Core Viewpoint - Virtu Financial is considered one of the most undervalued financial stocks by Wall Street analysts, despite a recent downgrade in earnings estimates due to reduced market volatility [1][2][3]. Group 1: Earnings Forecast and Price Target - Jefferies has cut its price target for Virtu Financial from $51 to $49 while maintaining a "Buy" rating, citing a revised adjusted earnings estimate for Q3 2025 from $1.02 per share to $0.83 per share [1][2]. - The downgrade in earnings forecast is attributed to a 31% decrease in the average level of the VIX index compared to the previous quarter, indicating lower market volatility [2]. Group 2: Business Model and Market Position - Despite the reduced volatility, Jefferies maintains that retail trading engagement remains positive, which supports Virtu's core revenue streams [3]. - Analysts express confidence in Virtu's business model and profitability, highlighting its ability to generate strong financial results even during periods of lower volatility [3]. Group 3: Company Overview - Virtu Financial, Inc. is a financial services company that utilizes proprietary technology to provide market-making, execution services, and multi-asset analytics across various sectors including equities, fixed income, currencies, commodities, options, futures, and cryptocurrencies [4].

Core Viewpoint - Investors are evaluating the value opportunities presented by Virtu Financial (VIRT) and Brookfield Asset Management (BAM) to determine which stock offers better value at the current time [1] Group 1: Zacks Rank and Earnings Outlook - Virtu Financial holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook, while Brookfield Asset Management has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank system favors stocks with positive revisions to earnings estimates, suggesting that VIRT has an improving earnings outlook [3] Group 2: Valuation Metrics - VIRT has a forward P/E ratio of 7.17, significantly lower than BAM's forward P/E of 37.99 [5] - The PEG ratio for VIRT is 0.41, indicating better value relative to its expected earnings growth compared to BAM's PEG ratio of 2.17 [5] - VIRT's P/B ratio stands at 3.28, while BAM's P/B ratio is much higher at 10.93, further indicating VIRT's relative undervaluation [6] Group 3: Value Grades - Based on various valuation metrics, VIRT has earned a Value grade of A, whereas BAM has received a Value grade of F, highlighting VIRT's superior valuation [6] - The stronger estimate revision activity and more attractive valuation metrics for VIRT suggest it is the preferred choice for value investors at this time [7]

Core Insights - The article emphasizes the importance of the Zacks Rank in identifying strong stocks through earnings estimates and revisions, while also acknowledging that investors have their own strategies [1] - Value investing is highlighted as a popular method for finding great stocks across various market conditions, utilizing established valuation metrics [2] Company Analysis - Virtu Financial (VIRT) is identified as a notable stock for value investors, currently holding a Zacks Rank of 1 (Strong Buy) and an A grade for Value [3] - VIRT's price-to-book (P/B) ratio is 3.32, which is attractive compared to the industry average of 3.80. The stock's P/B has fluctuated between a high of 4.39 and a low of 3.24 over the past year, with a median of 3.90 [4] - The price-to-sales (P/S) ratio for VIRT is 1.58, significantly lower than the industry's average P/S of 2.5, indicating potential undervaluation [5] - Overall, the combination of VIRT's strong valuation metrics and positive earnings outlook suggests it is an impressive value stock at this time [6]

Core Viewpoint - Virtu Financial, Inc. has successfully priced and closed incremental term loans amounting to $300 million, increasing its total term loan balance to $1,545 million under its senior secured credit facility [1][2]. Group 1: Incremental Term Loans - The Incremental Term Loan, along with existing Term Loans, will bear interest at Term SOFR + 250 basis points and will be issued at par [2]. - Proceeds from the Incremental Term Loan may be utilized for general corporate purposes [2]. Group 2: Company Overview - Virtu Financial is a leading provider of financial services and products, utilizing advanced technology to deliver liquidity and innovative trading solutions globally [3]. - The company offers a comprehensive product suite, including execution, liquidity sourcing, analytics, and broker-neutral platforms across over 50 countries and multiple asset classes [3]. - Virtu's integrated multi-asset analytics platform provides pre- and post-trade services, data products, and compliance tools for clients to manage investments and risks [3].

