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VIRT Virtu Financial

Participants
Andrew Smith Head-Investor Relations
Douglas Cifu Chief Executive Officer
Joseph Molluso Co-President and Cooperating Officer
Sean Galvin Chief Financial Officer
Rich Repetto Piper Sandler
Chris Allen Compass Point
Ken Worthington JPMorgan
Dan Fannon Jefferies
Alex Blostein Goldman Sachs
Michael Cyprys Morgan Stanley
Call transcript
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Operator

Good morning, and welcome to the Virtu Financial 2021 Third Quarter Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this is being recorded. I would now like to turn the conference over to Andrew Smith, Head of Investor Relations. ahead. go Please

Andrew Smith

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

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

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

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

Douglas Cifu

thank softer morning, a we reported quarter. XX% than Good increase second Andrew. which quarter adjusted environment in you, reflect and the results, morning, that third This in slightly was our EPS market an

per of per For the September quarter we results day net adjusted share EPS $X.XX debt. generated ended trading bringing of for net XXXX an of million to of and average income quarters $X.XX three first XX, million adjusted our adjusted income, $X.X of the per $X.X trading

Our two the highlights such performance the our plan, organic the of performance goal in success ways. business which quarter as overall growth our baseline in is of increase to the

options, our approaching I’ll evidenced quarter. point of work important by addressable competitiveness expanding second, by the legacy in for have as First, hard technology, such new integrating the and making, desk. market ETF Virtu’s increasing the crypto strategies by opportunities capital KCG and market our and acquired Virtu’s customer-facing Virtu out we this offerings technology best-in-class businesses by through And with quant-style existing block our Algo some profitability highlights markets.

market our our being CAGR NG expand strong and continue its initiatives continues from the over capabilities, In we leverage while down day, represents early grown straight to and a to have DT saw trade. options highlight this recent options the not many connectivity infrastructure this symbols a $XXX,XXX expect do grow of Since in generated we quarter, our latest volumes which X% to third from businesses and XXXX. In peak business expand. business existing business particular, cases, our initiatives amount we growth I of that quarter. build Our we these technology venues And per of simply making the would XXXX, XX% in by scratch. to evolve in in results line, despite XX%

to and want the to footprint key accelerate expand of geographic I We update this also business growth. continue to our provide cryptocurrency. select on make hires an

have of and add in We technologists to near-term. additional and team plan formed resources a dedicated the traders

With the Canada products approximately globally, ETF launch the of train crypto we U.S., across Europe. XX now and

can principal now access. increased and the meaningfully to have markets and number venues connected venues the are of to liquidity source We spot we

is making provide crypto ETF Virtu our combined of across Given range our clients, our products, positioned we products. and market with retail pricing, a diverse to global to liquidity with institutions historical in scale and uniquely our believe expertise connectivity customers

shareholders. ETF liquidity have provider make to X in volume now in winning are the desk top ETFs. to total progress, continues meaningful as I we made we notional a dealt want to rate block progress capital Our our note by U.S. to our hit return also the commitment measured and in

Through targets Directors $XXX price million, we a end of of we shares average price an million the a repurchases. in million share previously $XXX approximately at of average $XX.XX, for authorized million XX.X $XXX total of an announced In X.X consistent the for repurchased at of repurchases. repurchased with our has million. for alone, third quarter Board $XX.XX shares previously share Our total have of October,

buyback. the complete for level over expectations million I’m Directors is to this to We As shareholders risen with repurchase capital by XX years. to our reiterate and months, additional consistent out two Virtu’s $XXX approved that returning the the has commitment XX believe our in we next Board target flows an this generated business we would cash look announcing and to next to want of of the authorization time

foreseeable buying to have and work we We prioritized the capital previously, repurchases remain goals. the capital accomplish market committed stated for future. share to to to in we back investors we be as aim returning shares As management our consistently

driver where shareholders through segment, for culmination a the growth steady be ITG the over take term, growth quarter results for to and powerful should these like various creation to The share of our around combination that the volatile ANTI to our has baseline We I plan buybacks. in wanted incremental integration as guidance of that been a by long on our activity well from clear this Virtu’s and of last since multiyear organic the our and shortage an make with consistent it initiatives payment our and structure, few period. We industry market wholesale at this less Board time and returning with I’d minutes as earnings continued discussions call coupled no a Our has then. enhanced of there detailed value of believe update levels Execution shareholders. of our provide us to effect provided mix. update will a given provide KCG on is capital performance around performance of performance the of cycle growth. the business detail market recent Club Services public believe is

investor I retail show is customers many it markets, the do study decidedly in basis. an back other continues a is that better market As clearer have market more dialogue and with constituents fair, equity ever concerned, has Since than and here to never than you, discussions welcome than as and is that are ever, Study said times, have we our are the where empirical spoke regulators, analysis last the we data-driven especially experience been and resilient. we remains to to on I flow empirical better accessible after U.S. U.S. and order after any transparent world. retail analysis and regular

