VIRT - Earnings call transcript Q1 2022

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Operator

Good day, all, and thank you for joining the Virtu Financial 2022 First Quarter Results Call. My name is Louisa and I’ll be operating your call today. [Operator Instructions] I now have the pleasure of handing over to your host today, Andrew Smith, Head of Investor Relations. Andrew, please go ahead.

Andrew Smith

Thank you, Louisa, and good morning, everyone. us. joining for Thanks

Molluso, results Officer. website. this we On our remarks Galvin, take Mr. Douglas quarter Officer; then Co-Chief available Mr. and will and have and begin on Cifu, Sean Joseph Officer; Executive our this Chief Chief questions. Co-President were first and morning Operating Financial released our are Mr. our They Our your morning’s prepared call, with

this future represent that reminders. which few include call and statements. Virtu’s to current subject Today’s from is regarding the may company’s statements uncertainties, are releases which you to to statements you a First, to control. that forward-looking factors review We becomes information other the not presently and to and forward-looking or risks, belief available. forward-looking and financial and It and on important contained what as revise Please risk available differ may description results any condition based public undertake our Form we the events outside annual press and materially therefore, any disclaimers forward-looking report in indicated our are, is note those do information XX-K note update made statements, filings. company in assumptions actual of encourage on may our be in new to call refer

measures. direct financial GAAP consult on GAAP in may as These deem income, meaningful turn in of not supplemental like to with I’d be refer as margin. the these find we our measures call And why to explanation to we management as should portion certain to of equivalent including results, earnings Doug. adjusted non-GAAP this addition to We where over information income, well how to net be the as information of accordance to measures adjusted trading the website considered Investor terms well materials with you’ll an in adjusted adjusted the measures that, prepared call and to with GAAP. measures, as referred call, uses a net today’s EBITDA superior to reconciliation listeners During this to non-GAAP supplemental EBITDA non-GAAP and

Douglas Cifu

continued morning reflect morning X% first Andrew. quarter our for quarter-over-quarter $X.X our This strong another our initiatives results I’m I’m and and increase thank a you, results, growth our improve capped net with trading internalization. efforts to which reported quarter global in results quarter the for we of firmwide million pleased EPS and day Good These success $X.XX. Virtu. adjusted particularly pleased and income this of adjusted per with to

Our we Market $X.X quarter. more the per than Making achieved X% in million business quarter, in day the fourth produced

which optimizes firm. save the by and away across fees. Street progress the opportunity brokerage, we we to pay on positions internalization, internalize, spread how less made efforts continued factors, to have several and the our more significantly, clearance improve particular, as exchange diversified from were well driven able ETF to strong in performance saw strong capitalize products. and strong on our saw our noncustomer Our Market performance where Asia business in We results businesses. volatility commodities and commodity our was particularly other manage better we most the net and Firmwide, and, can in the we we Making including crude as Making The Market Making Market overall continued we on

Our asset levels higher to is intra uniquely global culture and of achieve means positioned footprint Virtu and inter collaborative multi-asset internalization. our

to and enhancements to new the grow ongoing on asset prior geographies. will we benefits as As calls, and for these fruit we the we classes foreseeable future of to bear continue will discussed our believe continue expand

team really first performed by our our has work Triton driven workflow the products, Valor. accomplished also Services well I’m this since Execution of in AMS ITG. where particularly of was segment quarter the Our performance acquisition the proud

As Services a business. Execution principal in we focused reminder, on objectives our X

was streamline building Triton moving new Valor. reduce helps enterprise them risk. clients features, by which on And new by technology, to second, value global scale our our delivering offering more and clients to to operational First to focus

efforts. uptick we’ve to on begun controlled results new routinize to quarter the work of XX% with were in well able where and use enhancements, we’ve manner. a safe technology This seeing the of we’ve to migrated from side, our To seen these date over clients traders automation Triton the busy respect good in

We’ve to ATM pipeline growth and quarter professionals are to of a also meaningful business are business team our its we to and was this excited added expansion. contributor Our Markets new the materialize. organic seasoned ATM Capital more the for continued we optimistic for

Making As Virtu’s Market and provide Services unique unlike and Execution any calls, ATM I prior provider. size to us mentioned and of allows other scope combination liquidity on

