VIRT - Earnings call transcript Q1 2019

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Operator

Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the Virtu Financial 2019 First Quarter Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now Head turn Financial. of would to call I Smith, Andrew Investor Instructions] like the to over [Operator Relations, Virtu go ahead. Please

Andrew Smith

Thank morning, Good you, everyone. Michelle.

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

answering Mr. Cifu, Speaking Executive your our Chief our today Joseph Mr. and Molluso, questions Financial Chief are and Douglas Officer; Officer.

new including remarks Company’s statements, and the release the factors and Form to press with questions. condition filings contained our Exchange uncertainties, to which forward-looking call our note Today’s regarding forward-looking control include or what forward-looking may forward-looking the risk which and materially to We therefore differ XX-K Virtu’s risks, information the refer becomes actual are to available do be is Annual your in based and in encourage Report financial any future regarding statements transaction outside statements subject the and this will call assumptions we We announced take events, in notes these on begin and the are presently statements. Commission. It’s and Securities then description forward-looking as results with undertake beliefs from represent other any available. of Company, to made important you revise not update indicated statements our prepared and current and to may you review on cautionary may that information on

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

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

Douglas Cifu

have ITG want highlight today. we quarter March I and as as X, Good date of some joining for well closing ITG we our quarter which the and to the X. results include ITG This achieved on Andrew. the learned since comment morning, first thank closed. you you, things results, March XXXX transaction Thank from morning the reported everyone, us on

$X.XX adjusted was $XXX normalized million, Looking trading at results, respectively. was the our Execution first Making net and adjusted from Market our EPS million and with from $XXX $XX million Services quarter income

and businesses. realized opportunity environment, in of workflow strong This quarter’s U.S. Making and the set quarter. volumes Market S&P helped reflect volatility XX% drop to that Execution occurred the were in the XXX by quite decline for equity given That our well businesses Services results the our XX% reduced the Index results analytics in market and our during performed relative growth said,

EBITDA adjusted market superior XX% commitment our at deliver demonstrates Our margin to returns environment. any in

range the revenues. lends already diverse come grow customer While base core and has products organically it extraordinarily the combination product Services' strategic our together. is company always Execution still recurring world-class opportunities a itself to with early, keen over potential powerful an ITG of more to at Virtu-ITG seeing a we its to are been that revenues, beginning of sticky

class multi opportunities, liquidity serve is customers. as to the we to improve a able As using market expand to clients unique retain, to to the look generated and offerings customer the to only ways were cross-selling better maker, the we growth products realize organic products and the suite in to workflow clients. you of have revenues you Virtu invest begin which combined analytics well to a intend our note CSA XX% scale geographies product potential this of addition It but legacy serve ITG in nearly base, to full and performance classes asset global across very firm. made are asset our clear to number can as There that firm asset in global table brings class capabilities better by is or of important Execution of this When not and Services. our as at array

tried firm. we we to you see will depict to our If what combined new five, believe you unique to Slide turn have aspects be of the

only base unique sources positioned diversified with to the global enhanced serve by products customer We a world-class firm of are liquidity.

Wheel see our toolkit Router of optimization, clients to algos Cost EMS and our vFX analysis and our Here And Trade models, and our trade-offs Clearing, cost products post-trade Value including curves Triton you ITG real-time MTF, comprehensive or finally OTC block our our trading Fair Best our Estimator, Peer multi-asset and vFI Order can Workflow conditions, POSIT RFQ-hub as or client’s processing technology services well index market such equities, and TCA, tools Customized MatchIt, inter-listed IOI, as vEQ, post-trade MATCHNow, pre-trade suite trade Alert, Server liquidity like class or as our from and trading offerings our ETF, and desk, own to our Market Algo Ticket analysis, transparent Net, risk for Smart Commission needs Management. Surveillance and monitoring trading OMS, including offerings. POSIT ATS database, with portfolio Liquidity including Single Global solutions help tailored Agency and and Prism,

management foremost, we Turning closing, have third, by teams opportunities. integration; been three on that our post-trade we to accommodate can offering uniquely them clients; focused cycle services. the pre-trade end-to-end and and Since Execution first Services, throughout second, customers analytics, primarily Slide believe from and trading our things: order solutions six,