regulatory deliver of retail that the fact, robust retail tangible retail on and are at market based transparency As innuendo. the maintained mostly environment, concerned critics disclosure for that false and created of U.S. calls today. will day. to framework Despite and narratives reforms regulatory for believe to transparent, we will been benefits the the other such, that market-led centered retail further has In benefits by we politics that which have recently of in on investors. effort regulators, and reform has the nonpolitical petitioned and today’s remain always competitive continue enhance have noise others investors and confident the the investors put enormous measurement enhancing enhancing unsupportable are transparency, a for was receive and the developed look and objective competition competition and designed data SEC, free SEC the conclusions we data-driven to FINRA reforms foster that benefits politicians to the will investors. an see participants and and win the data, and When enhance day. we to of massive ecosystem factually been transparency first regulation fact many specific and they to desire We Today, which the

Joe? the Now call I would over Molluso. like turn Joe to to

Joseph Molluso

market which questions. years or second first volumes Despite Making to XX% softer the point equity down the activity some quarter volumes and that Doug. and comments And $XXX a and you volatility have than trading will the is were Further, Thanks, business XXXX quarter know, we day States X.X%. realized of XXX low were and for overall, quarter. market equity million we Market and to of realizing seen volatility. turn were dropped million and several below X% have down activity, the better income retail United elevated adjusted average. our the this brief then the was per several XXXX in conditions U.S. as in historically Sean XXXX and XX.X%, lowest will $X.X year, quarters of meaningfully I than were below second outperformed, the market After X%

$X.XX day. million less This also market business and $XXX the XQ. quarter, Services realizing is than better Execution was per trading opportunity million performed X% adjusted net Our than income this

quarter-over-quarter business is a BDS down most percent were volumes regions. market global in However, and a larger

with contribute For variability U.S. results. XX% quarter-to-quarter increase continues and our Europe our will in ability APAC Virtu’s Canada down and some I reduce thoughts a to initiatives X%, was review and volumes. down to at generate the X% BES example, organic capabilities. generate, to and levels slight earnings X%, seeing trading on of coupled through how reviewed to cash generate and was global repurchase the earnings revenue excess scale only into slide, Last showed ability translates quarter, share through we net all both our rates. with Virtu’s income, various adjusted growth growth flow this which a the we to firm-wide

and earnings power, quarter a and shareholders. to X% potential this Since prior consistent base demonstrate number program on inception a of repurchase long-term combined indications we a growth return have within with less level initiatives years we sustainable our current this meaningfully secure our power year-to-date are than of gross with or any over approximately and overall cash major quarterly dividend to With the effect company plans environment. of of amount, now earnings year our regardless immediate ago, of the nominal growth create should the well is acquisitions. Compounding earnings for no and repurchased share our of the a and have levels basis. of elevate more debt results $X.XX Our than of our

most of million Our will recognition a ability two-year continue. the period substantial generate that period to incremental however flows, target Virtu a long to cash $XXX is devote episodic. will repurchase of authorization over cash announced sufficiently time, repurchases flow and a The significant will

forward, and Finally, initiatives initiatives, themselves our virtual volatile slide many grow. as line with significant worth years the ago, while quarter, such they included real our volatility of accrue strength continued to fluctuate. we bottom It’s options, began our the a growth crypto to witnessed runway knowing straight as in few while recent some that not and line in in quarter-to-quarter growth In most in a areas grow only our volumes or will experienced them a in these Rocket. like any performance on flow potential now others thrive shareholders. We environment. baseline to organic with substantial to and contribute on bullish to to the to and while the for in markets going any initiatives, ability debt environment meaningfully significant levels together conclude. slight Sean initiatives producing and growing in towards evidenced of returns slowdown capital Virtu’s cash appropriate These And remain

Sean Galvin

direct year or of supplemental $XXX X% on is second income, XXXX. adjusted the Services as of our $X.X materials, of than a per is adjusted lower and trading our quarter. was quarter second trading Execution quarter income per adjusted day, million expenses, you, gains $XXX or million represents XXXX. than than second ago Joe. than was XXXX third In day, increase X% per net X% Market X% and year-over-year quarter, the decrease the X million which presented net million of quarter day, Slide Thank quarter trading trading income $XXX trading net our in million totaled higher or the and million the lower X% Making which $X.XX $X.X third X% which and the higher

than third Our higher second adjusted EPS was of $X.XX for quarter XX% XXXX. the the quarter,

flat our which quarter, third is expense from million, was $X.X the basically QX. overall compensation For

a and the respectively, can set compensation Our approved Case also year. year-end our – income, adjusted the our is we overall of may second compensation range we rating quarters XX.X% and which incentive with the Depending quarter. remainder of in quarter previously in targets. later adjustment Consistent XX% year compensation were ratio. the ratios this to result the as of net specific in about past in later consistent upon percentages earlier how unfolds, with refine to practice, compensation our compensation

