Virtu Announces Third Quarter 2015 Results

NEW YORK, Nov. 04, 2015 (GLOBE NEWSWIRE) — Virtu Financial, Inc. (NASDAQ:VIRT) a leading technology-enabled market maker and liquidity provider to the global financial markets, which priced its initial public offering on April 15, 2015, today reported results for the third quarter ended September 30, 2015.

Third Quarter Selected Results*

  • Net Income of $69.5 million; Adjusted Net Income** of $76.2 million, which excludes IPO related adjustments
  • Adjusted EPS** of $0.40; GAAP Basic EPS of $0.36 and Diluted EPS of $0.35
  • Adjusted Net Trading Income** of $138.6 million, up 34.3%
  • Adjusted EBITDA** of $100.7 million, up 52.3%; Adjusted EBITDA Margin of 71.3%
  • Quarterly cash dividend of $0.24 per share payable on December 15, 2015

* All comparisons are versus third quarter 2014.

** 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 December 15, 2015 to shareholders of record as of December 1, 2015.

“Our business recorded $138.6 million in Adjusted Net Trading Income and $0.40 per share in Adjusted EPS in the third quarter of 2015,” said Douglas Cifu, Chief Executive Officer of Virtu Financial. “Favorable operating conditions for Virtu drove our performance in the third quarter; global volumes were up this quarter vs the third quarter of 2014, as well as quarter-over-quarter and YTD comparisons.  In particular, the U.S. equity market volatility in August spurred significant volumes and corresponding increased demand for Virtu’s liquidity.  As a result, our Americas Equities category recorded $45.8 million of Adjusted Net Trading Income and comprised 33.1% of our overall Adjusted Net Trading Income.  As I have stated publicly, Virtu has the capacity to thrive in high volume environments with increased volatility.  Our overall  performance in the third quarter reflects this favorable environment.”

GAAP Financial Results

Total revenues increased 24.6% to $215.8 million for this quarter, compared to $173.2 million for the same period in 2014. Trading income, net, increased 27.5% to $206.8 million for this quarter, compared to $162.3 million for the same period in 2014. Net Income increased 67.9% to $69.5 million for this quarter, compared to $41.4 million for the same period in 2014.

GAAP Basic EPS was $0.36 and Diluted EPS was $0.35.

Historical quarterly results from first quarter 2014 to date are available at http://ir.virtu.com.

Business Performance

Adjusted Net Trading Income increased 34.3% to $138.6 million for this quarter, compared to $103.2 million for the same period in 2014. Adjusted Net Income increased 56.8% to $76.2 million for this quarter, compared to $48.6 million for the same period in 2014. Adjusted EBITDA increased 52.3% to $100.7 million for this quarter, compared to $66.1 million for the same period in 2014. 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 taxation, Adjusted EPS was $0.40 for this quarter.

Since our inception, we have sought to broadly diversify our market making across securities, asset classes and  geographies, and as a result, for the quarter ended September 30, 2015, we achieved a diverse mix of Adjusted Net Trading Income results, with no single category constituting more than 33.1% of our total Adjusted Net Trading Income. Daily Adjusted Net Trading Income was approximately $2.166 million for this quarter compared to $1.612 million for the same period in the previous year. Current year to date, no one category constituted more than 26.0% of our total Adjusted Net Trading Income and our Daily Adjusted Net Trading Income was approximately $2.090 million compared to $1.614 million for the same period in the previous year.

The increase in Adjusted Net Trading Income this quarter, in comparison to the same period in the previous year, was primarily driven by strong performances in Americas equities, EMEA equities, APAC equities and Global Commodities, and reflected the overall increased volumes in most of the global markets we serve. As of September 30, 2015, Virtu was connected to more than 225 unique market venues in 35 countries and makes markets in over 11,000 financial instruments.

The following tables show our Adjusted Net Trading Income, average daily Adjusted Net Trading Income and percentage of Adjusted Net Trading Income by category for the three months ended September 30, 2015 and 2014, and nine months ended September 30, 2015 and 2014, respectively.

