Virtu Announces Third Quarter 2024 Results
Virtu Financial (NASDAQ: VIRT) reported strong Q3 2024 results with net income of $119.0 million and normalized adjusted net income of $132.1 million. Total revenues increased 12.2% to $706.8 million, while trading income rose 40.5% to $444.0 million compared to Q3 2023. The company achieved adjusted EBITDA of $214.8 million, up 54.0% year-over-year, with an adjusted EBITDA margin of 55.4%. Basic and diluted EPS were $0.65 and $0.64 respectively. The Board declared a quarterly dividend of $0.24 per share, payable December 15, 2024.
Virtu Financial (NASDAQ: VIRT) ha riportato risultati solidi per il terzo trimestre del 2024, con un utile netto di 119,0 milioni di dollari e un utile netto rettificato normalizzato di 132,1 milioni di dollari. Le entrate totali sono aumentate del 12,2% a 706,8 milioni di dollari, mentre le entrate da trading sono cresciute del 40,5% a 444,0 milioni di dollari rispetto al terzo trimestre del 2023. L'azienda ha registrato un EBITDA rettificato di 214,8 milioni di dollari, in aumento del 54,0% rispetto all'anno precedente, con un margine EBITDA rettificato del 55,4%. L'EPS di base e diluito erano rispettivamente di 0,65 e 0,64 dollari. Il Consiglio ha dichiarato un dividendo trimestrale di 0,24 dollari per azione, pagabile il 15 dicembre 2024.
Virtu Financial (NASDAQ: VIRT) reportó resultados sólidos en el tercer trimestre de 2024, con un ingreso neto de 119,0 millones de dólares y un ingreso neto ajustado normalizado de 132,1 millones de dólares. Los ingresos totales aumentaron un 12,2% a 706,8 millones de dólares, mientras que los ingresos por trading subieron un 40,5% a 444,0 millones de dólares en comparación con el tercer trimestre de 2023. La compañía logró un EBITDA ajustado de 214,8 millones de dólares, un 54,0% más interanual, con un margen de EBITDA ajustado del 55,4%. El EPS básico y diluido fueron de 0,65 y 0,64 dólares respectivamente. La Junta declaró un dividendo trimestral de 0,24 dólares por acción, pagadero el 15 de diciembre de 2024.
Virtu Financial (NASDAQ: VIRT)는 2024년 3분기 실적을 발표하며 순이익이 1억 1,900만 달러, 조정된 순이익이 1억 3,210만 달러에 달했다고 밝혔습니다. 총 수익은 12.2% 증가한 7억 6,080만 달러였으며, 거래 소득은 40.5% 증가한 4억 4,400만 달러로 Q3 2023와 비교되었습니다. 회사는 조정된 EBITDA가 2억 1,480만 달러로, 전년 대비 54.0% 증가했으며, 조정된 EBITDA 마진은 55.4%로 나타났습니다. 기본 및 희석 EPS는 각각 0.65달러와 0.64달러였습니다. 이사회는 주당 0.24달러의 분기 배당금을 발표했으며, 2024년 12월 15일에 지급될 예정입니다.
Virtu Financial (NASDAQ: VIRT) a annoncé des résultats solides pour le troisième trimestre 2024, avec un revenu net de 119,0 millions de dollars et un revenu net ajusté normalisé de 132,1 millions de dollars. Les revenus totaux ont augmenté de 12,2 % pour atteindre 706,8 millions de dollars, tandis que les revenus de trading ont augmenté de 40,5 % pour atteindre 444,0 millions de dollars par rapport au troisième trimestre 2023. L'entreprise a réalisé un EBITDA ajusté de 214,8 millions de dollars, en hausse de 54,0 % d'une année sur l'autre, avec une marge EBITDA ajustée de 55,4 %. Le bénéfice par action de base et dilué était de 0,65 et 0,64 dollars respectivement. Le Conseil a déclaré un dividende trimestriel de 0,24 dollar par action, payable le 15 décembre 2024.