and global surprise sales, opportunities engagement has the As spoken new visited even ITG This with for opportunity the have the solutions. And teams our of know a coverage, recent we our more. seen it client with clients and an closed I of of our been since client-facing should hundreds have from products response business, base are our already has two primary most clients months cross-selling or legacy increased transaction, positive. In from have are yielded clients focus. I be globally, overwhelmingly natural and client clients that on-boarding compliance revenue whom no

is leverage in Europe APAC versus These able number the integrate POSIT XXXX. Virtu’s the States, quarter unique Alert to of and users XX% in in April, firsthand X% cross-selling increase opportunities in example, experience we as globally X% different increased forward incumbent we may respectively. and commitment our to prospective telephone held April how forums synergies New The and first complementary will only focus security information. attend For and announced in and our have at our and major are London as United in recall, complete client clients pleased we to needs. via Naturally, report first Virtu was transparency we that look These especially XX, execution classes client and we clients XXX when where moment. protect you to provide us Also, had of realize over April forums into as and or and continued element information clients creates participate in-person I’m legacy ITG’s promised technology of the WebEx. York other unparalleled one businesses, clients deal X this in are on asset regions. the We also significant engagements this integration integration. to to expense for we on a potential front, nature similar ITG’s

market are data to and end platform Execution the integrating of the by us synergies to technology begin end, to firm side, trading expense infrastructure technology teams overhaul and with the will Virtu operating and worldwide skills algo enhanced uniquely in customer we experience Services making building and the legacy structure technology the that on are transparent duplicate are we uptake the significant routing XXXX. the combined deep acquired well of and scaled to almost enhance Services Execution customer to multiple the the base. gross global ITG infrastructure Our base to a stated excited market To scalable realize global Virtu’s truly increased customer expect Similar combines proof the algos common report began world-class I’m as publicly processes, suite. which offer licenses. client platform when relationships platforms believe the we on integration, as agency KCG from that order reduce engaged trading, market technological existing institutional KCG Virtu’s to seeing we Virtu’s We and XX% we as borne into this allowing quantitative new of that the post-trading leveraging only expertise. has

market in We opportunities the could and teams this technology our analytics complete a about. to continue to The products that workflow allows is leverage of that to benefit multi-asset services, have capabilities Triton been multi-asset offer most class of the area thinking accommodate including global leading addition expect Since its opportunities our acquisition. clients closing, the before and can services, the ITG Virtu of combined products expand Virtu’s well excited agency with this capabilities. We trend classes. legacy I’m suite

bank existing developed to this EMS including to our clients trading are Algo counterparts. Triton forwards step under banks and Triton next swap to out natural enable the our now to with Assets offering Virtu FX algos tenders utilize their the Wheel. clients in way trade spot into The is integrate tools in roll for

enhancing FX to products Virtu are class with standard follow. TCA other benchmark, first a deploying value offering ITG We new support fair multi-asset including we with which legacy are to index

we product, partnership We through with our announced that are every which already MarketAxess. previously manufacture productizing our ourselves day, will eNAV distributed for be

We expect counterparty successful by opportunities doubled in identified plan for to improved U.S. recently client and an drive we to has POSIT has technology globally. when the rolled Alert trading engagement. more employ that these latency including we than enhancements POSIT conditional enhancements is to of This have XX% which Alert. liquidity out We improvement the present, rate over and customer upgrade executions

– provide side execution offering the clients ITG continues and principal to with offer truly provider deeper critical now including with in buy base to ETF block both to opportunities Legacy Virtu’s Our FX, ability client margins. quality unique for highlights. accessing into execution the distribute Global We and additional and well equities, I the on and opt headcount to scale guidance can of few the on-screen clients, global size. I operating within liquidity. to POSIT interact Joe go remainder to year expense we base, technology the access will point bolster opportunities and and a fixed as provide unique board. ability offerings, principal grow liquidity. as trading improved of and in drive a improve transparently this Virtu ETF the the to have Virtu’s dealer’s can firm and opportunities liquidity deep have other which clients they to global when with liquidity income now gives These clients that mass the Virtu’s have institutional, ETFs, we to option liquidity combination principle a of side unique will the liquidity today trading commodities. deserve clients for let the of Alert employee. in expense Workflow enhancements liquidity ITG’s each retail wanted compete is but choice to transparency will blocks, capitalization the from to as on sources. details firm, liquidity a higher technology only for client products and gives quality We provisioning is out buy with the X,XXX

of As XXX headcount Virtu reference, was XXX point year-end at a at and ITG. at Legacy legacy

by is no cost reductions globally. not So adversely XX% Many headcount in departed worked down centers of little headcount or or revenues. offices the and redundant not These revenue. impact employees have generated will that