  Three Months Ended September 30,
Adjusted Net Trading Income:   2015     % of
Total
    2014     % of
Total
  % Change
Category (in thousands, except percentages)
Americas Equities $   45,815       33.1 %   $   25,982       25.2 %     76.3 %
EMEA Equities     15,087       10.9 %       12,324       11.9 %     22.4 %
APAC Equities     13,144       9.5 %       7,032       6.8 %     86.9 %
Global Commodities     28,273       20.4 %       18,457       17.9 %     53.2 %
Global Currencies     23,289       16.8 %       25,211       24.4 %     -7.6 %
Options, Fixed Income and Other     10,988       7.9 %       10,063       9.8 %     9.2 %
Unallocated1     2,020       1.4 %       4,120       4.0 %     NM  
Total Adjusted Net Trading Income $    138,616       100.0 %   $    103,189       100.0 %     34.3 %
                   
                   
  Three Months Ended September 30,
Average Daily Adjusted Net Trading Income:   2015     % of
Total
    2014     % of
Total
  % Change
Category (in thousands, except percentages)
Americas Equities $   716       33.1 %   $   406       25.2 %     76.3 %
EMEA Equities     236       10.9 %       193       12.1 %     22.4 %
APAC Equities     205       9.5 %       110       6.8 %     86.9 %
Global Commodities     442       20.4 %       288       17.9 %     53.2 %
Global Currencies     364       16.8 %       394       24.4 %     -7.6 %
Options, Fixed Income and Other     172       7.9 %       157       9.7 %     9.2 %
Unallocated1     31       1.4 %       64       3.9 %     NM  
Total Adjusted Net Trading Income $    2,166       100.0 %   $    1,612       100.0 %     34.3 %
                   
                   
  Three Months Ended September 30,
Selected Market Metrics:   2015           2014         % Change
US Equities Average Daily Volume, in millions2     7,321             5,678           28.9 %
EU Equities Average Daily Volume, in millions2     5,448             4,701           15.9 %
TSE Equities Average Daily Volume, in millions3     2,834             2,411           17.5 %
CME Average Daily Energy Contracts4     1,964,824             1,560,565           25.9 %
CME Average Daily FX Contracts4     854,505             795,217           7.5 %
OCC Average Daily Volume, in millions5     18.1             16.3           11.4 %
VIX (Average)6     19.31             13.09           47.5 %
VIX (High)6     40.74             17.03           139.2 %
VIX (Low)6     11.95             10.32           15.8 %
Trading Days (US)7     64             64          
                   
  Nine Months Ended September 30,
Adjusted Net Trading Income:   2015     % of
Total
    2014     % of
Total
  % Change
Category (in thousands, except percentages)
Americas Equities $   102,278       26.0 %   $   78,122       25.7 %     30.9 %
EMEA Equities     46,013       11.7 %       38,283       12.6 %     20.2 %
APAC Equities     33,875       8.6 %       20,450       6.7 %     65.6 %
Global Commodities     90,514       23.0 %       67,848       22.4 %     33.4 %
Global Currencies     90,147       22.9 %       70,557       23.2 %     27.8 %
Options, Fixed Income and Other     24,911       6.3 %       27,831       9.2 %     -10.5 %
Unallocated1     5,151       1.5 %       425       0.2 %     NM  
Total Adjusted Net Trading Income $    392,889       100.0 %   $    303,516       100.0 %     29.4 %
                   
                   
  Nine Months Ended September 30,
Average Daily Adjusted Net Trading Income:   2015     % of
Total
    2014     % of
Total
  % Change
Category (in thousands, except percentages)
Americas Equities $   544       26.0 %   $   416       25.7 %     30.9 %
EMEA Equities     245       11.7 %       204       12.6 %     20.2 %
APAC Equities     180       8.6 %       109       6.7 %     65.6 %
Global Commodities     481       23.0 %       361       22.4 %     33.4 %
Global Currencies     480       22.9 %       375       23.2 %     27.8 %
Options, Fixed Income and Other     133       6.3 %       148       9.2 %     -10.5 %
Unallocated1     27       1.5 %       1       0.2 %     NM  
Total Adjusted Net Trading Income $    2,090       100.0 %   $    1,614       100.0 %     29.4 %
                   
                   
  Nine Months Ended September 30,
Selected Market Metrics:   2015           2014         % Change
US Equities Average Daily Volume, in millions2     6,865             6,214           10.5 %
EU Equities Average Daily Volume, in millions2     5,964             5,357           11.3 %
TSE Equities Average Daily Volume, in millions3     2,761             2,574           7.3 %
CME Average Daily Energy Contracts4     1,949,387             1,572,980           23.9 %
CME Average Daily FX Contracts4     902,461             749,287           20.4 %
OCC Average Daily Volume, in millions5     16.6             16.6           -0.2 %
VIX (Average)6     16.55             13.53           22.4 %
VIX (High)6     40.74             21.44           90.0 %
VIX (Low)6     11.95             10.32           15.8 %
Trading Days (US)7     188             188          
                   
1 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 daily Adjusted Net Trading
  Income calculation can effectively defer or accelerate revenue from one day to another or one reporting period to another, as the case
  may be. We do not allocate any resulting differences based on the timing of revenue recognition.
2 Source: BATS
3 Source: Tokyo Stock Exchange
4 Source: Chicago Mercantile Exchange Group
5 Source: Options Clearing Corporation
6 Source: Chicago Board Options Exchange
7 Based on NYSE/NASDAQ trading calendar

Financial Condition

As of September 30, 2015, Virtu had $161.5 million in cash and cash equivalents, and total long-term debt outstanding in an aggregate principal amount of $501.1 million.  The increase in cash and cash equivalents from prior periods is primarily due to the net proceeds contributed to Virtu Financial LLC as a result of the Initial Public Offering.

