent) | 0.50% | |||
Broker-dealer credit facilities | ||||
Line of Credit Facility [Line Items] | ||||
Number of secured credit facilities | instrument | 2 | |||
Maximum borrowing capacity | $ 650,000,000 | |||
Outstanding principal amount | $ 115,000,000 | 0 | ||
Commitment fee (as a percent) | 0.50% | |||
Broker-dealer credit facilities | Borrowing Base A Loan | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 650,000,000 | |||
Broker-dealer credit facilities | Borrowing Base A Loan | SOFR | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 1.25% | |||
Broker-dealer credit facilities | Borrowing Base B Loan | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 | |||
Broker-dealer credit facilities | Borrowing Base B Loan | SOFR | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 2.50% | |||
Broker-dealer credit facilities | Virtu Financial Singapore Pte. Ltd. | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000,000 | |||
Broker-dealer credit facilities | Virtu Financial Singapore Pte. Ltd. | SOFR | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 3.50% | |||
Broker-dealer credit facility on an uncommitted basis | ||||
Line of Credit Facility [Line Items] | ||||
Number of secured credit facilities | instrument | 1 | |||
Maximum borrowing capacity | $ 400,000,000 | |||
Outstanding principal amount | $ 110,000,000 | $ 0 | ||
Founder Member Loan Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 |
Borrowings - Broker-Dealer Cr_2
Borrowings - Broker-Dealer Credit Facilities Carrying Values, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Total principal of long-term borrowings | $ 1,806,253 | $ 1,826,693 |
Deferred Debt Issuance Cost | (24,457) | (26,860) |
Outstanding Borrowings, net | 1,778,270 | 1,795,952 |
Deferred debt issuance costs | $ 24,457 | $ 26,860 |
Uncommitted facility | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 6.26% | 5.50% |
Financing Available | $ 400,000 | $ 400,000 |
Total principal of long-term borrowings | 110,000 | 0 |
Deferred Debt Issuance Cost | (3,279) | 0 |
Outstanding Borrowings, net | 106,721 | 0 |
Deferred debt issuance costs | $ 3,279 | $ 0 |
Committed facility | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 8.47% | 7.67% |
Financing Available | $ 650,000 | $ 650,000 |
Total principal of long-term borrowings | 0 | 0 |
Deferred Debt Issuance Cost | 0 | 0 |
Outstanding Borrowings, net | 0 | 0 |
Deferred debt issuance costs | $ 0 | $ 0 |
Overdraft facility | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 8.59% | 7.80% |
Financing Available | $ 10,000 | $ 10,000 |
Total principal of long-term borrowings | 5,000 | 0 |
Deferred Debt Issuance Cost | 0 | 0 |
Outstanding Borrowings, net | 5,000 | 0 |
Deferred debt issuance costs | 0 | 0 |
Broker-dealer credit facilities | ||
Line of Credit Facility [Line Items] | ||
Financing Available | 1,060,000 | 1,060,000 |
Total principal of long-term borrowings | 115,000 | 0 |
Deferred Debt Issuance Cost | (3,279) | 0 |
Outstanding Borrowings, net | 111,721 | 0 |
Deferred debt issuance costs | $ 3,279 | $ 0 |
Borrowings - Interest Expense o
Borrowings - Interest Expense on Broker-Dealer Facilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Line of Credit Facility [Line Items] | ||||
Interest expense | $ 24,850 | $ 22,089 | $ 49,138 | $ 43,422 |
Uncommitted facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest expense | 1,987 | 789 | 3,547 | 1,293 |
Committed facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest expense | 0 | 23 | 0 | 38 |
Broker-dealer credit facilities | ||||
Line of Credit Facility [Line Items] | ||||
Interest expense | $ 1,987 | $ 812 | $ 3,547 | $ 1,331 |
Borrowings - Short-Term Bank Lo
Borrowings - Short-Term Bank Loans (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Short-term bank loans | $ 0 | $ 3,900,000 |
Weighted average interest rate | 3.80% |
Borrowings - Prime Brokerage Cr
Borrowings - Prime Brokerage Credit Facilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Short-term Debt [Line Items] | |||||
Weighted Average Interest Rate | 3.80% | ||||
Total principal of long-term borrowings | $ 1,806,253 | $ 1,806,253 | $ 1,826,693 | ||
Interest expense | $ 24,850 | $ 22,089 | $ 49,138 | $ 43,422 | |
Short-Term Credit Facilities | |||||
Short-term Debt [Line Items] | |||||
Weighted Average Interest Rate | 7.87% | 7.87% | 7.42% | ||
Financing Available | $ 591,000 | $ 591,000 | $ 591,000 | ||
Total principal of long-term borrowings | 140,644 | 140,644 | $ 212,912 | ||
Interest expense | $ 3,600 | $ 1,700 | $ 7,100 | $ 3,300 |
Borrowings - Long-Term Borrowin
Borrowings - Long-Term Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Outstanding Principal | $ 1,806,253 | $ 1,826,693 |
Discount | (3,526) | (3,881) |
Deferred Debt Issuance Cost | (24,457) | (26,860) |
Outstanding Borrowings, net | $ 1,778,270 | $ 1,795,952 |
SBI bonds | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 5% | 5% |
Outstanding Principal | $ 24,253 | $ 26,693 |
Discount | 0 | 0 |
Deferred Debt Issuance Cost | 0 | (2) |
Outstanding Borrowings, net | $ 24,253 | $ 26,691 |
Senior Secured Credit Facility | Senior Secured Second Lien Notes | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 8.19% | 7.42% |
Outstanding Principal | $ 1,782,000 | $ 1,800,000 |
Discount | (3,526) | (3,881) |
Deferred Debt Issuance Cost | (24,457) | (26,858) |
Outstanding Borrowings, net | $ 1,754,017 | $ 1,769,261 |
Borrowings - Credit Agreement (
Borrowings - Credit Agreement (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Jan. 13, 2023 USD ($) | Mar. 02, 2020 | Jan. 31, 2020 USD ($) swap | Oct. 31, 2019 USD ($) | Mar. 31, 2020 USD ($) instrument | Dec. 31, 2019 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jan. 31, 2022 | Jan. 13, 2022 USD ($) | Apr. 30, 2021 | |
Debt Instrument [Line Items] | |||||||||||
Commitment fee (as a percent) | 0.50% | ||||||||||
Outstanding principal amount | $ 1,806,253,000 | $ 1,826,693,000 | |||||||||
Fixed interest rate percentage | 4.30% | ||||||||||
Interest rate swap | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Derivative contract term | 5 years | 5 years | 5 years | ||||||||
Derivative, notional amount | $ 525,000,000 | $ 1,000,000,000 | $ 525,000,000 | ||||||||
Number of interest rate swaps | instrument | 2 | ||||||||||
Fixed interest rate percentage | 4.50% | ||||||||||
January 2020 Interest Rate Swap | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Derivative contract term | 5 years | ||||||||||
Derivative, notional amount | $ 1,000,000,000 | ||||||||||
Number of interest rate swaps | swap | 2 | ||||||||||
Fixed interest rate percentage | 4.40% | 4.60% | 4.60% | ||||||||
Committed facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Outstanding principal amount | $ 0 | $ 0 | |||||||||
Committed facility | Scenario 1 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1% | ||||||||||
Committed facility | Scenario 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||||||
Committed facility | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 2.50% | ||||||||||
Committed facility | SOFR | Scenario 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0% | ||||||||||
Amended Credit Agreement | Overnight Bank Funding Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||||
Amended Credit Agreement | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1% | ||||||||||
Senior Secured First Lien Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt amortization, percentage of original aggregate principal amount | 1% | ||||||||||
Repayments of term loan | $ 18,000,000 | ||||||||||
Senior Secured Second Lien Notes | Scenario 1 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee stepdown (as a percent) | 0.375% | ||||||||||