We in have York, Singapore New and office San London, Chicago, locations Boston, Francisco. consolidated

process reduce will and operations Virtu a quality we further common operating consolidate infrastructure. and single migrate cost We as efficient to

as examining I what Joe, with remiss structure, an to us of These time we if we to align trends be over to the our the costs my industry combined business interest us capital to teams in more anticipate Virtu I would but to before With the with make also participants. going and I’m note call have to efficient. among at consistent increased express market I deleveraging attempt our turn and globally. the regard clients the that do outlined data technology gratitude help the we ever We failed acquisition.

Our the we this I professionals together. progress ability is of the that to credit have have a Joe? organization culture make in created excellence early and to outlined committed the

Joseph Molluso

closing EBITDA XX% recorded $XXX.X GAAP this adjusted loss a trading morning EBITDA through of intangibles. reported of $XXX $XX.X results the of EPS the the financing million, of the the adjusted million. acquisition, of margin. including Virtu Doug. X which transaction of of severance the fees, result costs result amortization results ITG ITG end is representing of quarter, for show million you, We income of one-time on include $X.XX a from March These quarter. results, adjusted a the Thank as fees, and net net of

Market Services purposes be Virtu Going be ITG Other. the Other Making Execution forward, past, three will and operating transaction. and will Virtu had for Making, Market by have in maintain same of and we products namely full can we past. the Corporate basis, The segments analytics Virtu not that supplemental and reporting Virtu Corporate legacy the workflow affected Services the we and including the Virtu see On as execution operating services, you information in ITG’s provide from Execution a have will in and services segment. similar results suite that will included

for information best to how provide global results of the management gives the global market market and within and businesses our respective the context supplemental making will global the We a other of best making, and run This presentation team, execution environment we, services. public results. fixed as the way equities interpret the is

less quarter. of down volatility. versus asset to on this was from averaged and quarter, volatility in period as Looking EU XX% XX% for had a compared same XX fourth figures The sequential was saw average realized the adjusted Realized The note global Consolidated XQ ADV XX% notional volatility the XQ. specifically. was at XX% declines daily decreased versus classes points quarter. it’s to the abrupt equity this basis XXXX markets XX% similar XXXX, consecutive consolidated were down and important XQ that in opportunity than net to down down market down and in trading Other was income QX. move weeks XX the U.S. mix volumes S&P

XX% Nikkei show versus realized Japan’s futures in to versus volatility XX% fourth For were Japanese XXXX. in equities volatility realized Commodity FX was and XX% and both XX% indices respectively. of down decline quarter, down XQ the volume XX% a and Index, and

Given the particularly in up the held well. we environment, performance Services feel Execution

and customer-facing Making Market quarter. impacted were business in and in Making prior results which including retail These decline quality quarter saw reduction Market opportunities most similar the the muted first this line Our biggest was our results quarter. versus a by in XX% Market down in flow performances to the quarter. with generally and this environments atypically was market activity Making, are volumes, Within historical

Execution business Services Services Both March. We opportunity Execution given Execution in ITG the the of performed ANTI quarter, acquisition set. this Services well – $XX quarter given Our million dramatically reported up the by the Virtu solidified product this opportunity and set. Results and businesses were ITG the the quarter of embedded sensitive the technology ITG offering. well given legacy analytics workflow less in performed businesses this nature

in from of realizing off are firms. the a very expense the two On to fast we side, start combination synergies the

are expenses. on we As have cash and providing guidance in operating we the specific overall past,

see on combined can baseline for Slide ITG in X million. operating expenses You plus the Virtu XXXX were $XXX

Doug by areas achieved the side we these office have consolidating As on mentioned, redundant headcount and expense reducing space. results

expenses, be these This total we process acquisition market to partial duplicate on two million adjusting and we operating million stated gross infrastructure. for announced XXXX, the occurred be synergy as we time, in XXXX. for gross months that of of of XX target At stated synergies November. to are for be for eliminating midpoint which year ago. of amount total technology the earn we On addition, when expenses $XXX would we of the In XX build-outs costs rate have transaction, within ownership of XX% the past, that a synergies to months year guiding the basis, from full closing operating begun of X, months million March we the $XXX ranges, that run would expected ITG to $XXX realized $XXX data the the At in million ITG.

