• Normalized EPS: $1.30
• Total Adjusted Net Trading Income per Day: $8.3 million
• Quarterly EBITDA: $320 million
• EBITDA Margin: 64%
• Market Making Adjusted Net Trading Income: $382 million or $6.4 million per day
• Execution Services Adjusted Net Trading Income: $115 million or $1.9 million per day
• Adjusted Operating Expenses: $193 million
• Financing Interest Expense: $30 million
• Blended Interest Rate for Long Term Debt: Approximately 7.1%
• Share Repurchase: 1.3 million shares at an average price of $36.44 per share, totaling $48 million
• Quarter-End Share Count: 160.2 million shares outstanding
• Dividend: $0.24 per share

• Warning! GuruFocus has detected 9 Warning Signs with VIRT.

Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Virtu Financial Inc (NASDAQ:VIRT) reported a strong first quarter with $1.30 of normalized EPS and total adjusted net trading income per day of $8.3 million.
• The company's Market Making segment had its best quarter since 2021, driven by strong performances in global equities, digital assets, and ETF block Market Making.
• Virtu Execution Services (VES) achieved its seventh consecutive quarter of increasing net trading income, indicating strong growth potential.
• The company has successfully expanded its listed options business in Asia, India, and Japan, and is making strides in expanding its ETF Block business in Europe.
• Virtu Financial Inc (NASDAQ:VIRT) continues to maintain an efficient cost structure and disciplined expense management, which has helped control operating expenses during an inflationary environment.

Negative Points

• Despite strong performance, the company acknowledges the inherent volatility in its business, which can impact future results.
• There is ongoing debate about the sustainability of retail participation, which could affect future market activity and revenue.
• The company faces competition in the outsourced trading business from firms like Citadel Securities and Jane Street, which could impact its market share.
• Virtu Financial Inc (NASDAQ:VIRT) does not break out customer versus non-customer Market Making, making it difficult to assess the specific performance of these segments.
• The company's reliance on market volumes and volatility means that external factors beyond its control can significantly impact financial performance.

Q & A Highlights

Q: Can you discuss the balance between the wholesale business and the on-exchange business, and the contribution from new organic growth initiatives? A: Douglas Cifu, CEO, explained that the increase from Q4 to Q1 was diverse and evenly allocated between customer and noncustomer businesses. The company has integrated its customer and noncustomer Market Making segments, enhancing internalization and creating a central risk book. This integration allows for better performance across various trading groups, including precious metals and options, contributing to the overall growth.

Q: What gives you confidence in achieving $2 million per day in the Virtu Execution Services (VES) business? A: Douglas Cifu, CEO, highlighted the strategic roadmap laid out since acquiring ITG, focusing on technology services, cross-selling, and product enhancements. The company has seen significant adoption of its technology solutions and has made cultural changes and strategic hires to support growth. These efforts have led to increased confidence in achieving the $2 million per day target.

Q: Is there any indication that retail participation is slowing down? A: Douglas Cifu, CEO, stated that retail engagement remains healthy and sustainable, with account openings continuing to grow. The data provided in supplemental materials shows a long-term positive trend in retail participation, contradicting any narrative suggesting a slowdown.

Q: Can you provide more color on the growth of the noncustomer Market Making business? A: Douglas Cifu, CEO, emphasized the importance of technology investments, connectivity, and internalization in enhancing the performance of noncustomer Market Making. The company continues to diversify revenue streams and sees growth in options, ETF block, and digital assets, contributing to the overall success of the business.

Q: How does Virtu's crypto business product roadmap look, and what exchanges are you providing liquidity on? A: Douglas Cifu, CEO, mentioned that Virtu is expanding its coverage of coins and operating 24/7. The company provides liquidity on exchanges like EDX, Coinbase, and Kraken, among others. Virtu is also building out institutional streaming and supporting digital asset products across various platforms.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.