VIRT - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Virtu Financial 2018 Q1 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank Relations, Investor begin conference. your Andrew you Smith, may

Andrew Smith

everyone you for Thank you, this thank morning Good Chris. joining and call.

on As results you website. available were quarter our released this know, morning and our first are

questions assumptions condition and are which and statements, Today's uncertainties, will call represent your Officer, Molluso, our begin today is on regarding Speaking belief outside subject prepared Joseph in made company's disclaimers our description which is Securities your and important are we Virtu's materially undertake and to risks, note Douglas with revise and call the future Chief Mr. Officer. Cifu, events Financial maybe Chief forward-looking questions. what therefore to to remarks you available. may Mr. our company with as include Executive and our press review and Form actual filings information update presently Commission. any you They do our becomes to to refer information take We risk answering XX-K are and and in results may current control, from not these new It indicated and and differ statements. financial of Annual encourage or statements the the the Exchange contained this on to factors statements in Report available forward-looking that other release any and forward-looking forward-looking based then

GAAP certain included may to these we GAAP non-GAAP and materials. to addition In reconciliation results, earnings in find terms refer of you measures to non-GAAP measures the will a

Executive Officer. to over the Chief would Virtu’s Now, turn I like Cifu, call to Douglas

Douglas Cifu

you, and morning Thank Andrew, good everybody.

today, question. our possible on remarks hand as it try them much as and discussion to prepared to to some time solely over we’ll and something try further going answer to and to will we’re to going focused for try I Joe to your a then save materials keep brief little supplemental then the different We’re limit

contributed two on earnings realized public already has revenue $X.XX examples starting XXXX. KCG and quarter. are this stages This I be adjusted prior records which a quarter; were early this and of to as quarter is since slide Namely has we we company. this outstanding morning, access Virtu the and and we income Virtu market new in and So fruits combination routing these we reporting efficient the migrate we closing trading adjusted reaping of financial with report not the proud Virtu more calls. To legacy deploying be of believe I’m places acquisition revenue and the about to full little pleased first first after order several legacy the Virtu of KCG the performance customer both the KCG the of as making of that that that second capabilities capabilities market from we to from of continued institutional with in market of announced combined synergies, Virtu integration result the in acquisition in quant-driven inherited the and a bear legacy adapting mentioned the first, synergies million for trading strategies strategic in still KCG the technology. specific more $XXX first, utilizing Virtu represent and making from are this could of several of more these to these our franchise technology. all benefits becoming the to There EPS X, quantitative XXXX factors the to of technology and net continue quarter the

more makes the KCG think that that profitable. nimble if We those mix you the Second, quant will and are know-how DNA market that strategies strategy. using Virtu in we making more those

and examples of calls. achieved Third; last these some several in the we’ve

trying factor given to the results allows further quarter to more was of to is advantage of a rest performance have the market conditions a technology KCG clear acquisition that in as generated our the effectively elevated and helped And significant it through firm closing the internalization quantify with our more the first rationalization integrated level base process. quarter, together. becomes that Virtu in But competitive internalize and away very which integration the first it’s from blended us the quarter. skill the continue flow as these scalable cost firms that firm for very us get in we having We’re of that to other and contributed to hedging continued of first the a KCG’s categories integration. Naturally, difficult

adjusted This were guidance with in a provided expense million expenses previously. detailed line quarter operating $XXX

industry. Virtu We run will have synergy best believe cash to to that do will achieve and we scalable and business so. generate continue targets That’s have margins we guidance how and the our we the provided always that are the expense in continue among flow

We the basis expense million have the operating approximately synergies combined both firms merger. of cost prior and reduced believe when in is have approximately we or complete, that realized $XXX cost will to dramatically of the integration XX%

basis, and do is headcount This managed confirms financial to institutions. market Our our large not thesis like May it’s run firms down need while be making people; materially revenues on have X on obviously our combined XXX a increased.

