Earnings call transcript Q1 2023

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

Operator

Hello and welcome to the Virtu Financial First Quarter 2023 Results. My name is Elliot, and I'll be coordinating the call today. [Operator Instructions]

I would now like to hand over to Andrew Smith, Head of Investor Relations. The floor is yours. ahead. go Please

Andrew Smith

and everyone Elliot, Thank -- you Thank joining good us. you for thank you, morning.

Our Financial results on Chief our on Chief and our Sean we first Co-Chief are Mr. Mr. Financial Executive website. Officer. and quarter have our Ms. Molluso, Galvin, With Officer; were Officer; released Operating Mr. and us our Cifu, Officer; Deputy today Douglas this Joseph call, morning morning's Chief our this Co-President available Lee, Cindy

we will take -- with prepared We then by will begin remarks and your begin questions.

Virtu's actual materially include outside First, be belief a results and what call are, assumptions Today's events from few risks, may indicated in therefore, is our may which the statements. future financial reminders. conditions company's these forward-looking and may statements, subject forward-looking uncertainties, to control. which represent Please differ regarding and that current note

and on to statements are filings. It Form available to note new and refer contained this disclaimers is important as to company, release press in call do our risk any forward-looking on any information forward-looking presently to you or annual description encourage made revise We we statements you not our based that report, information in the and update review public factors to other the becomes undertake available. of XX-K

These measures including with margin. call, superior to in EBITDA as trading net adjusted in income, supplemental as measures, measures refer may EBITDA, to reported accordance adjusted considered non-GAAP adjusted as today's During income, not certain addition to we should GAAP financial GAAP. to and net adjusted be measures, non-GAAP

materials information these well to you'll be an Investor the explanation why to use reconciliation portion non-GAAP as deem on management GAAP measures the find consult we of this to additional our as of listeners earnings how measures. information as in the website, term as direct equivalent this of meaningful, with to a well call where referred supplemental We

call the to like I'd that, over turn to with And Doug.

Douglas Cifu

ended and Virtu quarter Thank $X.XX we of million adjusted This trading our of Andrew, March day income. XXst, morning, good everybody. $X morning reported quarter earned per and net adjusted first you, the for results EPS

as EBITDA. million we discipline, XX% and adjusted Focusing of expense generated adjusted EBITDA $XXX margin on always a

I’m pleased the to fourth as results of this quarter our with compared quarter XXXX.

headline were quarter's volatility metrics was significantly up Realized equity This and down lines market U.S overall. mixed X%. XX% were

met specific look our always, As cases. in internal report businesses for our all benchmarks to at happy of we we and or each metrics that this I’m exceeded quarter

business by global Our Market as the currencies in proprietary Making particularly performances global in driven did European and well especially continued well strong performance strong commodities quarter, in equities. as [ph]

see opportunities continue to the of various across trading the desks benefit increased internalization [ph]. We firm's

to meaningfully in with this addition, biggest market as and growth contribute growth the trading In making our continued initiatives of net quarter generated income adjusted driver. our continue XX% options

Our which materially Making than against of performed better customer Market business the was well the XXXX. opportunity quarter presented fourth

$XX and I'm increase very a million the services improved delivering of quarter, fourth the net in Making this over adjusted quarter. million net pleased also Execution from trading XX% from $XXX Market income. adjusted trading quarter last with

March remained increased activity adjusted muted, did portfolios. in clients While institutional activity as volatility prompt their some

in investments offering and have exciting are helping retain business. win specifically income contribute successful, us fixed and new to new segment, the several the and will in that on of We believe we clients mandates analytics this initiatives pursuing currently data ongoing proven growth resulting existing Triton

of in use data and days, but uptake of the still this workflow the over automation. bear fruit in institutional analytics our It's case in API the automation of that early Triton expect course we year. clients' will

our clients achieve of a full scale and savings. aspects trade more number platform leveraging the of cost increased to of an for life noticed we've Finally, cycle

with the designed is increase as platform, was and their use. intentionally scalability, reliability costs focus This reduce a allows As a VES optimize clients ease our workflows, our reminder, case to on the trade of of the and Virtu across market opportunity businesses grow mixed stage our that impressive marketplace. every in at process. continue environment productivity by Overall, the yield of was afforded quarter this terms to and in a demonstrated

While part that any capable a on myriad quarter in range just -- in especially variable is volatility has of retail that asset able a is broad headline quarter Virtu opportunities, to capitalize viewed of can a not a deliver large is of metrics outcomes, trading, our this business when and the against business classes. a is but and that volume reminder global

initiatives. initiatives on contributed supplemental of see see our to meaningfully you success to in And important the our will Page materials, X continue performance. growth these We how

the In the total, these net initiatives quarter. trading represented generated $XXX,XXX over income, quarter 'XX. compared of over and first highest adjusted the of quarter, level to of our increase since income of first the trading In in day per the adjusted an prior quarter net growth our XX% initiatives XX%

options To business about growth which we the well. few first our continue perform years and continued of in is option Market-wide to X% and our a were business, highlight volumes just handful quarter up a initiatives, grow. ago, will just thriving launched to options

the to symbol expand from scratch year beginning XXXX. our of to incrementally record universe, continue building on was and forward what We achieved in this look we another since business