Virtu Financial (NASDAQ: VIRT) hat solide Ergebnisse für das dritte Quartal 2024 gemeldet, mit einem Nettogewinn von 119,0 Millionen US-Dollar und einem normalisierten, bereinigten Nettogewinn von 132,1 Millionen US-Dollar. Die Gesamterlöse stiegen um 12,2 % auf 706,8 Millionen US-Dollar, während das Handelseinkommen im Vergleich zum dritten Quartal 2023 um 40,5 % auf 444,0 Millionen US-Dollar zunahm. Das Unternehmen erzielte ein bereinigtes EBITDA von 214,8 Millionen US-Dollar, was einem Anstieg von 54,0 % im Jahresvergleich entspricht, und einen bereinigten EBITDA-Margin von 55,4 %. Der Basis- und verwässerte Gewinn pro Aktie betrugen 0,65 bzw. 0,64 US-Dollar. Der Vorstand erklärte eine vierteljährliche Dividende von 0,24 US-Dollar pro Aktie, zahlbar am 15. Dezember 2024.
- Total revenues increased 12.2% YoY to $706.8 million
- Trading income rose 40.5% YoY to $444.0 million
- Adjusted EBITDA grew 54.0% YoY to $214.8 million
- Normalized Adjusted Net Income increased 76.8% to $132.1 million
- Share buybacks of $48.4 million executed during quarter
- None.
Insights
Virtu Financial delivered strong Q3 2024 results with notable improvements across key metrics. Total revenues increased
Key highlights:
- Net income of
$119.0 million with16.8% margin - Adjusted EBITDA increased
54% to$214.8 million - Strong capital return through
$48.4 million in share buybacks - Quarterly dividend of
$0.24 per share maintained
The substantial improvement in trading income and operational efficiency demonstrates Virtu's strong market position and execution capabilities in volatile market conditions. The company maintains a solid balance sheet with
NEW YORK, Oct. 24, 2024 (GLOBE NEWSWIRE) -- Virtu Financial, Inc. (NASDAQ: VIRT), a leading provider of financial services and products that leverages cutting edge technology to deliver innovative, transparent trading solutions to its clients and liquidity to the global markets, today reported results for the third quarter ended September 30, 2024.
Third Quarter 2024:
- Net income of
$119.0 million ; Normalized Adjusted Net Income1 of$132.1 million - Basic and diluted earnings per share of
$0.65 and$0.64 , respectively; Normalized Adjusted EPS1 of$0.82 - Total revenues of
$706.8 million ; Trading income, net, of$444.0 million ; Net income Margin of16.8% 2- Adjusted Net Trading Income1 of
$388.0 million
- Adjusted Net Trading Income1 of
- Adjusted EBITDA1 of
$214.8 million ; Adjusted EBITDA Margin1 of55.4% - Share buybacks of
$48.4 million , or 1.7 million shares, under the Share Repurchase Program3
The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of
Note 1: Non-GAAP financial measures. Please see "Non-GAAP Financial Measures and Other Items" for more information.
Note 2: Calculated by dividing Net income by Total revenue
Note 3: Shares repurchased calculated on a settlement date basis.
Financial Results
Third Quarter 2024:
Total revenues increased
Basic and diluted earnings per share for this quarter were
Adjusted Net Trading Income increased
Assuming all non-controlling interests had been exchanged for common stock, and the Company’s Normalized Adjusted Net Income before income taxes was subject to corporation taxes, Normalized Adjusted EPS was
Operating Segment Information
The Company has two operating segments: Market Making and Execution Services; and one non-operating segment: Corporate.
Market Making principally consists of market making in the cash, futures and options markets across global equities, fixed income, currencies and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions.
Execution Services comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers. The Company also provides proprietary technology and infrastructure, workflow technology, and trading analytics services to select third parties. The segment also includes the results of the Company's capital markets business, in which the Company acts as an agent for issuers in connection with at-the-market offerings and buyback programs.
Corporate contains the Company's investments, principally in strategic trading-related opportunities, and maintains corporate overhead expenses.
The following tables show the trading income, net, total revenues and Adjusted Net Trading Income by segment for the three and nine months ended September 30, 2024 and 2023.