to more I we Importantly, months. in note past the want headcount made than is have this new XX six that that of hires inclusive

have to and addition we the term actively achieve attract talent companies, in the sought So hire to top combined goals. to long necessary right-sizing our

the was front the This far are revenue QX will considerably, the from cry synergies in average improvement in clearly realized average. our QX quarter-over-quarter improved QX which obviously operating environment across a firms. significant X.X XXXX sustainable the above continued XX.X, the our integration in drivers markedly but role impact and of efforts mind, clear and from Third played and volatility average on a environment QX in of their be results,

we volatility in QX, not saw While our overall for important far it the environment QX realized decidedly remain we half XXXX consider does second XXXX. This in than the as has thus averages better averages that to overall is sustained and a term and the the which thus years as is this over far Virtu. for environment couple improvement is are seeing in what and return we of QX of historical volatility, operating the a long meaningful positive realized past

XXXX, $XXX Finally, term progress make we we nearly end repayments there $XXX from X on long and We X. expense million quarter of brings significant interest repaid total we at million at loan. means July of capital have continue to we a targeted term XX X.X to another by of management ratio front closing, and this to approximately are the the year-end by year. up which the our per just debt-to-EBITDA X.X million This $XX to to reduced

slides $XX X, execution and million. and to income services making Turning market segment our generated X trading generated net million $XXX adjusted of

the the market see global led the can as in was franchise owing others. equities US well Unsurprisingly performance our quarter segment making outstanding. was and as America’s volatility performance to You in FICC performance our the this options market options in by led equities index

results. business, growth XXXX. in never business this very and the the was in equity and of market XXXX to [naming] material with nice has or options were had index quarter had of making pleased presence single continued quarters’ has Virtu quarter FX volatility options, I the half the category broad contributors of our While first improve a very significant equity a also which first from to

adjusted services execution net QX Our over improved its BondPoint. income excluding business trading

post-trade technology We analytics. transparent by are led committed superior to a trading and robust agency and execution business

we of as that business confident remain can with unexplored book central between making our we the key have orders. to addition, well business to our clients institutional synergies the responded risk institutional opportunity In realize market retail the previously interact and

very regulatory and headline receptive the materials driven forward coming I input the regulatory have on enforcement I regulation to to from Washington. and go front, is market remain as we grabbing, will data your through it but to by content remainder Virtu. We answering regulation questions. with no pleased and participant turn the tone rather tenor and Joe? to the by regulation such on out Joe longer of that Finally, of over now look is

Joseph Molluso

up on Thank I slide X. will you pick Doug.

include given expenses on and the which operation, of Now performance. year first to scale unified Back in moving detailed operating in various we integration a full wanted two guidance in perspective, following record firms to our put expenses, provided pieces this enabling the operating XXXX continued the expenses. we XXXX the order QX of operating and quarter, third half then

guidance we on of were slide If this target with on QX target first you half for look and in the XXXX. remain you’ll X, see on

a there bit this So half drill guidance, from our the of I expense is also compensation and down to than core expenses slightly XXX the first quarter. XXXX half operating wanted trend adjusted remains favorable. million the for on less

for ratio is XXXX. net compensation X.X% ratio the revenue million This XXXX quarter. in with in Virtu’s company revenues. expenses Our compensation a adjusted standalone line and GAAP were represents comp-to-net But as XX.X this of

expect compensation the particular this this around our is structure philosophy long model. out service of As in the ratio that’s include significant out we something analysis in to be expenses leverage to I guidance point that said, within wanted and model. demonstrative operating is operating We debt. Slide business point commitment capital technology- service business the that with X a demonstrate and to to ultimately and reviews expenses a term the our Virtu cost driven