believe early options significant products. a equities, and in mentioned and had of we've the and are cross-asset global in our we opportunity very OTC the our days expansion global ETFs, complements previously, footprint futures into As

to results Block contributing its ETF in global despite is initiative ETP XXXX of also quarters since had our period. declining best meaningfully one volumes global and Our the

world better trading performance we XXXX. This net full in to year here year, adjusted the achieved the income continues growing While global business onboard that clients than around it remains early was XX% quarter our liquidity. in average the demand first

initiatives market baseline our the together, progress helping any making other in and to raise our throughout Taken are our are these growth tremendous and performance environment all cycle. initiatives

deliberate of style. our these ability to and evidence point a are at the any While ground initiatives the Virtuian fluctuate from they time market build incremental with will businesses up in in environment,

brokers current the capital from the comment exchanges, of potential letter brief which the the dozens pensions, will me, unchecked Except the State motivated letters -- Rule noted I issuer be T. Rowe U.S. the all brokers, from proposal proposals, well the and SEC in been individual as and asset echo academics, chairs with to experiments. equity has CBOE the Street, concerns as regulatory as T. comment market outspoken formation harms investors and overhaul by to politically say to debate, groups to Price, opposition Rowe UBS enhance in managers, there significant excuse XXX, current as holy Virtu as commenting for to sell-side is our about jure. proposed least, and publicly retail broad Turning proposal of on joint

thoughtful today's included to review and group and that the supplemental to comment this of letters we've enhancements. filed you a of diverse demonstrates I approach the by market and materials, based industry investors world. virtues broad methodical the would urge exert just In phased participants, the broad not for [ph] consensus

Thankfully, exposed ill-conceived the issues common with the period market. they and how the abbreviated these significant entire has illustrates to proposals harmful, are and unworkable

continued levels income. we year, exceeding at million April has this so program of target buyback given XX, X.X share our ranges purchased far have net Our through adjusted shares trading

including growth acquisitions. about asked future new opportunities, nonorganic We often are

competes but we have, see third-party opportunities many net there we the have executing share given Since our our after of on answer we is we fully repurchasing of issuances. with initiatives create our shares. we value XX% today of new repurchase investment own Virtu the and initiated program, currently while shares repurchased Our abundance to and no is seek diluted always organic we opportunities, that review

excess our to annual to shares $X.XX use our while to return and We will dividend. repurchase cash maintaining continue significant flow shareholders our capital

Sean esteemed And to with Sean? that, turn over Galvin. I will it our CFO,

Sean Galvin

everyone. materials, good we morning, and of a On Doug, provided X of supplemental our you, quarterly Slide Thank summary performance. our

our adjusted For [indiscernible] quarter or quarter. per trading expenses, gains, the of first net trading million XX% direct represents our totaled a of $XXX million trading net prior day, the increase from which $X income is XXXX, which

trading net Making was quarter. the million or from trading $XXX income Execution which net was million income day, quarter. than $XX $X.X per per Services, million increase Market X% an or prior the adjusted XX% higher is adjusted day, million $X.X prior

EPS first a from up XX% quarter quarter XX% from XXXX, XXXX. was the our adjusted XXXX fourth was was adjusted the XX%, was quarter which Adjusted in increase of EBITDA Our of million quarter $XXX and fourth EBITDA which $X.XX. was for normalized the first margin

On Slide X, we results. our operating expense provided of a summary

For adjusted which the year-over-year. $XXX first million recorded we essentially quarter of was flat operating of XXXX, expenses,

helped disciplined expense structure cost which during has control expenses efficient management, environment. an this our maintain inflationary operating us to continue We

expense $XX of year Financing the compared first XXXX quarter. quarter $XX prior first to was for interest million million

over just aggregate. into years, rate rate X% the swap debt With long-term our prior blended our of in the contracts, entered interest was benefit interest we for our in which

adequate. Our capitalization remains

for -- repurchase commitment to of share share million million of XXXX In continued XXXX, combined and for program capital repurchased program the dividend. shareholders. combination dividend million. our the $XXX.X shares committed to our shares approximately per of million. April XX.X X.X the $XX first quarter And our date, We of in our Since a $X.XX through repurchase approximately to have the settlement XX, we quarter total November repurchased remain this demonstrates we inception return

would turn like to we the to the over Now for operator call Q&A. the

Operator

question Piper [Operator Repetto Rich comes from today first from Instructions] Our Sandler.

open. Your line is

Rich Repetto

team. and Yes. Doug Good morning,

normalized company. at guess the quarter my to there question, quarters, here. you it put about $X.XX quarter first, anything of you up more I look learn Doug, So is has and the the -- the congrats look on you strong you this when told last potential four the at is earnings And

the last or -- strong four anything but I guess? that should over if take there any last So quarter at little I quarters, $X the $X.XX, guess, from, look is bit you other investors year, like a

Douglas Cifu

Yes. a great I it. appreciate It's question. Thank you, Rich.