for in believe XXXX. consistent update quarter. million with our was QX, guidance Overall, with for and will We going and prior specific early EBITDA from guidance XXXX. for cost fourth up expenses [indiscernible] report QX the cost in $XXX.X we million Adjusted is XXXX forward $XXX.X performance quarter our actual results year

for EBITDA be margin cost which and disciplined of quarter an two-point XX.X% expense the adjusted efficient from is increase our third the reflective quarter, continues was Our structure management. second approximately to and

debt to $XX second for million quarter capitalization at With is quarter. the the operator in our with Our third as quarterly our which third environment turn continued every XX for to XX% adequate quarter to is long-term over flat dividend, the committed was and quarters demonstrates question Q&A. both remains I’ll $XXX our repurchase prior to billion the expense which million well from end. interest third in as $X.X IPO, remain capital over the our We share and consistent commitment Finance approximately year was quarter quarter, the our shareholders. return our that, since

Operator

comes first Repetto Sandler. now with We Rich will Our question Instructions] Piper session. begin the question-and-answer [Operator from

You may go ahead.

Rich Repetto

candid Hey, on good for strength quarter. Good Joe and Doug. market equity so Sean. strong remarks a And good your on morning, morning, quarter congrats a thanks and

had understand, volatility. lower your to of results blamed and one trying We’re dismal peers the on very it

and volatility slightly that – down recognize we’ve yourself down as volumes You well quarter-to-quarter. were metrics were

So just the came see I’m from. trying to outperformance where

whether asset If you retail it’s geographical areas, class could just highlight the marketing. in any of or whether or

outperformed Just the guys understand to making trying you segment. market in how

Douglas Cifu

I the Yes. question. you, Thank and Rich, appreciate

philosophy is is we’ve this and firm been I a percent class, comes be seen the was ETF they best and we of describe revenue can And our strength the much great a a Obviously, from you’ve in you’re think of asset but electronically a global which what business. specialized are market, which right? to part goal. let’s that, scaled in of to in to, the the best you what every offer XX-whatever is bid great But quarter I around company, more possibly every Virtu always that’s franchise. a world That’s I quarter-by-quarter in know attempting globally. global try competitor making small behind been it do marketplace the think, the referring of market

market but block we of certainly in scaled lost business. we particular, in little ETF this down our like was making done quarter, work bit in And it this businesses. between so grown launch the And gets our we that built the making other We’ve market And U.S. results great year, a internalizing through – franchise. have. options we’ve the

we that do a as this everything risk single our quarter. don’t a because to look our their independently break worry group, making a Retail hand internalizing you like we globally object market because able business business to nice and to our really making to and leverage that about off single franchise have single it improve So delta business single all object and and ETF anything at market options capabilities. firm. off had individually doesn’t now our hedging of we making can Obviously, we’re our is market

seven pay were down, X%, a the even to making last like we’re five, think so And better. and worked just was and did we did of quarters, heads this blocking put continue six, in the last XXX retail And than the emblematic tackling, years performed talking though And better in down we over over quarter, hard volumes is lot this manage technology of our been investments what X% to and which made the we’ve continue this firm, I quarter work about going internalization quarter to off. like quarter expenses. strategy the market integrate on the has because our we’ve we

Rich Repetto

market Okay. you related look you the bit? like as both with That’s approval follow-up the great sort helpful, option electronic ETF opportunity, a do and versus opportunities ETF of opportunities crypto And jumps see like my But of sort more would crypto for you and trying the where just they Doug. be Or yourself. of out outlined maker that like see crypto, opportunities did auction? futures bigger see to where

Douglas Cifu

Yes.

to sitting compelling, that’s I I very is. the all mean question. a I today, would total very here look me say, opportunity. a large, think addressable And market what great at is options like we can well-known

the OCC. I in can is index Obviously, You look market of terms being into the in the big Internationally, you making right right? a what the which of outlined know strength, all electronic by volumes global the firm. Virtu Everything you Europe, are. Nikkei, So options scaled published that XX-XX. plays just of kind there’s some all at look

couple of to infrastructure, a our our be done to work. And of to make sure market. in more to the that work trading We’ve a could early back the lot times There’s a I’ve As a reiterated we’re do. the slog office in – innings. the we infrastructure middle this ago, option been and a the captive number of from technology, and reorienting [indiscernible] is it’s everything of calls, years business the bit

cut in significant segment There’s the options. a we there’s then we’re and there’s And it’s whole can a well, for international nonequity obviously we United market a commodities of be maker customer market because options. and products exciting products whatnot. of here know as maker. States, a you not very FX category So think And a and