Senior Secured Second Lien Notes | Scenario 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee stepdown (as a percent) | 0.25% | ||||||||||
VFH | Committed facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 250,000,000 | ||||||||||
VFH | Letter of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 20,000,000 | ||||||||||
VFH | Swingline Subfacility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 20,000,000 | ||||||||||
Term Loan | Scenario 1 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||||||
Term Loan | Scenario 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 2% | ||||||||||
Term Loan | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 3% | ||||||||||
Term Loan | SOFR | Scenario 1 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||||
Term Loan | First Lien Term Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Outstanding principal amount | $ 1,782,000,000 | ||||||||||
Term Loan | First Lien Term Loan Facility | VFH | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount | $ 525,000,000 | ||||||||||
Term Loan | First Lien Term Loan Facility | VFH | January 2020 Interest Rate Swap | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount | $ 1,000,000,000 | ||||||||||
Senior Secured First Lien Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount | $ 1,800,000,000 |
Borrowings - SBI Bonds (Details
Borrowings - SBI Bonds (Details) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 JPY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 JPY (¥) | Jul. 25, 2016 USD ($) | Jul. 25, 2016 JPY (¥) | |
Debt Instrument [Line Items] | |||||||||
Outstanding principal amount | $ 1,806,253,000 | $ 1,806,253,000 | $ 1,826,693,000 | ||||||
SBI bonds | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding principal amount | 24,253,000 | 24,253,000 | 26,693,000 | ||||||
VFH | SBI bonds | SBI Bonds | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 33,100,000 | ¥ 3,500,000,000 | |||||||
Outstanding principal amount | 24,300,000 | 24,300,000 | ¥ 3,500,000,000 | $ 26,700,000 | ¥ 3,500,000,000 | ||||
Gain (loss) on due to change in currency rates | $ 2,100,000 | $ 3,000,000 | $ 2,400,000 | $ 4,900,000 |
Borrowings - Future Minimum Pri
Borrowings - Future Minimum Principal Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Remainder of 2023 | $ 0 | |
2024 | 18,000 | |
2025 | 18,000 | |
2026 | 42,253 | |
2027 | 18,000 | |
2028 | 18,000 | |
Thereafter | 1,692,000 | |
Total principal of long-term borrowings | $ 1,806,253 | $ 1,826,693 |
Financial Assets and Liabilit_3
Financial Assets and Liabilities - Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Assets | ||
Other Assets | $ 73,435 | $ 78,965 |
Receivables from broker-dealers and clearing organizations | 1,459,826 | 1,115,185 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 5,812,887 | 4,196,974 |
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (657,348) | (497,799) |
Interest rate swap | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 81,141 | 87,268 |
Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 5,155,084 | 3,667,481 |
Financial instruments owned, at fair value, counterparty and cash collateral netting | (603,560) | (493,237) |
Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,297,216 | 963,071 |
Equity securities | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 2,923,769 | 2,163,594 |
Equity securities | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 2,506,410 | 2,006,603 |
Equity securities | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,285,503 | 957,443 |
U.S. and Non-U.S. government obligations | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,637,601 | 837,898 |
U.S. and Non-U.S. government obligations | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,299,886 | 827,654 |
Corporate Bonds | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,202,295 | 1,183,394 |
Corporate Bonds | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,323,402 | 803,880 |
Exchange traded notes | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 44,689 | 8,199 |
Exchange traded notes | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 13,046 | 16,828 |
Exchange traded notes | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 11,713 | 5,628 |
Equity investment | ||
Assets | ||
Other Assets | 71,059 | 76,613 |
Exchange stock | ||
Assets | ||
Other Assets | 2,376 | 2,352 |
Currency forwards | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (657,348) | (497,799) |
Currency forwards | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 8,024 | 7,316 |
Financial instruments owned, at fair value, counterparty and cash collateral netting | (603,560) | (493,237) |
Options | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 4,533 | 3,889 |
Options | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 4,316 | 5,200 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Other Assets | 2,376 | 2,352 |
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,555,488 | 1,298,008 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate swap | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,561,573 | 718,446 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 770,971 | 552,647 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,495,283 | 1,146,701 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 781,837 | 461,487 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 770,965 | 552,641 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. and Non-U.S. government obligations | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 55,665 | 147,418 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. and Non-U.S. government obligations | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 775,363 | 251,708 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bonds | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bonds | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange traded notes | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 7 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange traded notes | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 57 | 51 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange traded notes | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 6 | 6 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity investment | ||
Assets | ||
Other Assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange stock | ||
Assets | ||
Other Assets | 2,376 | 2,352 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Currency forwards | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Currency forwards | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Options | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 4,533 | 3,889 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Options | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 4,316 | 5,200 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Other Assets | 0 | 0 |
Receivables from broker-dealers and clearing organizations | 1,378,685 | 1,027,917 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 4,914,747 | 3,396,765 |
Significant Other Observable Inputs (Level 2) | Interest rate swap | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 81,141 | 87,268 |
Significant Other Observable Inputs (Level 2) | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 4,197,071 | 3,442,272 |
Significant Other Observable Inputs (Level 2) | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 526,245 | 410,424 |
Significant Other Observable Inputs (Level 2) | Equity securities | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,428,486 | 1,016,893 |
Significant Other Observable Inputs (Level 2) | Equity securities | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,724,573 | 1,545,116 |