on has broad and a this I reminder as quarter to a think my is I that are able Virtu said, had we just prepared that, opportunities. capitalize remarks in business,

a remember, of to And lot the is. didn't we don't a you've can by being for this it, And but [indiscernible] you very XXXX. been broad-based kind I of -- better centerness can footed minimize center until public, overshadowed perpetuate we helps business continue generate obviously, very around the following in it obviously, and and growing being front has a we because -- business and think or retail returns. making generate outsized on have trading. what by retail it's been Virtu mean since market worse, is first I of have that to front front went us firm it,

things have we in that prepared highlighted have I Knight because of you almost other thesis and front. almost obviously, has thesis and connotation additional payouts is The I've mentioned on create remarks, I depth all -- previous pods here. traditionally present calls firm so and the could mechanism the -- with and culture in been, stuff cringe discussions an and all very, that the remarks, efficiencies, when thing and we Virtu very internalization trading my of right? a one acquiring never I that I trader where the not the that [ph] execution like trade was strong one-firm provides this separate extract within is from a in ITG to we effectively That's my perspective. And in say

But more best efficiency. [indiscernible] right? always class offer heightened world, us has the to importantly, the to in asset enable the bid as It around just in the be every says,

a within a larger And denigrates that and market and stuff goes options firm, or that's the so push equities all have it's an maker even there's of in other an market from mission. if maker, commodities does and institutions that pull where on P&L that attribution you or constant firms, standalone

But right? the options opportunity all can going nonretail, for synergies equity the products, that. in first of like firm provides firm, presents delta risk the because instilled not we as At that And the broader cost is an linked one the that for everything and and culture just it we about opportunities internalize firm. got commodities, hedge, You for the have just management, scaled, of outside and is retail, and about reducing within additional ethos by firm or gotten obviously when have with hedging Virtu everything started, internalization. been equities,

So term, some? you again, book made we very that a have the central happy have got risk regard. firm. progress overused To developed in great in with very, being very use we've Joe, the a

Joseph Molluso

to there's net look the and Yes. is over an you at quarters, of We've of The ways million different had interesting you discussion four kind past of chart levels Hey, of EPS lot round $X.XX say it's EPS, of about back Rich, the comment this. generates. number would various looking lots income. it make. of $X.X I trading our a

If is think you I it want to over the look comment short-term, at fair. your

a earnings. terms it net reasonable look income to and I in way trading that of at of that's level think

I'd ago, term, we basis. KCG noted X look longer average went was, to public, our FIA when say at over whatever it's you numbers, we we an a if at if and were has we it performance pro -- forma you want on and the it what and been in X weeks around included ITG since

of And should and since net XX% we've growth that for third round the say, long-term both It's, numbers, for and right? buybacks, and so is we then issuances we that term short-term a longer happen billion bought it's consider there, the which stock back the quarters the again, got basis $X So the I of compensation. would -- hold and of given started to program. impact the company, buyback on of to our the then be would we the given outsized inevitably, layer, I that

So I it, way as fair. think emerging that's -- an I think frame that’s to a

Rich Repetto

Got to -- being you're it. around think and And being I million [indiscernible]? referring $X in NTI

Joseph Molluso

trading per over a million yes. period of income time, $X very day long net

Rich Repetto

Yes.

And Very thank the presenting did very be but -- these comment my want you for you all follow-up in helpful. I So the laborious and this letters quick then would you through It's format that's quick, don't work the going did. helpful. it on helpful.

if next? summarize process? And can I think you in What's we expect? could want investors next to what just briefly the know what's

Douglas Cifu

there try remarks. was I title have will Yes. come in. comment my Yes. Look, I be of wave mean, Thanks, that in a letters professional Rich. to

he's the they You long think follow has be letters. the industry And Bloomberg which an because if of law, prepared have review it would conference he's thought I and comment at internally or and that I in a interest Gensler comments, just comment, but the even that think to dismissive ago, a certain thoughtful a at the process industry traditionally, where remarks made is long there point shameful in comments and dismissive was like said not of and SEC I frankly, my paraphrasing. they on we

a summary. proposal with participants, been route the Citadel if totality what we at provided would New Stock think format says, the you of York letter Exchange notion the that auction at essentially look that of would this And would because why and have my and we put beneficiaries we along there. the they with comment presumably, the look I look, satisfy the that that's received, But friends wholesalers the an Schwab new you publicly be has at would and to out with this orders auction rule, be obligated other would

thing NASDAQ did any and our makes When same the up Exchange this stands we York the is sense, Stock says, please Gary, same New think thing. this comment. And don't Tilly and and withdraw friends CBOE the

Justice putting are a we sense, SEC. the on right? out a these properly integrated groups government exchange and of is how you of Department I that, letter just you the says of not these don't When that are to great the of saying, any criticizing good own think Another three me, make the arm we its United together that -- mean, deal can regulator? the ignore in conscience States that major that comment have think rules sense. You this have makes don't volition

the consistent Chair And you Procedures certainly, obligations SEC that has can't Administrative the Act. the with do that the and under

it my So on basis view. for foolhardy him proceed be would this to in

well there the industry not you be U.S. did heretofore of prior Reg dialogue, we that is just the I there well. Nobody integrate around What that when overhaul a shouldn't so meaningful equities that proposals took years major saying is remember discussion another do to would quite right XXXX, SEC thing in he which like of market deliberation. was and NMS, the are in rush very 'XX, done the And ill-conceived these industry 'XX, in to saying think don't a reforms. be engage had

example. Virtu we X with format. retail fulsome should and just in on everybody that give proposal this execution one more proposed a that. Rule you data ago. me Citadel, There's years XXX says, agrees a Let update present