Core Insights - The financial sector is currently experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] Group 1: Oversold Stocks - Blackstone Secured Lending Fund (BXSL) has an RSI of 27.2, with a recent stock price of $27.54 and a 52-week low of $25.89. The stock has fallen approximately 8% over the past month [4] - Ares Capital Corporation (ARCC) has an RSI of 25.1, with shares closing at $21.09 and a 52-week low of $18.26. The stock has decreased around 6% in the last five days [4] - Virtu Financial Inc (VIRT) has an RSI of 18.4, with a stock price of $35.17 and a 52-week low of $29.82. The stock has dropped about 15% over the past month [4] Group 2: Analyst Coverage and Price Targets - UBS analyst Doug Harter initiated coverage on Blackstone Secured Lending Fund with a Neutral rating and a price target of $31 [4] - Ares Capital recently priced a public offering of $650 million in unsecured notes due 2031 [4]

Market Overview - Wall Street has continued its bull run in 2025, with the S&P 500 recording 20 all-time highs year to date, including five in August alone [1] - Historically, September is the worst-performing month for U.S. equities, with an average decline of 0.7% since 1950, and a more pronounced average decline of 2% over the last 10 years [2] Investment Recommendations - It is advisable to invest in low-beta, high-yielding stocks with a favorable Zacks Rank, including Assurant Inc. (AIZ), Hasbro Inc. (HAS), The Mosaic Co. (MOS), Virtu Financial Inc. (VIRT), and Houlihan Lokey Inc. (HLI), all of which have a Zacks Rank 1 (Strong Buy) [3][10] Assurant Inc. (AIZ) - Assurant is focused on both inorganic and organic growth strategies, expecting adjusted EBITDA to increase modestly in 2025, driven by improved performance in Global Housing and growth in Global Lifestyle [13] - The company has an expected revenue growth rate of 5.7% and an earnings growth rate of 5.8% for the current year, with a Zacks Consensus Estimate for earnings improving by 7.6% over the last 30 days [15] Hasbro Inc. (HAS) - Hasbro is concentrating on high-margin segments such as Wizards, Licensing, and Digital, which are expected to support bottom-line growth [16] - The company anticipates that digital gaming and licensing partnerships will contribute about 25% of corporate revenues by 2027, with an expected revenue growth rate of 6.6% and an earnings growth rate of 21.5% for the current year [19] The Mosaic Co. (MOS) - The Mosaic is expected to benefit from higher demand for fertilizers, with strong grower economics and crop commodity prices driving global fertilizer demand [20] - The company has an expected revenue growth rate of 16.4% and an earnings growth rate of 60.1% for the current year, with a Zacks Consensus Estimate for earnings improving by 13.2% over the last 30 days [22] Virtu Financial Inc. (VIRT) - Virtu Financial's diversified business model supports sustainable long-term growth, with ongoing cost-control initiatives improving adjusted net margins [24] - The company has an expected revenue growth rate of 18.9% and an earnings growth rate of 33.8% for the current year, with a Zacks Consensus Estimate for earnings improving by 17.9% over the last 60 days [25] Houlihan Lokey Inc. (HLI) - Houlihan Lokey is a global investment bank specializing in mergers and acquisitions, capital solutions, and financial advisory services [26] - The company has an expected revenue growth rate of 13.1% and an earnings growth rate of 21.9% for the current year, with a Zacks Consensus Estimate for earnings improving by 6.7% over the last 60 days [27]