Total revenues by segment
(in thousands, unaudited)
| Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | |||||||||||||||||||||||
| Market Making | Execution Services | Corporate | Total | Market Making | Execution Services | Corporate | Total | |||||||||||||||||
| Trading income, net | $ | 440,442 | $ | 3,555 | $ | — | $ | 443,997 | $ | 310,523 | $ | 5,562 | $ | — | $ | 316,085 | ||||||||
| Commissions, net and technology services | 12,721 | 118,900 | — | 131,621 | 6,343 | 103,933 | — | 110,276 | ||||||||||||||||
| Interest and dividends income | 122,065 | 3,164 | — | 125,229 | 124,803 | 2,890 | — | 127,693 | ||||||||||||||||
| Other, net | 1,432 | 108 | 4,453 | 5,993 | 75,682 | 68 | 360 | 76,110 | ||||||||||||||||
| Total Revenues | $ | 576,660 | $ | 125,727 | $ | 4,453 | $ | 706,840 | $ | 517,351 | $ | 112,453 | $ | 360 | $ | 630,164 | ||||||||
| Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||
| Market Making | Execution Services | Corporate | Total | Market Making | Execution Services | Corporate | Total | ||||||||||||||||||
| Trading income, net | $ | 1,264,214 | $ | 14,273 | $ | — | $ | 1,278,487 | $ | 1,021,179 | $ | 13,585 | $ | — | $ | 1,034,764 | |||||||||
| Commissions, net and technology services | 29,203 | 347,130 | — | 376,333 | 22,677 | 318,546 | — | 341,223 | |||||||||||||||||
| Interest and dividends income | 330,178 | 8,109 | — | 338,287 | 300,086 | 7,830 | — | 307,916 | |||||||||||||||||
| Other, net | 43,855 | 1,063 | 4,639 | 49,557 | 77,580 | 84 | (4,171 | ) | 73,493 | ||||||||||||||||
| Total Revenues | $ | 1,667,450 | $ | 370,575 | $ | 4,639 | $ | 2,042,664 | $ | 1,421,522 | $ | 340,045 | $ | (4,171 | ) | $ | 1,757,396 | ||||||||
Reconciliation of trading income, net to Adjusted Net Trading Income by operating segment
(in thousands, unaudited)
| Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||
| Market Making | Execution Services | Corporate | Total | Market Making | Execution Services | Corporate | Total | |||||||||||||||||||||||
| Trading income, net | $ | 440,442 | $ | 3,555 | $ | — | $ | 443,997 | $ | 310,523 | $ | 5,562 | $ | — | $ | 316,085 | ||||||||||||||
| Commissions, net and technology services | 12,721 | 118,900 | — | 131,621 | 6,343 | 103,933 | — | 110,276 | ||||||||||||||||||||||
| Interest and dividends income | 122,065 | 3,164 | — | 125,229 | 124,803 | 2,890 | — | 127,693 | ||||||||||||||||||||||
| Brokerage, exchange, clearance fees and payments for order flow, net | (152,316 | ) | (24,429 | ) | — | (176,745 | ) | (101,077 | ) | (22,168 | ) | — | (123,245 | ) | ||||||||||||||||
| Interest and dividends expense | (134,912 | ) | (1,158 | ) | — | (136,070 | ) | (132,523 | ) | (279 | ) | — | (132,802 | ) | ||||||||||||||||
| Adjusted Net Trading Income | $ | 288,000 | $ | 100,032 | $ | — | $ | 388,032 | $ | 208,069 | $ | 89,938 | $ | — | $ | 298,007 | ||||||||||||||
| Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||
| Market Making | Execution Services | Corporate | Total | Market Making | Execution Services | Corporate | Total | |||||||||||||||||||||||
| Trading income, net | $ | 1,264,214 | $ | 14,273 | $ | — | $ | 1,278,487 | $ | 1,021,179 | $ | 13,585 | $ | — | $ | 1,034,764 | ||||||||||||||
| Commissions, net and technology services | 29,203 | 347,130 | — | 376,333 | 22,677 | 318,546 | — | 341,223 | ||||||||||||||||||||||
| Interest and dividends income | 330,178 | 8,109 | — | 338,287 | 300,086 | 7,830 | — | 307,916 | ||||||||||||||||||||||
| Brokerage, exchange, clearance fees and payments for order flow, net | (394,154 | ) | (73,177 | ) | — | (467,331 | ) | (323,868 | ) | (67,370 | ) | — | (391,238 | ) | ||||||||||||||||
| Interest and dividends expense | (382,200 | ) | (3,591 | ) | — | (385,791 | ) | (340,954 | ) | (1,942 | ) | — | (342,896 | ) | ||||||||||||||||
| Adjusted Net Trading Income | $ | 847,241 | $ | 292,744 | $ | — | $ | 1,139,985 | $ | 679,120 | $ | 270,649 | $ | — | $ | 949,769 | ||||||||||||||
Financial Condition
As of September 30, 2024, Virtu had
Share Repurchase Program