We continued impressive to $XXX,XXX our grew trading growth initiatives our business XX% net this stated see organic as day. to income or progress in quarter our adjusted per of

delivered business Growing options of quarter significant of to become back a as retail as globally. investing options growing options growth simple our coverage on the our technology venue as expanded remains service priority resources our new a top increase are well initiatives, solid we footprint these partners. our wholesaler another capabilities deployment in to Within we and

years market calls, technology an expertise. prior leveraging by and out As build franchise set structure we have scratch to a options of we ago mentioned from infrastructure, our on couple

options. our this the was in we XXXX us leverage out the Additionally, decided to this product XXX the In instruments core between our products build traders capabilities coverage talented assets, in to us We to nearly environment. the and pricing will and we important part the required, an expand and great of initially options that exists on and of fill in sharpen and our add focus in and we framework, index resources and infrastructure abroad. as grew trading Virtu the on that of initial built in products allowed to U.S. ultimately strategic name one capabilities handful team unique Virtu’s to develop single most important to and hypercompetitive compromise a year set brokers and retail connectivity the to in relationship expanded for This our proportion volumes did and past of the expanded management we continue our developers. risk gaps and allocated accelerate began group growth. XXXX and Asia systems simple and the

crypto Our major progress continues Asia, traders over expand across as more our now to technologies trade crypto venues. ETFs. and United activities as including Market Making States, to we allocate Canada, XXX well Europe the across and products We the

to at launch. to of ETF Bitcoin the We these spot continue crypto working be and support the funds ready to for are U.S.-based launch with support issuers

in war our impactful volatility. supplemental said, to as at of us, measures the has as they materials, outbreak fourth XXX a retail volumes the from standpoint. versus retail the in this a indices XX% the XXXX. at like The as investor Most Xx in volatility down a in XXXX up overall you fourth as volumes market. well a quarter significantly retail of strong presence for indicates and share That from volatility XXXX market Europe some of course a although humanitarian environment. To of Looking broader remained over were were was the will of significant saw volumes Russell see what long-term resilience market-wide the macro quarter reduced percentage participation was XX% although down Rule the with

in well disruption the and around inflation see disruptions. to continue the global emergence continued as supply and macroeconomy from issues the from other as record chain pandemic economic We

remains compounds of or sustained efforts operations enhancements Our markets that to management environment. committed entering trend macro the to and core type and our footprint Virtu by means scaled with growth a our is to businesses not Virtu to expand secular for continued our our new success from expense products tied and tailwinds. disciplined combined single macro potential

well macroeconomic environment as we any seek positioned endeavor our the to environments. to gamut performance are We raise -- success we of as baseline across continually in

amendments to SEC and of the Turning industry. our the recent on the impact more some from

We REG with and recent in vocal the SEC’s in believe where and to data-led among We have approach In and challenging is share repurchase and including ATFs, the rules various industry reform been warranted. for SEC’s practice. with proposed rules XXbX-X weeks, calling a we regarding consistent entire mission a amendments the have joined others. fact consistent data-driven

proposals not impact imperative will feel follow processes have proper proposals that established for the these the rules good today and an in it’s on the responsible are all future ensure to Virtu, we for SEC of While making rule market.

unexpected. guidelines comment but impermissible won’t follow and consult sensible As and in these the you can proposals making That reforms the do rule in under disappointing, SEC not letters, for are our the sadly see propose Procedures good faith the is Act. ill-advised published prescribed because rushed, not industry clearly they Administrative with statutorily

industry opposite with exact information investment for CFTC other the its they and our lawmakers, the hand, stakeholders On markets structure clients, in transparent investors. have and that the regulators more We policies with continuous and regarding and who accessible investors choices make provide more applaud more Chairman key market taken remain we in dialogue approach.

our power net Virtu about of believe that investment are shareholders. as where $XXX of global generates use represents in capital clearly evident We Page X% on a course capital new our Virtu out at lay of the late materials. supplemental new repurchase would return We become for shares purposes. flows share the repurchased end, share the our inception excess our our presents to of post-acquisition have a Finally, of an past as our note post-acquisition years, $XX. of X we new back X compensation of I normal and you I of foreseeable I the integration entered look clear of business phase our company for price issuances This compelling the benefits have XXXX, our significant million all future. the that the story. to To refer to Virtu available that has this of average cash business earnings program since

over and the before provide Now I questions. your more detail will to it turn quarter Sean, on will taking Joe? who Joe