Group 1 - The article compares two companies, Virtu Financial (VIRT) and Brookfield Asset Management (BAM), to determine which is a better option for investors seeking undervalued stocks [1] - Virtu Financial has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook, while Brookfield Asset Management has a Zacks Rank of 4 (Sell) [3] - Value investors typically analyze traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [4] Group 2 - VIRT has a forward P/E ratio of 8.82, significantly lower than BAM's forward P/E of 37.33, suggesting VIRT is more undervalued [5] - The PEG ratio for VIRT is 0.51, while BAM's PEG ratio is 2.14, indicating VIRT's expected earnings growth is more favorable [5] - VIRT's P/B ratio is 3.92 compared to BAM's 10.74, further supporting VIRT's valuation as more attractive [6] - Overall, VIRT earns a Value grade of A, while BAM receives a Value grade of F, making VIRT the preferred choice for value investors [6]

Market Overview - The U.S. equity markets have been volatile, reaching record highs due to strong quarterly earnings from blue-chip technology companies, but also experiencing sharp declines due to inflation concerns [1] - Stable labor market conditions and increased nonfarm productivity indicate a robust U.S. economy, although upcoming key inflation data is causing market uncertainty regarding future interest rate cuts [1] Momentum Investing Strategy - Investors are turning to momentum stocks, such as Carpenter Technology Corporation (CRS), Virtu Financial, Inc. (VIRT), and Root, Inc. (ROOT), as a strategy to achieve sustained profits when traditional value or growth investing falls short [2] - Momentum investing is based on the principle of "buying high and selling higher," capitalizing on established trends that are likely to continue due to existing momentum [3] Screening Parameters for Momentum Stocks - The strategy involves selecting the top 50 stocks with the best percentage price change over the last 52 weeks, ensuring steady appreciation [5] - From these, the bottom 10 performers over the past week are chosen to identify short-term pullbacks, combined with a Zacks Rank 1 (Strong Buy) for proven outperformance [6] - Stocks must have a Momentum Style Score of B or better, indicating favorable trading conditions and high probability of success [7] - Additional criteria include a current price greater than $5, being among the top 3000 by market capitalization, and an average 20-day trading volume exceeding 100,000 [8] Company Profiles - **Carpenter Technology Corporation (CRS)**: Specializes in premium specialty alloys, with a stock price increase of 78.4% over the past year but a recent decline of 1.8% in the past week. It holds a Momentum Score of B [9] - **Virtu Financial, Inc. (VIRT)**: A financial services firm that has seen a stock price increase of 45.9% in the past year, with a recent decline of 3.2%. It also has a Momentum Score of B [10] - **Root, Inc. (ROOT)**: Provides insurance products and has experienced a stock price surge of 89.3% over the past year, despite a recent decline of 26.3%. It maintains a Momentum Score of B [11]

Core Insights - Virtu Financial, Inc. (VIRT) reported a decline of 3.6% in shares following the release of its second-quarter 2025 results, primarily due to elevated expense levels, although this was mitigated by improved revenues from commissions and technology services [1][10] Financial Performance - Adjusted earnings per share (EPS) for Q2 were $1.53, exceeding the Zacks Consensus Estimate by 12.5% and showing an 84.3% increase year over year [2][10] - Adjusted net trading income reached $567.7 million, a 47.4% year-over-year increase, surpassing the consensus estimate by 9.4% [2][10] - Revenues from commissions and technology services rose 22% year over year to $153.9 million, beating both the Zacks Consensus Estimate and internal estimates [3] - Interest and dividend income increased by 19.9% year over year to $128.4 million, also exceeding estimates [3] Expense Analysis - Total operating expenses increased by 21.4% year over year to $652.6 million, which was higher than the estimated $584.3 million, driven by various costs including brokerage and employee compensation [5][10] Segment Performance - In the Market Making segment, adjusted net trading income was $451.5 million, up 58.1% year over year, with revenues climbing 38.1% to $786.6 million [6] - The Execution Services segment reported adjusted net trading income of $116.3 million, a 16.8% year-over-year increase, with