that the or realize for will year practice, will are progresses. we the of we with exceed full already provide on Consistent confident we targets. year these those guidance, ultimately synergies are year XXXX to full we guidance meet past based as Given initial XX% expecting

our On of capitalization the part as debt. we the of ITG closing refinanced transaction, front, existing the

our would can we the from part and to on ITG bond in You announced billion plus excess estimated at acquisition and XXX existing $XXX We basis at part the the in XX reduce see to Page $X.X that fund million $XXX LIBOR forward. going loan outstanding million used is had acquisition indebtedness term X.XX%. be capital points

You’ll bonds. option the call on note X.XX% existing the

of our within remain bonds capital of opportunities lower with our overall at returning XX% our to opportunities environment We quarter least earnings. we and are existing that a and evaluating debt. return you’ll goal to even historical capital this our Page committed repurchases. cost of share in currently to such on our reduced that to see XX well the On Note our quarter, due as returning dividends refinance through is shareholders

our and IPO, returned have $XXX over shareholders dividends in of since million In repurchases. form fact, the to share we our

begin turn question-and-answer the the will we call the back to to operator session. Now,

Operator

question first comes Jefferies. from Dan Instructions] Your from [Operator Fannon

is line Your open.

Dan Fannon

Hi. that Good the about in factors of terms talk Doug, the the what’s realized April of It maybe other quarter. quarter guess, quarter? drove starting start you just positive either talk Can and soften in or were in negative in that got results vol throughout happened the obviously and to kind here quarter. the like I the second about morning. environment of kind seems

Douglas Cifu

and hasn’t will, indices a there in a have March transitions anything. from February volatility. lot that January marketplace you level means of have And was from from you. Yes, think, a real definitely well Sure. data and And reported, all volatility. Good supplementally QX question. obviously Thank to you was as it was the QX. provided mean, But started been the single similar Fed direction real has felt than guys March big doing a where it’s you drop-off going decline, and obviously that’s and it been I if December a have don’t there then, and a starting I actually you we’ve in – through January and

And focus tend it’s equities on obviously U.S. see also it’s not So that’s in you same. same that the in saw segment that, and our we thing again, that will. whatnot. to biggest but globally, FX people the just just We stifles trading, and if

result, – to as impacts – volatility was in much it so was And XX%. roughly it as obviously it a results. April appears was quarter the April similar. first down Realized from our be very

about is now, which volatility again number. think eight a realized I pretty little is right under a low

I’ve So firm built feast the the a for last obviously we’ve pretty for muted long-term three-plus environment. the these on famine. and said a Again, as years, calls

the but operating in now, feast had environment not margins. significant right still We’re we

helps Services exciting the think, prepared about remarks the we I Execution that of talked thing the very which in kind well. segment is serve

think that of credit things: to the do scope drives Triton, I outsider, just that of Triton the grasp lot and to that the products. one, being really give has I ITG solution on lot with really products, ITG Net, as workflow the desktop, didn’t power of a former OMS of two an a and scale the Frankly, how the revenues.

on algos, use Algo the they’re the clients, products to the so Wheel, desktop there RFQ-hub, of outlined. going your various we You’re

products, kind you So fit they nice if like of of all ballet will. a together

And all they’re had So very In bumps a a was the that thing from the KCG Virtu, really road our in done. deterministic, of transition usage the the work on transparent, that like the pat extremely who porting our seeing as it’s we they’re to very in and back helpful. is but we’re largely very former extremely really algo simple, to fact transparent. and they’re XXXX, that, understandable uptick real job was ourselves – we algos nice in second that done to we’ve clients tried

top group. to now benchmarks answer now that then the we our and as surpasses we we’ve really of of really great got performance we analytics routing order demonstrate post-trade the of performance have on So and in the an suite to business that layer that where best questions the products can analytics peer with all is and

we’re long-winded here to the your about obviously. future excited So question, but answer