Since inception of the program in November 2020 through settlement date October 22, 2024, the Company repurchased approximately 49.2 million shares of Class A Common Stock and Virtu Financial Units for approximately
Earnings Conference Call Information
Virtu Financial will host a conference call to review its third quarter 2024 financial performance today, October 24th, at 8:30 a.m. ET. Members of the public may listen to the conference call through an audio webcast through the Investor Relations section of the firm’s website ir.virtu.com/investor-relations.
Website Information
We routinely post important information for investors on the Investor Relations section of our website, ir.virtu.com/investor-relations and also from time to time may use social media channels, including our Twitter account (twitter.com/virtufinancial) and our LinkedIn account (linkedin.com/company/virtu-financial), as an additional means of disclosing public information to investors, the media and others interested in us. It is possible that certain information we post on our website and on social media could be deemed to be material information, and we encourage investors, the media and others interested in us to review the business and financial information we post on our website and on the social media channels identified above, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website and our social media channels is not incorporated by reference into, and is not a part of, this document.
Non-GAAP Financial Measures and Other Items
To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), we use the following non-GAAP measures of financial performance:
- “Adjusted Net Trading Income”, which is the amount of revenue we generate from our market making activities, or trading income, net, plus commissions, net and technology services, plus interest and dividends income and expense, net, less direct costs associated with those revenues, including brokerage, exchange, clearance fees and payments for order flow, net. Management believes that this measurement is useful for comparing general operating performance from period to period. Although we use Adjusted Net Trading Income as a financial measure to assess the performance of our business, the use of Adjusted Net Trading Income is limited because it does not include certain material costs that are necessary to operate our business. Our presentation of Adjusted Net Trading Income should not be construed as an indication that our future results will be unaffected by revenues or expenses that are not directly associated with our core business activities.
- “EBITDA”, which measures our operating performance by adjusting Net Income to exclude Financing interest expense on long-term borrowings, Debt issue cost related to debt refinancing, prepayment, and commitment fees, Depreciation and amortization, Amortization of purchased intangibles and acquired capitalized software, and Income tax expense, and “Adjusted EBITDA”, which measures our operating performance by further adjusting EBITDA to exclude severance, transaction advisory fees and expenses, termination of office leases, charges related to share-based compensation and other expenses, which includes reserves for legal matters, and Other, net, which includes gains and losses from strategic investments and the sales of businesses.
- “Normalized Adjusted Net Income”, “Normalized Adjusted Net Income before income taxes”, “Normalized provision for income taxes”, and “Normalized Adjusted EPS”, which we calculate by adjusting Net Income to exclude certain items, and other non-cash items, assuming that all vested and unvested Virtu Financial Units have been exchanged for Class A Common Stock, and applying an effective tax rate, which was approximately
24% .
- “Adjusted Operating Expenses”, which we calculate by adjusting total operating expenses to exclude severance, share based compensation, reserves for legal matters, termination of office leases, connectivity early termination and write-down of assets.
Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, and Normalized Adjusted EPS and Adjusted Operating Expenses are non-GAAP financial measures used by management in evaluating operating performance and in making strategic decisions. Additional information provided regarding the breakdown of Total Adjusted Net Trading Income by category is also a non-GAAP financial measure but is not used by the Company in evaluating operating performance and in making strategic decisions. In addition, these non-GAAP financial measures or similar non-GAAP measures are used by research analysts, investment bankers and lenders to assess our operating performance. Management believes that the presentation of Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS provide useful information to investors regarding our results of operations because they assist both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS provide indicators of general economic performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period. Furthermore, our credit agreement contains tests based on metrics similar to Adjusted EBITDA. Other companies may define Adjusted Net Trading Income, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS differently, and as a result our measures of Adjusted Net Trading Income, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS may not be directly comparable to those of other companies. Although we use these non-GAAP financial measures as financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business.
Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS should be considered in addition to, and not as a substitute for, Net Income in accordance with U.S. GAAP as a measure of performance. Our presentation of Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Adjusted Net Trading Income, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted EPS and our EBITDA-based measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
- our EBITDA-based measures do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and our EBITDA-based measures do not reflect any cash requirement for such replacements or improvements;
- they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
- they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; and
- they do not reflect limitations on our costs related to transferring earnings from our subsidiaries to us.
Because of these limitations, Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS are not intended as alternatives to Net Income as indicators of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. These U.S. GAAP measurements include Net Income, cash flows from operations and cash flow data. See below a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure.
| Virtu Financial, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands, except share and per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues: | ||||||||||||||||
| Trading income, net | $ | 443,997 | $ | 316,085 | $ | 1,278,487 | $ | 1,034,764 | ||||||||
| Interest and dividends income | 125,229 | 127,693 | 338,287 | 307,916 | ||||||||||||
| Commissions, net and technology services | 131,621 | 110,276 | 376,333 | 341,223 | ||||||||||||
| Other, net | 5,993 | 76,110 | 49,557 | 73,493 | ||||||||||||
| Total revenues | 706,840 | 630,164 | 2,042,664 | 1,757,396 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Brokerage, exchange, clearance fees and payments for order flow, net | 176,745 | 123,245 | 467,331 | 391,238 | ||||||||||||
| Communication and data processing | 59,601 | 57,066 | 177,110 | 170,837 | ||||||||||||
| Employee compensation and payroll taxes | 107,646 | 97,221 | 314,185 | 296,214 | ||||||||||||
| Interest and dividends expense | 136,070 | 132,802 | 385,791 | 342,896 | ||||||||||||
| Operations and administrative | 24,939 | 22,416 | 69,346 | 72,204 | ||||||||||||
| Depreciation and amortization | 16,486 | 15,815 | 48,640 | 47,076 | ||||||||||||
| Amortization of purchased intangibles and acquired capitalized software | 11,848 | 15,967 | 38,688 | 48,007 | ||||||||||||
| Termination of office leases | 17 | 364 | 50 | 314 | ||||||||||||
| Debt issue cost related to debt refinancing, prepayment and commitment fees | 1,767 | 1,796 | 27,740 | 5,744 | ||||||||||||
| Transaction advisory fees and expenses | 69 | 6 | 264 | 30 | ||||||||||||