X.X repayment our our in XX of times. debt-to-EBITDA debt We is are ahead trailing targets ratio for month

repurchase return million We recall, XX% have history. believe our to of went back income takes of Virtu’s returns. capital because we sustainability $XX.XX. long our our capital range stakeholders. We’ve year the dividend to to an reviews of $XX restate philosophy, to policy our are a we our over When X this long on long well this least achieving term the in our excess to and by inherent end used net To set fully quarter-to-quarter goal. of of confidence in XXX,XXX we policy a we that because average a view would XX you’ll If said million shareholders times not overtime. and to in at public at Indeed, a and authorized of a of return X.X shareholders program target QX returning we policy and term we we appropriate believe results. shares repurchase also be share term price step what of (inaudible) variability way

first we’ve returned have quarter, of the through of form the since see the been can in dividends. XX% we public; our of end earnings You

times, to long term and term Our target our no debt priorities remain, capital our long income. ratio return X.X a a the at of of more of reduce payout least XX% load than repurchases, net in consider share opportunistic debt-to-EBITDA maintain

month environment put Finally, on Obviously the can in extraordinary of volatility wanted six see an X. X, perspective. have and month from a on left was volume to slide you slide XXXX bottom the the we and the operating February we last perspective

was we the average than although above QX XXXX in March-April Importantly, less historic environment and the lows overall remained XXXX. well

With the till that For rose third digit good QX number the portion. trend XXXX realized Q&A XXXX, more looking news of so market volatility April normal to line, to conditions back begin operator, volatility the end realized can example, averages. dip with of back is The a consistent above remains the below the will call I the quarter turn single environment. we that although

Operator

[Operator question O’Neil. comes of from Rich Your Instructions] Sandler first Repetto

line is Your open.

Rich Repetto

better. for you going how but comments sort guess help X made Doug, a million above the said below you quarter between synergy given forward, million norms, from But the be is things, if day. before, model X this decidedly at we that the feel and and combined how integrated per income results range a firms if April, appreciate midpoint back get the as X.X I net or the there would it’s to or you’ve million quantitative a like us just way was standpoint, about revenue historic of some I say you that two don’t you could to the million think we’re you’ve I that. X But were or for outsize in at trading you what us

Douglas Cifu

side some that but frustrates from away, for on years I to guidance. done folks why always I side. away think with know a high in you, forecast emblematic time we’ve this I’ve started is We’ve XX been of the steered the both low the frustrates wrong every giving quarter Vinnie, that it Virtu I street, because I’ve and the direct steered last

we point did key the over the third is think I quarter integration to these is combination that great first from some put stress we’ve that history a again franchises, over the scalable great this has together financial tried dynamite KCG nimble, the superior two call and firms in that we’ve superior in people back environments a a that of long with and firm technology. and fabulous has quantitative a a customer of having firm models that testing it, that with very some and simulation with

going know, ‘XX, over and and we’re market going perspective the perspective. and volatility years of to scaling will answer our made operated going to of of quarter which and is as years fundamentally Virtu quarter We’ve numbers so obviously that The you continue I’m the second from volumes time, again, to over have of a volumes volatility I in now. And clear was the where certainly direct give given any the this which that perspective. both there from about worked a grow. we’ve we’re and February exogenous not quarter-by-quarter volume the the is there but we’ve ’XX a here vary and company, revenue be XX third seen direct before, and synergy storage I the superior long together volatility, quarter growth conditions given you the operating and also is to point business the the this story of years first from obviously period then avoiding public question it not think I and never three a events answer to accelerated business been that And a do and in around I’m a were a you that’s

opportunities you trading double realized digit. like a significant We’re I’m from not back that in down going guy encourages in saw positive will place market take and to at is advantage or first has state thing if that we the to up of The quarter. a me continue upbeat discount to there (inaudible) returned X volatility

hey last there lot hope two systemic a again a of the is in I got over that’s asked, volatility normal here. the change So, I new years. questions

think I the answer clearly is not.

about firms. because I it’s we KCG optimistic very one. become remarks, I’m a the have potential my combined mentioned forward of say to the after transaction prepared harder and and looking So in And really year as harder than less the Virtu

Rich Repetto

and you clearly follow-up the cost firm the Joe, debt both And the the from combined the just Doug almost pay-down. if there perspective. at for year-end one or synergies Virtuized look capital the XX% you’ve you’re And target,

takeout but the of sort to the there, I plan debt is gauge guess and I’m certainly pay sort for the front and know down trying in targets run this etcetera. forth. so which are and because possibility on synergies or to XX% rates meaningfully exceed, I You’re there potential the end it these big cost year, you I guess, already