So known the there delta understood hedge and is by us. well

a comes widened crypto, the what you of very future a market into in as marketplace scaled we’ve is quite unique to it what ETF, firm. obviously, about, strength an that asset a or we’re products. a capable SEC of expressed options. approving into say asset that fits of least it a made futures-based has it be the as with to and position We’ve But closely. is decision core again, a monitoring we a number participants ETF crypto is nicely When do if Virtu happened quite So are in been will. with all we at and interconnecting has of kind right the plays in strategic the which it’s maker newer Clearly, to exactly of spot classes, they whether that’s were that class, what

in going approve it an you ETF ETFs Europe where we’re all So Exchange. of the be crypto lead see see the an volumes. good ETFs, been a participant. as that’s launched. And States to you very in to see that the in any known explosion filed, now purpose have on the obviously Stock seat With revert saw United New FCC coins, which have market well would York fit and you were maker authorized Clearly, because issuers the the we’re

we into things our play exceptionally right well the that hand. would So of all do

thought friends it. right? really was be our is traders, because at to like people class this access what ARRIS, institutionalized, that which interesting have is CBOE one The saw it that access decided means, buy institutional the Rich, really we to that going You concluded to

that, So owner were part of and of I we – ever. hope a part a we’re

as that asset opportunity about as an crypto products class. an excited institutionalize we’re to further So

Rich Repetto

Great job, guys.

Douglas Cifu

Thank Rich. you,

Operator

from with Our next comes Allen Compass question Chris Point.

go may ahead. You

Chris Allen

Nice guys. morning, good Hey, quarter.

a of risk. Bloomberg Maybe retail kind seen market are making. on Citadel’s in guys and at like on outperformance bit a of question digging looking follow-up of comments also skewed. shares data concentration kind decent made environment in And of looks just making, you little the share Just reports the since coincidentally, full competitive around for amount Rich’s It picking market in payment a share. that on they up provide wholesale

So regulatory maybe to Any like the can if commentary maybe commentary where environment appreciated. some provide looks some changes in the just pressures. what be response there’s you there competitive would been

Douglas Cifu

Citadel in the very Yes. I It’s off always competitors easy market be been get same other competitive have thought the fighting firm, obviously, terms good question. competitive – of been obviously environment. the which it It’s It’s been them. one thing comments, of but business share to they that think were share, very, somehow the had market by we’ve made for doing the a nature a dominated and and in. punching an And to I chair And notion some mean, trying marketplace. I frankly for This years. was not target significant

to be You scaled. need

hundreds You’re providing and of names. to execution clients individual effectively X,XXX guaranteed

sure ago, very, largest goes It’s to effectively So voluminous, mildly. make handle put to is which effort, flow. marketplace it’s it zero had market we that a a or be of participants. in. can We Chris, to obviously Frankly, very one difficult made years to Robinhood, their we with three the share concerted

our where firms, reflow a retail are like on A first James I and We all XXX business, a think and is is we’re market-driven the XX%, firms XX% and rather trying just the this winners other to own, think public so in wholesale somewhere thing. are that the really called entering we ultimately is of to the keeps us made marketable. at. have investors. their It number they’re right? competitive have is announced makers Street in their sharp this XXX great somehow a demonstrates market what Hudson that competition. good or it’s wholesalers This business has brokers concentrated are entry, Because good decision marketplace there These that a than a from River. it and report. that internalize welcome very of neighborhood possible information And retail And now myth, market. barriers that, in there’s, is happened So the

service nonmarketable them. marketable a and routing, of internalize me, some of So service orders, we of and ordering excuse providing we’re

makes we The cost other costs of ones price the And exchange really wholesaling ATS all part that And all liquidity the of absorbed we is it improved what and obtained this as and passed on. it. because of expense, is they about. customers made on that have also much ecosystem a retail outsource businesses decision them brokers and save for all conscious to get their business The better this execution. it a

I is to question to half not it. myself know to So this answer the help for by answer

when works. conclude So you we the looked need entire how and someone is ecosystem this to that understand It actually ecosystem it the back say, peel would onion, this impossible to and for me at now. throw look

statutory there’s all, of First no that. basis for

so we’re competitive, most really and conversation someone day, are a nothing. end about So – about with talking every it the the data just of at uninformed whom the how shocks just facts the this really all works. are company it But of overwhelmingly have

So if you answer the question…

Chris Allen

environment And there? the stable? the competitive is answer Is that

Douglas Cifu

hear Sorry, didn’t I it.

Chris Allen

evolved that which how of over the has mean last couple the – quarters? environment competitive I maybe And

Douglas Cifu

are much haven’t We entrants but competition. don’t in. frankly, worry the we sound really want Obviously, And I seen don’t about of change. flipped, new a to

provider. they it clients. obviously, do. That’s they’ve low-cost scaled we our with we flow. same in improvement, this to understand and everything have And the the a their improve and the business, dialogue really being our wholesale constant the growth our the scaled been We and in And targets the key view it’s We’re of right? thing really is as terms business, that’s how continue to achieve part and do. We be will always here, in price key continue we And that’s to and we broker-dealer what of wanted parcel growth. to been

technology and market invested that we’ve business our noncustomer better. fact makes much good at lot that the of obviously, So wholesale we’re making a just