SEC And okay? proposal is auction today, they essentially suggesting complete proposing How saying, defies putting in it out have when Then change proposal, yardstick major change retail market retail broken. so just where mean that logic. the data market. is are I to the there's that another in the don't to proposal the we a world you are the a saying you

And so should step take I everyone this think engage deliberately conversation and a deep back collaboratively. a take and just breath,

leading to don't be said field, have to But approach think to as purposes. the prominence we level is there are our a exchanges world almost have compete to just markets And my and right? playing the scientific I many a around, impact view, have has the to the and center times, I want too driven solely the on never we needs capital in formation important this. muck that in that, political markets ability said on as for These too important data capital

now So my and off Thank will get I [indiscernible] you, take will next Rich. I the question.

Operator

Blostein from Our comes next Sachs. Goldman question Alex from

Your line is open.

Alex Blostein

up per a of we see to of from guys wanted your efficiencies were Good it able relative but it's what know ended to we day a equal, were better the have to and guys. putting right, of proxies But about to back, there up. What the the us, where if to tough been and be kind Like good the more public how to had morning. question results you quarter, sort way of more you to to all today? like not do as that? from I trading would point about is from your we if frame can go answer, to looking that extrapolate in I you relative Hey, -- you're net this would to able you the sort think the for look Doug, internalization opportunity business. like outside, much And ecosystem? think of else doing what more extract

Douglas Cifu

Yes. to And and with commission line, Well, this look great exchanges pay right? hard obviously, at come going obviously there. an can a like you try cost a really where exact it's not It's to I'm -- broker question, our avoid we does and up there's it. what ATSs to expense and significant

cost our trading day we I KCG mean if internalization, So the net grow, So from had will, XXXX highest on there's we in a savings. will to the basis. quarter, of kind continue will, you adjusted merger say right? I you since opportunity this if

cetera, the mentioned response, to first I is, more important and and it the in and excellent I more be that dark we though, thing, think is make it to firm can I prices, aggressive the to what et pricing markets on public enable pools does, Richard's clients around think, and post around the us question just world.

you makes were XXXX my when provider Vinny into thesis the just better was which drilled 'XX the and firm, we in market been starting right, it head of a you two-sided most become this that efficient maker. always So how That's liquidity. by do is

of work they your because be risk firm execute and central great frankly, guy, internalization renowned as have the can they are having wall risk This capital, book, a does and institution for a with quarter a great a fabulous end probably over, a job. there's quarter. do and I And state, had a them but but can't more a they well great right? we a lot Goldman in like gets not So deal more you is go know you take it equities this your to lot snarky and

that say, of in That do attribute never important we've bottle, kind not as kind attribute I it's that and the way in gets exceptionally thesis doesn't like Virtu. this very happen non-virtuous will I conversation But bubble that, excellence. like -- of to bonus just do There's how that whose of culturally, So because stuff think discovered. fits well in it you it's P&L, some firm.

opportunity. So about we're the excited

to to do, I kind that quantifying and comfortable I to grow highlighting of done it Block a even we and not ETF our advantage Alex, really think like with. competitive in you particular, will that. I'm business But And a we huge way try hard business. our has in for not of it because great it's say a will that do options know for I I have really me feel job it's helped continue

Alex Blostein

Got it. right. All

my We as a follow-up, prepared side. from revenues, sounds that's does for greater I Execution suggested side trading focus. that. but and treasuries guys as will It question well there, credit help lot again, in ask you on do to you're think today? Market execution making you the the of as your us fixed evolves services? comprise the trading, remarks, maybe becoming initiatives, across for around a stay like Making, making tuned you a particular, maybe that fixed Hey, is those Can do I don't on wanted opportunity frame for side services Services you market what whole some guess, In market income income. an benefiting more I on maybe your the better market there

Douglas Cifu

a XXXX, right? very, something to very So that fleet income. in in started -- we the really you on it's little are are grail, with it's the early great options getting if but I innings. of, dressing even we Look, think -- regard we don't in right? our to Yes. want mean, We not in we holy I are fixed early are say in are and it's [indiscernible], room the still earnest bit it's in question, a stages Yes.

our in a some help to time, and participating we've improve fixed treasuries, So the we improvements I but made have paths for long some hires DNA from of a Obviously, there. think there's outside number growth in which income. been firm

corporate credit, same thing. think in I

those we help of Block MarketAxess in Trumid I with in of also surprisingly. those business effectively there's it part electronification nicely businesses to prices of see frankly, the is and think Tradeweb both reason but I distribution Bloomberg fixed Europe. and obviously, our users, at really and and whatnot in like a like it's and ETF end that, be markets and business, because here related what income that our significant Not fits friends

it I it's opportunity. but de results, minimis a do is again, in significant So think our

big great we We to the mean to of of to credit that. to and a the our and never way some firms a have Look, really that Tradeweb, users in those don't will significant of bank. providing end footings do not distribution do they the do. continue go swing it's are through firms are going cetera, blocks well et our acute our the the I be there. terms mechanisms, opportunity. It's prop corporate huge desk But in that in network, DNA to right, own of competitor MarketAxess, around through client liquidity,