| Financing interest expense on long-term borrowings | 24,492 | 25,361 | 71,154 | 74,499 | ||||||||||||
| Total operating expenses | 559,680 | 492,059 | 1,600,299 | 1,449,059 | ||||||||||||
| Income before income taxes and noncontrolling interest | 147,160 | 138,105 | 442,365 | 308,337 | ||||||||||||
| Provision for income taxes | 28,137 | 20,512 | 83,917 | 51,117 | ||||||||||||
| Net income | $ | 119,023 | $ | 117,593 | $ | 358,448 | $ | 257,220 | ||||||||
| Noncontrolling interest | (59,071 | ) | (55,678 | ) | (176,093 | ) | (120,722 | ) | ||||||||
| Net income available for common stockholders | $ | 59,952 | $ | 61,915 | $ | 182,355 | $ | 136,498 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.65 | $ | 0.63 | $ | 1.95 | $ | 1.36 | ||||||||
| Diluted | $ | 0.64 | $ | 0.63 | $ | 1.95 | $ | 1.36 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 87,152,658 | 93,408,537 | 88,093,082 | 95,376,590 | ||||||||||||
| Diluted | 87,536,847 | 93,408,537 | 88,340,592 | 95,376,590 | ||||||||||||
| Comprehensive income: | ||||||||||||||||
| Net income | $ | 119,023 | $ | 117,593 | $ | 358,448 | $ | 257,220 | ||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign exchange translation adjustment, net of taxes | 6,835 | (4,005 | ) | 3,745 | 170 | |||||||||||
| Net change in unrealized cash flow hedges gain (loss), net of taxes | (19,568 | ) | (7,646 | ) | (30,931 | ) | (12,612 | ) | ||||||||
| Comprehensive income | $ | 106,290 | $ | 105,942 | $ | 331,262 | $ | 244,778 | ||||||||
| Less: Comprehensive income attributable to noncontrolling interest | (54,083 | ) | (50,832 | ) | (164,990 | ) | (115,557 | ) | ||||||||
| Comprehensive income available for common stockholders | $ | 52,207 | $ | 55,110 | $ | 166,272 | $ | 129,221 | ||||||||
| Virtu Financial, Inc. and Subsidiaries Reconciliation to Non-GAAP Operating Data (Unaudited) |
The following tables reconcile Condensed Consolidated Statements of Comprehensive Income to arrive at Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, and selected Operating Margins.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands, except percentages) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Reconciliation of Trading income, net to Adjusted Net Trading Income | ||||||||||||||||
| Trading income, net | $ | 443,997 | $ | 316,085 | $ | 1,278,487 | $ | 1,034,764 | ||||||||
| Commissions, net and technology services | 131,621 | 110,276 | 376,333 | 341,223 | ||||||||||||
| Interest and dividends income | 125,229 | 127,693 | 338,287 | 307,916 | ||||||||||||
| Brokerage, exchange, clearance fees and payments for order flow, net | (176,745 | ) | (123,245 | ) | (467,331 | ) | (391,238 | ) | ||||||||
| Interest and dividends expense | (136,070 | ) | (132,802 | ) | (385,791 | ) | (342,896 | ) | ||||||||
| Adjusted Net Trading Income | $ | 388,032 | $ | 298,007 | $ | 1,139,985 | $ | 949,769 | ||||||||
| Reconciliation of Net Income to EBITDA and Adjusted EBITDA | ||||||||||||||||
| Net income | 119,023 | 117,593 | 358,448 | 257,220 | ||||||||||||
| Financing interest expense on long-term borrowings | 24,492 | 25,361 | 71,154 | 74,499 | ||||||||||||
| Debt issue cost related to debt refinancing, prepayment and commitment fees | 1,767 | 1,796 | 27,740 | 5,744 | ||||||||||||
| Depreciation and amortization | 16,486 | 15,815 | 48,640 | 47,076 | ||||||||||||
| Amortization of purchased intangibles and acquired capitalized software | 11,848 | 15,967 | 38,688 | 48,007 | ||||||||||||
| Provision for income taxes | 28,137 | 20,512 | 83,917 | 51,117 | ||||||||||||
| EBITDA | $ | 201,753 | $ | 197,044 | $ | 628,587 | $ | 483,663 | ||||||||
| Severance | 690 | 1,346 | 3,651 | 5,256 | ||||||||||||
| Transaction advisory fees and expenses | 69 | 6 | 264 | 30 | ||||||||||||
| Termination of office leases | 17 | 364 | 50 | 314 | ||||||||||||
| Other | (5,669 | ) | (74,599 | ) | (48,334 | ) | (67,396 | ) | ||||||||
| Share based compensation | 17,945 | 15,353 | 50,941 | 47,108 | ||||||||||||
| Adjusted EBITDA | $ | 214,805 | $ | 139,514 | $ | 635,159 | $ | 468,975 | ||||||||
| Selected Operating Margins | ||||||||||||||||
| GAAP Net income Margin (1) | 16.8 | % | 18.7 | % | 17.5 | % | 14.6 | % | ||||||||
| Non-GAAP Net income Margin (2) | 30.7 | % | 39.5 | % | 31.4 | % | 27.1 | % | ||||||||