Douglas Cifu

virtualizing because I I comment. comment, Joe of appreciate is, answer obviously one making wanted have you we’re afraid make the in all which to that I’ll specific, like first to verb of things Virtu I’d and just

and this across being firm other key of in That’s it’s built as and not tried asset driven from to of lots with make we’re it. to architected see of to by very is firms that with And scalability combining it all Virtu’s the footprint work technology I the ubiquitous think we from it firms. have do say combinations hopefully going and to note you run we scratch a will, something, classes to are fact But of notion we’re is be years that a again you all financial XX significant geographies. when which to going have compared with and these if headcount from firms operate very manner a important to last was in the there synergies perspective obtained was more which the differentiator a type underlining this succeeded. possible that and these do

more XX,XXX with to turn that So over I’ll horribly Joe comment, it foot for specifics.

Joseph Molluso

to I transactions, basis we XXX. had we’re think, think XXX and on when we with I million, to originally that announced closer the revived annualized the sticking with we’ve XXX XXX

we quarter to thing combined in but in. the – acquisition the were can of originally operations and always that guidance I a numbers You’re put this but put comfortable right, that is out we was specific we’ve confident upfront big originally, QX, first the ability and important company in to the think that go our numbers non-US feel as obtain there out impactful, the we detail,

it and a million XXX we like that on XXX comfortable range X. by the next the that year think is of get and says be right that we’ll are there run confident and on I rate at slide should basis XXX year, number the end a we to fiscal this

million return XXX you to the of terms so return In BondPoint I million to and without million We’ve BondPoint to proceeds said take get date we XX goal. capital that of XXX have reduce million XXX, think, of that capital, go to net done capital, original we’d to would originally we we debt. out XXX of

by think in year the well this end I of so And we are our way.

ratio lot quarter a So terms this headed helped the obviously of and operating expenses not in up. are certainly debt-to-EBITDA

that if you are to XXXX going even million that expenses you fourth first and a extrapolate to of numbers out XXXX X.X. XXX be you year get if just the with of you take the EBITDA close that So quarter XXX you of on at environment or look were more and X is, and it normal to base, end the if quarter the whatever put this, million,

So feel we about that. good

Operator

Goldman next Alex comes Your Sachs. question from Blostein of

Your open. line is

Unidentified Analyst

for Alex. This is in (inaudible) filling

(inaudible). data about Just And data are the market seeing views consumption also data spending Virtu, any are latest blocking know increase. within trend free the talk the and wanted and market you your the what rising or and stakes the market to on SEC you actionizing can increasing

Douglas Cifu

tilting feel ago, And validated. the some vindicated, from a my market kick. rock side certainly that bit college. started data a hill I thought little Quixote this of path it to questioning the book just was up need years Obviously for you will unless like touch down Joe windmill Don increases, we in we When light couple remember a rolling upon and as somewhat a

I months Virtu, all essentially retail the wakes to firms think is a look, us XX ago, Virtu, the these and institutions, costs. wrote the of from not Six Vanguard, around is IBKR, saying enough, this great brokers, side give the important our right. investment firms letter buy Citadel, SEC transparency is that industry enough shapes thing some financial

customer it, at entire but friends of base Be around entire get work great our I maybe increasing So service, are really money. with live industry, really exchanges, transparent a when the is provide lot hard got we saying, a costs and the we why you these increases. for we’ll

And We’ve contexted that moment And maintaining we’ve situation been time, in Redford are a very view. at others Virtu obviously our of only significant right our and good questions positive cost the is and trend SEC them got X% increasing year. in historically very that’s then that a in that the I asking at and cost. are for X% or now folks Brad obviously because portion think about so and our this a

to significant So, going material expense are I and I’m to a cost, on not in of these to costs decrease a is thrashed to going back rolling our be happen think base. think sudden effect there’ll get this don’t half all insane that

great there just to not just are firms to be point all derived, rationale industry. can’t the same that has thing. Virtu to some be they the related to the passed how along saying say it’s and aforementioned these that all It’s costs important The are was