total revenues rising 68.8% to $214.5 million [7] Financial Position - As of June 30, 2025, Virtu Financial had cash and cash equivalents of $752.1 million, a decrease of 13.8% from the end of 2024, while total assets increased by 25.5% to $19.3 billion [8] - Total equity rose by 9.8% from the end of 2024 to $1.6 billion [8] Shareholder Returns - The company repurchased 1.7 million shares for $66.3 million during Q2 2025, with a remaining buyback capacity of $302.8 million [9] - A cash dividend of 24 cents per share was announced, payable on September 15, 2025 [11]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section details the Company's financial statements, management's discussion, market risk disclosures, and internal controls [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Virtu Financial, Inc.'s unaudited condensed consolidated financial statements for Q2 2025, including core statements and detailed accounting notes [Condensed Consolidated Statements of Financial Condition (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition%20(Unaudited)) This statement details the Company's financial position, showing total assets of **$19.28 billion** and total equity of **$1.63 billion** as of June 30, 2025 | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $752,101 | $872,513 | | Securities borrowed | $2,654,360 | $2,294,529 | | Trading assets, at fair value: Financial instruments owned | $8,303,418 | $5,520,015 | | Total assets | $19,284,489 | $15,361,743 | | **Liabilities** | | | | Short-term borrowings | $251,754 | $38,541 | | Securities loaned | $3,118,350 | $2,431,878 | | Trading liabilities, at fair value: Financial instruments sold, not yet purchased | $8,423,628 | $6,440,971 | | Long-term borrowings | $1,743,171 | $1,740,467 | | Total liabilities | $17,651,148 | $13,874,366 | | **Equity** | | | | Total equity | $1,633,341 | $1,487,377 | | Total liabilities and equity | $19,284,489 | $15,361,743 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) This statement outlines the Company's financial performance, reporting **total revenue of $999.6 million** and **net income of $293.0 million** for the three months ended June 30, 2025 | (in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues:** | | | | | | Trading income, net | $652,796 | $426,395 | $1,242,779 | $834,490 | | Interest and dividends income | $128,406 | $107,066 | $237,459 | $213,058 | | Commissions, net and technology services | $153,859 | $126,101 | $305,166 | $244,712 | | Other, net | $64,512 | $33,423 | $52,038 | $43,564 | | **Total revenue** | **$999,573** | **$692,985** | **$1,837,442** | **$1,335,824** | | **Operating Expenses:** | | | | | | Brokerage, exchange, clearance fees and payments for order flow, net | $202,125 | $150,787 | $424,000 | $290,586 | | Employee compensation and payroll taxes | $136,181 | $105,716 | $255,537 | $206,539 | | Interest and dividends expense | $165,213 | $123,693 | $296,541 | $249,721 | | Financing interest expense on long-term borrowings | $32,551 | $23,430 | $62,442 | $46,662 | | **Total operating expenses** | **$652,553** | **$537,600** | **$1,266,686** | **$1,040,619** | | Income before income taxes and noncontrolling interest | $347,020 | $155,385 | $570,756 | $295,205 | | Provision for income taxes | $54,044 | $27,268 | $88,145 | $55,780 | | **Net income** | **$292,976** | **$128,117** | **$482,611** | **$239,425** | | Noncontrolling interest | $(141,789) | $(61,531) | $(231,743) | $(117,022) | | **Net income available for common stockholders** | **$151,187** | **$66,586** | **$250,868** | **$122,403** | | **Earnings per share** | | | | | | Basic | $1.65 | $0.71 | $2.74 | $1.30 | | Diluted | $1.65 | $0.71 | $2.73 | $1.30 | [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)) This statement details the changes in the Company's equity, including increases in stockholders' equity and noncontrolling interest, and ongoing share repurchase activities - Total Virtu Financial Inc. stockholders' equity increased from **$1.25 billion** at December 31, 2024, to **$1.41 