Press Release Details

Virtu Announces First Quarter 2019 Results

May 3, 2019

NEW YORK, May 03, 2019 (GLOBE NEWSWIRE) -- Virtu Financial, Inc. (NASDAQ: VIRT), a technology enabled global market maker and provider of innovative, transparent trading solutions and integrated workflow products, today reported results for the first quarter ended March 31, 2019.

First Quarter 2019 Selected Highlights

Reported results include Investment Technology Group, Inc. (“ITG”) from March 1 through March 31, 2019

  • Net loss of $13.6 million, as a result of costs associated with the ITG acquisition and amortization of purchased intangibles; Normalized Adjusted Net Income* of $64.6 million
  • Basic and diluted loss per share of $0.07; Normalized Adjusted EPS* of $0.34
  • Total revenues of $363.0 million; Trading income, net of $257.5 million; Adjusted Net Trading Income* of $228.8 million
  • Adjusted EBITDA* of $124.2 million; Adjusted EBITDA Margin* of 54.3%
  • Expected to achieve 85% of publicly stated operating expense synergies by end of 2019
  • Quarterly cash dividend of $0.24 per share payable on June 17, 2019

* Non-GAAP financial measures. Please see "Non-GAAP Financial Measures and Other Items" for more information.

The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share. This dividend is payable on June 17, 2019 to shareholders of record as of June 3, 2019.

“Our businesses performed well given the reduced opportunity set in the first quarter of 2019 and our execution services results were quite strong relative to the market environment.  Since closing the ITG acquisition on March 1st, we have worked diligently on integrating the comprehensive buyside and sellside solutions to serve our clients. I am more excited than ever about how Virtu’s technology, market presence and scale, combined with ITG’s extensive product suite, will enable us to create the most advanced, multi-asset class offering for our global, blue-chip client base,” said Douglas Cifu, Chief Executive Officer of Virtu Financial.

Acquisition of Investment Technology Group, Inc.

On March 1, 2019, the Company completed its acquisition of Investment Technology Group, Inc. in a cash transaction valued at $30.30 per ITG share, or a total of approximately $1.0 billion. The reported financial results of the Company for the periods following the acquisition reflect ITG's and the Company's balances, and the impact of purchase accounting adjustments. All periods prior to the closing date comprise solely the results of the Company.

Financial Results

First Quarter 2019:

Total revenues decreased 55.5% to $363.0 million for this quarter, compared to $815.1 million for the same period in 2018. Trading income, net, decreased 36.6% to $257.5 million for this quarter, compared to $406.2 million for the same period in 2018. Net income was a loss of $13.6 million for this quarter, compared to net income of $410.0 million for the same period in 2018. The decrease was primarily due to the one-time transaction gain of $337.6 million on the sale of BondPoint in January 2018.  

Basic and diluted loss per share for this quarter were $0.07 and $0.07, respectively, compared to earnings per share of $1.89 and $1.86, respectively, for the same period in 2018.

Adjusted Net Trading Income decreased 32.8% to $228.8 million for this quarter, compared to $340.3 million for the same period in 2018. Adjusted EBITDA decreased 44.2% to $124.2 million for this quarter, compared to $222.7 million for the same period in 2018. Normalized Adjusted Net Income decreased 55.4% to $64.6 million for this quarter, compared to $145.0 million for the same period in 2018.

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 $0.34 for this quarter, compared to $0.76 for the same period in 2018.

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, options, 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 analytic services to select third parties. Legacy ITG’s operations are included within the Execution Services segment.

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 operating segment for the three months ended March 31, 2019 and 2018.

Total revenues by operating segment
(in thousands, unaudited)
   
     
      Three Months Ended March 31, 2019    
      Market   Execution            
      Making   Services   Corporate   Total    
                       
    Trading income, net $   255,121     $   2,419     $   -      $   257,540      
    Commissions, net and technology services     5,000         70,147         -          75,147      
    Interest and dividends income     18,503         10,628         -          29,131      
    Other, net     597         324         252         1,173      
                       
    Total Revenues $     279,221     $     83,518     $     252     $     362,991      
                       
      Three Months Ended March 31, 2018
   
      Market   Execution            
      Making   Services   Corporate   Total    
                       
    Trading income, net $   405,709     $   453     $   -      $   406,162      
    Commissions, net and technology services     8,501         45,343         -          53,844      
    Interest and dividends income     17,769         145         35         17,949      
    Other, net     557         337,838         (1,297 )       337,098      
                       