Dan Fannon

basis lot the Yes. Slide revenue kind you’re lot ITG. on a of opportunity a success Thanks. gave around around what the And based the put having? cross-sell potential a opportunity of us X on set you with some see to on numbers of early kind Is kind some of the there you combined and way

Douglas Cifu

put is I in look, Yes. the management that XX% I and mean, users percentage great most I important question. workflow commission that also statistic is technology there a that on it’s users. algo I a thing of think I analytics mean, are the look, and think,

kind firm that’s done evidence prima So job historically facie nice to this cross-selling. a that me, of of has

of electronically all, them just suite Now you be that us any products. be to to outline maker. have a in We marketplace traded make a that market but liquidity anything about full can tried in allows we markets

have So a we’ve got ETF we’ve got blocks, FX, more. mechanism now we and delivery

and FX had platform. managers sit products hard, to our it’s size through because example, for asset Europe, trading never So Dan, distribute in a we’ve access that opportunity, to to here

operations little will it’s that we provide opportunity stage kind But we’ve So probably the seen management of you or will. that it. a in size We’ll down is quarter that of of management. early and more information into to look, further be. think order scale business, shutting Bloomberg as some kind next getting if in little competitors of out get what its are I a execution

and we now to pre-trade are the we’re And think are given say products, company be product investing – we a them, it I it And them, exciting will in again. it’s them wonderful think investing these more capability, real more estate be make I the to has we for of better the wonderful the and and That’s we’re is important. said opportunity building not if the truly over continue keeping don’t post-trade. you product my desktop. and to are something performant. to ITG products. multi-asset opportunity most grab the and I the the only a keeping going record, really over appreciated It with scope it for in again, understanding company. will And I I importance, real Virtu a to thing. class us and remarks very from saying prepared power of ITG will, we’re on people our so

Operator

come will question next your Rich And Repetto O’Neill. from from Sandler

open. line Your is

Richard Repetto

X. and X with on about all you morning, mentioned the Joe. ringing how It’s excited Good opportunities Good you the ITG and Doug. Slide Yes. cross-selling are obviously morning, things through

and sort was and looks So guess down as that but on ITG, you like X.XX to well. thought you’re a is you’re you remarks, begin moving what than the in this headcount the bit question the headcount brought we it little it it addressed was the reducing of prepared headcount synergies and was with up lower I it

the sales question guess headcount force – is I the enough is, these the the take reductions you excited guess strong to – well to could the take about? opportunities you that’s you’re you of So are so question. I and able advantage given synergies, – Do these opportunities that

Douglas Cifu

Yes, this measure, factors: long the that’s there’s of I wonderful a superior the very, and I management have one, ITG was Rich, of I’ll that very great institutional bought. firm, one with and relationships two as a a a in ITG the was the was they this say credit, relationships large here. that of one, in of number again firm there’s Number products; an team sales question. really Virtu, has And I that because we people I’ll for institutions had. said the give here lot think, because force in of that number two, great just asset example. apparent deep salesmen that Milwaukee, great was two, had than was and it with that gentleman a depth sustained that’s is very relationships. Milwaukee, town, our very publicly firm and large deep yesterday it a

our same the and the going and reductions great on management where headcount institutional in retail impact KCG be story did coverage people, did we relationship and here. like desk sales not at the to the it’s business, the transaction KCG much So and

functions that’s they So come Rich, of that, things layers where and legal, redundancies and between compliance very are from a come management very unfortunate ITG of deep which had but cross-selling come, They culture not well-trained, from. do already. products And overlap finance, and like very, coverage. office and middle generally kind back from

enthusiasm voice, the not by opportunities, tell very algos, are but can We’re training I significant. my now think of And liquidity. the obviously them as Virtu only in Virtu the in you the

to FX pairs time Now where venue to for every every colleagues new is that makers traded the are have first understand example, analytics, FX XX our our day. trade colleagues, where that sell for access FX market we trying

really and You of firm within can’t put cross-sell. to level on ability dollar a the that expertise amount

to sell going be to multi-asset products ability really class our We’re upgrading globally.