So positive sense of a in bit that I want to some won’t in we give, the little material on fill you these Joe a costs. in increases see think information. a it’s

Joseph Molluso

data out. data we includes data, telco line our well all costs as have costs don’t We processing and all as it center of break communications market and of

and were that sort of If prior line as to this you where item compare Virtu merger, to from standalone quarter-to-quarter companies the KCG flat was it year.

expenses organic but is, we for growth around I some the think the start but been for in. one fees as is reduction these think going we’re the any some from the But data in rates to reductions that the of market the is up they’ve that publicly, I don’t see that Doug’s haven’t kick material data past. telco we’re going right in and what which expect in comment going when – hoping at extracted I market it, up they timing

Unidentified Analyst

X, [NDI] of one just And volumes that’s outside March tracking the if color just that possible. saw you in how provide can Jan from more us, Feb any was we and on

Joseph Molluso

wasn’t don’t like I interesting it just and do frustrates I thing event. we’re isolated think it everybody like monthlies, was not that I going to But an it about quarter August XX here. specifics this wasn’t the on do one Again, know not an situation. day;

kind throughout sustained. election. actually continued the peaks on the period thing market clearly Brexit premium the people fix and we and volatility some Trump You and interesting etcetera realized with around a saw there, a I more just things. that continued obviously volatility time or of February was at is a from momentary flash, really to a through similar in I had maker March. month It mean XX were tailed of great a the what it of we was quarter that you those saw about for around the the of off market which spike will, to situation wasn’t and a imply like movements volatility, if its think maybe for a that of But focused volatility imply

out and months, were So but solid March very was form. January February of an clearly

Operator

Kramm Alex of UBS. Your from next question comes

open. is line Your

Alex Kramm

A, right terms unless you that quick, the have combined are past, talked were the can that’s how the from should thinking I but in heavy out; improvement as trading do an maybe of Real in you done quantify at this of to just some still all be think probably there can we the I in done think you’ve the continued a through is is we improvements done that then you etcetera word, you improvements the strategy quarter-over-quarter, synergies think that I organic pause that. about the and go of know much you already. you as that that came you lifting opportunities think about or related revenue maybe year. process, and do ongoing quarter-over-quarter but if

Douglas Cifu

I’ll use in answer we’re my hockey don’t this quarter, are analogy. a if in we first said second definitely has but not fourth it’s hockey, which and sport is, the first the remarks in football prepared three I quarter only think know frankly not easier, part because I I to periods. the that’s don��t

in maybe There’ the So we’re opportunity here. of inning. significant third amount a still

the finished of on structure of Intraday the re-platforming not facing. KCG the is the not have the you We’ve better smarter to that, better have the architecture; our some institutional if analysis. segment, easier will intraday finished customer more segments that decommissioning done We allow and strategies to obviously more process, Virtu every iteration sensitive in the it’s of deal more and in we’ve Virtu much (inaudible). framework that cost at retail technology not begun and the KCG is its say you its and we Certainly to which time most it because and nimbler, just obviously and it’s for allows proper it’s do for it’s architecture. with

time we’ve uptick. seen like this, something So we’ve an every done

of collaborating work that not just it’s The So excited and I’m of women lot Austin smart Austin, a folks important we there down there as or that in are are integrating. here thing really working trainer enhancement. spending couple excited Virtu of really strategies well. as that young got will, about is the has is improved the time we’ve down men smart a officer if and And head and become quantified very me quants you quant optimistic because

less result as we’re uptick So significant and a we’ve that. two really integrated of year in the a than seeing firms

there Alex is there very about. we’re So do since runway think excited that I more

to terms the as performed In volatility actually organic, down so. It in was all and environment hard again said it difficult look well because and volumes the was strategies it’s the guys, to it’s we exceptionally how firm say of up. to do lot much of around when revenues and quarter easier went very went fourth right, like you a opposed to