Alex Blostein

right. guys. All Thanks, you. Got

Operator

Our Ken next from JPMorgan. comes question from Worthington

open. is line Your

Ken Worthington

Hi. morning. Thanks helpful like be It seems earnings. has for the a Good taking questions. always potential big to to crisis the

And perspective, How [indiscernible] deal the to crisis in the to did customer in mentioned was for Swiss a big you past? helpful remarks. prepared this think like franc the others compared banking how quarter? were profits that repositioning with earnings I crisis this

Douglas Cifu

blah. question. services what portfolio, a activity it's did side, one out other In Ken, think blah, in making. more on. as It there on of market Actually, result Yes, is a great getting institutional than more moving I was blah, was People words, going it execution XL this [indiscernible] of helps different.

Services helps that so our Execution segment. And

X before, you remember X, from either or go Market material we serendipity stocks goes right, side, to Valley short. amount long way. you said this when from Silicon and the I were Making where it On it's where I've a were wasn't if don't Frankly, publicly just

but regional broad big of event events, some in Services. activity, thousands It there making, did and bigger like fine, some instruments thousands market impacted a impact so had wasn't wasn't in and obviously, add? quarter. large of a terms want in the that the on really to you so material it were Joe, Execution banks, And we it macro like

Joseph Molluso

say, I isolated. FX around commodities started decoupling, more, Swiss in equities, the remember This the franc and U.S. It Ken. and reverberated I'd that. it mentioned You into was European idiosyncratic

Ken Worthington

It Okay. yes. -- makes total

Douglas Cifu

made There regional think which than less making. pretty was in amount. from we no. probably darn market risk mean big good. up I was banks, amazing No, ended you an or will, frankly, like a no Like if breaking windfall the even, more management we perspective I

Ken Worthington

Okay, any of and on what a have over perfect. big time? zero-day opinions business for for is based And durability grow do you this then on trading it how more the you Or you in options product? might options, see, or how you much

Douglas Cifu

it. fight. Ken. I retail more I mean, frankly, Yes. there's like a between and read, participant mean, that an to like asset have Look, that I we institutional don't appears there's a retail bid JPMorgan, know are in it, that I think institution a in product as dog know like interest investors, I I've offer any in Goldman a [ph] significant -- It We what be institutional and based on

doing. think So more in space what as hedge look, maker I options to their I market participants active are which that's daily exposure, are market an look think, this these we to institutions

speculatory it I of like instrument. think it's more than probably more -- a a is kind that than

way important an exposure. a it's to think portfolio I hedge

And competitive maybe the here, advantage got and that. making, index in lucky where is we market so we just we have started,

So it plays nicely strengths. to our

that as segment, sub So of you the if we grows, will to reap that. will, benefits continue

Making So business. options it's driver P&L think Market in positive I our for a our

Ken Worthington

Okay.

Thank it. very That's great. you much. Okay,

Douglas Cifu

Ken. Thanks,

Operator

now turn from We Allen to Citi. Chris

Your line open. is

Chris Allen

on Congrats everyone. windows. [indiscernible] morning, Good the

Douglas Cifu

I want have he's in. big Thank it rub but that you. Rich, don't I sand. a should to to brown mentioned

Chris Allen

better performing bit quarter opportunity the Energy mixed equities. are more the we of continue get in you in [Indiscernible] we your got missed look at bit the both get areas little little the European in quarter, last well -- you quarter, beginning know improve FX, year. color in best. a I there. kind commodities of Yes. at indicators of European more if noted on and underlying the FX from this equities, kind and to But -- it of first to the some seems

to kind Was Any strength in -- get Just see competitive any that wondering pullbacks? as we just some can't of where trying see there you're able clear. special stuff of the maybe just to of there? trajectory terms I'm So gather situations?

Douglas Cifu

It's Yes. a you. Yes. Thank obviously, at we And look good question. opportunities.

mixed. terms remarks, segments participate and said did obviously an of did I outperformance. I measure in, the metrics we in note in have opportunity spreads Chris, that volume and As that of each that we my prepared things in we were and bid like offer these

So than volatile I segment won't at less a been think others. if -- a I dormant, you FX, it's been that's say little look but

internal improvements I and X% I think were changes borne think FX We and made have and up enhancements was volumes volatility up there some XX%. that fruit.

it's class, we growing performance obviously, about its an important to that don't area. is kind be -- don't asset disclose of as continues much, will, it Again, but we separately an you anymore, if it talk