Significant Other Observable Inputs (Level 2) | Equity securities | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 514,538 | 404,802 |
Significant Other Observable Inputs (Level 2) | U.S. and Non-U.S. government obligations | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,581,936 | 690,480 |
Significant Other Observable Inputs (Level 2) | U.S. and Non-U.S. government obligations | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 524,523 | 575,946 |
Significant Other Observable Inputs (Level 2) | Corporate Bonds | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,202,295 | 1,183,394 |
Significant Other Observable Inputs (Level 2) | Corporate Bonds | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 1,323,402 | 803,880 |
Significant Other Observable Inputs (Level 2) | Exchange traded notes | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 44,682 | 8,199 |
Significant Other Observable Inputs (Level 2) | Exchange traded notes | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 12,989 | 16,777 |
Significant Other Observable Inputs (Level 2) | Exchange traded notes | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 11,707 | 5,622 |
Significant Other Observable Inputs (Level 2) | Equity investment | ||
Assets | ||
Other Assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Exchange stock | ||
Assets | ||
Other Assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Currency forwards | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 657,348 | 497,799 |
Significant Other Observable Inputs (Level 2) | Currency forwards | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 611,584 | 500,553 |
Significant Other Observable Inputs (Level 2) | Options | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Options | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Other Assets | 71,059 | 76,613 |
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Interest rate swap | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity securities | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity securities | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity securities | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | U.S. and Non-U.S. government obligations | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | U.S. and Non-U.S. government obligations | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate Bonds | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate Bonds | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Exchange traded notes | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Exchange traded notes | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Exchange traded notes | Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity investment | ||
Assets | ||
Other Assets | 71,059 | 76,613 |
Significant Unobservable Inputs (Level 3) | Exchange stock | ||
Assets | ||
Other Assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Currency forwards | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Currency forwards | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Options | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Options | Not Pledged | ||
Assets | ||
Financial instruments owned, at fair value | $ 0 | $ 0 |
Financial Assets and Liabilit_4
Financial Assets and Liabilities - Fair Value Inputs (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 71,059 | $ 76,613 |
Minimum | Discounted cash flow | Estimated revenue growth | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.008 | (0.057) |
Minimum | Discounted cash flow | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.155 | 0.155 |
Minimum | Market | Future enterprise value/ EBIDTA ratio | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.00074 | (0.00012) |
Maximum | Discounted cash flow | Estimated revenue growth | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.064 | 0.050 |
Maximum | Discounted cash flow | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.155 | 0.155 |
Maximum | Market | Future enterprise value/ EBIDTA ratio | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.00183 | 0.00181 |
Weighted Average | Discounted cash flow | Estimated revenue growth | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.041 | 0.031 |
Weighted Average | Discounted cash flow | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.155 | 0.155 |
Weighted Average | Market | Future enterprise value/ EBIDTA ratio | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.00114 | 0.00122 |
Financial Assets and Liabilit_5
Financial Assets and Liabilities - Level 3 financial instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other, net | |||
Fair Value, Asset, Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other, net | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 79,726 | $ 84,482 | $ 76,613 | $ 81,358 |
Purchases | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains / (Losses) | (8,667) | (6,920) | (5,554) | (3,796) |
Net Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 | 0 |
Ending balance | 71,059 | 77,562 | 71,059 | 77,562 |
Change in Net Unrealized Gains / (Losses) on Investments still held at End of Period | (8,667) | (6,920) | (5,554) | (3,796) |
Equity investment | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 79,726 | 84,482 | 76,613 | 81,358 |
Purchases | 0 | 0 | 0 | 0 |
Total Realized and Unrealized Gains / (Losses) | (8,667) | (6,920) | (5,554) | (3,796) |
Net Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 | 0 |
Ending balance | 71,059 | 77,562 | 71,059 | 77,562 |
Change in Net Unrealized Gains / (Losses) on Investments still held at End of Period | $ (8,667) | $ (6,920) | $ (5,554) | $ (3,796) |
Financial Assets and Liabilit_6
Financial Assets and Liabilities - Not Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash restricted or segregated under regulations and other | $ 47,133 | $ 56,662 |
Receivables from broker-dealers and clearing organizations | 1,459,826 | 1,115,185 |
Receivables from customers | 130,623 | 80,830 |
Other assets | 299,348 | 303,916 |
Liabilities | ||
Payables to broker-dealers and clearing organizations | 848,277 | 273,843 |
Payables to customers | 39,740 | 46,525 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | 698,674 | 981,580 |
Cash restricted or segregated under regulations and other | 47,133 | 56,662 |
Securities borrowed | 0 | 0 |
Securities purchased under agreements to resell | 0 | 0 |
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Receivables from customers | 0 | 0 |
Other assets | 11,758 | 0 |
Total Assets | 757,565 | 1,038,242 |
Liabilities | ||
Short-term borrowings | 0 | 0 |
Long-term borrowings | 0 | 0 |
Securities loaned | 0 | 0 |
Securities sold under agreements to repurchase | 0 | 0 |
Payables to broker-dealers and clearing organizations | 0 | 0 |
Payables to customers | 0 | 0 |
Other liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Cash restricted or segregated under regulations and other | 0 | 0 |
Securities borrowed | 1,665,179 | 1,187,674 |
Securities purchased under agreements to resell | 793,815 | 336,999 |
Receivables from broker-dealers and clearing organizations | 1,378,685 | 1,027,917 |
Receivables from customers | 130,623 | 80,830 |
Other assets | 21,209 | 30,579 |
Total Assets | 3,989,511 | 2,663,999 |
Liabilities | ||
Short-term borrowings | 115,000 | 3,944 |
Long-term borrowings | 1,801,798 | 1,783,943 |
Securities loaned | 1,306,894 | 1,060,432 |
Securities sold under agreements to repurchase | 1,120,151 | 627,549 |
Payables to broker-dealers and clearing organizations | 848,277 | 273,843 |
Payables to customers | 39,740 | 46,525 |
Other liabilities | 24,255 | 23,776 |