$XXX it of fourth adjusted performing trading million that environment, just clearly well. was Here quarter. - I further was the first income of is the strategy wasn’t sit and net percent. as long at It we made what more a at But so crystal the enhancement or Y% and to excited this from was all over a can’t the Virtu of long about ball Again, is I’m this Virtu here look look a I and it investor, combination. am. X% term as with a term I say I oppose the to some very this and

Alex Kramm

maybe a more a model perspective in my VIX business me a then or lot relative ones of the to of little things. I on highlighted at big also detail same the quantitative and the along maybe – surprised lines, that us think But today And breakdown Because I FX been of you focus. bit performed. give you can a least, bit there’s businesses has the little couple in a a that’s and and know a the past terms of which lot

businesses a some maybe are equity are had us obviously commentary, faring focused. because to realized its of April, more those So maybe tougher that little those gauge, how also (inaudible) some commentary in incremental very the for bit

Douglas Cifu

Clearly, to comments, of obviously that. That’s returns fair place, in because volatility VIX it’s I a kind the in of state we’ve kind clearly quarter it’s question, couple of that the and together market the a saw business. lumped that franchise but obviously think superior the a all the at to people, of better I way categories know look frustrates again some first

lot to as We doing in very spread there obviously time maker a market volatility are shouldn’t lot the etcetera. a a a We’ve and there that was paying anybody. a for of large VIX volume come people more and bid offer a surprise and family that and lot etcetera, long of

comment my FX make a had that So remarks well. as nice helpful. very that prepared was purpose quarter which in I was did on

I think now some the folks prognosticating that that’s Virtu FX.

– think indeed spike. I I’m sorry in volume quarter. our didn’t see first false. quarter-over-quarter because the against same P&L and it It VIX the wasn’t just were you And in reports improved is those FX April volatility related our up that April

little So, you I’ll that give tit-bit.

about FX performing banks better the than buying second It’s desk, fixed doing. upon that look In was and just disappears. Again, it’s you the FX suffered other not it look and I had our their bonds at the same they right zero; going see to central as just center, the XXXX. So, FX, simply essentially half the are and well many that dealers when complaining many, as FX ECB had fact is times that a zero, you if I When are going fate. what business in Virtu, is in been. actually bank somewhat weren’t said carriage is concerns large the globally left, the zero in rate rates XXXX volatility large lack central way. at we depended have of the business

As the as rates, for raise eternity. said, we the won’t be resort listen, the last ECB the fed is started has of of buyer to rest

a managers So currencies. then portfolios, there’s now going does they manage very have now to It’s their currencies be risk to portfolio and situation, now that and of world, their to large When they where movements real across risk. are managers, global moving with risk faced treasurers Virtu are better. happens have manage so the

and I’m KCG that the very our really FX business significantly. in where capabilities business business about helped optimistic our one scaled So is have particular quant

really I making work markets technology and market making integration the it fixing KCG’s better. of example of the problem, that’s So a where Virtu algorithms years answered the Virtu wasn’t at quantitative was your question? just prime looking hope KCG I experience

Alex Kramm

That’s that FX great thanks little for in tit-bit. and sneaking

Operator

Allen Your with next question Chris from comes Rosenblatt.

Your line open. is

Chris Allen

the relative [decline]. Alex’s kind VIX any was Can quarter in down prior it of getting give on quarter. the question, to Just fits just you in the how (inaudible) of is us sizing to following like that

So the you perspective and a think obviously volume about to there quarter a have just relative to help in we normalized us seen quarter, prospective be trying maybe second magnitude volatility past should the that little about first thinking the fourth. bit and

Douglas Cifu

it’s is right resisted overall asking question trying question. in sub ultimately really here good And accomplish that monthly. that know they’ve the know have I Again, obviously of obviously found them you’re why call what the I at look you and what we’re specific doesn’t like. I It’s out CPOE, because were obviously ask X.XX, firm. can get question. which categories and them the Look, the a I a you to getting their help have can very I’ve of put analysis to volumes at volumes Chris legitimate they

we We’re options a and as on CPOE exchange significant trade market futures the well. maker

category question, just it Asia So spent or other our a of and some in well answering answering growth hour not becomes opportunity, geographies. the spent that first opportunity key as we more of saw elements within are end across with to a the there category that of the in day comfortable well. asset FX us again very classes business in uptick FX, in that was goes classes maker point we I’m which will quarter. within significant business market is sub-asset are in a multi-asset that But XX a to that at I’m And was portion Alex namely an continue and but our very particular and say a We’ve business. as seen that I significant there the did for clearly that I other class integrated But to And metals that energy significant business opportunity. the going size grow.