I saw Energy XX%. our nice segment. up volume, was volatility in think XX% were commodity volumes some but we activity down

of much were was area that driven. it So more kind But mix there. volume again, in

then that making is of XXX to all last this and large the I helped I Europe. and to opportunities our under something globe, having and them deaths, do ETF products really Block shouldn't scale new response deal to in is in these ability an off and impacts say, kind and having firm, And business. desks the other our within even making, to think Alex's Virtu which grow has that opportunities but continue thing desk in that underappreciated like with the in I market hand cross around positions having and we market which able European be block mentioned the before would particular, questions, internalization What into

night. big broad these are a the think I [indiscernible] that on very, responsibility I firm. box soap and I has around my stood we've measure, really, Again, that day diverse you got any completely retail, overshadowed, proposals will, and and for and non-reliant grow take full said we on really screen order fact But about very because if nicely. to customer blame there I before, business in continues is flow the a that that as large

with pace I trajectory. you in can tell and happy that very our growth I'm the the

are years, investors. the long think going X And firm this I run here, discipline X are but the and We in big and we ways, last, said I this should every think says quarter-by-quarter surprise that before, a ones. firm growth the manage and one expense over guess, and they know of there seeing -- it for choppy you've both guess, not that is long which is the this to CEO be Joe don't, that, quarters and [ph] for it to have last sustained to is I nailed our it to I I I going I've period haul. been will happen they for inure years. the and ultimately capital particular,

So I'm along the stock.

Chris Allen

in a I'm challenging seeing an and trying maybe I crypto. you're of expanding right environment challenging know you're you traction from And it. now. more just what's been ATM imagine us maybe obviously environment. challenged kind been think about the the are initiatives, but could side, would a increased Got seeing growth? perspective, just you on organic growth if seeing help where on and to I try about has then option maybe think what's year-over-year on

right to what's trying working about pressured? being well cyclically just So think what's now,

Douglas Cifu

Yes. Great question.

I is think Block well and what's options ETFs. working

had quarters. think those both enough I about nice talked I've

a ago, You're and crypto, about opportunities the there. whatnot. I year I and guess, before right. the Obviously, the debacle talking was criminality FDX

crypto, we market making initiative exist and but market some pulled the Fidelity, very, We and we not are with continue Schwab, be resumed in called to platforms, paradigm. Susquehanna, some about back me, don't very markets -- EDX no, excuse SEQUOIA excited frankly, anymore, Citadel, Susquehanna making, obviously limited still and we

that. about excited are we so And

not but decent again, which scalable trajectory. incredible Virtu. fits income, the into has an a ATM nicely is business, contributor right, you're really Fixed again, a And

working we at really everything ETF have something, I driver firm So the again, else contributor Block that time, we is have were quarter. to to Doug. and people that great in options right? that's leverages think four the full But look Thanks, in going this over time, and period it's it grow. long I a the of

Douglas Cifu

you. Thank

Operator

next from Our question from Fannon comes Jefferies. Dan

Your is line open.

Dan Fannon

but or can to obviously about and we years and the goals, extended more new these year a continuing, there's of from about guess are kind success volumes the Thanks. think growth been what growing. it's talking markets the growth options Good period talk benchmarks or success? what the X now, And morning. I hold we on time. of guess Because from are like the of And are against about I for an now when the initiatives. you've one

your could goals or of gauge to trying growing? are point internal you outside success kind your success to things versus targets there could or or us help to is So we benchmarks that just lay gauge out of that

Douglas Cifu

quarter provide around because various right? question. a two-edged metrics, lack I remember Like ago, always granularity like our everyone business better one has a and years don't bid it X their sword, if with clearly know start word to to fire, our great around Again, on FX we hair that's business businesses providing runs our out that's Boy, vaguely granularity and was I'm like I when not. loath of got around a going like we satisfy subdivide businesses the

mean, which that's -- from look, was want what So, first should okay, the look I've say remarks, Dan, Board figure a grow, it think I said couple to that, ambition. that next the the in and in will that forces, amount. market firm. say, our mean that $XXX,XXX be I ... in the said absent in in we quarter meaningful XXXX. perspective, of that look amount you our should I will was and do per seven here, at that the you a I Yes, the quarter, that's and it think And day if to and like of Joe, contribution that will, my to whatnot, I years? the highest and I

Joseph Molluso

is a X-year-ish million you our to contribution as term No. $X medium period. of in that type goal said type of have period We've of --

on depend on going opportunity. it's conditions. going market It's to again, to depend the the So

at little up X, to bit and on right discern If a XXXX growth there. you look nice is chart, of obviously, can outlier, type the Page that you but an a of

that expect we to continue. So

Dan Fannon

changed look and Longer one quarter Okay. And market year? -- tracking. first expenses. It on then still term just guys things for of last targets, on knowing how guidance doesn't quarter your the expense helpful. to is No, that is be helpful. outlined going what hold Does kind based that's all the like you are you the updated guys

Joseph Molluso

to And the out back of first our categories major the at expenses it's of in nominal historically falls all the and look individually QX think go the I so. quarter that. got sort of then compensation, percentage amount in is you you think amount and highest of compensation, typically quarter, dollar look, the any I if not a

up full quarter of looking ratio type So comp year, our the X.X-ish comparing first I think percent. was to

is would an years the that of that's I you've prior Again, higher, terms we an think, inflationary a [ph]. in are basis, has percentage points accrued that's weeding same just annualized So that expect at trend processing, Communication higher. X%, the work in few we I seen in on hard that. tracking data out environment, amount dollar X% and -- and

actually So I good think job we've done there. a

typical consistent I would are past. up And then expect that did made the up and same But it to dollar 'XX impacting a bit Again, we thing, a what would lower just in little a in running on of the update it provided be would bit. the you stuff the we the pretty overhead inflation strong expect I some expect There's bit. basis. a a category, with It's in there. little dollar expenses that constant firm little guidance,

Dan Fannon

Thank you. Okay.