    Total Revenues $     432,536     $   383,779     $     (1,262 )   $     815,053      
                       
                       
Reconciliation of trading income, net to Adjusted Net Trading Income by operating segment
(in thousands, unaudited)
   
                       
      Three Months Ended March 31, 2019    
      Market   Execution            
      Making   Services   Corporate   Total    
                       
    Trading income, net $   255,121     $   2,419     $   -      $   257,540      
    Commissions, net and technology services     5,000         70,147         -          75,147      
    Interest and dividends income     18,503         10,628         -          29,131      
    Brokerage, exchange and clearance fees, net     (43,027 )       (21,026 )       -          (64,053 )    
    Payments for order flow     (23,540 )       (21 )       -          (23,561 )    
    Interest and dividends expense     (34,260 )       (11,109 )       -          (45,369 )    
                       
    Adjusted Net Trading Income $     177,797     $     51,038     $     -       $     228,835      
                       
                       
      Three Months Ended March 31, 2018
   
      Market   Execution            
      Making   Services   Corporate   Total    
                       
    Trading income, net $   405,709     $   453     $   -      $   406,162      
    Commissions, net and technology services     8,501         45,343         -          53,844      
    Interest and dividends income     17,769         145         35         17,949      
    Brokerage, exchange and clearance fees, net     (69,072 )       (18,752 )       -          (87,824 )    
    Payments for order flow     (16,196 )       (60 )       -          (16,256 )    
    Interest and dividends expense     (33,207 )       (417 )       -          (33,624 )    
                       
    Adjusted Net Trading Income $     313,504     $     26,712     $     35     $     340,251      

    

Reconciliation of trading income, net to Adjusted Net Trading Income by category – Market Making segment
(in thousands, unaudited)
 
      Three Months Ended March 31, 2019  
      Global   Global FICC,       Total  
      Equities   Options and Other   Unallocated   Market Making  
                     
    Trading income, net $   208,633     $   49,790     $   (3,302 )   $   255,121    
    Commissions, net and technology services     5,028         (28 )       -          5,000    
    Brokerage, exchange and clearance fees, net     (37,981 )       (10,688 )       5,642         (43,027 )  
    Payments for order flow     (23,540 )       -          -          (23,540 )  
    Interest and dividends, net     (12,532 )       (2,989 )       (236 )       (15,757 )  
                     
    Adjusted Net Trading Income $     139,608     $     36,085     $     2,104     $     177,797    
                     
                     
      Three Months Ended March 31, 2018
 
      Global   Global FICC,       Total  
      Equities   Options and Other   Unallocated   Market Making  
                     
    Trading income, net $   324,882     $   82,070     $   (1,243 )   $   405,709    
    Commissions, net and technology services     8,522         (21 )       -          8,501    
    Brokerage, exchange and clearance fees, net     (57,034 )       (12,539 )       501         (69,072 )  
    Payments for order flow     (16,196 )       -          -          (16,196 )  
    Interest and dividends, net     (11,127 )       (3,251 )       (1,060 )       (15,438 )  
                     
    Adjusted Net Trading Income $     249,047     $     66,259     $     (1,802 )   $     313,504    
                     
                     

The following tables show our Adjusted Net Trading Income and average daily Adjusted Net Trading Income by category for the three months ended March 31, 2019 and 2018: 

(In thousands except percentages , unaudited)   
      Three Months Ended March 31,  
    Adjusted Net Trading Income by Category:   2019       2018     % Change  
                 
    Market Making:            
    Global Equities $   139,608     $   249,047       -43.9 %  
    Global FICC, Options and Other     36,085         66,259       -45.5 %  
    Unallocated1     2,104         (1,802 )     NM    
                 
    Total Market Making $   177,797     $   313,504       -43.3 %  
                 
    Execution Services     51,038         26,712       91.1 %  
                 
    Corporate     -          35       NM    
                 
    Adjusted Net Trading Income $     228,835     $   340,251       -32.7 %  
                 
                 
    Average Daily   Three Months Ended March 31,  
    Adjusted Net Trading Income by Category:   2019       2018     % Change  
                 
    Market Making:            
    Global Equities $   2,289     $   4,083       -43.9 %  
    Global FICC, Options and Other     592         1,086       -45.5 %  
    Unallocated1     34         (30 )     NM    
                 