Joseph Molluso

for will and investors at with the our brief some growth to a continues measures believe for levels. we be to value I these around began by Thanks, and Doug. clarity our shares repurchasing Sean to was before drivers communications create of Virtu, take We of and to time thought we we Q&A. our in would review a what be be good opportunity to of significant it expectations get shareholders

of you provided. exceeded materials, expectations X reiterate us We our in significant information XXXX. update an you can detail to supplemental the a began I would our see look middle today allows have of principles. met in Slide guidance of as well outcomes. that some in it we across core the at snapshot range as Revisiting note a this of provide the If presenting to or

so drivers to the be one business largest our expect our volatility of results of is First, and variable. investors should

variability of to more reduction we initiatives given the of our However, share our we growing and repurchases; believe the expense around application of the base confidence results. consistent and anticipated cash in excess growth, around the baseline have clarity

and the the of have as reacts and businesses, we tailwinds positioned to of global well in to addition are retail expansion demonstrated growth increases continued in Second, new contemplated historical levels period anticipates elevated we to we our believe interest an benefit favorable rate from initiatives well economy core as with as inflationary activity.

promise quarter, structure term good has shareholders. billion we manage Third, our have of believe this our refinanced and Early loan $X.X this now we long-term we our value on made debt created and capital have for our outstanding. to

long-term what Our we which allows acceptable buy to at any outcome believe on this believe at attractive our page, leverage back us we are is shares values. level

with our acquisitions. ETF given successful already The ATM. size block, to income for we of the hurdle and opportunity opportunities the on often potential fixed Given are continues number an about options, more be high M&A for the and table in asked acquisitions crypto, the very past,

any course Of explore we opportunities.

However, before with the to any Sean Combined buyback at going should enhancements businesses, brief continued do that shares change power turn initiatives it our our we to And earnings investment this for anticipate regardless competes comments the repurchasing will with Q&A. and core elevate our base some over Virtu’s environment. help of present now I’ll growth not that and Virtu not see time, forward.

Sean Galvin

or quarter was higher of materials, as was X presented per net quarter X% Services which $XXX day, the which XX% quarter adjusted income Making $XXX income of $X.X Execution net net fourth adjusted about is our which Market Thank a fourth or direct increase of XXXX. million In million of or adjusted fourth just per per from XXXX. higher our million $X trading the totaled expenses, the million you, on trading income, net day, Joe. supplemental $X.X XXXX. represents trading gains day, million of than our is than the million trading $XXX first Slide quarter X% trading

higher XXXX. EPS fourth Our QX, adjusted the first EBITDA for was the X% quarter million up $XXX X% $XXX fourth million quarter. in for was from the Adjusted of than quarter, $X.XX

for is XXXX expense the and of continues fourth quarter, efficient our disciplined Our that adjusted the XX% reflective EBITDA and for margin which first reported margin was cost and the full we to quarter same year management. be structure

For were trading the overall XX% was adjusted our our ratios income, cash respectively. million compensation compensation fourth of $XXX overall net and quarter, expense and XX% and

quarters compensation As previously I’ve practice the ratios, this in the adjustments the our in as we to unfolds, of how targets. refine year-end a specific we compensation about year said ratio of upon compensation to result the our percentages with compensation remainder our consistent range accrued past dollar in year. Depending earlier later may

cash not our compensation a we XXXX, of remainder in fluctuation from significant the to forward levels. expense do historical Looking expect

note want have compensation with number We believe operating will do that of the employees. our as Slide vary X the outlined balance well state based a relatively which of the upon presentation. that we are I on to as our performance of However, steady overall reached expenses,

As to and with and in for administrative expect actual amounts. XXXX depreciation expenses and remain XXXX such, our line processing, operations and data we communication amortization

$X.X in that upsized billion at we Joe that $X.X As outstanding the mentioned, billion. January long-term and refinanced successfully year-end of to was debt

expect as increase we our X on a that per expense materials. interest As supplemental will million approximately result, $XX Slide proportionately annual our of to outlined year

paid $X.XX quarters shareholders. our XX which every the in million commitment for remain back to now first committed $XXX Our Q&A. IPO the and consistently -- since environment operator have to our we our quarterly to our capitalization share We’ll remains is over adequate. approximately our demonstrates turn our which repurchase dividend, We call in to return continued capital quarter

Operator

first from [Operator telephone team, Sandler. Our Repetto today of comes Richard Thank for you, Instructions] your presentation. Piper question

Richard Repetto

block it this the to the $XXX But and there buyback forward? count buybacks going on million buybacks all deduct I GIC. pretty guess, in words, we buyback, going $XXX calculate you there? through quarter from the are go If would forward, guess to NTI, how was you X? XQ Joe, excess are the repurchases was in -- guess going the we average we future at appeared going GIC In to back, impressive in million actually opportunistic there quarter that? So I $XXX a I some million we should roughly table we other from -- Are Page