Virtu’s headcount was 150 full-time employees as of September 30, 2015.

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 interest and dividends income and expense, net, less direct costs associated with those revenues, including brokerage, exchange and clearance fees, 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 market making activities.
  • “Adjusted Net Income”, which measures our operating performance by adjusting Net Income to exclude amortization of purchased intangibles and acquired capitalized software, severance, termination of office leases, equipment write-off, acquisition related retention bonus, share based compensation, charges related to one-time share based compensation at IPO, 2015 Management Incentive Plan, and charges related to share based compensation awards at IPO.
  • “EBITDA”, which measures our operating performance by adjusting Net Income to exclude financing interest expense on senior secured credit facility, depreciation and amortization, amortization of purchased intangibles and acquired capitalized software, equipment write-off and income tax expense, and “Adjusted EBITDA”, which measures our operating performance by further adjusting EBITDA to exclude severance, termination of office leases, acquisition related retention bonus, share based compensation, charges related to one-time share based compensation at IPO, 2015 Management Incentive Plan, and charges related to share based compensation at IPO.
  • “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 including IPO related adjustments 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 a corporate tax rate of 35.5%.  

Adjusted Net Trading Income, Adjusted Net Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS are non-GAAP financial measures used by management 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, Adjusted Net Income, EBITDA, Adjusted EBITDA, 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 it assists both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted Net Trading Income, Adjusted Net Income, EBITDA, Adjusted EBITDA, 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 covenants and other tests based on metrics similar to Adjusted EBITDA. Other companies may define Adjusted Net Trading Income, Adjusted Net Income, Adjusted EBITDA, 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 Net Income, Adjusted EBITDA, 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, Adjusted Net 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, Adjusted Net Income, EBITDA, Adjusted EBITDA, 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, Adjusted Net 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, Adjusted Net 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, Adjusted Net 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 operating income (loss), Net Income (loss), 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,
      2015       2014       2015       2014  
    (in thousands, except share and per share data)
Revenues:                
Trading income, net   $   206,832     $   162,260     $   590,554     $   480,799  
Interest and dividends income       6,425         8,518         21,022         21,287  
Technology services       2,545         2,456         7,733         7,419  
Total revenues       215,802         173,234         619,309         509,505  
                 
Operating Expenses:                
Brokerage, exchange and clearance fees, net       61,814         55,861         179,453         164,132  
Communication and data processing       16,110         17,256         51,602         50,568  
Employee compensation and payroll taxes       24,736         24,768         66,801         63,636  
Interest and dividends expense       12,827         11,728         39,234         34,438  
Operations and administrative       4,857         4,392         17,288         16,517  
Depreciation and amortization       8,176         8,552         26,025         22,514  
Amortization of purchased intangibles and                
acquired capitalized software       53         53         159         159  
Acquisition related retention bonus       –          152         –          2,639  
Termination of office leases       –          –          2,729         849  
Initial public offering fees and expenses       –          60         –          8,961  
Charges related to share based compensation at IPO     1,107         –          45,301         –   
Financing interest expense on senior secured credit facility     7,205         7,815         22,066         23,114  
Total operating expenses       136,885         130,637         450,658         387,527  
                 
Income before income taxes and non-controlling interest     78,917         42,597         168,651         121,978  
Provision for income taxes       9,378         1,179         14,103         829  
Net income   $   69,539     $   41,418     $   154,548     $   121,149  
                 
Non-controlling interest       (57,233 )           (141,768 )    
                 
Net income available for common stockholders   $   12,306         $   12,780      
                 
Earnings per share:                
Basic   $   0.36         $   0.37      
Diluted   $   0.35         $   0.37      
                 
Weighted average common shares outstanding              
Basic     34,305,052           34,305,052      
Diluted     34,738,733           34,641,497      
                 
Comprehensive income:                
Net income   $   69,539     $   41,418     $   154,548     $   121,149  
Other comprehensive income (loss)                
Foreign exchange translation adjustment, net of taxes     3,596         (3,520 )       595         (3,683 )
Comprehensive income   $   73,135     $   37,898     $   155,143     $   117,466  
Less: Comprehensive income attributable to noncontrolling interests       (59,931 )           (141,053 )    
Comprehensive income available for common stockholders $   13,204         $   14,090      
 

 

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 Income, EBITDA, Adjusted EBITDA, Adjusted Net Trading Income, and selected Operating Margins.
 