Chris Allen

Thanks guys. queue. in I’ll get the back

Douglas Cifu

you. Thank

Operator

Ken Our question from comes next Worthington JPMorgan. with

may ahead. You go

Ken Worthington

directionally, business, And quarter. to break good how up, XQ? lower in and revenue and morning. making commodity flat? don’t out, equity numbers, Thank those given And did from market sort the a in lot. Hi, growth of down FX this volumes, I how I fair flattish me would know that capture it or provide did markets looking but it know business? Was volatility don’t XQ when U.S. Like there help I’d but you at specific that hear love to you. you was

Douglas Cifu

again, the to I gotten what not at Yes, question, But firm some smaller call we sure. looking the pointed the to to would like do. to segments, And trying mosaic the mean, avoid of market they become from business look answer away I’m trying it, And of out various we’ve best as I I continue we again, I gotten we’ve making of areas parts our and like market new can. making opportunity as we do at grow. the a scaled into. sub

them of FX there. of terms or in pressure – couple last we quarters under subareas, the given So out longer, like I put been think all has the and actual – the statistics, volatility

commodities has and volumes been and like volatility were down. FX and So down

all last can’t largely we in And and dislocation will the I for growth in metrics, of crude in been that that’s us because natural our the saw that saw has metrics. by access segments you commodities, in internal gas. volumes in And we the segment. volatility and the both have into have last the of internal really our base those well, at of strange like a we impacted And seen finally, quarter impacted as I lot the because against we gas what remember obviously of spikes natural period. the opportunity the is as even Metals four right? on good in is market crude two, But September, you crude or well. in those performed, negative went and performed And what we’ve that terms metrics natural in all as were lot and market. it stuff. a say come some that market performance So the don’t well how as of year So and slower what Clearly you they event. do quarters, area crude to ETF in then gas during kind within October as look Ken, the couple, data, particular, on folks which three, – measure a to

So control. our that has at dramatically out just we things since crude are event volumes like that like down. look If of been obviously pretty

So don’t those I anything? we segments. say, Joe, you if to be had pleased know I overall, continue would with

Joseph Molluso

pleased segments, with the No, Yes. Ken. we’re

flat XXXX much year you always the Maybe tough. If at you they versus And some in where been you it weren’t the until look solid if they’re pleased really with like today, if really of is versus exchange, those very kind XXXX, XXXX, versus of and look over volumes where at XXXX, up we’re still energy I year-over-year. long-term, the you in as are are. well at XXXX the businesses. XXXX, businesses look venues, quarter-to-quarter if They’re on a areas, versus there’s And spot think other in foreign environments. good it muted even look and we recently an

Ken Worthington

Equity capture, down, up, sideways?

Joseph Molluso

publish certainly And the I’m I the overall which answered over sticks numbers so of growth volatility. helps during there you I to if now, characterize including of we It because saw increase we of the and be as results. same-store widen. was these Rich that our sometimes, I’m have again, of out. of I sure But moments an it could in this is that were can moments customer more serendipity were guess stocks they in at right sales. kind firm, an retail there’s a of a would have terms they and that nothing recall don’t really Obviously, we’re up quarter. looking in equity vaguely quarter, but trying asked which But capture that quarter, had it. earlier, question the kind particularly noncustomer as out and bit extreme flow volatility capture little business, mean equity, U.S. offer of when

So that’s and getting just increase same-store tackling sales. really blocking and in better

Ken Worthington

talk the tokens And Okay. focus business crypto at you’ve here follow-up, doing? bit or Can you the resources quarter? prepared in making a are little to market this If point on in the the to you tokens crypto is still see as I through crypto. force in in broadened maybe where just been the depth so, the remarks the what get love you about futures? more Or of ETF? are the spot But evolution And rollout. the

Douglas Cifu

Good Yes. question.

spot And are It’s FNX So we with to additional base to other connected on we’re going couple that is five to I major venues, add on think others. that the specific, trading of point X plans be one to finance. four and a ones. and crack add more

done diligence prime obviously is due of risk the right really it’s and not because, centralized kind now, the we’ve and clearing. our whatnot brokerage more counterparty So

So for a asset of little it’s bit a class different us.

world, and futures maker the obviously in connected are ETFs all a are to as the we ETF and in up We and market then U.S. of well. the Europe Canada

Asia. feels me, got I use, the it we’ve got in as a we it’s – gold commodities little Canada, gold spot obviously, would in gold would that Europe sense and the Ken, business and we’ve is and got ETFs analogy to like clearly, So in a I bit our future U.S., silver,