Joseph Molluso

in Rich, going would I get ranges the your X. question. I buyback say Page forward, use the numbers on

of it couple quarter remainder I’d left the of level the buybacks. of a for So of the however perform, elevated buybacks whatever the year proportion were level we for and to say first in correspond is reasons. the should

to the the we mentioned did. refinancing not buybacks, we opportunistic You trades that the of some that had refinance, of we some all When opportunity applied of block proceeds to them. from excess

And then and be the proportionate excess have in the driven a quarter-to-quarter first past, little maybe to in we I little quarter. spoken a a the QX I there’s in basis in did some you and you I proportionate less and on more did that’s basis a going bit changeability on bit so think some see we So think QX. of as

I forward, we’re So at the with in it all these levels. ranges on obviously But I the factors would mix would which X. say, very going Page happy those elevated apply

Richard Repetto

solid Good results. Thank you.

Operator

question comes next Goldman Sachs. Our of from Blostein Alex

Alex Blostein

and mix really is Because of it, going know don’t hoping I retail institutional business. high strong versus we of delineate was how retail to right? to help on answer is but is while spend pre-COVID little no, in I the what the be of we business So the impact business guess the economics and we’re between of could kind the a does sort hoping at is institutional retail volatility But sort we And might talk is moderating;. the probably now to least of unit kind in seems I relative I was about activity could bit time institutional the NTI, levels, be high. really seeing

that helpful. would be of So together helping put super kind

Douglas Cifu

Thanks results a for Alex. subunits we right say the your those reason. by observation our broken for And down obviously, would is correct. you’re not have I question,

commission You and prepandemic in did sense an U.S. point that I’ve business competitive that others, that and in as U.S. that script as aggregate seen have continually met and notional significantly was Fidelity pandemic made And participation. change basis of Hood] triggered supplemental on the the by in then retail it’s systemic that a really more prior and equities, have that trading systemic. in we however, it uptick Schwab So seen calls, [Robin you obviously in than materials, The The this. U.S. equities and the in right? in mix and indicated driven a the the wasn’t by participation free phenomenon institutional opportunity has market you the initiated made the challenged levels. is the in a you’ve that we’ve case equities is in

terms rates answer that happening the obviously environment what’s day it depends. mean on In in on depends capture opportunity the particular it It the and and marketplace. and I on depends whatnot, of is macro

expansion there when more people in you’ll offer tend immediacy excess immediacy bid or desire bid their accelerate, is in more spreads. offers see to executions need volatility, and a So corresponding

our to orders, market they’re the the done. retail continuously segment, business, the our second when continuously need send say be Making when clients we’re arrangement I with the The which referring market in meaningfully and that printed to an have XXX-odd say we us in assume we market Market in they and sense that you different and business institutional thing I than in would is is noncustomer you’re the retail

be be balances. there can also are when and very retail that can it good So painful and

So right? intentional, to trying you understand an it really one this can the in conditions. of your not but was of is, our and market of segment, depend benefits retail Asia if can on take volatility And that pockets because built have step a not block. GAAP you in where I’m like quarter a does I’m question, business saying, our and scale what strong, avoid of and segment and we quarters the in I’m again have that the back, you giving have that we that the diversity ETF commodities be outsized retail the but So kind frankly in of noncustomer

more And built is strength we core have platform firm add of financial so and the this prosaically, attempting diversified we products services again to more the that to. are widgets more that

So to within X, avoid how y an the I as Page nice saying trying and you and all right, our the point to to conditions, continue again think equal looking is trying excess Virtu capital and larger investment just to I’m question. drive. x for following a which again at thesis And of provide buybacks. will z, framework your why I okay, not very be I’m can understanding a way business to times can applied

about good is -- to talked where the the I’ve these firm very calls, quarters, And next you’ll headed. over X just sense look in at as have as to X a back XX this so XX quarters, always the to you if next last

Alex Blostein

for earnings And it. other but calls. call thanks the and going doing today a Got totally early. ton overlapping the thanks of There’s way, for by unrelated, on the

Douglas Cifu

We to responsibilities adjust and recognize your accordingly. we try

Operator

JP Worthington from comes Ken next Morgan. Our today of question

Ken Worthington

I’m follow comments. Alex’s on going question and also up to his

and the out I and Making from sequentially volumes the equity million. coming into options we about $XXX FICC, assume NTR in the energy XQ suggests about was it business given the business. FICC If business progress volatility XQ like think that in sequentially down digging would or Market Making and Market looked actually up to of we FX your versus saw $XX So versus million in Market revenue Making up was the your it was that in revenue XQ.