Richard Repetto

it. synergies anyway, contribution last dis-synergies. time probably in It revenue like breakout, not conversation going back do can seems the rather one the but you is, Got you’re revenue my – And the Services? going give I Execution has question now from helpful. March ITG that’s this than forward, know gone to to the But going us

Douglas Cifu

one we month. – of mean, and ITG is that. I Yes, XQ are look and XQ, operated have Page I say done if at yet significant that I the supplemental you that What Rich, the is the for Services not obvious would difference it’s and we if you fact would say portion look that at of increase X due materials Execution in owned the between to

real XX terms number there’s mystery grew from in there So to XX. no how that of

representation So a of contribution. is that the that good – was

Operator

Goldman Your Sachs. next question comes from Alex from Blostein

line Your is open.

Alex Blostein

Thanks. Good Hey. morning, guys.

bucket. hoping in global on equities can So I maybe was double-click the what happened we

in between past and America’s used it break down non-U.S. the think, to I you

done missed look in like of doesn’t trends deck was I release those it Sorry you’ve But two a little the in somewhere, more like if the it it can sort past? in the buckets bit the or dissect between you there. help

Douglas Cifu

I mean, combined right. Yes. Sure. less. It’s we’ve you’re going bucket the forward,

market we execution a we we’ve KCG KCG an a within kind a quant at excuse services now making integrated, As as we’re trade very of our and is, if the lot business firm, me, making migrated with globally. the of looked you global it’s because market cross-border product, equities grown view we’ve firm expanded and and strategies, or products will,

no Market business were volumes The there’s of flow equities a declines former largely is they call was and quarter not and or quarter and VCMM that terms we’ve because have for largest first which and just and are given the not or to change the part competitors have the to largest continues realized And equities, business. lower Making volatility the the It’s and Market global global can’t really guess, or internalize volatility the input our result, formulaic and all business. or expectations, significantly kind less retail commodities opportunity and and quarter disproportionate be this simple. the the that, partial our downs, to that flows have data. surprise. The partners, less make obviously is this really integrated. a now the products business. Retail But how quarter and was you assure certainly Making with we fundamental from gotten fourth Making our compared lower ebbs do that for a universe, for or its share in of respect quarter, fifth opportunity. opportunity volume segment Customer so us candidly our out then with I we or as what opportunity volatility the come in really set obviously quarter. no know sixth us Alex, very It’s right the when trade. we I I within So in us less and input KCG Market internally, with there. toxic what the ups tends business, familiar somewhat the happened trends it, Virtu in and there’s Americas where volumes largely line fully part the is getting we you first is of was full that mystery as FICC It’s of therefore owned business FX and are to can significantly largest And obviously We’ve flows of we is. has a less of is we’re because had if trend, and decline that P&L, first in downs unfortunately, to And level and opportunity because toxic with how realized will, we to they in XXX

Alex Blostein

it. Got

of or whether And pace of closed should kind help the on have guys here go I their from will deal we and cash flows capital assume toward guess, through all Thanks. the pace not maybe that deleveraging you excess deployment, net then Okay. and that? of deleveraging of the of pace dividend kind just as generally us now, the of

Joseph Molluso

Yes.

outset, to times target we debt X.X of wanted that the of XXXX, Alex. of times to kind think, get we the by two at to I long-term end said EBITDA our to back

think I to and So the target. did We a used transaction the we’ll and of on sources that as capital portion from in million $XXX ITG would still we be excess part, uses fund be transaction, said, that. part the of

role. I the to will going then likely the incorporate that. But we outlined forward, pace capital with some at of long-term debt would be we’ll yes, that bond, we to we you I save approach of and time funding, lower assume that as get dry reduction think, will deployment that we to here call that; something, – we is our date we that should cost will of do the to there of do market will decide the of powder similar as transaction the our opportunity the what

Operator

Your from next Point. Chris question Allen from Compass comes

Your line is open.

Chris Allen

guys. rate run of model perspective? in as I or just tipping XXXX. synergies help a technology pace think the morning, was conceptualize the going to idea wondering what’s so to gets of Is forward, of integrations us of XXXX a can it of about going can going to in if you now. in be rough kind the for terms gradual right just from fairly just maybe Maybe Good realization be there’s easy quarterly some we kind correctly it points

