We came across a bullish thesis on Virtu Financial, Inc. on X.com by secretlyaninja. In this article, we will summarize the bulls’ thesis on VIRT. Virtu Financial, Inc.'s share was trading at $34.32 as of December 2nd. VIRT’s trailing and forward P/E were7.60 and 8.63 respectively according to Yahoo Finance. First Horizon (FHN) Soars to All-Time High, Then Gives up All Gains Copyright: kritchanut / 123RF Stock Photo Virtu Financial, Inc. operates as a financial services company in the United States, Ire ...

NEW YORK, Dec 3 (Reuters) - Virtu Financial will pay a $2.5 million fine to settle U.S. Securities ​and Exchange Commission accusations the large market maker ‌improperly allowed almost all employees at its broker-dealer unit access to ‌confidential information about customers and their trades. The broker-dealer unit Virtu Americas, which according to the SEC handled about 25% of market orders from U.S. retail investors during the relevant ⁠period, did not ‌admit or deny wrongdoing, the SEC said on Wednes ...

Core Viewpoint - Virtu Financial reported strong Q3 earnings, with adjusted EPS of $1.05, beating estimates by 8.3% and showing a 28% year-over-year increase [3][4]. Financial Performance - Adjusted net trading income reached $467 million, up 20.4% year over year, surpassing consensus estimates by 11.2% [3][4]. - Revenues from commissions and technology services rose 17.4% year over year to $154.5 million, exceeding estimates [5]. - Interest and dividend income was $127.4 million, a 1.7% increase year over year, but fell short of estimates [5]. - Adjusted EBITDA climbed 24.7% year over year to $267.8 million, with an improved margin of 57.3% [6]. Expense Analysis - Total operating expenses increased 15.2% year over year to $644.8 million, driven by higher brokerage fees, employee compensation, and other costs [7]. Segment Performance - Market Making segment reported adjusted net trading income of $344.1 million, a 19.5% year-over-year increase, and revenues of $668 million, up 15.8% [8]. - Execution Services segment achieved adjusted net trading income of $122.9 million, a 22.8% increase year over year, with total revenues rising 22.9% to $154.5 million [9]. Financial Position - As of September 30, 2025, cash and cash equivalents were $707.9 million, down 18.9% from the end of 2024, while total assets increased to $21.3 billion [10]. - Long-term borrowings rose to $2 billion from $1.7 billion at the end of 2024, and total equity increased by 14.4% to $1.7 billion [10]. Shareholder Returns - The company repurchased 0.5 million shares for $20.9 million in Q3 2025, with a remaining buyback capacity of $302.8 million [12]. - A cash dividend of 24 cents per share was announced, payable on December 15, 2025 [12]. Market Outlook - Following the earnings release, consensus estimates have increased by 32.09%, indicating positive investor sentiment [13]. - Virtu Financial holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [15]. Industry Comparison - In the same industry, Synchrony reported a revenue increase of 2.4% year over year, with an EPS of $2.86 compared to $1.94 a year ago [16]. - Synchrony is expected to post earnings of $1.99 per share for the current quarter, reflecting a 4.2% year-over-year change [17].

Core Insights - Virtu Financial received recognition in seven categories at the 2025 TRADE Awards held in New York and London, highlighting its strong performance in the financial services sector [1][2]. Awards and Recognition - The company was awarded TCA Provider of the Year and Best Dark Pool Capabilities in London, and Best Customer Support & Consulting in New York [2]. - Virtu Triton, the company's multi-asset execution management system, was recognized for Best Market Access and Best Provider for both UK & Europe and North America [2]. Company Commitment and Leadership - Keith Casuccio, Global Head of Virtu Execution Services, emphasized the company's commitment to high-quality execution technology and client service globally, attributing the recognition to the hard work of the Algos, Analytics, and Triton teams [3]. Company Overview - Virtu Financial is a leading financial services firm that utilizes advanced technology to provide execution services, data, analytics, and connectivity products, delivering liquidity to global markets [4]. - The firm offers a comprehensive product suite that includes execution, liquidity sourcing, analytics, and broker-neutral, multi-dealer platforms, enabling clients to trade across hundreds of venues in over 50 countries and multiple asset classes [4].