down. look equity retail? first, up Americas get equity not at to kind the guess left the equities it if If is which But and they To size equity business of business, but what Is sort split? highlighted Market is legacy is sort Making we of help So tied have retail of a Market it really how just -- and that follow change, of right business of clearly XXX it presentation? of trying Is institutional. is this you know it’s is are Alex’s, that or sort of the it on today, the that I XX% us better portion I -- issue versus breaks guys XX% Making will throughout sense Virtu? to XX% what business

Joseph Molluso

first Making Ken, a businesses. Market it’s you’re we break the in very said nonequities results right, there Joe. that includes that business of out. off, I’d Doug provide reasons it say don’t diversified because We there is

many commodities, for sure elevated the want very all historically not favorable equities that Doug I’m right? and outside familiar You’re XX-XX. well were the particular the in XX-XX well I or is that the of customer retail crude in and of Energy business have well We Making around fixed diversified not areas. were on obviously draw remains equities income, are remarks opportunity includes with. do And and businesses as volatility the XXX part that in or equities right that and too crude therefore customer wouldn’t the exceeded there. some legacy think So that levels did and currency more in his Market the have performed versus participation to We up products, I things that business business. actually do XXX versus businesses resilient, the pointed very FICC we I into a with of customer. go other XXX Market -- out outside Making looks conclusions you’re at of about equities the

Douglas Cifu

metrics used more be really, and mean, with it’s break you Obviously performed back. public we much I was quarter. Making of The business track company. XX-XX, But certainly noncustomer Ken. Yes. will, go really business, balanced a mean, I had strong a that separate retail opportunities a can the internally. to Making consistent Knight Market the subsegment, nowhere out clear, and Market if we it’s to this you near And

I’ve As customer I in mentioned metrics Market Making look at look said have it an outsider as this and and in just calls, and business it prior said to a Boca is retail you difficult volatility at directional and conclusions. have The situations significant makers money reach retail days other and satisfy. retail and market marketplaces. lose have where certainly those you are magic buying some selling. makers significant Virtu elixir market guys, can volume I in don’t to There and the to

look the of at the volumes sell XX%, retail they a balances, trading you noncustomer Making way won’t kind impact with along that’s have on an dropped an impact If in share that like So versus business. track which our what right? fourth opportunity that’s retail roughly obviously quarter, Market and buy of versus can what we indication internally is

Operator

Our from Kramm Investment UBS of next question comes Alex Bank.

Alex Kramm

something Maybe curious new, mentioned the the comments Certainly few the at Doug, the a it mentioned from times. internalization not but within firm. you beginning, you benefits times, several

pursued? improvements much is also think gone like the where do in unit economics? since and how So are there still -- still haven’t just constant outside low-hanging last of you’re thinking things, that improving you ITG can for of into years room up any Like your, assume here, economics came think maybe how improvement? guess, through process I on much context has here is fruit in you maybe particular I couple over you constantly I this you you unit If but put the this guess?

Douglas Cifu

to that’s point We a style of and up not for some collaborative Like firm. I’ll living, there’s you statements It’s It’s generally has people pay So I’ve culture is need of Virtu in is it separately when not ask just ebb been within answer have have. would help been [indiscernible] -- in. a or all distraction, yes, impact. either me grow is don’t a give and right? to numbers away, based on XX% never hedge an obviously look you right? on detail go example of show so the Joe of the Making like the that group do paid trying it’s most trading in the trying direct BC&E a those I to options financial are that Sean that’s hey, technology of one more always we more separate have business delta opportunities they to obviously the obviously can we do It spread make, a little Let you’re where terms obviously guarantees. and firm. to overall through you would to people is debt. kind part which firm. bring results, what at We and the What of are financial not This don’t not they it’ll somewhat our see easy and This making so firm firm. and like and is flow with pass Market of what style needs fills -- a frankly, when compensation, you but to that that’s

these will right. you’re it, to go so part X I the reason emphasize The some the And of results, made significant is We’ve acquisitions. that’s and started guys overlay. of exactly cultural these through

and quants a about When set the some if and the how the it the of heck you here just for matching have easier traders into will, up. outside fruits endeavor. of a architecturally becomes challenges -- if of you a of equivalent to flow to was single you Virtu we’re all engines internalization it realize and think technologists United a you single stack, States Virtu and the lot migrated broker-dealers that Once of you’re you effectively had the the was platform can series around is collapse and Some on technological, of right? a

and more add can to negotiate and have like you don’t with obviously around and world. whatnot you color? if that any things know and I well you As negotiating want the power ATS that Joe, exchanges tiers