    Three Months Ended September 30,   Nine Months Ended September 30,
      2015       2014       2015       2014  
    (in thousands, except percentages)
Reconciliation of Trading income, net to Adjusted Net Trading Income            
Trading income, net   $ 206,832     $ 162,260     $ 590,554     $ 480,799  
Interest and dividends income     6,425       8,518       21,022       21,287  
Brokerage, exchange and clearance fees, net   (61,814 )     (55,861 )     (179,453 )     (164,132 )
Interest and dividends expense     (12,827 )     (11,728 )     (39,234 )     (34,438 )
Adjusted Net Trading Income   $ 138,616     $ 103,189     $ 392,889     $ 303,516  
                 
Reconciliation of Net Income to Adjusted Net Income              
Net income   $ 69,539     $ 41,418     $ 154,548     $ 121,149  
Amortization of purchased intangibles and acquired capitalized software   53       53       159       159  
Severance     342       2,742       645       3,136  
Initial public offering fees and expenses           60             8,961  
Termination of office leases                 2,729       849  
Equipment write-off     251             1,719        
Acquisition related retention bonus           152             2,639  
Share based compensation     3,254       4,170       11,907       11,299  
Charges related to one-time share based compensation at IPO, 2015 Management Incentive Plan     1,655             2,913        
Charges related to share based compensation at IPO   1,107             45,301        
Adjusted Net Income   $ 76,201     $ 48,595     $ 219,921     $ 148,192  
                 
Reconciliation of Net Income to EBITDA and Adjusted EBITDA            
Net income   $ 69,539     $ 41,418     $ 154,548     $ 121,149  
Financing interest expense on senior secured credit facility   7,205       7,815       22,066       23,114  
Depreciation and amortization     8,176       8,552       26,025       22,514  
Amortization of purchased intangibles and acquired capitalized software   53       53       159       159  
Provision for income taxes     9,378       1,179       14,103       829  
EBITDA   $ 94,351     $ 59,017     $ 216,901     $ 167,765  
                 
Severance     342       2,742       645       3,136  
Initial public offering fees and expenses           60             8,961  
Termination of office leases                 2,729       849  
Acquisition related retention bonus           152             2,639  
Share based compensation     3,254       4,170       11,907       11,299  
Charges related to one-time share based compensation at IPO, 2015 Management Incentive Plan     1,655             2,913        
Charges related to share based compensation at IPO   1,107             45,301        
Adjusted EBITDA   $ 100,709     $ 66,141     $ 280,396     $ 194,649  
                 
                 
Selected Operating Margins                
Net Income Margin1     49.3 %     39.2 %     38.6 %     39.0 %
Adjusted Net Income Margin2     54.0 %     46.0 %     54.9 %     47.7 %
EBITDA Margin3     66.8 %     55.9 %     54.1 %     54.0 %
Adjusted EBITDA Margin4     71.3 %     62.6 %     70.0 %     62.6 %
                 
1 Calculated by dividing net income by the sum of Adjusted Net Trading Income and technology services revenue.
2 Calculated by dividing Adjusted Net Income by the sum of Adjusted Net Trading Income and technology services revenue.
3 Calculated by dividing EBITDA by the sum of Adjusted Net Trading Income and technology services revenue.
4 Calculated by dividing Adjusted EBITDA by the sum of Adjusted Net Trading Income and technology services revenue.

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 and Normalized Adjusted Net Income per share.
 
    Three Months Ended September 30,   Nine Months Ended September 30,
      2015       2014       2015       2014  
    (in thousands, except share and per share data)
Reconciliation of Net Income to Normalized Adjusted Net Income            
Net income   $ 69,539     $ 41,418     $ 154,548     $ 121,149  
GAAP provision for income taxes     9,378       1,179       14,103       829  
Income before income taxes   $ 78,917     $ 42,597     $ 168,651     $ 121,978  
Amortization of purchased intangibles and acquired capitalized software   53       53       159       159  
Severance     342       2,742       645       3,136  
Initial public offering fees and expenses           60             8,961  
Termination of office leases                 2,729       849  
Equipment write-off     251             1,719        
Acquisition related retention bonus           152             2,639  
Share based compensation     3,254       4,170       11,907       11,299  
Charges related to one-time share based compensation at IPO, 2015 Management Incentive Plan     1,655             2,913        
Charges related to share based compensation at IPO   1,107             45,301        
Normalized Adjusted Net Income before income taxes $ 85,579     $ 49,774     $ 234,024     $ 149,021  
Normalized provision for income taxes1     30,381       17,670       83,079       52,902  
Normalized Adjusted Net Income   $ 55,198     $ 32,104     $ 150,945     $ 96,119  
                 