Total Liabilities | 5,256,115 | 3,820,012 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Cash restricted or segregated under regulations and other | 0 | 0 |
Securities borrowed | 0 | 0 |
Securities purchased under agreements to resell | 0 | 0 |
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Receivables from customers | 0 | 0 |
Other assets | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities | ||
Short-term borrowings | 0 | 0 |
Long-term borrowings | 0 | 0 |
Securities loaned | 0 | 0 |
Securities sold under agreements to repurchase | 0 | 0 |
Payables to broker-dealers and clearing organizations | 0 | 0 |
Payables to customers | 0 | 0 |
Other liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 698,674 | 981,580 |
Cash restricted or segregated under regulations and other | 47,133 | 56,662 |
Securities borrowed | 1,665,179 | 1,187,674 |
Securities purchased under agreements to resell | 793,815 | 336,999 |
Receivables from broker-dealers and clearing organizations | 1,378,685 | 1,027,917 |
Receivables from customers | 130,623 | 80,830 |
Other assets | 32,967 | 30,579 |
Total Assets | 4,747,076 | 3,702,241 |
Liabilities | ||
Short-term borrowings | 111,721 | 3,944 |
Long-term borrowings | 1,778,270 | 1,795,952 |
Securities loaned | 1,306,894 | 1,060,432 |
Securities sold under agreements to repurchase | 1,120,151 | 627,549 |
Payables to broker-dealers and clearing organizations | 848,277 | 273,843 |
Payables to customers | 39,740 | 46,525 |
Other liabilities | 24,255 | 23,776 |
Total Liabilities | 5,229,308 | 3,832,021 |
Fair Value | ||
Assets | ||
Cash and cash equivalents | 698,674 | 981,580 |
Cash restricted or segregated under regulations and other | 47,133 | 56,662 |
Securities borrowed | 1,665,179 | 1,187,674 |
Securities purchased under agreements to resell | 793,815 | 336,999 |
Receivables from broker-dealers and clearing organizations | 1,378,685 | 1,027,917 |
Receivables from customers | 130,623 | 80,830 |
Other assets | 32,967 | 30,579 |
Total Assets | 4,747,076 | 3,702,241 |
Liabilities | ||
Short-term borrowings | 115,000 | 3,944 |
Long-term borrowings | 1,801,798 | 1,783,943 |
Securities loaned | 1,306,894 | 1,060,432 |
Securities sold under agreements to repurchase | 1,120,151 | 627,549 |
Payables to broker-dealers and clearing organizations | 848,277 | 273,843 |
Payables to customers | 39,740 | 46,525 |
Other liabilities | 24,255 | 23,776 |
Total Liabilities | $ 5,256,115 | $ 3,820,012 |
Financial Assets and Liabilit_7
Financial Assets and Liabilities - Netting of Certain Financial Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Securities borrowed | ||
Gross Amounts of Recognized Assets | $ 1,665,179 | $ 1,187,674 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition | 1,665,179 | 1,187,674 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instrument Collateral | (1,631,134) | (1,148,238) |
Counterparty Netting/ Cash Collateral | (6,261) | (5,138) |
Net Amount | 27,784 | 34,298 |
Securities purchased under agreements to resell | ||
Gross Amounts of Recognized Assets | 793,815 | 336,999 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition | 793,815 | 336,999 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instrument Collateral | (793,815) | (336,849) |
Counterparty Netting/ Cash Collateral | 0 | 0 |
Net Amount | 0 | 150 |
Total | ||
Gross Amounts of Recognized Assets | 3,156,035 | 2,117,694 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | (603,560) | (493,237) |
Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition | 2,552,475 | 1,624,457 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instrument Collateral | (2,424,949) | (1,485,087) |
Counterparty Netting/ Cash Collateral | (10,239) | (9,027) |
Net Amount | 117,287 | 130,343 |
Currency forwards | ||
Trading assets, at fair value: | ||
Gross Amounts of Recognized Assets | 611,584 | 500,553 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | (603,560) | (493,237) |
Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition | 8,024 | 7,316 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instrument Collateral | 0 | 0 |
Counterparty Netting/ Cash Collateral | 0 | 0 |
Net Amount | 8,024 | 7,316 |
Options | ||
Trading assets, at fair value: | ||
Gross Amounts of Recognized Assets | 4,316 | 5,200 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition | 4,316 | 5,200 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instrument Collateral | 0 | 0 |
Counterparty Netting/ Cash Collateral | (3,978) | (3,889) |
Net Amount | 338 | 1,311 |
Interest rate swap | ||
Trading assets, at fair value: | ||
Gross Amounts of Recognized Assets | 81,141 | 87,268 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition | 81,141 | 87,268 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instrument Collateral | 0 | 0 |
Counterparty Netting/ Cash Collateral | 0 | 0 |
Net Amount | $ 81,141 | $ 87,268 |
Financial Assets and Liabilit_8
Financial Assets and Liabilities - Netting of Certain Financial Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Securities loaned | ||
Gross Amounts of Recognized Liabilities | $ 1,306,894 | $ 1,060,432 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 1,306,894 | 1,060,432 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instruments | (1,287,973) | (1,027,062) |
Counterparty Netting/ Cash Collateral | (6,614) | (9,100) |
Net Amount | 12,307 | 24,270 |
Securities sold under agreements to repurchase | ||
Gross Amounts of Recognized Liabilities | 1,120,151 | 627,549 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 1,120,151 | 627,549 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instruments | (1,120,151) | (627,388) |
Counterparty Netting/ Cash Collateral | 0 | 0 |
Net Amount | 0 | 161 |
Total | ||
Gross Amounts of Recognized Liabilities | 3,088,926 | 2,189,669 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | (657,348) | (497,799) |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 2,431,578 | 1,691,870 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instruments | (2,408,124) | (1,654,450) |
Counterparty Netting/ Cash Collateral | (10,592) | (12,989) |
Net Amount | 12,862 | 24,431 |
Currency forwards | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 657,348 | 497,799 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | (657,348) | (497,799) |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 0 | 0 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instruments | 0 | 0 |
Counterparty Netting/ Cash Collateral | 0 | 0 |
Net Amount | 0 | 0 |
Options | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 4,533 | 3,889 |
Amounts Offset in the Condensed Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 4,533 | 3,889 |
Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition | ||
Financial Instruments | 0 | 0 |
Counterparty Netting/ Cash Collateral | (3,978) | (3,889) |
Net Amount | $ 555 | $ 0 |
Financial Assets and Liabilit_9
Financial Assets and Liabilities - Gross Obligations For Securities Lending Transactions (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | $ 1,120,151 | $ 627,549 |
Remaining contractual maturity for securities loaned | 1,306,894 | 1,060,432 |
Overnight and Continuous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 720,151 | 227,549 |
Remaining contractual maturity for securities loaned | 1,306,894 | 1,060,432 |
Less than 30 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 140,000 | 250,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
30 - 60 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 150,000 | 100,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
61 - 90 Days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 110,000 | 50,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Greater than 90 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 400,000 | 400,000 |