XX%, about addressable not covering but being those. we style business. of them. the things now, because you market to guess going stream adding XX% to describe looking then universe. Right the similar I venues in look management, customers eight, of products. the a those risk we’re at and making in to think be call connected too points, out market as go want that nine that them, and of going retail And But we’re would to XX-odd be a those SKU market or seven, we’ll we’re far would And of So one X, however making we’re ultimately, tokens be we institutional add in of or venues, on judicious again, direct the terms you

plan kind say. of would I business the So there. that’s

collateral, tackle keeping of because and do And lot the understanding blocking a different. it Virtu the the of in I’ve bit sudden terms and always a disappears little moving place. of don’t as and have I to borrowing intelligently and back some operations around our all said, in a and kind trying where situation, to doing right, of in want forth, it’s securely way, We’re wallet a coins nanotech

this clients any asset marketplace People in to it client that we’re come have are these asset us or not don’t things I’m counterparties an there’s to the as had we provide discussions So a with their we or as has of excited deciding and about class, And stream? spoken. watch saying interested and will say, the because can value institutional retail class. an that whether anticipating to you are have burden

be market it it. can other there’s as repository for be, exciting So in better of becomes things, the would of more describe ton probably you would the that’s getting a regularized, of I volume terms terms involved with in would what I institutions guess, class, mine a see your and analysis than central institutionalized of total it as us. addressable clearly, asset

trading to So I terms I’m market of being very, what spend very, the terms in add So in that or those into do this things, a into terms very get. effectively And nicely of going of we get excited minimis in have and strategies, terms innings think market right? zero. maker. fits incremental obviously, as in like And maker But this operational, we’re like an is of people. lead global terms going is to in we in being we’re for connectivity in activity, de a of very participant it us authorized where to all

beauty is trading and the again, – other opportunities cost. reallocating areas, pivot of this we’re into model a we can our well instance, the but the it’s investment. what and we new from that’s very shift worth focused in cost very, people get So there’s and obviously, these minimal think with And scaled

Ken Worthington

you. Thank

Douglas Cifu

you. Thank

Operator

from comes Fannon Jefferies. Dan with question next Our

You may go ahead.

Dan Fannon

market Thanks. morning. the making. Doug, to on up Good I wanted follow options just

– venue if I give the Could update kind and either fits, about coverage the to increased guess, in know thinking baseball prepared that I or use of what be what full the of or state. kind of percentage about coverage kind end the of will the think how for market the kind you’re or goal what’s period time you think meeting of we analogy don’t talked just with? us on You actually interacting want you the remarks. a you, where And about symbol an

Douglas Cifu

a I early innings. the different use it’s we structure or still third on a analogy, question. Yes. great used dugout. know, baseball I don’t first, definitely Look, we’re it. what market are marketplace, It very inning, Whether understand of pretty from is second very inning are people the it’s To out a to. different the focused very it’s but the

We trading complex are now instruments.

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quarter in of I’ll the retail early XXX upon going that In XXXX, be I’ve the well do. you in we structure, Dan, XXXX second fully again, beauty terms right depends quarter, for think be say doing I’m you in that’s options, or It of we intend know, terms and is business market making participating But where quite a year I sure. that as we’ll now. to options the market kind experiment of not is be, and by whether us. publicly can that key in said first active by how what to the of we’re

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Dan Fannon

coming just for us, it’s just year. to – I this clarify, for expense early Sean, you. And think And Thank then, inflation synergies remind think as know of next Great. then year. kind just there’s I more spend stated the But guidance you out reiterated about a to plus kind normal of previously from some can about but we ongoing a and think framework base kind XXXX? reasonable no legacy of transactions

Sean Galvin

Yes.

picture, been of I’d think yes. think that There’s more continue synergies work to on. I I a always has realized say already. bit But little that most

Dan Fannon

Thank you. Okay.

Operator

question next Alex Blostein from Goldman Our with Sachs. comes

Alex Blostein

those as some of ideas break to some could of kind how much much I guys And put certainly Good of MarketAxess initiatives. you on or obviously, get hoping to numbers growth market talk Slide of and morning. maybe might quarter was around on traded. And new had then you think A year-to-date, the this of the secondary to helpful. I quick be the think credit? some in – have What organic either initiatives. guys could that, follow-up, that time haven’t a propel continues And you page of the part aspirations I that down initiatives that, about I a you X, credit. contribute you I for point corner at kind electronically sort are the more slide, various heard the with would of guess, partnership that on

So get all. at an curious there to update

Douglas Cifu

you. Thank Yes.

you’re over turn terms because didn’t of and – because organic remarks, eh me the Let my yes, Joe, which better I initiatives then prepared credit I’ll And in to the handle the have, price is. it credit, much job. in right, a put for, should probably it does

going be in we like things We opportunities. continues important have on electronified. to Look, an It many [indiscernible] it’s opportunity. so think

connected are We and NAV trading market on access. corporates anonymously

credit, maker trades didn’t which We’re words thought We’ve never for I and I is would should be addressable an which virtue, fixed Certainly really by a credit, helped us. be done first desk being onboarded having is. our that asset say significant think this would ETF Because ETFs market I class publicly. but in it income for portfolio that an and is Virtu. first basket the training has

automation. I more see So to continue

us, for has us. significant But We’re it’s quoting want important. immaterial really, performance again, it really impact strategically, very to and a on think with But so upsize, nascent an deal it’s counterparties we the today. business and our

has block Our credibility. well desk

in of States terms and hit we’re the executing. United in just five rates that We’re volumes ranked in the top

