Virtu Financial, Inc. Q3 FY2025 earnings call

• Over the past years, Virtu completed major integrations, expanded into new asset classes, and returned capital to shareholders. The company's edge is in technology, risk management, and operational efficiency.
• Currently, the focus is on growing trading results by investing in infrastructure, talent, and expanding the capital base, with a goal to trend toward the higher end of the adjusted net trading income range of $6 million to $10 million per day.
• Market Making had strong performance across various asset classes, and VES continued to show momentum with its workflow and analytics products, including Triton which was awarded top spot in a survey for the third year in a row.

Market Making reported adjusted net trading income (ANTI) of $344 million, which is $5.1 million per day, driven by strong performance across global equities, cryptos, currencies, and commodities. VES (Virtu Execution Services) reported ANTI of $123 million, or $1.9 million per day, marking its best quarter since early 2021 and a sixth consecutive quarter of increased ANTI. On a trailing 12-month basis, the workflow and analytics business (led by Triton) generated $137 million of ANTI. Market Making contributed a significant revenue portion, and VES showed consistent quarter-on-quarter growth regardless of the environment.

• The goal is to grow the business to trend toward the higher end of the $6 million to $10 million per day adjusted net trading income range.
• Plan to grow the capital base to take advantage of trading opportunities, with incremental capital to be deployed in growing the business across all areas, not limited to previously highlighted initiatives.

• Forward-looking statements are subject to risks, assumptions, and uncertainties outside the company's control.
• Actual results may differ materially from forward-looking statements.
• Risk factors detailed in the annual report, Form 10-K, and other public filings should be reviewed.

Q: Patrick Moley asked about breaking down growth areas and capital build-up.

A: Aaron Simons stated there's growth opportunity everywhere in the firm, including areas like crypto, options, and ETF block, and mentioned raising over $500 million of new trading capital in 2025 which has been deployed, with the goal to potentially double the P&L by doubling the capital base over time.

Q: Alex Blostein inquired about the strategy pivot and M&A.

A: Aaron Simons said there's a confluence of factors enabling refocus on growth, including completed integrations and increased external opportunity, and Joseph Molluso added that M&A would be explored if returns from a deal are superior to internal growth.

Q: Unknown Analyst asked about options market making timeline and M&A.

A: Aaron Simons mentioned focus on excelling in options trading with no specific near-term customer market making timeline, and Joseph Molluso stated M&A would be considered if it creates shareholder value and has attractive returns.

Q: Christopher Allen asked about capital deployment impact.

A: Joseph Molluso said incremental capital deployed this quarter earned a 95% return, and growth initiatives like crypto, options, ETF block, and VES were above second quarter performance.

Q: Daniel Fannon asked about revenue variability and investment timing.

A: Joseph Molluso said investment is mostly in line with revenue opportunity, with ongoing volatility but no long-term lag in seeing results from incremental talent and capital.

Q: Kenneth Worthington asked about buybacks and tokenization.

A: Joseph Molluso stated incremental dollars are spent on growing the business, and Aaron Simons mentioned Virtu is active in crypto markets and new trading infrastructure, including tokenized assets.