Remaining contractual maturity for securities loaned | 1,306,894 | 1,060,432 |
Equity securities | Overnight and Continuous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
Remaining contractual maturity for securities loaned | 1,306,894 | 1,060,432 |
Equity securities | Less than 30 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 140,000 | 250,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | 30 - 60 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 150,000 | 100,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | 61 - 90 Days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 110,000 | 50,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | Greater than 90 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
Remaining contractual maturity for securities loaned | 0 | 0 |
U.S. and Non-U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 720,151 | 227,549 |
U.S. and Non-U.S. government obligations | Overnight and Continuous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 720,151 | 227,549 |
U.S. and Non-U.S. government obligations | Less than 30 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
U.S. and Non-U.S. government obligations | 30 - 60 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
U.S. and Non-U.S. government obligations | 61 - 90 Days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
U.S. and Non-U.S. government obligations | Greater than 90 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | $ 0 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Equities futures | Derivative instruments not designated as hedging instruments | Receivables from broker-dealers and clearing organizations | ||
Derivatives Assets | ||
Fair Value | $ (304) | $ (575) |
Notional | 774,998 | 663,110 |
Equities futures | Derivative instruments not designated as hedging instruments | Payables to broker-dealers and clearing organizations | ||
Derivatives Liabilities | ||
Fair Value | (951) | 1,819 |
Notional | 1,303,263 | 3,238,651 |
Commodity futures | Derivative instruments not designated as hedging instruments | Receivables from broker-dealers and clearing organizations | ||
Derivatives Assets | ||
Fair Value | (3,636) | (31,007) |
Notional | 5,706,595 | 7,597,057 |
Commodity futures | Derivative instruments not designated as hedging instruments | Payables to broker-dealers and clearing organizations | ||
Derivatives Liabilities | ||
Fair Value | 358 | 597 |
Notional | 35,234 | 39,046 |
Currency futures | Derivative instruments not designated as hedging instruments | Receivables from broker-dealers and clearing organizations | ||
Derivatives Assets | ||
Fair Value | (8,169) | (24,023) |
Notional | 3,226,865 | 7,460,531 |
Currency futures | Derivative instruments not designated as hedging instruments | Payables to broker-dealers and clearing organizations | ||
Derivatives Liabilities | ||
Fair Value | (3,252) | 8 |
Notional | 566,817 | 6,386 |
Fixed income futures | Derivative instruments not designated as hedging instruments | Receivables from broker-dealers and clearing organizations | ||
Derivatives Assets | ||
Fair Value | 9 | (360) |
Notional | 24,469 | 30,292 |
Fixed income futures | Derivative instruments not designated as hedging instruments | Payables to broker-dealers and clearing organizations | ||
Derivatives Liabilities | ||
Fair Value | (136) | (264) |
Notional | 149,069 | 123,043 |
Options | ||
Derivatives Assets | ||
Fair Value | 4,316 | 5,200 |
Derivatives Liabilities | ||
Fair Value | 4,533 | 3,889 |
Options | Derivative instruments not designated as hedging instruments | Financial instruments owned | ||
Derivatives Assets | ||
Fair Value | 4,316 | 5,200 |
Notional | 1,288,736 | 691,737 |
Options | Derivative instruments not designated as hedging instruments | Financial instruments sold, not yet purchased | ||
Derivatives Liabilities | ||
Fair Value | 4,533 | 3,889 |
Notional | 1,245,988 | 742,531 |
Currency forwards | ||
Derivatives Assets | ||
Fair Value | 611,584 | 500,553 |
Derivatives Liabilities | ||
Fair Value | 657,348 | 497,799 |
Currency forwards | Derivative instruments not designated as hedging instruments | Financial instruments owned | ||
Derivatives Assets | ||
Fair Value | 611,584 | 500,553 |
Notional | 44,930,685 | 30,286,330 |
Currency forwards | Derivative instruments not designated as hedging instruments | Financial instruments sold, not yet purchased | ||
Derivatives Liabilities | ||
Fair Value | 657,348 | 497,799 |
Notional | 44,953,567 | 30,284,952 |
Interest rate swap | ||
Derivatives Assets | ||
Fair Value | 81,141 | 87,268 |
Interest rate swap | Derivative instruments designated as hedging instruments | Receivables from broker-dealers and clearing organizations | ||
Derivatives Assets | ||
Fair Value | 81,141 | 87,268 |
Notional | $ 1,525,000 | $ 1,525,000 |
Derivative Instruments - Gain (
Derivative Instruments - Gain (Loss) From Derivative Instruments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Oct. 31, 2019 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2020 USD ($) instrument | Dec. 31, 2019 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Not designated as hedging instruments | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Trading income, net and other, net | $ 10,322 | $ 73,478 | $ 74,043 | $ 158,177 | |||
Derivative instruments designed as hedging instruments: | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Other comprehensive income | 9,514 | 16,430 | (5,879) | 72,575 | |||
Futures | Not designated as hedging instruments | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Trading income, net and other, net | (4,449) | 118,455 | 120,017 | 195,801 | |||
Currency forwards | Not designated as hedging instruments | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Trading income, net and other, net | 16,750 | (44,665) | (46,187) | (35,754) | |||
Options | Not designated as hedging instruments | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Trading income, net and other, net | (1,510) | 157 | 1,145 | (938) | |||
Interest rate swap | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative contract term | 5 years | 5 years | 5 years | ||||
Derivative, notional amount | $ 525,000 | $ 1,000,000 | $ 525,000 | ||||
Number of interest rate swaps | instrument | 2 | ||||||
Interest rate swap | Not designated as hedging instruments | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Trading income, net and other, net | (469) | (469) | (932) | (932) | |||
Interest rate swap | Derivative instruments designed as hedging instruments: | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Other comprehensive income | $ 9,514 | $ 16,430 | $ (5,879) | $ 72,575 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2023 venture | |
Variable Interest Entity [Line Items] | |
Number of joint ventures considered as VIEs | 5 |
JV building microwave communication networks in US, Europe and Asia | |
Variable Interest Entity [Line Items] | |
Number of joint ventures | 2 |
JV building microwave communication networks in US and Asia | |
Variable Interest Entity [Line Items] | |
Ownership of equity of JV held be each investor (as a percent) | 11.10% |
JV building microwave communication networks in US and Europe | |
Variable Interest Entity [Line Items] | |
Ownership interest | 50% |
JV offering derivatives trading technology and execution services | |
Variable Interest Entity [Line Items] | |
Ownership interest | 9.80% |
JV developing a member-owned equities exchange with the goal of increasing competition | |
Variable Interest Entity [Line Items] | |
Ownership interest | 14.20% |
JV developing and operating cryptocurrency trading platform | |