billion** at June 30, 2025, driven by net income and share-based compensation, partially offset by treasury stock purchases and dividends[18](index=18&type=chunk) - Noncontrolling interest decreased from **$233.2 million** at December 31, 2024, to **$226.0 million** at June 30, 2025, influenced by net income attributable to noncontrolling interest and distributions[18](index=18&type=chunk) - Treasury stock purchases amounted to **$(1.45 billion)** at June 30, 2025, compared to **$(1.34 billion)** at December 31, 2024, reflecting ongoing share repurchase activities[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement presents the Company's cash flows, showing **net cash provided by operating activities of $77.7 million** and a **net decrease in cash of $124.2 million** for the six months ended June 30, 2025 | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $77,729 | $95,408 | | Net cash provided by (used in) investing activities | $(11,381) | $(36,444) | | Net cash provided by (used in) financing activities | $(207,811) | $(194,671) | | Effect of exchange rate changes on cash and cash equivalents | $17,279 | $(3,090) | | Net increase (decrease) in cash and cash equivalents | $(124,184) | $(138,797) | | Cash, cash equivalents, and restricted or segregated cash, beginning of period | $913,991 | $855,460 | | Cash, cash equivalents, and restricted or segregated cash, end of period | $789,807 | $716,663 | - Cash paid for interest increased to **$313.2 million** for the six months ended June 30, 2025, from **$285.7 million** in the prior year period[25](index=25&type=chunk) - Cash paid for taxes significantly increased to **$75.2 million** for the six months ended June 30, 2025, from **$26.0 million** in the prior year period[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations of significant accounting policies, financial instruments, debt, equity, and other relevant financial information supporting the condensed consolidated financial statements [1. Organization and Basis of Presentation](index=11&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) VFI controls Virtu Financial LLC (57.1% ownership), operating as a leading financial firm with Market Making and Execution Services segments, and recently sold a 49% interest in RFQ-hub - VFI owns approximately **57.1%** of Virtu Financial LLC as of June 30, 2025[27](index=27&type=chunk) - The Company provides liquidity in over **25,000 financial instruments** on over **250 venues** in **40 countries**[28](index=28&type=chunk) - The Company has **two operating segments**: Market Making and Execution Services, and **one non-operating segment**: Corporate[31](index=31&type=chunk) - On May 9, 2025, the Company completed the sale of a **49% interest in RFQ-hub**, retaining approximately **2%** and deconsolidating the entity[32](index=32&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The Company adopted ASU 2023-08 on January 1, 2025, requiring crypto assets at fair value, resulting in a **$21.8 million** adjustment to retained earnings, while other ASUs had no material impact - Effective January 1, 2025, the Company adopted ASU 2023-08, requiring in-scope crypto assets to be measured at fair value with gains or losses recognized in net income[36](index=36&type=chunk) - Upon adoption of ASU 2023-08, the Company recorded a fair value adjustment of **$25.4 million** and a deferred tax liability of **$3.6 million**, resulting in a net cumulative-effect adjustment of **$21.8 million** in the beginning balance of Retained earnings[37](index=37&type=chunk) - Other ASUs adopted on January 1, 2025 (ASU 2023-05, ASU 2024-01, ASU 2024-02) did not have a material impact on the financial statements[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [3. Sale of RFQ-hub](index=13&type=section&id=3.