| EBITDA Margin (3) | 52.0 | % | 66.1 | % | 55.1 | % | 50.9 | % | ||||||||
| Adjusted EBITDA Margin (4) | 55.4 | % | 46.8 | % | 55.7 | % | 49.4 | % | ||||||||
| 1 Calculated by dividing Net income by Total revenue. | ||||||||||||||||
| 2 Calculated by dividing Net income by Adjusted Net Trading Income. | ||||||||||||||||
| 3 Calculated by dividing EBITDA by Adjusted Net Trading Income. | ||||||||||||||||
| 4 Calculated by dividing Adjusted EBITDA by Adjusted Net Trading Income. | ||||||||||||||||
| Virtu Financial, Inc. and Subsidiaries Reconciliation to Non-GAAP Operating Data (Unaudited) (Continued) |
The following tables reconcile Condensed Consolidated Statements of Comprehensive Income to arrive at Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands, except share and per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Reconciliation of Net Income to Normalized Adjusted Net Income | ||||||||||||||||
| Net income | $ | 119,023 | $ | 117,593 | $ | 358,448 | $ | 257,220 | ||||||||
| Provision for income taxes | 28,137 | 20,512 | 83,917 | 51,117 | ||||||||||||
| Income before income taxes and noncontrolling interest | $ | 147,160 | $ | 138,105 | $ | 442,365 | $ | 308,337 | ||||||||
| Amortization of purchased intangibles and acquired capitalized software | 11,848 | 15,967 | 38,688 | 48,007 | ||||||||||||
| Debt issue cost related to debt refinancing, prepayment and commitment fees | 1,767 | 1,796 | 27,740 | 5,744 | ||||||||||||
| Severance | 690 | 1,346 | 3,651 | 5,256 | ||||||||||||
| Transaction advisory fees and expenses | 69 | 6 | 264 | 30 | ||||||||||||
| Termination of office leases | 17 | 364 | 50 | 314 | ||||||||||||
| Other | (5,669 | ) | (74,599 | ) | (48,334 | ) | (67,396 | ) | ||||||||
| Share based compensation | 17,945 | 15,353 | 50,941 | 47,108 | ||||||||||||
| Normalized Adjusted Net Income before income taxes | $ | 173,827 | $ | 98,338 | $ | 515,365 | $ | 347,400 | ||||||||
| Normalized provision for income taxes (1) | 41,719 | 23,601 | 123,688 | 83,374 | ||||||||||||
| Normalized Adjusted Net Income | $ | 132,108 | $ | 74,737 | $ | 391,677 | $ | 264,026 | ||||||||
| Weighted Average Adjusted shares outstanding (2) | 161,709,295 | 167,164,049 | 162,322,747 | 169,101,067 | ||||||||||||
| Normalized Adjusted EPS | $ | 0.82 | $ | 0.45 | $ | 2.41 | $ | 1.56 | ||||||||
| (1) Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately | ||||||||||||||||
| (2) Assumes that (1) holders of all vested and unvested non-vesting Virtu Financial Units (together with corresponding shares of the Company's Class C common stock, par value | ||||||||||||||||
| Virtu Financial, Inc. and Subsidiaries Condensed Consolidated Statements of Financial Condition (Unaudited) | |||||||
| (in thousands, except share data) | September 30, 2024 | December 31, 2023 | |||||
| Assets | |||||||
| Cash and cash equivalents | $ | 701,405 | $ | 820,436 | |||
| Cash and securities segregated under regulations and other | 36,823 | 35,024 | |||||
| Securities borrowed | 2,301,690 | 1,722,440 | |||||
| Securities purchased under agreements to resell | 708,773 | 1,512,114 | |||||
| Receivables from broker-dealers and clearing organizations | 1,194,193 | 737,724 | |||||
| Receivables from customers | 169,565 | 106,245 | |||||
| Trading assets, at fair value | 7,186,027 | 7,358,611 | |||||
| Property, equipment and capitalized software, net | 93,899 | 100,365 | |||||
| Operating lease right-of-use assets | 190,261 | 229,499 | |||||
| Goodwill | 1,148,926 | 1,148,926 | |||||
| Intangibles (net of accumulated amortization) | 214,971 | 257,520 | |||||
| Deferred taxes | 122,399 | 133,760 | |||||
| Assets of business held for sale | 4,637 | — | |||||
| Other assets | 327,137 | 303,720 | |||||
| Total assets | 14,400,706 | 14,466,384 | |||||
| Liabilities and equity | |||||||
| Liabilities | |||||||
| Short-term borrowings, net | 128,761 | — | |||||
| Securities loaned | 2,109,164 | 1,329,446 | |||||
| Securities sold under agreements to repurchase | 1,045,811 | 1,795,994 | |||||
| Payables to broker-dealers and clearing organizations | 619,640 | 1,167,712 | |||||
| Payables to customers | 97,774 | 23,229 | |||||
| Trading liabilities, at fair value | 6,335,171 | 6,071,352 | |||||
| Tax receivable agreement obligations | 196,254 | 216,480 | |||||