Joseph Molluso

difficult you think, tight philosophy. specific we a did We differently that’s as thing expenses with it anchor our No, the did rest everyone’s in out guidance, very is because the some bit you and we the then here. business I little same guidance. first-half and XXXX at obviously of things model. to didn’t two X, model, one second-half two do we provided Yes. if of give break things overall to yet is kind look The I think, want The between Page we

when run the XX synergy million rate we the there at $XXX XX% to months. $XXX the we transaction, of look you announced period estimated achieved, at where weight When XX-month the right. end you’re of a XX months million a think I over

of game. So we’re the way ahead obviously

on also think, gradual realization here I – and we acquisition, the the the just given opposed the was consistently nature of will pace is chunkier it think will that to, uniform – business. of what I said it be more as of sort we’ve KCG was

think uniform. cost the will begin combined on to base. will is guide XX% give here in of XXXX then, you And I XX% So we this million $XXX that to The number. be gradually months, coming as well expenses ultimate the the synergy

we that said take the got better say when the announced to we we’ll than KCG. But we XX% do the think from XX%. we deal, achieve wouldn’t I

Chris Allen

can look kind Got any XQ pro us chance would OpEx it. you I adjusted XXXX give what forma of mean, like?

Joseph Molluso

haven’t provided of we months two Again, February. January those and

off number actual like – at that million, the did it’s it obviously $XXX XXX. did up gross and compared to we come make synergy to of actual, revenue what you took an the up it But wouldn’t to we kind XXX, If fourth estimate. you is you But apples-to-apples. of down we can compare look if story, number with and quarter it that the be we

So XXX the run to on ITG to it rate cut make we apples-to-apples. based for XX-month a have

Operator

next from comes from Evercore. Your question Chung Kaimon

Your open. line is

Kaimon Chung

and Maybe a to from mix what back more if to is you color and go I the the the run rate between Wondering the to just provide just existing Services. you increase as want of new here. maybe could clients think Hi. Execution good

Douglas Cifu

overlap. know from prospect clients. March Xst, thing will to very The in really new I on of was on once Services hood, this terms Yes, and trying been really of The one kick overlap the ITG little where a business can’t side kind from houses. flow be at very touch of have there’s and a Services at even there And in with business is days you on largely and versa. Execution and terms you very in all was but terms in any there the the both business Virtu clients few the it real the happy of sides existing it good for question. so get comes papered early due closed of which tires But vice base. overlap, and that was say, We can they the It’s client low I’ve diligence, under acquisition clients. is until on we there the of were you Execution the lot high ITG is the sense touch shared might clients where significant business

that but cross Virtu is sell great obviously the product, product to understand many uniform, if client product the that have growing. if managers So real regionally. to one but sell, algo is regions, region, in And – things the exciting It activity very will, preponderance is share and we really enough ITG if us, things the structure in is is what The of because the opportunity great news business – some smart that’s you – of got for asset the you an good one had a global. there’s legacy not Virtu found and great algo regionalized. thing market ITG, various you’ve one is the global scalable existing it’s also about that are easier the market about it’s it

suite the your – really nomenclature, So the the in the you touch, asset in want truly of if is of products U.S. Asia you in are use or a trading lingo, global it’s is or the the Canada, manager located global in London, feel, transparency to a the head and global product.

don’t buckets global don’t we don’t have we back are different regions, offices that different. middle of firm, desks, We different are have we have products have in don’t and indeed we a individuals,

of it stabilization clients a which effective not offer heretofore to global been us of truly their the because with technology. as enables in has manner the So service ITG to firm successful

exciting wayside opportunity and us. firm. that That’s of the Virtu-ize go to is globalize All for going by we the as really the

that thing my and TradeTech, meeting for week, Europe, law. I last with you world hundreds post particularly example execution Europe in clients are two in of was clients. in only that just it’s there cool can recommended, I’ve at are a of and analytics mean, other recognized travels, not best is mid clients lead I analytics there in the hundreds with The to

you Triton which product, management or a on cross a product at And two-sided class very sale legacy analytics ultimately Virtu i.e., there is the on then a liquidity. a commission result, into into even so, provisioning product important as product an algo bespoke liquidity and asset product, having leads a a naturally obviously,

again, for is the over around days; hood two under a palpable. the firm little months, been really So here but early we’ve excitement the

Kaimon Chung

to the next the of would you opportunity and over then Thanks that size Okay. partnership And be for able MarketAxess that. maybe your you can plans talk years? about to couple