    Total Market Making $   2,915     $   5,139       -43.3 %  
                 
    Execution Services     837         438       91.1 %  
                 
    Corporate     -          1       NM    
                 
    Adjusted Net Trading Income $     3,751     $     5,577       -32.7 %  
                 
  Under our methodology for recording ‘‘Trading income, net’’ in our condensed consolidated statements of comprehensive income, we recognize revenues based on the exit price of assets in accordance with applicable U.S. GAAP rules, and when we calculate Adjusted Net Trading Income for corresponding reporting periods, we start with trading income, net. By contrast, when we calculate Adjusted Net Trading Income by category, we recognize revenues on a daily basis, and as a result prices used in recognizing revenues may differ.  Because we provide liquidity on a global basis, across asset classes and time zones, the timing of any particular Adjusted Net Trading Income calculation can defer or accelerate the amount in a particular asset class from one day to another, and, at the end of a reporting period, from one reporting period to another. The purpose of the Unallocated category is to ensure that Adjusted Net Trading Income by category sums to total Adjusted Net Trading Income, which can be reconciled to Trading income, net, calculated in accordance with GAAP. We do not allocate any resulting differences based on the timing of revenue recognition.  

Financial Condition

As of March 31, 2019, Virtu had $788.3 million in cash, cash equivalents and restricted cash, and total long-term debt outstanding in an aggregate principal amount of $2,031.6 million.

Share Repurchase Program

The Virtu Financial, Inc. Board of Directors approved the share repurchase program for $50 million Class A common stock and common units of Virtu Financial LLC in February 2018 and subsequently expanded the program to $100 million in July 2018.  Since the inception of the program, the Company has repurchased approximately 2.56 million shares and units for approximately $65.9 million.  The Company now has approximately $34.1 million remaining capacity for future purchases of common stock and common units under the plan.

Non-GAAP Financial Measures and Other Items

To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), we use the following non-U.S. GAAP (“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 and clearance fees, net and payments for order flow. 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 market making activities.
  • "EBITDA", which measures our operating performance by adjusting Net Income to exclude financing interest expense on our long-term borrowings, debt issue cost related to debt refinancing, 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, reserves for legal matters, transaction advisory fees and expenses, termination of office leases, acquisition related retention bonuses, trading related settlement income, gain on sale of business, connectivity early termination, other, net, write-down of assets, share based compensation, charges related to share based compensation at IPO, Amended and Restated 2015 Management Incentive Plan, and charges related to share based compensation at IPO, and “Adjusted EBITDA Margin”, which compares Adjusted EBITDA to Adjusted Net Trading Income.
  • “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 LLC units have been exchanged for Class A Common Stock, and applying an effective tax rate, which was between approximately 23% and 24% beginning January 1, 2018 as a result of the Tax Act.
  • “Adjusted Operating Expenses”, which we calculate by adjusting total operating expenses to exclude severance, share based compensation, reserves for legal matters, 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, 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, Normalized Adjusted EPS and Adjusted Operating Expenses 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, Normalized Adjusted EPS and Adjusted Operating Expenses 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 covenants and other 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, Normalized Adjusted EPS  and Adjusted Operating Expenses 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, Normalized Adjusted EPS and Adjusted Operating Expenses 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 and Normalized Adjusted Net Income 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, Normalized Adjusted EPS and Adjusted Operating Expenses 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 and Normalized Adjusted Net Income 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 and Normalized Adjusted Net Income 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 March 31,    
  (in thousands, except share and per share data)   2019       2018      
             
             
  Revenues:          
  Trading income, net $   257,540     $   406,162      
  Commissions, net and technology services     75,147         53,844      
  Interest and dividends income     29,131         17,949      
  Other, net     1,173         337,098      
             
  Total revenues     362,991         815,053      
             
  Operating Expenses:          
  Brokerage, exchange and clearance fees, net     64,053         87,824      
  Payments for order flow     23,561         16,256      
  Communication and data processing     41,814         49,486      
  Employee compensation and payroll taxes     107,837         64,670      
  Interest and dividends expense     45,369         33,624      
  Operations and administrative     22,078         19,919      
  Depreciation and amortization     16,450         15,339      
  Amortization of purchased intangibles and          
   acquired capitalized software     10,922         6,851      
  Termination of office leases     -          19,970      
  Debt issue cost related to debt refinancing     9,214         6,021      
  Transaction advisory fees and expenses     15,109         7,496      
  Charges related to share based compensation at IPO     -          14      
  Financing interest expense on long-term borrowings     22,788         19,047      
             