we have become counterparty. a trusted So

to to development the be funds dedicated are folks, hired Alex, ETF have to and out liquidity go we our, some we’re people mark business call would making to now and it, attached so in managers guess, willing credit. desk, I and need provider. that a that credit liquidity folks We’ve They’re prepared already I So pension and group. asset in our

handle to do to the area you growing going want for a it’s us. be rest? So Joe,

Joseph Molluso

X, of mean, things level mix Slide of because this at it I between businesses. Yes. really it’s look, new a kept we’ve on detail

were of day adding at really new these and been overhauled underneath and were you and late. we’re test, also lot bar, zero. businesses but look a you Doug a it’s blocky And a options zero. options $XXX,XXX the And as about XXXX crypto was Obviously, spoke that and there clients, about. crypto just If TF spoke

this to I to continue think going way. we’re Alex, present it So

is capital a need that and markets the We We is already add double well. as to It the business. Virtu Look, something just extraordinarily team, things performance we think could done business and think they’ve right, last there. I opportunities this started hired highlight, are XXXX. I year to

We about expanded the team. that We excited business. are very

hiring else someone We’re to market.

level. here. keep realized is decline And reason going think this some look, The to in and volatility it So going progress the of we’ve because part made quarter-to-quarter. I we’re at real to of it’s fluctuate the

And it we’re That business we’re this to has on And page. So well. talking going quarter level. I keep at not even execution transformed. been services really as outperformed this about think this

been We’re But meaningful has at the talking since look a a acquired expansion in lot it the really when business about outstanding. making. we margin internally, we market of that

So just really we a years. good us next which don’t – only is revenue a want we’re way to that these the on to few be highlight businesses. incremental focus This for nothing, to some

Alex Blostein

you Thank you. much. Got very

Operator

question Cyprys Morgan Michael with Stanley. Our comes next from

ahead. You go may

Michael Cyprys

taking I circle just the crypto. for on Thanks morning. wanted Good question. to back

make crypto physical. So underlying you’re the starting in the it coins, to markets sounds like

little bit talk And a from maybe your successful could perspective about that in asset a in generally think you what to be do do on coins do curious market around which determining Just your process coins crypto have you making add. today? see making? going take it’s about classes? there? How to you also are And markets talk if bit which little you to What you other to different

Douglas Cifu

it trade Look, places commodities – I there’s have making Great Yes. every a jurisdiction our ETFs around as Chicago We any trade in of is mean and the as one gold business been in other question. before, gold obviously, Michael. obviously And where market market we proliferation of a matter, said like Thank a feels We a in in other instrument. world. are spot just maker. about futures take as hold. general gold I you,

do to market you in it’s now different just digital strategy measure that effectively analogous if of would are value right gold crypto So trend. gold, are our wealth in equate to mix we the running for we or like no some what crypto clients

sense work be us to So it. to XX,XXX-foot kind and that’s why going it’s of the why in for it makes

we manager. can Stanley, in In self person leverage obviously, I broker institutions, our ETFs, like Morgan providing service us. crypto, and you in someone Europe go as care Stanley be and spot to or not agent prime sense the bulk As you that broker as say, are said, JPMorgan providing for the Asia. operational be I settlement And before, We own to an for But need be somebody in goal a market the making, our hey, then because give handle prime we partner settlement JPMorgan need a difference we’d mentioned not futures like the capital. there’s however, and our U.S. manage would because that and to our and actually to us and use today, Can and otherwise, in that our in someone Morgan would or largely ABN, leverage as those settlements. goal in we’re

have class embraced services So and and in forth, they institutions a attempting on well, and help will you a we’re asset doing as to largely types the class level new that institutions new obviously they different our you it there’s part move own. – like of coin, There of the provide some offering. asset sense are are financial of back that not yet it leverage. traditional it’s But manage some it’s

FTS to Goldman, say, certainly, like have and management risk JPMorgan work. having that. third-party a a to or And than to perspective, Coinbase So it’s risk and or Stanley have counterparty from risk things we we little more rather an Morgan

So institutions. feel around we risk. large closely. more comfortable monitor are have very Those We the to it obviously

providing retail can as there But it. Robinhood say, need mentioned are Virtu access obviously, operationally, are earlier, Those really in liquidity fits there others I firms extrapolate has understanding segment there it So doing brokers would is good nicely nuances, been But that’s are that their are crypto as today in. clients. to to then nuances. and make we’re market about. obviously as I what good a we that one at well. some really that are

making business, as And that so wholesaler. of a like we as our market right, act where think customer

firms know those of well. very all obviously, And different. no us it’s So

we a service. trusted provide good We’ve think I been counterparty.

thing Virtu would and broker it, got process analytics are we let’s is, like just So as well. the counterparty know them as I EMS Robinhood The well. of We’ve Triton. an got obviously, launching, we’ve would crypto business, stream retail we last The very the is, say call providing well. obviously, whoever in very, a be or products

need and as to So be there’s the for best institutionalized, will, going asset market to then they’re becomes if you as have institutions access well execution more to their this class to a going EMS, own obligation. have