Douglas Cifu

Thank you, Dan.

Operator

question next Michael Our Cyprys from comes from Morgan Stanley.

open. is line Your

Unidentified Analyst

question know I to standing like get morning. quarter even the necessarily. Mike close to commentary into just about for guys in [indiscernible] Good This you a here. Hi. month-by-month environment. is I had

Just in month-to-date. curious evolved QX from how market April has the

think think perform what about macro on the there? if strong think set well the ways could from would evolves you of various to you do particularly Or Virtu that, I how firm you heard as correctly, FX commodities you. I do you better? prefer guess, is and I environment particular see evolve how are And macro following or the -- things be and are the to think would any you Thank here? there up could regardless evolve,

Douglas Cifu

up he into not if to Kramm Alex happened I like you Did getting quarter stick put -- the I'm we've I Look, April. the Because to don't usually even and will, Thanks. ask mean XX. that, like to talking I I about and hard what's tried today joking. you very mean in script, question? April that

don't I have should in I a had XX know, maybe I XX-day So trading we've any guess quarter. days

market. more. move are portfolios I -- best money said there this early. it of I a wouldn't times, have for think us one there's making it's the confidence, and Look, any trade to is talk marketplace So then where rising People because I've many app. about just they lot a I want mean,

firm. very, We this have volumes very are always that to important said

market collects a offer are that the spread. We making firm

better the And so doesn't. drive that the When there's not, markets, various systems will, going more bid you through returns. it offer comes then often volatility results to if are more we to spread, volume, than have sometimes and better that and tends

a certain of helpful. my are Sometimes, that always And there finger disconnect there's I volatility are types put that on can't necessarily why.

whatever as to other go algorithm have that that. to stocks can response Silicon When volatility. Uber said of handle in question X, not it's And Ken from down we early like from a I've there's Valley effectively types Bank some was

depending at We instant were or money we lose in are going make short that to long upon either whether or time.

portfolios to what pretty more feel where moving confidence more about investors and doing. certainty markets they're like we and are So good

it XXXX, live you're war. saber to mixed see in obviously So intense geopolitical got going right? with a market, and and in Asia uncertainty a now over both mildly, rattling put You've Europe to [indiscernible] in

You've the to are way got out trying all over place central banks figure it's that which up.

to You've to inflation and manage got try expectations.

doesn't ceiling debt which happy. right, a got You've investors this make fight country, in

that -- certain a that variables, those backdrop in mixed can So provide be are again, circumstances. are

well well hard said trying very a X, get couple as they your over intelligent the about talking that poised manage at do we X folks extremely through the positioned, been question liquidity to that. to the and will, you macro looking I'm are long haul, large if answer and need But without next sensible years portfolios wasn't again, is events. X, I provide in these I going because various April to that way have

Unidentified Analyst

is because greedy color. I sound lot I the on are from Virtu as there guys for is appreciate the like where bit going is space options a that. think you all the And where I follow-up, are But here know with do white this you -- Doug, that currently a there presence. growth start build could think at may business a you much I the about thank initiatives the scratch look any guess all you platform, working have potentially doesn't organic you you there for any on. very How the there guess and business that?

Douglas Cifu

time, it's issue. and system, being about. of whom are because the in distribution Yes. right, a talked to and all presumably we can that's money and mean why are whatnot, the terms being question. with or a products terrific we've great is white, of say marketplace both all we RFQs us. profitable No, to the I partners more being always put able all if will, and is the it's of about make, to pricing are on. an I respond constructed, not there amount, elements, in in white, MarketAxess pretty our partner think and but which would Tradeweb, darn credit, you to That's focus we it we right, more can and the We through it's income widgets close fixed which

So at look greenfield opportunity. as that I a

in terrific Street, the aware, have Jane reemphasize still it's I Flow The I'm compete early et mean very but meaningful are firms would there obviously, Citadels, firms, that Traders, that for I are that there. we just us cetera, with again, options. the that presences

So So in again, provoked started it's -- not probably quite of this on to that wider it's either, I white, continue black me. analogy you it's than very right? painful black actually where but it's opportunity not terms

prefer baseball are [indiscernible] innings great like of those player a the the very, baseball two think I that the analogy -- player. is I were my and areas very son So

So the stand. in future, we I'd if could we that it. we with that's where where stand. But stick That's appreciate

Unidentified Analyst

color. the all for you Thank

Douglas Cifu

Thank you.