| Accounts payable and accrued expenses and other liabilities | 469,796 | 451,293 | |||||
| Operating lease liabilities | 236,253 | 278,317 | |||||
| Long-term borrowings, net | 1,741,543 | 1,727,205 | |||||
| Liabilities of business held for sale | 1,184 | — | |||||
| Total liabilities | 12,981,351 | 13,061,028 | |||||
| Total equity | 1,419,355 | 1,405,356 | |||||
| Total liabilities and equity | $ | 14,400,706 | $ | 14,466,384 | |||
| As of September 30, 2024 | |||||||
| Ownership of Virtu Financial LLC Interests: | Interests | % | |||||
| Virtu Financial, Inc. - Class A Common Stock and Restricted Stock Units | 91,902,168 | 57.2 | % | ||||
| Non-controlling Interests (Virtu Financial LLC) | 68,666,792 | 42.8 | % | ||||
| Total Virtu Financial LLC Interests | 160,568,960 | 100.0 | % | ||||
About Virtu Financial, Inc.
Virtu is a leading financial services firm that leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients and deliver liquidity to the global markets. Leveraging its global market making expertise and infrastructure, Virtu provides a robust product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. Virtu’s product offerings allow clients to trade on hundreds of venues across 50+ countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income and myriad other commodities. In addition, Virtu’s integrated, multi-asset analytics platform provides a range of pre and post-trade services, data products and compliance tools that clients rely upon to invest, trade and manage risk across global markets.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Virtu Financial, Inc.’s (“Virtu’s”, the “Company’s” or “our”) business that are not historical facts are forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, and if the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties, some or all of which are not predictable or within Virtu’s control, that could cause actual performance or results to differ materially from those expressed in the statements. Those risks and uncertainties include, without limitation: risks relating to fluctuations in trading volume and volatilities in the markets in which we operate; the ability of our trading counterparties, clients, and various clearing houses to perform their obligations to us; the performance and reliability of our customized trading platform; the risk of material trading losses from our market making activities; swings in valuations in securities or other instruments in which we hold positions; increasing competition and consolidation in our industry; the risk that cash flow from our operations and other available sources of liquidity will not be sufficient to fund our various ongoing obligations, including operating expenses, short-term funding requirements, margin requirements, capital expenditures, debt service and dividend payments; potential consequences of recent SEC proposals focused on equity markets which may, if adopted, result in reduced overall and off-exchange trading volumes and market making opportunities, impose additional or heightened regulatory obligations on market makers and other market participants, and generally increase the implicit and explicit cost as well as the complexity of the U.S. equities eco-system for all participants; regulatory and legal uncertainties and potential changes associated with our industry, particularly in light of increased attention from media, regulators and lawmakers to market structure and related issues including but not limited to the retail trading environment, wholesale market making and off exchange trading more generally and payment for order flow arrangements; potential adverse results from legal or regulatory proceedings; our ability to remain technologically competitive and to ensure that the technology we utilize is not vulnerable to security risks, hacking and cyber-attacks; risks associated with third party software and technology infrastructure. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in forward-looking statements, see Virtu’s Securities and Exchange Commission filings, including but not limited to Virtu’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.
CONTACT
Investor & Media Relations
Andrew Smith
investor_relations@virtu.com
media@virtu.com
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