%20Sale%20of%20RFQ-hub) On May 9, 2025, the Company sold a **49% interest in RFQ-hub** for **$37.9 million** cash, retaining **2%**, deconsolidating the entity, and recognizing a **$67.0 million gain** on sale - Sale of **49% interest in RFQ-hub** completed on May 9, 2025, for gross proceeds of **$37.9 million** in cash[48](index=48&type=chunk) - The Company recognized a gain on sale of **$67.0 million**, recorded in Other, net[48](index=48&type=chunk) | (in thousands) | May 9, 2025 | | :--- | :--- | | Total sale proceeds received | $37,932 | | Retained noncontrolling investments | $1,548 | | Carrying value of noncontrolling interest deconsolidated | $35,608 | | Less: Total carrying value of RFQ-hub's net assets | $8,100 | | Gain on sale of RFQ-hub | $66,988 | [4. Earnings per Share](index=14&type=section&id=4.%20Earnings%20per%20Share) Net income available for common stockholders and both basic and diluted EPS significantly increased for the three and six months ended June 30, 2025, reflecting improved profitability | (in thousands, except for share or per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income available for common stockholders | $151,187 | $66,586 | $250,868 | $122,403 | | Basic earnings per share | $1.65 | $0.71 | $2.74 | $1.30 | | Diluted earnings per share | $1.65 | $0.71 | $2.73 | $1.30 | | Weighted average common shares outstanding (Basic) | 85,490,121 | 88,137,799 | 85,585,040 | 88,568,461 | | Weighted average common shares outstanding (Diluted) | 85,530,426 | 88,358,223 | 85,794,619 | 88,671,329 | [5. Tax Receivable Agreements](index=15&type=section&id=5.%20Tax%20Receivable%20Agreements) TRA obligations decreased to **$175.8 million** at June 30, 2025, with annual payments expected to range from **$0.1 million to $22.1 million** over 15 years, totaling **$134.8 million** paid to date - Tax receivable agreement obligations were approximately **$175.8 million** at June 30, 2025, down from **$196.6 million** at December 31, 2024[56](index=56&type=chunk) - Payments under the tax receivable agreements are expected to range from **$0.1 million to $22.1 million** per year over the next 15 years[55](index=55&type=chunk) - Total payments made with respect to TRA obligations from February 2017 through June 2025 amounted to **$134.8 million**[55](index=55&type=chunk) - Remaining deferred tax assets related to TRA matters were approximately **$99.7 million** at June 30, 2025, compared to **$114.4 million** at December 31, 2024[56](index=56&type=chunk) [6. Goodwill and Intangible Assets](index=15&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) Goodwill remained stable at **$1.15 billion** with no impairment, while total intangible assets decreased to **$178.5 million** due to amortization and RFQ-hub asset reclassification - Total goodwill was **$1.15 billion** as of June 30, 2025, and December 31, 2024, with no impairment recognized[57](index=57&type=chunk) | (in thousands) | Market Making | Execution Services | Corporate | Total | | :--- | :--- | :--- | :--- | :--- | | Balance as of period-end | $755,292 | $393,634 | $— | $1,148,926 | - Total intangible assets decreased to **$178.5 million** at June 30, 2025, from **$203.2 million** at December 31, 2024[58](index=58&type=chunk) - Amortization expense for finite-lived intangible assets was **$11.8 million** for Q2 2025 (down from **$12.2 million** in Q2 2024) and **$23.6 million** for H1 2025 (down from **$26.8 million** in H1 2024)[60](index=60&type=chunk) [7. Receivables from/Payables to Broker-Dealers and Clearing Organizations](index=17&type=section&id=7.%20Receivables%20from%2FPayables%20to%20Broker-Dealers%20and%20Clearing%20Organizations) Receivables from broker-dealers increased to **$1.34 billion** and payables to broker-dealers increased to **$1.23 billion** at June 30, 2025, driven by higher prime broker balances and unsettled trades | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Due from prime brokers | $421,302 | $344,662 | | Unsettled trades with clearing organizations | $121,281 | $17,239 | | Securities failed to deliver | $282,703 | $274,072 | | Total receivables from broker-dealers and clearing organizations | $1,335,968 | $1,100,850 | | **Liabilities** | | | | Due to prime brokers | $970,546 | $583,914 | | Unsettled trades with clearing organizations | $512 | $251,036 | | Securities failed to receive | $276,766 | $94,941 | | Total payables to broker-dealers and clearing organizations | $1,233,988 | $918,566 | - Outstanding principal balance on prime brokerage credit facilities increased to **$174.4 million** at June 30, 2025, from **$123.0 million** at December 31, 2024[63](index=63&type=chunk) [8. Collateralized Transactions](index=17&type=section&id=8.