Joseph Molluso

look look The net XX income the Page segment, Market is if the you at at you just since and if just frenzy XXXX in our the the of quarter we and $XXX for of $XXX those XX% gross break highest the income that’s you if and results is out million that trading trading Making days. supplement, level color example at net look that convert second segment. million, adjusted And by percentage kind of first this trading income quarter in

So included multiple I segment. goes asset a classes Market that that calculation. Making There in obviously lot into think are

others. asset third XX% and see the more up; classes the quarter of think percentage when equal, gross and are XXXX to this than things that last of was tick it second then trade Some all in to I was quarter, quarter conversion you being it expensive a from XX%. XX% and those net of of But XX%

net So convert kind gross and tiers, better. reduction income. trading part you in exchange income -- and we this fees into internalization, Obviously et how fee is see And fruit the better of that percentage, from of cetera. brokerage the higher the trading that of of our kind that’s that’s

Operator

Fannon Our Dan next Jefferies. from of question today comes

Dan Fannon

I Doug, follow guess, wanted to up. I

still You’ve and there past guess today your starting Are X regards slowdown. participation you may -- think kind as mentioned what you of -- we’re participation you from I were guess not outlook of as retail walk and through mentioned I see just the commissions. can why in the may retail your around you or sustainability before? you to to terms if just look of you’re quarters optimism like don’t here earlier bullish with in

Douglas Cifu

at from the that share We time. at and I upswing of today. put in through. have the supplemental interest look in a certainly to at mean normalized as kind like we all fallen think and all and of the And on has opening, new obviously balances through will I also XX to the driven becoming can’t in has notional business I I well. to percolate crypto materials to the rippled that I proliferation which has talk terms Obviously it mean size. an about we the you obviously track then do where at equities that like of you minimize continue is you pre-X saw metrics in stock the our overall talked look about think sizes. slide FTX accounts this look lot commission markets venues, look of of Page -- level the at how that and just period I and new market account clients because Look, proliferation and then I and a the But off. is of me, now same are

also ease pandemic stimulus of doesn’t here secular doesn’t appear to Washington checks. Dan, So their we’re continue and mobile being is use systemic among that in a that global really participation in and young a in a self-directed this any as to out, between commissions I trading shift people retail. X I now being mean seem that thing everybody That is yet to stuck think optimism some my It around that any and phenomenon. opposed to trading going will have would basements, be shift. participation drives heightened and stay. has basement continue among of people point their I more policy are a out like see we support this to

interest. are to a coming have seen significant us of clients retail with that and in participation We Europe increase in terms

see in into we to both And indeed those regions, of XX-hour continue from very We in those in clients trading equities. interest U.S. see interest strong Asia.

but want continue for to the important and helped opportunity more broker innovating a of this size. [indiscernible], have can that in driven. which reduces a And creating I them the obviously right? become as is a So tenth So buy will world I $X,XXX. to think buy XX-hour last is fractional phenomenon, share it’s we $XXX. of the the facilitate, notional shares, to for share well, I think I which

all factors conclusion think kind a there really Yes. that dramatic quarter-to-quarter? it But in I systemic playing think drive to my has change. do fluctuations Will fashion. those a is of the changed I So be field of this

Operator

Horgan today Rosenblatt. Sean question from of next comes Our

Sean Horgan

well question on and the the first Obviously business growth initiatives. doing organic of growing is overall organic XX% business. there Just to the

So going of of on I’m and components of forward? towards sort specifically and how on those and just think if the growth options curious get crypto we could that should an update about the we the of each contributions size and

Douglas Cifu

the and new API was a about roughly like options talked connectivity products work crypto, things like It traded driver nascent a mean, fourth those was been really With XX really regard quarter crypto for endeavor literally and we very us. and lot I for us. we’ve that’s lines. doing along a Obviously it big in to

we XXX. over Now trade

I script, for I Vinnie in like extremely the on circa Virtu had think days. when firm equity. started said were focused As and Financial still early I XXXX it’s It and the feels we

opportunity So a us. for greenfield it feels like

X, and to the run key look grow with it the grew we XX Virtu way going We’re opportunities, develop at relationships it exact the same venues. which the to organically, big X, is