Core Insights - Virtu Financial, Inc. has announced the recognition of Gabriella Gambino and Julie Feng at the Markets Media's Women in Finance Americas Awards, highlighting the company's commitment to diversity and excellence in the financial services industry [1][4] Group 1: Awards and Recognition - Gabriella Gambino received the Rising Star award for her contributions across equities analytics, business development, and fixed income sales, showcasing her versatility and strong communication skills [2] - Julie Feng was honored for Individual Achievement, recognized for her decade of experience and leadership in complex onboarding initiatives, which have enhanced client relationships and created new business opportunities [3] - The company also acknowledged Kelly Pratko, Kirra Peery, and Nicole Malloy, who were shortlisted for awards, reflecting their dedication and positive impact within the firm [4] Group 2: Company Overview - Virtu Financial is a leading provider of global, multi-asset financial services, utilizing advanced technology to deliver execution services, data, analytics, and connectivity products to clients [6] - The firm offers a comprehensive product suite that includes execution, liquidity sourcing, analytics, and broker-neutral platforms, enabling clients to trade across hundreds of venues in over 50 countries and various asset classes [6] - Virtu's integrated multi-asset analytics platform provides essential pre- and post-trade services, data products, and compliance tools that assist clients in investing, trading, and managing risk in global markets [6]

Financial Performance - Total revenue for the three months ended September 30, 2025, was $824.8 million, an increase of 16.7% compared to $706.8 million for the same period in 2024 [253]. - Trading income, net accounted for 67% of total revenues for the nine months ended September 30, 2025, compared to 63% for the same period in 2024 [259]. - Net income for the three months ended September 30, 2025, was $149.1 million, representing a 25.3% increase from $119.0 million in the same period of 2024 [257]. - Basic earnings per share for the three months ended September 30, 2025, was $0.86, up from $0.65 in the same period of 2024 [257]. - Total revenue for the nine months ended September 30, 2025, was $1,771,839,000, a 38.5% increase from $1,278,487,000 in the same period of 2024 [287]. - Net income for the nine months ended September 30, 2025, was $631,662,000, a significant increase of 76.1% compared to $358,448,000 for the same period in 2024 [284]. - Adjusted Net Trading Income for Q3 2025 reached $467,015,000, up 20.4% from $388,032,000 in Q3 2024 [282]. - The company reported a GAAP net income margin of 18.1% for the three months ended September 30, 2025, compared to 16.8% in the same period of 2024 [255]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $644.8 million, an increase of 15.1% from $559.7 million in 2024 [255]. - Employee compensation and payroll taxes increased by $50.1 million, or 46.6%, to $157.7 million for the three months ended September 30, 2025, compared to $107.6 million for the same period in 2024 [300]. - Operating expenses increased by $311.2 million, or 19.4%, to $1,911.5 million for the nine months ended September 30, 2025 [318]. - Interest and dividends expense increased by $76.4 million, or 19.8%, to $462.2 million for the nine months ended September 30, 2025 [323]. Debt and Financing - The company reported a senior secured first lien term loan of $1,800.0 million, fully drawn on January 13, 2022, to repay previous debts and fund share repurchases [241]. - The company completed the offering of $500.0 million aggregate principal amount of 7.50% senior secured first lien notes due 2031 on June 21, 2024 [248]. - The Term B-2 Loans bear interest at a rate of 6.92% through November 2025, fixing interest payment obligations on $1,075.0 million of principal [247]. - The company entered into a two-year floating-to-fixed interest rate swap agreement for $1,525.0 million at a rate of 7.5% through November 2025 [348]. - As of September 30, 2025, the outstanding principal balance on broker-dealer facilities was $125.0 million, and short-term credit facilities amounted to approximately $123.2 million [344]. Market Segments and Services - The company operates in two segments: Market Making and Execution Services, with a focus on leveraging technology for competitive liquidity provision [236]. - The company provides liquidity across over 25,000 securities and financial instruments on more than 250 venues in 40 countries [237]. - The company’s execution services include algorithmic trading, portfolio trading, and matching client conditional orders, generating revenue through commissions and service fees [239]. - The company’s diversified product offerings include execution, liquidity sourcing, analytics, and broker-neutral platforms across multiple asset classes [231]. Technology and Operations - The company emphasizes the importance of technology in maintaining operational efficiency and enhancing market health [234]. - The company’s proprietary technology platform integrates directly with exchanges and liquidity centers, enabling scalable operations without significant incremental costs [233]. - The company utilizes proprietary risk management tools to monitor market risks continuously, including locking down trading strategies that exceed preset limits [406]. Tax and Compliance - The effective tax rate is subject to significant variation, influenced by pre-tax income, acquisitions, and changes in tax law, with an approximate effective tax rate of 24% applied for normalized calculations [275][279]. - The provision for income taxes was $30.9 million with an effective tax rate of 17.2% for the three months ended September 30, 2025, compared to $28.1 million and 19.1% for the same period in 2024 [310]. - The company is subject to tax receivable agreements that require payments equal to 85% of cash tax savings realized from favorable tax attributes [394]. Cash Flow and Liquidity - As of September 30, 2025, the company had $707.9 million in cash and cash equivalents, with borrowings under credit facilities totaling approximately $248.2 million [332]. - Net cash provided by operating activities was $9.0 million for the nine months ended September 30, 2025, a significant decrease from $207.5 million for the same period in 2024 [370]. - Future liquidity is expected to primarily come from cash flows from operating and financing activities [336]. Share Repurchase Program - The company has repurchased approximately 53.8 million shares for approximately $1,417.2 million since the inception of the share repurchase program, with $302.8 million remaining capacity for future purchases [374]. - The company’s share repurchase program has been extended through April 24, 2026, with total authorizations reaching $1,720 million [373].