Variable Interest Entity [Line Items] | |
Ownership interest | 9.30% |
JV Growth and expansion of multi-asset request-for-quote communication platform | |
Variable Interest Entity [Line Items] | |
Ownership interest | 51% |
Variable Interest Entities - No
Variable Interest Entities - Nonconsolidated VIEs (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Asset | $ 13,389,684 | $ 10,583,241 |
Liability | 11,837,383 | 8,931,814 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Asset | 50,939 | 43,589 |
Liability | 0 | 0 |
Maximum Exposure to Loss | 50,939 | 43,589 |
VIEs' assets | $ 264,860 | $ 239,682 |
Revenues from Contracts with _3
Revenues from Contracts with Customers (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | $ 109,504,000 | $ 136,340,000 | $ 230,948,000 | $ 290,995,000 | |
Total revenue | 506,854,000 | 604,738,000 | 1,127,233,000 | 1,306,000,000 | |
Revenue related to performance obligation | 55,800,000 | 55,800,000 | $ 56,100,000 | ||
Impairment losses on receivables | 0 | ||||
Deferred revenue related to contracts with customers | 14,000,000 | 14,000,000 | $ 9,600,000 | ||
Services transferred at a point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 488,678,000 | 586,730,000 | 1,091,059,000 | 1,269,561,000 | |
Services transferred over time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 18,176,000 | 18,008,000 | 36,174,000 | 36,439,000 | |
Commissions, net | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 76,627,000 | 102,143,000 | 163,585,000 | 219,381,000 | |
Workflow technology | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 22,576,000 | 24,334,000 | 47,532,000 | 51,270,000 | |
Analytics | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 10,301,000 | 9,863,000 | 19,831,000 | 20,344,000 | |
Other sources of revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Other sources of revenue | 397,350,000 | 468,398,000 | 896,285,000 | 1,015,005,000 | |
Operating Segments | Market Making | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 6,634,000 | 11,145,000 | 16,334,000 | 20,194,000 | |
Total revenue | 405,250,000 | 432,595,000 | 904,169,000 | 979,158,000 | |
Operating Segments | Market Making | Services transferred at a point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 405,250,000 | 432,595,000 | 904,169,000 | 979,158,000 | |
Operating Segments | Market Making | Services transferred over time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
Operating Segments | Market Making | Commissions, net | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 6,634,000 | 11,145,000 | 16,334,000 | 20,194,000 | |
Operating Segments | Market Making | Workflow technology | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | |
Operating Segments | Market Making | Analytics | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | |
Operating Segments | Market Making | Other sources of revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Other sources of revenue | 398,616,000 | 421,450,000 | 887,835,000 | 958,964,000 | |
Operating Segments | Execution Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 102,870,000 | 125,195,000 | 214,614,000 | 270,801,000 | |
Total revenue | 109,116,000 | 130,997,000 | 227,593,000 | 282,742,000 | |
Operating Segments | Execution Services | Services transferred at a point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 90,940,000 | 112,989,000 | 191,419,000 | 246,303,000 | |
Operating Segments | Execution Services | Services transferred over time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 18,176,000 | 18,008,000 | 36,174,000 | 36,439,000 | |
Operating Segments | Execution Services | Commissions, net | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 69,993,000 | 90,998,000 | 147,251,000 | 199,187,000 | |
Operating Segments | Execution Services | Workflow technology | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 22,576,000 | 24,334,000 | 47,532,000 | 51,270,000 | |
Operating Segments | Execution Services | Analytics | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 10,301,000 | 9,863,000 | 19,831,000 | 20,344,000 | |
Operating Segments | Execution Services | Other sources of revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Other sources of revenue | 6,246,000 | 5,802,000 | 12,979,000 | 11,941,000 | |
Corporate | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | |
Total revenue | (7,512,000) | 41,146,000 | (4,529,000) | 44,100,000 | |
Corporate | Services transferred at a point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | (7,512,000) | 41,146,000 | (4,529,000) | 44,100,000 | |
Corporate | Services transferred over time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
Corporate | Commissions, net | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | |
Corporate | Workflow technology | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | |
Corporate | Analytics | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue from contracts with customers | 0 | 0 | 0 | ||
Corporate | Other sources of revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Other sources of revenue | $ (7,512,000) | $ 41,146,000 | $ (4,529,000) | $ 44,100,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Tax Credit Carryforward [Line Items] | |||||
Provision for income taxes | $ 5,923 | $ 24,888 | $ 30,605 | $ 66,674 | |
Effective Income Tax Rate Reconciliation, Percent | 16.70% | 14.30% | 18% | 16% | |
Current income taxes receivable | $ 48,300 | $ 48,300 | $ 54,100 | ||
Current taxes payable | 9,300 | 9,300 | 13,400 | ||
Deferred tax asset, state and local operating loss carryforward | 400 | 400 | 400 | ||
Unrecognized tax benefits that would impact effective tax rate | 6,800 | 6,800 | |||
ITG | |||||
Tax Credit Carryforward [Line Items] | |||||
Operating loss carryforwards | 66,900 | 66,900 | 64,600 | ||
Deferred tax asset, non-U.S. operating loss carryforward | 12,800 | 12,800 | 12,400 | ||
Valuation allowance on deferred taxes | 12,800 | 12,800 | 12,400 | ||
KCG | |||||
Tax Credit Carryforward [Line Items] | |||||
Operating loss carryforwards | 239,300 | 239,300 | |||
Deferred tax asset, non-U.S. operating loss carryforward | $ 44,900 | $ 44,900 | $ 44,900 |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating leases | ||
Operating lease right-of-use assets | $ 174,136 | $ 187,442 |
Operating lease liabilities | 224,086 | 239,202 |
Finance leases | ||
Property and equipment, at cost | 36,343 | 27,908 |
Accumulated depreciation | $ (12,985) | $ (12,736) |
Finance lease, liability, noncurrent, statement of financial position [extensible list] | Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities |
Finance lease liabilities | $ 23,682 | $ 15,323 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
Weighted average remaining lease term | ||
Operating leases | 6 years 1 month 6 days | 6 years 2 months 15 days |
Finance leases | 3 years 1 month 6 days | 2 years 10 months 2 days |
Weighted average discount rate | ||
Operating leases | 5.51% | 5.43% |
Finance leases | 4.36% | 3.92% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating lease cost: | ||||
Fixed | $ 19,487 | $ 18,426 | $ 38,365 | $ 36,494 |
Variable | 1,292 | 1,349 | 3,056 | 3,245 |
Total Operating lease cost | 20,779 | 19,775 | 41,421 | 39,739 |
Sublease income | 4,917 | 4,923 | 9,806 | 9,846 |
Finance lease cost: | ||||
Amortization of ROU Asset | 2,428 | 1,986 | 4,552 | 3,894 |
Interest on lease liabilities | 312 | 96 | 520 | 174 |
Total Finance lease cost | $ 2,740 | $ 2,082 | $ 5,072 | $ 4,068 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 | $ 36,932 | |
2024 | 46,498 | |
2025 | 38,395 | |
2026 | 35,241 | |
2027 | 29,117 | |
2028 and thereafter | 81,452 | |
Total lease payments | 267,635 | |