SEC’s frankly. not a legally determination front, is ETF think and that On regard not the just we with approving the spot to defensible regulatory

the Firm, Our Law week unbelievably in friends a Davis from letter put compelling. at was which [Greenvale] this

either it or I would floored tomorrow ETF be. crypto in the if SEC should So approve the the ultimately spot blank, but in through a next be won’t own his it be litigation on doesn’t fill volition

So will that continue we opportunities as grow think see I evolves. to marketplace

was to I we to we the We’re our over firm, the the way over network that into frankly, and getting Knight be XX think of frankly liquidity execution retail That brokers this built be out effect. with reasons, and their roll core again crypto solution, XXX trust value one adding this needs. to market. quality it’s is very that that direct bought we in and [indiscernible] counterparties back last relationships do have can’t of strengths one there know which that assets the us V in years we’ll which acquire use network don’t the difficult for of of people superior that us, Capital It’s break to for understated main provide execution, XXXX why

to created class add look we is instruments, environment revenue opportunities multi-asset of how us. key is virtually P&L. will here takeaway I’m for very provide these continue widgets, that and really we this our have value again, bullish line And cost at demonstrates financial the can where the to which asset the bottom So incremental drive collegial we scaled and it effectively class network X that at optimistic

Sean Horgan

as just relates market then on equity thoughts structure. get your to Okay, great. it wanted And to latest

your expectations, SEC it and and fall then It it it are around to how of what market socializing about So if are it’s sort any, going happen been to structure that was sort of was relates of if series something specifically timing? handshakes around tangible PEFA? the sort so, like seems out from you And of as actions seems a of the thinking to conversation. that equity

just your what So latest curious thoughts are.

Douglas Cifu

Yes, that at, is I a will politically muzzle my swing to as to incorrect as possibly on but and I CEO softball try best like do can. myself positive be and that

out a have on as of proposals SEC prepared So and of just wave this. my tidal but the have disclosure as that varied maybe I share remarks seems ATS out. look, not And In frankly that not it well we’ve climate topics come and thought seen buybacks change these particularly was as saying I are isn’t been, just as politically rushed, correct Virtu should reforms. this

sense. number the be of the if we’ll in competition is day. for don’t have a make we of in market put structure don’t it in positive just regard impacts there I think and very comes and big that clear just in data-driven there a letter Frankly, Fidelity out [indiscernible] proposals, believe lot be, and reform, out. Act all right transparency, continues advocates we great a a to guide we which Bloomberg and proposal believe of others that situations. light With really won’t We if believe where of we what these questioning and -- have these ever in Procedures the a the to see and a letter are that of followed, data-driven bounced and from Virtu flow any be answer ultimate whatnot. crystal and these continue out I proposals think zealous great collaborative. from order-by-order the to competition comment will was order history have frankly and payment not varying be as they and It’s to Again Administrative for has really the lot don’t chair continue I just he the said, things continued have these a proposals viability of was what lot in on we are the think thoughts -- of ball. -- is point just by And there frankly, I calls great and mistakes, will

to We have data price improvement. of provided all types with Virtu specific regard

convinced over drives We are improvement ecosystem billion as price value significant XXX% from an multibillion that $XX of Virtu the industry. and dollar

aisle. frequently aisle Hill of engaged the of and both are on Capitol sides Senators with We the from from representatives sides both

very, works rhetoric ignore political. how we importantly, not understand We and more the and how very very make just ignore that the a fantastic, investors and we States, want to sure understand substantially in We’re low-cost and entire is actually transparent, marketplace people better have opinion the efficient, marketplace the transact very our civilized which United which in retail other experience ecosystem in our is in any for today, here the headlines which world. basically than

think the ways seek we’ll do So collaborative. going and we will I’m here what we’re continue improve go constructively result to our markets, happy that testify. regulatorily. and right to we be great vigorously to to we’ll is defend But ultimately,

means years we it be optimistic there SEC unfortunately, as historically well. to that’s And with we’ll participants past, sadly it transparent. and happened up case that control. look has the as happen have But if be different litigation it well, participant for we in there sense. that hard if not be the happy say results at know We’re little years and various a the industry in that going makes from and a the in end I’m to can’t a it’s politics inputs the that’s sensible because are Washington called Washington to in result

Operator

Allen question Our from Compass next of comes today Chris Point.