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Core Insights - Virtu Financial (VIRT) reported quarterly earnings of $1.05 per share, exceeding the Zacks Consensus Estimate of $0.97 per share, and up from $0.82 per share a year ago, representing an earnings surprise of +8.25% [1] - The company achieved revenues of $467.02 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 11.16%, and an increase from $388.03 million year-over-year [2] - Virtu Financial has consistently surpassed consensus EPS estimates over the last four quarters [2] Financial Performance - The earnings surprise for the previous quarter was +12.5%, with actual earnings of $1.53 per share compared to an expected $1.36 per share [1] - The current consensus EPS estimate for the upcoming quarter is $0.87, with projected revenues of $417.87 million, and for the current fiscal year, the EPS estimate is $4.80 on revenues of $1.91 billion [7] Market Position - Virtu Financial shares have underperformed the market, losing about 3.1% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The company currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Virtu Financial belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The firm reported normalized adjusted EPS of $1.05 and adjusted net trading income (ANTI) of $467 million, or $7.4 million per day, driven by a positive operating environment [9] - Market making reported ANTI of $344 million, or $5.4 million per day, with strong performance in global equities, crypto, and currencies and commodities [9] - Virtu Execution Services (VES) reported ANTI of $123 million, or $1.9 million per day, marking its best quarter since early 2021 and its sixth consecutive quarter of increased ANTI [9][10] Business Line Data and Key Metrics Changes - VES showed consistent quarter-on-quarter growth, achieving a goal of $2 million per day through the cycle [10] - The workflow and analytics business generated $137 million of ANTI on a trailing 12-month basis [10] - Existing growth initiatives delivered ANTI per day slightly ahead of the prior quarter [11] Market Data and Key Metrics Changes - The firm experienced strong performance in crypto and proprietary market making business, particularly in commodities [33][39] - The 605 quoted spread opportunity declined 3% sequentially, while market making revenue fell 26% sequentially, indicating a broader market trend affecting performance [33] Company Strategy and Development Direction - The company aims to focus on growing trading results through investing in infrastructure, acquiring talent, and expanding the capital base [7] - There is a strategic pivot to include options, cryptocurrency, and ETF block trading as growth areas, while not excluding other business segments [22] - The management emphasizes a long-term plan to double the capital base to significantly grow the P&L [16][60] Management's Comments on Operating Environment and Future Outlook - Management noted a confluence of factors enabling a focus on growth, including successful integrations and a favorable external environment [20] - The firm aims to move towards the higher end of the adjusted net trading income range of $6 million-$10 million per day as a base case [7][45] - Management acknowledged the inherent volatility of the business but expressed confidence in achieving consistent growth [46] Other Important Information - The company raised over $500 million of new trading capital, which has already been deployed [15] - Management indicated that any incremental capital deployment will be within historical risk parameters [41] - The firm is actively hiring across various roles, including developers and traders, to support growth initiatives [62] Q&A Session Summary Question: Areas of significant growth opportunities - Management highlighted that growth opportunities exist across the firm, particularly in crypto options and ETF block trading, while also focusing on core businesses [15][20] Question: Capital management priorities and share repurchases - Management stated that they will dial back share repurchases to build more capital, with over $500 million raised for trading capital already deployed [15][16] Question: Timeline for options market making - Management indicated that while they are not specifically targeting customer market making in options, they are focused on excelling in trading options [29] Question: Revenue capture in market making segment - Management acknowledged a decline in market making revenue but emphasized strong performance in other areas like crypto and proprietary market making [33][39] Question: Impact of new capital on performance - Management noted that any incremental capital deployed earned a 95% return, with strong performance in crypto and options contributing to growth [38] Question: Variability in revenue due to increased capital deployment - Management expects to move towards the high end of the net trading income range but acknowledged that the business remains volatile [45][46] Question: Tokenization and infrastructure changes - Management expressed readiness to adapt to tokenized assets and highlighted ongoing participation in various crypto markets [55] Question: Prioritization of capital allocation - Management indicated flexibility in capital allocation based on market conditions, with a focus on areas like cryptocurrency and ETF block trading [64]