  Total operating expenses     379,195         346,517      
             
  Income (loss) before income taxes and noncontrolling interest     (16,204 )       468,536      
  Provision (benefit) for (from) income taxes     (2,585 )       58,514      
             
  Net income (loss) $   (13,619 )   $   410,022      
             
  Noncontrolling interest     6,946         (235,271 )    
             
             
  Net income (loss) available for common stockholders $   (6,673 )   $   174,751      
             
  Earnings per share:          
  Basic $   (0.07 )   $   1.89      
  Diluted $   (0.07 )   $   1.86      
             
             
  Weighted average common shares outstanding          
  Basic   107,319,812       90,699,321      
  Diluted   107,319,812       92,406,318      
             
  Comprehensive income:          
  Net income (loss) $   (13,619 )   $   410,022      
  Other comprehensive income (loss)          
    Foreign exchange translation adjustment, net of taxes     (3,744 )       2,529      
             
  Comprehensive income (loss) $   (17,363 )   $   412,551      
  Less: Comprehensive income (loss) attributable to noncontrolling interest     9,082         (236,559 )    
             
  Comprehensive income (loss) available for common stockholders $   (8,281 )   $   175,992      
             

       

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 March 31,    
  (in thousands, except percentages)   2019       2018      
             
             
  Reconciliation of Trading income, net to Adjusted Net Trading Income        
  Trading income, net $   257,540     $   406,162      
  Commissions, net and technology services     75,147         53,844      
  Interest and dividends income     29,131         17,949      
  Brokerage, exchange and clearance fees, net     (64,053 )       (87,824 )    
  Payments for order flow     (23,561 )       (16,256 )    
  Interest and dividends expense     (45,369 )       (33,624 )    
             
  Adjusted Net Trading Income $   228,835     $   340,251      
             
  Reconciliation of Net Income to EBITDA and Adjusted EBITDA          
  Net income (loss) $   (13,619 )   $   410,022      
  Financing interest expense on long-term borrowings     22,788         19,047      
  Debt issue cost related to debt refinancing     9,214         6,021      
  Depreciation and amortization     16,450         15,339      
  Amortization of purchased intangibles and acquired capitalized software     10,922         6,851      
  Provision for income taxes     (2,585 )       58,514      
             
  EBITDA $   43,170     $   515,794      
             
  Severance     53,351         3,744      
  Transaction advisory fees and expenses     15,109         7,496      
  Termination of office leases     -          19,970      
  Connectivity early termination     -          2,500      
  Gain on sale of business     -          (337,549 )    
  Other, net     1,387         451      
  Write-down of assets     -          936      
  Share based compensation     9,813         7,902      
  Charges related to share based compensation at IPO, Amended and Restated 2015 Management Incentive Plan     1,394         1,398      
  Charges related to share based compensation awards at IPO     -          14      
             
  Adjusted EBITDA $   124,224     $   222,656      
             
             
  Selected Operating Margins          
  Net Income Margin1   -6.0 %     120.5 %    
  EBITDA Margin2   18.9 %     151.6 %    
  Adjusted EBITDA Margin3   54.3 %     65.4 %    
             
  1 Calculated by dividing net income by Adjusted Net Trading Income.          
  2 Calculated by dividing EBITDA by Adjusted Net Trading Income.          
  3 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 March 31,  
  (in thousands, except share and per share data)   2019       2018    
           
           
  Reconciliation of Net Income to Normalized Adjusted Net Income        
  Net income (loss) $   (13,619 )   $   410,022    
  Provision (benefit) for (from) income taxes     (2,585 )       58,514    
           
  Income (loss) before income taxes and noncontrolling interest $   (16,204 )   $   468,536    
           
  Amortization of purchased intangibles and acquired capitalized software     10,922         6,851    
  Debt issue cost related to debt refinancing     9,214         6,021    
  Severance     53,351         3,744    
  Transaction advisory fees and expenses     15,109         7,496    
  Termination of office leases     -          19,970    
  Connectivity early termination     -          2,500    
  Write-down of assets     -          936    
  Gain on sale of business     -          (337,549 )  
  Other, net     1,387         451    
  Share based compensation     9,813         7,902    
  Charges related to share based compensation at IPO, Amended and Restated 2015 Management Incentive Plan     1,394         1,398    
  Charges related to share based compensation awards at IPO     -          14    
           