Less imputed interest | (43,549) | |
Total lease liability | 224,086 | $ 239,202 |
Finance Leases | ||
2023 | 4,607 | |
2024 | 8,385 | |
2025 | 4,798 | |
2026 | 4,020 | |
2027 | 3,930 | |
2028 and thereafter | 490 | |
Total lease payments | 26,230 | |
Less imputed interest | (2,548) | |
Total lease liability | $ 23,682 |
Cash (Details)
Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 698,674 | $ 981,580 | ||
Cash restricted or segregated under regulations and other | 47,133 | 56,662 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 745,807 | $ 1,038,242 | $ 849,770 | $ 1,120,953 |
Capital Structure - Additional
Capital Structure - Additional Information (Details) | 6 Months Ended | ||
Jun. 30, 2023 vote class shares | Jun. 30, 2022 shares | Dec. 31, 2022 shares | |
Class of Stock [Line Items] | |||
Number of classes of common stock | class | 4 | ||
Non-voting common interest units outstanding (in shares) | shares | 4,289,305 | 4,462,840 | |
Number of non-voting common interest units forfeited or repurchased (in shares) | shares | 173,535 | 328,999 | |
Virtu Financial | |||
Class of Stock [Line Items] | |||
Ownership interest | 58.90% | ||
Class A common stock and Class C common stock | |||
Class of Stock [Line Items] | |||
Number of votes | vote | 1 | ||
Class B common stock and Class D common stock | |||
Class of Stock [Line Items] | |||
Number of votes | vote | 10 | ||
Class C common stock and class D common stock | Founder | Virtu Financial | |||
Class of Stock [Line Items] | |||
Ownership interest | 85.80% |
Capital Structure - Amended and
Capital Structure - Amended and Restated 2015 Management Incentive Plan (Details) - 2015 Management Incentive Plan - Class A - shares | Nov. 13, 2020 | Jun. 02, 2022 |
Class of Stock [Line Items] | ||
Number of shares of stock authorized (in shares) | 26,000,000 | |
Service period | 5 years |
Capital Structure - Amended a_2
Capital Structure - Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (Details) - Assumed Awards - Class A | Mar. 01, 2019 shares |
Class of Stock [Line Items] | |
Number of shares of stock authorized (in shares) | 2,497,028 |
Number of shares remaining to be issued (in shares) | 1,230,406 |
Capital Structure - Share Repur
Capital Structure - Share Repurchase Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 32 Months Ended | |||||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Nov. 03, 2021 | May 04, 2021 | Feb. 11, 2021 | Nov. 06, 2020 | |
Class of Stock [Line Items] | |||||||||
Stock repurchased during period, value | $ 424 | $ 52 | $ 8,204 | ||||||
Treasury stock purchases | $ 41,744 | $ 93,218 | $ 47,486 | $ 305,565 | |||||
Class A | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase authorized amount | $ 1,220,000 | $ 100,000 | |||||||
Additional authorized amount | $ 750,000 | $ 300,000 | $ 70,000 | ||||||
Stock repurchase program, remaining authorized repurchase amount | $ 203,300 | $ 203,300 | |||||||
Stock repurchased during period, value | 38,500 | ||||||||
Treasury stock purchases | $ 1,016,700 |
Capital Structure - Employee Ex
Capital Structure - Employee Exchanges (Details) - VFH | 6 Months Ended | |
Jun. 30, 2023 shares | Jun. 30, 2022 shares | |
Class of Stock [Line Items] | ||
Common stock exchange ratio | 1 | 1 |
Class A | ||
Class of Stock [Line Items] | ||
Issuance of common stock in connection with employee exchanges (in shares) | 152,037 | 92,930 |
Capital Structure - Warrant Iss
Capital Structure - Warrant Issuance (Details) - Class A Common Stock Warrants - $ / shares | Mar. 20, 2020 | Dec. 17, 2021 |
Class of Warrant or Right [Line Items] | ||
Number of shares available for purchase (in shares) | 3,000,000 | 3,000,000 |
Exercise price of warrants (in dollars per share) | $ 22.98 | |
Warrant, number of trading days | 10 days |
Capital Structure - Schedule of
Capital Structure - Schedule of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 1,635,374 | $ 1,698,742 | $ 1,651,427 | $ 1,863,618 |
Balance at end of period | 1,552,301 | 1,740,408 | 1,552,301 | 1,740,408 |
AOCI reclassified into earnings over next 12 months | 30,100 | 30,100 | ||
Net change in unrealized cash flow hedges gains (losses) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 37,091 | 18,906 | 44,925 | (10,481) |
Amounts reclassified from AOCI to income | (7,535) | 2,189 | 11,025 | 32,797 |
Amounts recorded in AOCI | 12,414 | 6,391 | (13,980) | 5,170 |
Balance at end of period | 41,970 | 27,486 | 41,970 | 27,486 |
Foreign exchange translation adjustment | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (12,341) | (2,887) | (13,321) | 285 |
Amounts reclassified from AOCI to income | 0 | 0 | 2,483 | (13,945) |
Amounts recorded in AOCI | 1,503 | (10,773) | 0 | 0 |
Balance at end of period | (10,838) | (13,660) | (10,838) | (13,660) |
AOCI attributable to parent | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 24,750 | 16,019 | 31,604 | (10,196) |
Amounts reclassified from AOCI to income | (7,535) | 2,189 | 13,508 | 18,852 |
Amounts recorded in AOCI | 13,917 | (4,382) | (13,980) | 5,170 |
Balance at end of period | $ 31,132 | $ 13,826 | $ 31,132 | $ 13,826 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 868,315 | 580,710 | |||
Increase (decrease) in accrued employee compensation expense | $ 6.1 | $ 9.6 | $ 12 | $ 15.5 | |
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expense recognized | 10.1 | $ 9.5 | 20.2 | $ 18.1 | |
Unrecognized share-based compensation expense | $ 74.7 | $ 74.7 | $ 54.6 | ||
Weighted average period for compensation expense expected to be recognized | 1 year 3 months 18 days | 10 months 24 days | |||
2015 Management Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 0 | 0 | |||
2015 Management Incentive Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Expiration period | 10 years | ||||
2015 Management Incentive Plan | RSUs and RSAs | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years |
Share-based Compensation - Summ
Share-based Compensation - Summary of Activity in Options (Details) - 2015 Management Incentive Plan - $ / shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options | ||||
Outstanding at beginning of period (in shares) | 1,521,776 | 1,795,655 | 1,795,655 | |
Granted (in shares) | 0 | 0 | ||
Exercised (in shares) | 0 | (268,879) | ||
Forfeited or expired (in shares) | (10,000) | (5,000) | ||
Outstanding at end of period (in shares) | 1,511,776 | 1,521,776 | 1,521,776 | 1,795,655 |
Weighted Average Exercise Price Per Share | ||||
Outstanding at beginning of period (in dollars per share) | $ 19 | $ 19 | $ 19 | |
Granted (in dollars per share) | 0 | 0 | ||
Exercised (in dollars per share) | 0 | 19 | ||
Forfeited or expired (in dollars per share) | 0 | 0 | ||
Outstanding at end of period (in dollars per share) | $ 19 | $ 19 | $ 19 | $ 19 |
Weighted Average Remaining Contractual Life | ||||
Weighted Average Remaining Contractual Life | 1 year 8 months 26 days | 2 years 8 months 26 days | 2 years 2 months 26 days | 3 years 2 months 26 days |
Options exercisable, number of options (in shares) | 1,521,776 | 1,521,776 | 1,521,776 | 1,795,655 |
Options granted, number of options (in shares) | 0 | 0 | ||
Options exercised, number of options exercised (in shares) | 0 | (268,879) | ||
Options exercisable, number of options forfeited or expired (in shares) | 0 | (5,000) | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 19 | $ 19 | $ 19 | $ 19 |
Share-based Compensation - Su_2
Share-based Compensation - Summary of Activity in RSUs and RSAs (Details) - 2015 Management Incentive Plan - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
RSUs and RSAs | ||
Number of RSUs and RSAs | ||
Outstanding at beginning of period (in shares) | 3,954,833 | 3,224,447 |
Granted (in shares) | 3,473,137 | 2,951,863 |