Financial Data and Key Metrics Changes - The company reported normalized adjusted EPS of $1.05 and adjusted net trading income (ANTI) of $467 million, averaging $7.4 million per day, reflecting a positive operating environment [8][9] - Market making reported ANTI of $344 million, or $5.4 million per day, driven by strong performance in global equities, crypto, and currencies and commodities [9] - Virtu Execution Services (VES) achieved ANTI of $123 million, or $1.9 million per day, marking its best quarter since early 2021 and its sixth consecutive quarter of increased ANTI [9][10] Business Line Data and Key Metrics Changes - Market making showed strong performance across all businesses, particularly in global equities, crypto, and currencies and commodities [9] - VES reported consistent quarter-on-quarter growth, achieving a goal of $2 million per day through the cycle, with a strong suite of workflow and analytics products [10] Market Data and Key Metrics Changes - The company noted continued momentum in crypto markets and strong performance in options and ETF block trading, indicating a favorable market environment for these segments [36][37] Company Strategy and Development Direction - The company plans to focus on growing trading results by investing in infrastructure, acquiring talent, and expanding its capital base, aiming to trend toward the higher end of the adjusted net trading income range of $6 million to $10 million per day [6][11] - The management emphasized a pivot to growth across all areas of the business, including options, cryptocurrency, and ETF block trading, while maintaining a disciplined approach to capital management [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current growth opportunities and the excitement among employees to refocus on growth, citing a confluence of factors that make this the right time for expansion [20][21] - The company aims to double its P&L over time, which may require doubling its capital base, indicating a long-term growth strategy [15][54] Other Important Information - The company raised over $500 million of new trading capital in 2025, which has already been deployed, and plans to continue accumulating capital organically over time [14][15] - Management highlighted the importance of maintaining a strong operational leverage while attracting and retaining top talent to support growth initiatives [24] Q&A Session Summary Question: Can you elaborate on the focus on growth opportunities? - Management indicated that there are significant growth opportunities across the firm, particularly in crypto options and ETF block trading, and they are prepared to adapt to new market conditions [14][20] Question: What is the timeline for customer market making in options? - Management stated that while they are not specifically targeting customer market making, they are focused on excelling in trading options and will explore opportunities as they arise [28] Question: How does the recent capital raise impact growth initiatives? - Management noted that any incremental capital deployed has earned a 95% return, with strong performances in crypto, options, and ETF block trading contributing to growth [36] Question: Will increased capital deployment lead to more variability in results? - Management clarified that while they aim to move towards the higher end of the net trading income range, the business will remain volatile, and results will depend on market conditions [42][44] Question: How do opportunistic buybacks fit into capital management? - Management emphasized that the priority is to invest in growth opportunities rather than buybacks, although they have the capacity to consider buybacks if necessary [46][48] Question: How is the company positioned for tokenization of assets? - Management indicated that they are actively involved in crypto markets and are prepared to adapt their technology to support trading in tokenized assets [50] Question: What areas will the company prioritize for capital allocation? - Management highlighted that capital allocation will be flexible and based on market conditions, with a focus on areas like cryptocurrency and ETF block trading [58][59]