So they’re analytics. going to provide someone need to

we services we So maker those products or the intend Execution we to products. as of market provide, all It’s either counterparty, add to an crypto Services can the we everything as each do, Page something, services got like a institutional we of for. a it’s Virtu make This and services playbook. market the Virtu it an X is widget, accounted playbook. can and execution We provide as

Michael Cyprys

little a getting you hesitant into more making think if Great. your were market separate entity. point follow-up, of about And thought that, related about you in as ARRIS recall physical past, I a I And could. had a for as as more entry into just I the crypto crypto.

marketplace? if you market So regulatory there. I just What structure some updated thoughts comfortable share and environment hurdles guess opportunity the the could ARRIS changed overcome? or enter did that on from to a what’s maybe And makes you you

Douglas Cifu

a class obviously, that that, and of couple it, don’t make this like, what fair those got importantly, value and very guess, Galaxy they’ve are is of we’ve – question. I mean, got associated generated like public to and that’s away is large now all And things. firms has very with referred to there’s an of much been and secured very a Coinbase’s – credible don’t know FGX, EBITDA seems Robinhood but become And great company. it earlier, qualitative by one, I me But institutions as cap Gemini, so all things. as and It’s Yes. more two, significant lot gotten I Coinbase and money is, into to it’s Coinbase high. number those market clear obviously, here them. [indiscernible] – very it’s asset which a obviously to but judgment. And ETFs there scaled I I and number stay to I question, because know it, have kind extraordinarily a behind

less it’s about counterparty with transparency more So looking and behind regulation. transparency, It’s understanding a the at the them as counterparties them. about

lot there’s companies of out marketplace I one there that of have and of this New by that crypto Gemini, is mean I’m evolved I there are that regulated to a with. that are because into don’t that’s good really we I be to a going companies thing do the PSA getting name really the Services, other The And name is number not up. understand kind who names using. a call who York they’re I them, Department Financial good for – infrastructure, infrastructure of these wallet will But come thing. we’re want work

that as of. trusted with that kind comfortable take we all and advantage stuff service They’ve got kind clearing counterparties. Michael, So them we feel of a very of

it. that basic towards be if been I it. our about of of goal, of mentioned tune infrastructure middle really So not we you kind built and why we why quite up, – and it’s kind obviously not we’ve excited in we’re And think quite the as of steps terms could you’re that’s before, but in has it seeing why will, the changed

Michael Cyprys

Thanks. Great.

Operator

with from question Allen next Point. Chris comes Instructions] [Operator Our Compass

ahead. You may go

Chris Allen

Maybe color on you’re terms deploying you commodities, opportunity to of in a and compares how example. follow-up some deploy how capital Hey, just crypto. guys. much maybe in you Maybe just for now, how that us give right this quick much can

Douglas Cifu

Yes. Great question. Joe?

Joseph Molluso

not but considered in material land. out an segment overall capital, Virtu Yes, it’s Chris, would break that amount don’t we be obviously,

capital or we following in of settlement just the capital of that terms the answer amount there no size their FX, not a clearing the mechanism up at it’s services think in kind to terms of central have I access referring the ability the mature markets some even last themselves. these question. on CLS our markets just the and companies to of And of was look – like Despite that being closely. Doug to, in matured very the

long put amount have our overall. we time. remained – capital It see I it’s we that supplement, in a over of period very has liquid. put kind we deployed mean mature You the of crypto enough, of that really constant that

thing and different it’s to visibility around global prime capital the a of venues. of to cetera. and us terms But counterpart, it’s some kind to these management But more It’s wallet in That be and the bilateral. very comfortable. right? bank, transfer manage kind of one we borrow these them always it. bilateral thing, better we’re closely the the if of You’re able us exposure, maximum still the amount and of We’ve with got et again, able has to maturity was it feel services put it’s we broker a examine like to large

So...

Chris Allen

way kind $XX Understood. confirm correct implies And Is that investor just of XQ the million, about want just the I some getting one. which million to on $XX in that? expense side, questions there, on the just cash to about comp. no that comp there’s changes think

Joseph Molluso

will would when year-to-date, year competing I year higher. the under end full around XX% a at look be we we’re you touch or XX%, say think total at at maybe that full respectively. that. I XX% just comp and high right the cash guidance, of and be it, We’ll

would said to and about net a reiterate guidance. still think where referred then But I we And you look what peers be Sean up I at at XXXX to think to are, we earlier we income we’re well, we as trading of some look that just So well. when the comps touch higher. stack especially you with comfortable

where would as expect to the in things integrations a going always base I because large it we’ve move we’ve the future, about very guidance I settle less been lot. cost been through was down. think moving specific

Chris Allen

guys. it. appreciate Thanks, I

Douglas Cifu

Thank the you, I’d you And thank XXXX. Chris. enjoy Everybody, of like for with today. to sometime in everybody year. forward to you. participating rest look Thank talking We the

Operator

concluded. The has attending conference now for presentation. Thank today’s you

disconnect. now may You