Douglas Cifu

with new been hey, each firms while. two a other McVey, for as you the relationship Yes. makes I I’m friend the and this sense. be The great a a of with – my mean, between President to Chris When Chris there obviously, the Rick called conversations example there. here had in of going that’s great used know, partner good Concannon said, he’s we on very took my lot other job and just a

be of is RFQ other ETFs. matching we product RFQ income terms good. to in dramatically respect to a a in following. it fixed global particularly income Virtu, post Obviously, of into called and very in and strong is for and world fixed fixed market really will where ETF, two RFQ want should You’re asset be firm, speaking trade an it’s cash mid we’re here in is income lot great particular which particular, that leading United very It world-class as have about I’m class you the this a ETF credit capabilities know, a people in have maker States well products got is very, expanded RFQ-hub, in strong Europe. in product a I global very in on obviously desirous it MarketAxess, a basis, service. and a they’ve

NAV products that We’re use of product income a JNK block for and other have big fixed and type our making. market maker market HYG own streaming in and we size a internal we

if sense. distributor. and MarketAxess made another do great over How products those So our developed we’re distribute for of customers has through RFQ for products, that to lot globally? distribution the effectively of a we you the buying years Well, will, our thousands eNAV it

through that companies very with the of I exclusive have to the other the distributor with another direct and do access model revenue. customer or clients. not this sharing relationship it’s done with and so, will I’m going And having

we seven-figure us to maker and obviously a platform of to and be as MarketAxess, well. glove having is going hope relationship close hand really is a it’s a income, also very partnership. for it’s as firm in opportunity time fixed us a electronic good of nice a good helps It So, terms a over example which income, set, market with fixed in opportunity, a stronger that’s in opportunity be leading working an a thing

So Concannon, I talk to a of a good situation to thing. is that, win-win around, top which all Chris always it got on was and

Operator

comes from Instructions] next Michael Stanley. Morgan question Your from Cyprys [Operator

open. line Your is

Michael Cyprys

Thanks crypto, curious taking morning. for good opportunity There’s headlines into thinking morning the Facebook some Hey, around this question. set? you’re just I’m getting around that. about how the

see and evolution for how longer there you curious guys term. Just you opportunities

Douglas Cifu

publicly cleared valid or transparency judgment not as of Look, is how to with, very make any comfortable question. with kind I’m how future the Great I again type we executed, like that and we not or will, if you it Yes. a state it’s regulated type where are simply. asset is, if spot and I market markets crypto we digital way the currency statements I it as That’s a I great settled – will to mean, counterparty a are my of very, electronic of universe. What is is will trading whether there hedge thing as run so That’s as I’ve a make in have I don’t at sustainable. don’t look a the very and around product, comfortable whether or don’t risk are as an I job to make there bank, it’s big and said class, a don’t that. fund, useful run or a

And platform. the so, investment Eris we have made digital in

we’re and product world-class got talent We’re believers they’ve working on a is Don – in that. there. Wilson a

and and of So we’ve a the we market liquidity we’re Switzerland made there. maker investment on Eris provisioning. but that really we’re Again, are a so believer

has clearing and like what clear are the we or futures to world, settlement are will understand be be what number feel exchanges can but very around counterparty it a we a there maker other market market responsibly whether we working firms Again, on spots if the So that. structure a that understand process. that exchanges exchanges There’s have there. the and great of risk, situation a where looks

We’re firms working a design with that think products we behind find the number help to that we are of scenes exciting.

with that they Some our be on so of liquidity products as their they will retail you into our as announced, business in great and evolve. have the partners will space we these partners provide jump indicated, retail of therefore, behalf partners two-sided customers, and

it. not qualitative So validity products. Again, of these as making I’m about excited or any judgments necessity to the

in they’re long an a As will that feels be as market we maker. environment Virtu-like,

Operator

in I have I’ll turn back closing no queue. questions further call the remarks. to over for Cifu Douglas

Douglas Cifu

the that through, firm important core technology, hope it now for come is takeaway financial around Most a excitement sounds very services broad Thank ITG a has and my enthusiasm product participation today. but firm. are transaction with has. like Virtu its financial we you, I about it is everybody,

for. look a thank at post-trade, X seller, soon. and to very to solution will a X and and and buyer between everything I a from talk much take Virtu client Just has a think Page natural everything you of natural we pre-trade you

Operator

Thank you everyone. This will conclude today’s call. conference

now may You disconnect.

Virtu Financial (VIRT) 4 May 192019 Q1 Earnings call transcript