Adjusted shares outstanding2     138,881,040       138,447,359       138,783,804       138,447,359  
                 
Adjusted Net Income per share   $ 0.40     $ 0.23     $ 1.09     $ 0.69  
                 
1 Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 35.5%.
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,  (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.
Includes 433,681 and 336,445 additional shares from dilutive impact of options and RSU’s granted under the 2015 MIP for the three and nine months ended September 30, 2015, respectively.

Virtu Financial, Inc. and Subsidiaries
Condensed Consolidated Statements of Financial Condition (Unaudited)
 
    September 30,   December 31,
      2015       2014  
    (in thousands, except share data)
Assets        
Cash and cash equivalents   $   161,538     $   75,864  
Securities borrowed       510,600         484,934  
Securities purchased under agreements to resell     –          31,463  
Receivables from broker-dealers and clearing organizations     560,716         387,652  
Trading assets, at fair value       1,454,558         1,544,308  
Property, equipment and capitalized software, net     42,442         44,644  
Goodwill       715,379         715,379  
Intangibles (net of accumulated amortization)     1,255         1,414  
Deferred taxes       160,782         –   
Other assets       34,676         33,800  
Total assets   $   3,641,946     $   3,319,458  
         
Liabilities, redeemable interest and equity      
Liabilities        
Short-term borrowings   $   28,000     $   –   
Securities loaned       741,728         497,862  
Securities sold under agreements to repurchase     9,000         2,006  
Payables to broker-dealers and clearing organizations     328,054         686,203  
Trading liabilities, at fair value       1,198,881         1,037,634  
Tax receivable agreement obligations     184,679         –   
Accounts payable and accrued expenses and other liabilities     128,278         93,331  
Senior secured credit facility, net       494,498         495,724  
Total liabilities   $   3,113,118     $   2,812,760  
         
Class A-1 redeemable membership interest     –          294,433  
         
Total equity       528,828         212,265  
         
Total liabilities, redeemable interest and equity $   3,641,946     $   3,319,458  
         
         
    As of September 30, 2015
Ownership of Virtu Financial LLC Interests: Interests   %
Virtu Financial, Inc. – Class A Common Stock     34,305,052       24.8 %
Non-controlling Interests (Virtu Financial LLC)     104,142,307       75.2 %
Total Virtu Financial LLC Interests     138,447,359       100.0 %
 

Conference Call Information

Douglas Cifu, Chief Executive Officer, and Joseph Molluso, Chief Financial Officer, will host a conference call to discuss the Company’s financial results and outlook on Wednesday, November 4, 2015, at 8:00 a.m. Eastern Time. To access the conference call, please dial (855) 645-0552 (U.S.) or (720) 634-9067 (international). The Company will also host a live audio Webcast of the conference call on the Investor Relations section of the Company’s website at http://ir.virtu.com/events.cfm. The Webcast will also be archived on http://ir.virtu.com/events.cfm for 90 days following the announcement.

About Virtu Financial, Inc.

Virtu is a leading technology-enabled market maker and liquidity provider to the global financial markets. We stand ready, at any time, to buy or sell a broad range of securities and other financial instruments, and we generate revenue by buying and selling securities and other financial instruments and earning small amounts of money on individual transactions based on the difference between what buyers are willing to pay and what sellers are willing to accept, which we refer to as “bid/ask spreads,” across a large volume of transactions. We make markets by providing quotations to buyers and sellers in more than 11,000 securities and other financial instruments on more than 225 unique exchanges, markets and liquidity pools in 35 countries around the world. We believe that our broad diversification, in combination with our proprietary technology platform and low-cost structure, enables us to facilitate risk transfer between global capital markets participants by supplying liquidity and competitive pricing while at the same time earning attractive margins and returns.

Cautionary Note Regarding Forward-Looking Statements

The foregoing information contains certain forward-looking statements that reflect the company’s current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company’s operations and business environment which may cause the company’s actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the company on the date of this release. The company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the company’s financial results may be found in the company’s filings with the Securities and Exchange Commission.

CONTACT              

Investor Relations
Andrew Smith
Virtu Financial, Inc.
(212) 418-0195
investor_relations@virtu.com

Media Relations
media@virtu.com