Chris Allen

what are a options a how become the process revenue wanted comment in where the made does wholesaler on that entails that I’m opportunity up in to there, options. earlier Market Making? Just follow and about investing you you change just within wondering to

Douglas Cifu

players looks options. the in X retail a Look, at is because are options and in I others that a and competitor participation that significant there mean we significant to significant goal to It’s be have here pervasive there our that host of there’s is said and marketplace there are significant ultimately, provide services. end opportunity anybody obvious

the Chris, relationship in the of assets cash retail script said is As equities. the one and we brokers just before it our I have, as question was with to well, and in answer another

if won’t will, it implored you you so us surprise options. to hear that they getting And to XXX, to have

built And clients the having benefit that with the all knock-on of former XX-year have. wonderful of Capital that, that clearly to a these Knight it’s relationships so firm XX- we

so about options, Which that "internalization" on know, Market where the the exchange, thing will, periodic execute means participant that to other is the internalization you to internalization they architecture which to Maker auctions various means open are have any you is if done created to is and from an receive. and options we we well participate wholesalers, as And that that are these interesting the around on are exchanges as flow attempt -- exchange. that the attempt other options their exercise capable there

We are clients. currently innovative handful doing that with of with fashion a

out our can we say have making if news customer or begin and and to can is spigot So to are with and to the regard dipping will, and But endeavor. all options. significant in turn a the obviously clients to water which our test you we the toe is internalization, investment to strategies of the the don’t names full to Y associated on strikes, of hey, Z good you X,XXX go X, X,XXX

don’t continue So How aggressive in, we’ll I when and I start guess obviously tap get do we opportunity. turning do in the right It’s know the right significant flow XXXX. coming more so we a to to now. that that starts

significant us some Asia. firm. here we a paid at for this so right the If to rebates the as in grow that of work that’s compared now as are options noncustomer paid both in States opportunity options rebates lot and are do to a it’s significant to for in of around United continue There’s published for looked you equities, that statistics cash and

as plate it guys right but in their lot a now, And on the see significant the do have future, a opportunity very I revenue Chris. so

Operator

Our Michael of question today final from telephone Stanley. comes Morgan Cyprys

Michael Cyprys

Execution Services about ask the business. I wanted to

of be us about a you And revenue some Services growing of could little pool in remind the maybe stream. initiatives recurring within relates Services overall talk pool have might is about bit the to recurring and that Execution revenue Execution compared Services the to So you revenue talk around that able recurring hoping place what that I here to how was portion revenue? maybe Execution the within contractual guys growing revenue And you stream?

Joseph Molluso

Joe, that of that there don’t again remained mix has Michael. it revenue there’s is consistent. a break is out and Obviously we This --

old quarters ITG the to acquired we out the in of it think before used break I them. some

stream I revenue. it provides really think it that It recurring a great is We’ve been a of able business steady we like. to grow modestly.

gets think business. supports out, would And think I to is here us brokerage the that complements where I set look, product breaking a it if we the do that. it in the point worth growth

think standpoint to I do made I that out. would technology again the don’t it a by But a think right part we now gain I more right so breaking around gotten, much it’s we think a we’ve from lot we’ve like now, efficient business Execution and continue Services. of important that remains presentation and an

Douglas Cifu

the type more Yes. businesses consulting loaded The more of some will as and one these analytics business in shall the of to technologies and a more we like be that more a like Software-as-a-Service workflow that looked like of word, platform should use example I are at here is for other automated that thing business. and opposed as more, I driven sinking say

our APIs can can and within them a a particularly basis use us so own effectively order have see can customize they within subscription in own do And we shops. they as analysis analytics, come so clients fit pay, platform their to they their now where that say, as on to you and

really so obviously because access analytical anonymous basis. they performing they a larger relative an basis, of compendium funds and lot their asset globally also But competitors have a full how like our a that on can and to are pension our tools. on they And look understand at managers

own clients shop. with darn because creates a my pretty my wow, they own So that real scientist that’s in halo can unique. effect I say data have can

As do to reports work. pushed me, opposed out own I to my can getting

excited $X that says, what Making. we’re a of impressive -- happens it clearly is first a stickiness But a of Execution in which and part evolution pretty non-bulge as significant something part obviously Services, by a business. little business tends a Services of it’s a it wealth. Again, for Market smaller get Joe bracket a million clients overwhelmed a with it’s creates that’s Execution so that about So significant to the in our was it have business. the a these quarter A quarter is quarter very real day overall

with really, pleased So I was results the this quarter. really

Operator

results first your management your Have concludes call. presentation. Virtu questions Thank today’s the of lovely day. for all. you their That for for XXXX a rest quarter and you you thank Thank team Financial

You your disconnect may now lines.

Virtu Financial (VIRT) 28 Apr 222022 Q1 Earnings call transcript