Operator

UBS. Kramm from We to Alex turn now

is Your open. line

Alex Kramm

morning, going for good I everyone. ask thanks, shout yes, Hey, definitely was Yes. out. question. Doug, to And the the

somebody options have on things I only asked already a discussed. to couple to maybe left, now, we've So about just back come I trajectory. of organic think the the of follow-ups I have that business nothing because Maybe do kind

maybe I you're expanding about markets think some rolled quarter, talked out the you number you've of slowly and last into. symbols

in bit can symbols perhaps you specific So four you or where want you of to be want to the be we think bigger? you're be to the to actually on? markets accountable in, maybe business hold see of that you about options a that quarters, little terms next the earlier as in of are looking something is again, at Like more what those question underlying metrics getting to

Douglas Cifu

Yes. Okay.

to I XXXX have one So mentioned And in this of emphasis is is in be in earlier going main Asia. think quarters. I our

caliber We from moved moved have New have ramped up high are there, really there there. and to York people We out staffed out there. up

is there for market, think opportunity participant do are in we in Japan options, there there's I robust So a there. significant Obviously, and India both a there. competitors are index very there, but

that where we so obviously, large there. they'll to as market yes, the then and market Board making mix in as growth noncustomer we accountable report grow metrics hold folks going end get have But something XXXX out. a the to opportunity challenge us included, internal desk be want the a of to that it's that's business, and it's to And to. at we the significant and is and making And and of meaningful, the

that. excited we about So are

options. opportunities there's in another class around et options Korea cetera. think cross-asset FX I is energy market, and

Citadel, using my mean innings. Susquehanna, great that I as very fabulously firms to do They're things, wonderfully sports that terrific be that are firms right? all continue firms the are XX the analogy are in of big lot years, there. IMCs, I been [indiscernible] executing work scaled, these where have for broad there we the So early a said the before, doing this

near nowhere are We in their excellence size. their

client and that And as we us. with exchange, a be that will, distribution a you to breadth, the named want do or there's on same the business so we et to that's in cetera, we have party the with deal technology, firms, counter goal won't if those the have not

the capital, the clearing. have We we have

last years That's to me firm. a and into now XX done. question the executing the just for what So invite of it's we've since enough [indiscernible]

executing firm. good We are really

we to our the goal. do could But in don't excellence look know at that a I triple I say, public again, double, that's could have or that's what and and quarter-by-quarter. as X, business So in years, company. business next measure I that X size, success

Alex Kramm

early things progress give right, Okay. since us But updates too on on that, symbols like before? them and to mentioned you

Douglas Cifu

… I don't not Yes. so even a -- symbol Frankly, count I'm don't going have here, just I to in know

Alex Kramm

the future. helpful be in May

Douglas Cifu

Okay.

Alex Kramm

little but just about sorry helpful of That and -- future. would three and equities European the obviously here, FX and somebody you buff be secondly, mentioned a And a those then commodities, history maybe be bit business in to asked and before. --

pre-KCG when go were XXXX, businesses I them I we able peaked if Now the to those think to track more back actively. days,

were commodities day a was doing and XXX,XXX I European think equities on each, XXX,XXX. FX

X about X of them. the million So between

when So a now this But -- know out these lot businesses has years them the X, changed, years would how changed bigger? Like lot. in called it's at meaningfully but I compare X in been markets those you X have are I look a clearly, you prior results context, quarter. them? mean, you

Douglas Cifu

your you Yes. question. No, very it. homework a look, market, do do home and thorough you're you And should your at and great it's

and dissipated used has effectively a gender years as market, back in like Look, trade competitive. have XXXX. didn't to lot much significant trying sympathy And contributor be here. or track So not something really and The and think volumes has volatility track for we in I'm that to gas market a X again, natural The The incredibly changed it commodities you was for as that. I FX you since then. thank gotten significantly. market more X

away on going So to comment gotten not I'm because are separately that. results what we've those from

important that I firm scale think really we parts resources. dedicated of are it the again, they is opportunities ice continue that I to just think even the ebb flow and within to that bring And diversified the vibrant mentioned within those really, somehow it contributors very robust. cube firm to valid. where back, I the of in that I and debts part melting terrific stuff be that firm. all do a the opportunities be a continued will we And not [indiscernible] like think we have is P&L is desks will were or I say internalization continue kind that story from -- of narrative And

we've a dead opportunities. the and away in horse one management been granularity spaces service, anything expense can where of right say, an which have and a that's scale is so us the X buyback horrible allows pivot reasons, from you the we being the will, have the program have thesis all the to the look investment that's It's that and the And things out we of "white at we is to that beat project there's stock performance we the on say, or ashamed are firm has firm to this if us because because opportunities, not X and lot. by the reallocate at resources the years, attractive disclosures, the totality where gotten world that and marketplace not Alex, of gives and firm be next this happened that to provide discipline okay, think to has we this around to look equal, that, capital the we and the given

continue investors parenthetically and thesis forward. that are investment that story and year investment the know paid getting thesis believe per like to You $X.XX going to in

Alex Kramm

Thanks Very color. helpful. for the

Douglas Cifu

Thank you, sir.

Operator

hand back Q&A. CEO, for any to Cifu, I closing This remarks. will now Douglas our concludes

Douglas Cifu

all. you great all Thank with speaking in you very and our and to work you the hard the investors for and look we analysts for to research and thank you Elliot, questions, much, thank for forward the summer.

Operator

for Ladies thank concluded. We and now you to has participation. gentlemen, your call today's like would

disconnect now may lines. You your

Virtu Financial (VIRT) 20 Apr 232023 Q1 Earnings call transcript