Forfeited (in shares) | (139,609) | (322,220) |
Vested (in shares) | (2,413,550) | (1,669,030) |
Outstanding at end of period (in shares) | 4,874,811 | 4,185,060 |
Weighted Average Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 28.13 | $ 24.30 |
Granted (in dollars per share) | 19.40 | 30.03 |
Forfeited (in dollars per share) | 27.48 | 25.47 |
Vested (in dollars per share) | 23.59 | 25.07 |
Outstanding at end of period (in dollars per share) | $ 24.18 | $ 27.94 |
RSUs and RSAs, performance-based | ||
Number of RSUs and RSAs | ||
Granted (in shares) | 37,500 |
Regulatory Requirement - Narrat
Regulatory Requirement - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Virtu Financial Capital Markets Llc | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Minimum capital required to be maintained in connection with the operation of the company's DMM business | $ 1,000 | |
Required amount under exchange rules | 1,000 | |
Required amount under exchange rules for every 0.1% NYSE transaction dollar volume | $ 75 | |
Percentage of NYSE transaction dollar volume | 0.10% | |
VAL | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Cash in special reserve bank accounts for the benefit of customers | $ 40,900 | $ 50,200 |
Cash in reserve bank accounts for the benefit of proprietary accounts of brokers | 5,900 | 5,800 |
Virtu Europe Trading Limited | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Deposit funds for trade | 100 | 100 |
Virtu ITG Hong Kong Limited | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Capital settlement | $ 30 | 30 |
Virtu ITG Canada Corp | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Deposit funds for trade | $ 400 |
Regulatory Requirement - Regula
Regulatory Requirement - Regulatory Capital and Capital Requirements (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Virtu Americas LLC | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | $ 455,763 | $ 554,550 |
Regulatory Capital Requirement | 1,577 | 1,000 |
Excess Regulatory Capital | 454,186 | 553,550 |
RFQ-Hub Americas LLC | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 2,111 | |
Regulatory Capital Requirement | 5 | |
Excess Regulatory Capital | 2,106 | |
Virtu Canada Corp | Canada | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 11,516 | |
Regulatory Capital Requirement | 189 | |
Excess Regulatory Capital | 11,327 | |
Virtu ITG Canada Corp | Canada | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 14,248 | |
Regulatory Capital Requirement | 184 | |
Excess Regulatory Capital | 14,064 | |
Virtu Financial Canada ULC | Canada | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 2,682 | 2,663 |
Regulatory Capital Requirement | 189 | 184 |
Excess Regulatory Capital | 2,493 | 2,479 |
Virtu Europe Trading Limited | Ireland | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 119,962 | 78,834 |
Regulatory Capital Requirement | 27,176 | 28,502 |
Excess Regulatory Capital | 92,786 | 50,332 |
Virtu Financial Ireland Limited | Ireland | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 90,589 | 89,853 |
Regulatory Capital Requirement | 51,497 | 39,768 |
Excess Regulatory Capital | 39,092 | 50,085 |
Virtu ITG UK Limited | United Kingdom | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 1,477 | 1,405 |
Regulatory Capital Requirement | 953 | 906 |
Excess Regulatory Capital | 524 | 499 |
Virtu ITG Australia Limited | Asia Pacific | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 22,986 | 30,027 |
Regulatory Capital Requirement | 7,452 | 3,115 |
Excess Regulatory Capital | 15,534 | 26,912 |
Virtu ITG Hong Kong Limited | Asia Pacific | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 2,340 | 1,683 |
Regulatory Capital Requirement | 556 | 497 |
Excess Regulatory Capital | 1,784 | 1,186 |
Virtu ITG Singapore Pte Limited | Asia Pacific | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 690 | 1,147 |
Regulatory Capital Requirement | 87 | 91 |
Excess Regulatory Capital | 603 | 1,056 |
Virtu Financial Singapore Pte. Ltd. | Asia Pacific | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Capital | 126,025 | 121,166 |
Regulatory Capital Requirement | 69,227 | 46,025 |
Excess Regulatory Capital | $ 56,798 | $ 75,141 |
Geographic Information and Bu_3
Geographic Information and Business Segments - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues from External Customers [Line Items] | ||||
Total revenue | $ 506,854 | $ 604,738 | $ 1,127,233 | $ 1,306,000 |
United States | ||||
Revenues from External Customers [Line Items] | ||||
Total revenue | 415,338 | 485,744 | 937,966 | 1,035,193 |
Ireland | ||||
Revenues from External Customers [Line Items] | ||||
Total revenue | 47,493 | 58,072 | 101,452 | 136,030 |
Singapore | ||||
Revenues from External Customers [Line Items] | ||||
Total revenue | 28,079 | 31,043 | 54,297 | 77,320 |
Canada | ||||
Revenues from External Customers [Line Items] | ||||
Total revenue | 7,782 | 21,514 | 16,498 | 38,711 |
Australia | ||||
Revenues from External Customers [Line Items] | ||||
Total revenue | 7,215 | 7,347 | 13,855 | 16,268 |
Others | ||||
Revenues from External Customers [Line Items] | ||||
Total revenue | $ 947 | $ 1,018 | $ 3,165 | $ 2,478 |
Geographic Information and Bu_4
Geographic Information and Business Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of non-operating segments | 1 |
Geographic Information and Bu_5
Geographic Information and Business Segments - Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 506,854 | $ 604,738 | $ 1,127,233 | $ 1,306,000 |
Income before income taxes and noncontrolling interest | 35,467 | 173,784 | 170,231 | 415,494 |
Operating Segments | Market Making | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 405,250 | 432,595 | 904,169 | 979,158 |
Income before income taxes and noncontrolling interest | 43,741 | 125,446 | 167,850 | 349,668 |
Operating Segments | Execution Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 109,116 | 130,997 | 227,593 | 282,742 |
Income before income taxes and noncontrolling interest | (115) | 7,887 | 8,898 | 23,013 |
Segment Reconciling Items | Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (7,512) | 41,146 | (4,529) | 44,100 |
Income before income taxes and noncontrolling interest | $ (8,159) | $ 40,451 | $ (6,517) | $ 42,813 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) venture | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) venture | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Related Party Transaction [Line Items] | |||||
Contributions from noncontrolling interests | $ 39,200 | ||||
Noncontrolling Interest | |||||
Related Party Transaction [Line Items] | |||||
Contributions from noncontrolling interests | $ 39,200 | 39,200 | |||
Microwave communication network JVs | |||||
Related Party Transaction [Line Items] | |||||
Payments to related party | $ 6,300 | 5,500 | $ 12,600 | $ 10,900 | |
Number of microwave communication network JVs the company makes payments to | venture | 2 | 2 | |||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Net payables | $ 1,800 | $ 1,800 | |||
Receivables | $ 500 | ||||
Rebates on trading activities | 6,200 | 6,200 | 12,800 | 12,800 | |
Regulatory and transaction fees | 100 | 100 | 200 | 200 | |
SBI | |||||
Related Party Transaction [Line Items] | |||||
Payments to related party | $ 3,400 | $ 3,700 | $ 5,900 | $ 7,500 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | 3 Months Ended | ||||
Jul. 26, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Subsequent Event [Line Items] | |||||
Dividends declared (in dollars per share) | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.24 | |
Class A | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared (in dollars per share) | $ 0.24 |