had not �� will. and all in the we’re futures markets the VIX products and that if making the so the ETFs ETP you that options or only but are represent strength We’re

maker for opportunity market great a multi-asset multi-country class, like just that’s so Virtu. And a

Chris Allen

surprised I there cash pretty any little than bit just, The a volumes in we in flow your Europe was rest it of equities, only was any and quarter? is be there be color up saw. In question more the commentary would So wouldn’t good are I world had the helpful. there

Douglas Cifu

fourth really; quarter, overall that and were the obviously the European so It’s the doesn’t say countries different Asia, in segments. was then Tokyo volumes the volumes it’s I separately help. percent which you’re quarter, down obviously we countries up. and XXish would obviously from Europe, previously very right Asian reported share around

and that the of speaking miss I people too. in Exchange to saw Europe block or investors. forced uncertainty, last used obviously I away, an uncertainty new. the in crossing to cap. you and so week is to I buy the facilities change volume. periodic was capper, I’ll to because where large route some and lot options was in guess our That a double so and networks uncertainty there be And the across an the had it enforcement really saw at the I BCN and in and call the opportunity statistics and of to two over a the volume as issue that not volumes didn’t nice hurt the SI (inaudible) Dark uptick part that TradeTech, Pool ITG [BID] think were a and in only of miss Liquidnet of is was there clearly went lot I and Dark talk because a getting in Pool in legal walked the side terms when double

So our help all business. not did of that European

believer I term but eloquent, the Now off always always I’m not been will I that big to on there’s is want there do reason wasn’t at There’s and necessarily transact investors I’ll which be that exchange that say being an long TradeTech, liquidity. in said said, What institutional a a SI it maybe exchange. regime. again

force to is you two go of trying on which don’t the method saw periodic to crossing So there, block they why exchange, networks. to just rise want and is people auctions

within in X% quarter SI now. to still early we we capability any were is it’s brokers XX June the SI connectivity The provider X% to data in Europe, first the will right in between somewhere that’s come Probably Europe out of grade; and very in than more are SI. but connected market other Our have the broker stages. estimates first

step. it’s So baby a

Pool block money. doing because we kind So the It’s broker crossing lot in volume made to all openly auction where a proxy network. going and that were that’s periodic migrated I’m that’s and BCN a back that exchanges. Dark of to little we come it’s of to the confident SI, very what to bit has a of and a lot

because going think providers the at very new. darn so for was where difficult day, a SI I’m Europe’s So I in it of quarter about to it end lead. was optimistic very the Europe just the

Operator

next Your from JP Ken of Worthington Morgan. question comes

open. is line Your

Ken Worthington

talk in you bigger gotten launched products new cyber that have much maybe think about launched have currency you I trading. Can the or quarter?

whether right any isn’t equities are other much it [SIC] on about new neither So or product bigger this quarter.

Douglas Cifu

call, quite I hope publicly, say this said can’t now. if on it think I’ve remember. last I said I’ve not I I’ll the

now. not currency; We’re cyber their guess bitcoin if in make risk. futures futures CBOE do and in to prime words, been have currently CME always the around concern transparent maker risk any with in party the cash, markets broker. I markets of cyber for right Bitcoin has our ammo the centralized products so primarily clearing will around In a cash and We other regulate that and currently those are market currencies of management. we types of a trade our clearing or you exchanges, around In not concerns counter or because available

judgement regulate the make I So all we’ll toe as toes if will. those have are to therefore very don’t toe. more about and big it big if a in, new certainly asset little be market and to will follow a I essentially we’re not we’ve becomes you a when and a it qualitative there. regular, It’s dipped But it’s maker Again toe put and we cleared, excited appropriate asset a will classes, or very, but whether small – do a class