  Normalized Adjusted Net Income before income taxes $   84,986     $   188,270    
           
  Normalized provision for income taxes1     20,397         43,302    
           
  Normalized Adjusted Net Income $   64,590     $   144,968    
           
  Weighted Average Adjusted shares outstanding2     192,725,796         190,056,747    
           
  Normalized Adjusted EPS $   0.34     $   0.76    
           
1 Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 24% for 2019 and 23% for 2018.  
2 Assumes that (1) holders of all vested and unvested Virtu Financial LLC Units (together with corresponding shares of Class C common stock), have exercised their right to exchange such Virtu Financial LLC Units for shares of Class A common stock on a one-for-one basis, and (2) holders of all Virtu Financial LLC Units (together with corresponding shares of Class D common stock), have exercised their right to exchange such Virtu Financial LLC Units for shares of Class B common stock on a one-for-one basis, and subsequently exercised their right to convert the shares of Class B common stock into shares of Class A common stock on a one-for-one basis.  


Virtu Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition (Unaudited)       

           
    March 31   December 31,  
      2019     2018    
           
    (in thousands, except share data)  
  Assets        
  Cash and cash equivalents $   771,003   $   729,547    
  Cash and securities segregated under regulations and other     17,324       6,500    
  Securities borrowed     1,282,867       1,399,684    
  Securities purchased under agreements to resell     5,655       15,475    
  Receivables from broker-dealers and clearing organizations     1,187,720       1,101,449    
  Receivables from customers     121,550       -     
  Trading assets, at fair value     2,952,449       2,639,921    
  Property, equipment and capitalized software, net     154,754       113,322    
  Operating lease right-of-use assets     350,423       -     
  Goodwill     1,193,697       836,583    
  Intangibles (net of accumulated amortization)     552,547       83,989    
  Deferred tax assets     215,063       200,359    
  Other assets     271,921       254,149    
             
  Total assets $   9,076,973   $   7,380,978    
           
  Liabilities and equity        
  Liabilities        
  Short-term borrowings, net $   159,716   $   15,128    
  Securities loaned     819,903       1,130,039    
  Securities sold under agreements to repurchase     290,000       281,861    
  Payables to broker-dealers and clearing organizations     987,842       567,441    
  Payables to customers     72,404       -     
  Trading liabilities, at fair value     2,294,625       2,475,395    
  Tax receivable agreement obligations     214,403       214,403    
  Accounts payable and accrued expenses and other liabilities     363,094       294,975    
  Deferred tax liabilities     65,860       -     
  Operating lease liabilities     394,764       -     
  Long-term borrowings, net     1,977,716       907,037    
             
  Total liabilities $   7,640,327   $   5,886,279    
           
           
  Total equity     1,436,646       1,494,699    
           
           
  Total liabilities and equity $   9,076,973   $   7,380,978    
           
           
    As of March 31, 2019  
  Ownership of Virtu Financial LLC Interests: Interests   %  
           
  Virtu Financial, Inc. - Class A Common Stock and Restricted Stock Units     111,683,440     57.5 %  
  Non-controlling Interests (Virtu Financial LLC)     82,601,626     42.5 %  
           
  Total Virtu Financial LLC Interests     194,285,066     100.0 %  
           

About Virtu Financial, Inc.

Virtu is a leading financial firm that leverages cutting edge technology to deliver liquidity to the global markets and innovative, transparent trading solutions to our clients. As a market maker, Virtu provides deep liquidity in over 25,000 securities, at over 235 venues, in 36 countries worldwide that helps to create more efficient markets. We leverage our market structure expertise and scaled, multi-asset technology infrastructure to provide a complete suite of client solutions, including transparent agency execution and broker-neutral offerings.

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: fluctuations in trading volume and volatilities in the markets in which we operate; the ability of our trading counterparties 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 effect of the acquisition of Investment Technology Group, Inc. (“ITG”) on existing business relationships, operating results, and ongoing business operations generally; the significant costs and significant indebtedness that we have incurred and expect to incur in connection with the acquisition of ITG; the risk that we may encounter significant difficulties or delays in integrating the two businesses and the anticipated benefits, cost savings and synergies or capital release may not be achieved; the assumption of potential liabilities relating to ITG's business; 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, capital expenditures, debt service and dividend payments; 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; potential adverse results from legal or regulatory proceedings; our ability to remain technologically competitive and to ensu re 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 Relations
Andrew Smith
Virtu Financial, Inc.
(212) 418-0195
investor_relations@virtu.com

Media Relations
media@virtu.com

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Source: Virtu Financial, LLC