we’re So that. excited about

We started that. XX,XXX me products, all In is quarter. there any I particular product the any an and new was don’t actually instrument. are we is so new time Andrew came kind to obviously Spotify IPO, terms any of wasn’t looking that. product, of countries, I first its telling in its and making popping at do my in XX we certainly because futures other we’re in think already higher there than market so in so already other that or in XX,XXX that the OTC mind up made markets there’s

time Virtu. products we the ETP so within we’re element had a products. We launch, So pretty a those a spun every things much big a had new Clearly to big this globe supporter a suite we week, that’s for here. issue become is products that, and they of opportunity there whole or have want of of of these in one AP happen an new proliferation

So that grow, we tops in issuers to continue other but with that there’s integrate nothing the line. than continue and to particular these

Ken Worthington

you revenue guidance. you compensation, are year, for it think and or earnings how through kind And of quarter kind competition words guys comps know the big more we other have if in XQ? line then is expect have Joe as of accruing accruing year. as the we that sort revenue kind I down you straight lower to In think reiterated with just come too Obviously more already the about you to about happens a come how from should are to the of or of line XQ we straight

Joseph Molluso

individual to basis, We performance at revenue look individuals, comp performance of headcount, on deals targets. here we net at we look one look we payout business, and top-down has bottoms-up businesses, we or so accrue at of comp at the and strict bottoms-up no look with a a Virtu as

versus a is we an So it because Ken business, then the the to it’s model, not and high comp geared more line the towards model check leverage is payout model. that straight operating of performance

in a if ratio it think how can But could look see ranging a that pre we low – right there. like where So old, the ranging kind at you should it, you quarter’s teens that’s to of it. there from you the from so high XXs. stack about that’s is numbers I this the that here, KCG-Virtu the see around put band, I numbers

Operator

Evercore ISI. Kaimon Instructions] Your next [Operator comes question of from Chung

open. Your is line

Kaimon Chung

settlement the linked your some issues on but surrounding the you any proliferation answered, think scrutiny my VIX auctions, are VIX, question of looking on the volatility the if regulators good just it’s on been it. wanted of what’s now to of volumes? of has the get given products What’s and of on still review that going Houston there like and to perspective the the do of gauge you recent and in impact it, concerns Most that could sense a ETS

Douglas Cifu

with the them. are last pre-amp test if manner. experience Look in future the said closing this call more our my way is with. manage of that with transparent. other and interacted cross very want don’t is the to the It’s XX call those, the any exchange minutes I’ll best industry, they’ve upfront think the there. in experience Ed settlement And best I their I two they in in is futures I exchange forthright say Their a again, like way ever that and we’ve and (inaudible) and the dealt not

participants the all that think are I how it understand experienced there works.

the a I to not product, investor were an issue folks and ex-[VIXI] suitability regards think It’s that trading a it’s product. product. was there with XIB holding unfortunately

retail of a year if investors settlement o’clock professional and what X settled the to that idea holding volatility has for to is and was really little that because exchanges be and February to others and traders at The bad price at makers sure on future bad be relationship market because X. it you’re a particularly and wanted going you closing So a know probably idea, was X.XX don’t. price

my Clearly are is. will product fundamentally that my When way pay there the issues beyond Is CPOE investor opinion Is the look did and I at? education anything that regulators do comes that VIX Absolutely. flawed to it the an settlement sure humble answer again, think question? it I’m around no. So suitability wrong? to is options is and in grade. of that

will sure want can’t lawyer question. by math, so trading I’m the do you that that Ed adding answers Chris but Just a to and you give I all that

Operator

time. are our this There at return questions the no to further will call now presenters. I

Douglas Cifu

interest Thank to your for you call. We you regularly very Thank your and our on forward attention speaking scheduled to Virtu. much you. everybody in look next

Operator

may disconnect. call, you conference today’s concludes This now

Virtu Financial (VIRT) 4 May 182018 Q1 Earnings call transcript