%20Collateralized%20Transactions) Securities received as collateral increased to **$3.67 billion** (substantially all repledged), and financial instruments owned and pledged increased to **$2.63 billion** at June 30, 2025 | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Securities received as collateral:** | | | | Securities borrowed | $2,584,056 | $2,222,054 | | Securities purchased under agreements to resell | $1,084,322 | $983,753 | | Total | $3,668,378 | $3,205,807 | | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Financial instruments owned and pledged:** | | | | Equities | $2,620,067 | $2,269,299 | | Exchange traded notes | $5,288 | $13,338 | | Total | $2,625,355 | $2,282,637 | - Substantially all securities received as collateral have been repledged by the Company[64](index=64&type=chunk) [9. Borrowings](index=18&type=section&id=9.%20Borrowings) Short-term borrowings significantly increased to **$251.8 million**, while long-term borrowings remained stable at **$1.74 billion** after refinancing Term B-1 into Term B-2 Loans with interest rate swaps | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Short-term Borrowings, net** | | | | Broker-dealer credit facilities | $181,454 | $10,000 | | Short-term bank loans | $70,300 | $28,541 | | Total | $251,754 | $38,541 | | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Long-term borrowings, net** | | | | First Lien Term B-2 Loan Facility | $1,226,875 | $1,226,882 (Term B-1) | | Senior Secured First Lien Notes | $491,996 | $491,320 | | SBI bonds | $24,300 | $22,265 | | Total | $1,743,171 | $1,740,467 | - On February 19, 2025, the Company refinanced its Term B-1 Loans into Term B-2 Loans, maintaining an aggregate principal amount of **$1.245 billion** and fixing interest payment obligations on **$1.075 billion** at **6.92%** through November 2025 via an interest rate swap[91](index=91&type=chunk)[93](index=93&type=chunk) - The Senior Secured First Lien Notes, totaling **$500.0 million**, bear interest at **7.50%** per annum and mature on June 15, 2031[97](index=97&type=chunk) [10. Financial Assets and Liabilities](index=23&type=section&id=10.%20Financial%20Assets%20and%20Liabilities) Financial instruments are primarily fair valued (Level 1 or 2), with significant equity and government obligations, and the **JNX Investment (Level 3)** valued at **$86.0 million** with a **$10.1 million gain** - Fair value of financial instruments owned (excluding pledged) was **$8.30 billion** at June 30, 2025, and **$5.52 billion** at December 31, 2024[108](index=108&type=chunk)[109](index=109&type=chunk) - Fair value of financial instruments sold, not yet purchased, was **$8.42 billion** at June 30, 2025, and **$6.44 billion** at December 31, 2024[108](index=108&type=chunk)[109](index=109&type=chunk) - The JNX Investment, a Level 3 equity investment, had a fair value of **$86.0 million** at June 30, 2025, and **$75.8 million** at December 31, 2024[108](index=108&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) - The JNX Investment recognized a net unrealized gain of **$10.1 million** for the six months ended June 30, 2025[113](index=113&type=chunk) [11. Digital Assets Held](index=32&type=section&id=11.%20Digital%20Assets%20Held) Total digital assets held increased to **$101.5 million** at June 30, 2025, primarily Bitcoin, Ethereum, and XRP, including **50.0 million PYTH tokens** valued at **$5.3 million** with selling restrictions | (in thousands, except units) | June 30, 2025 Fair Value | December 31, 2024 Carrying Value | | :--- | :--- | :--- | | Bitcoin | $44,067 | $59,925 | | Ethereum | $18,241 | $11,212 | | XRP | $22,791 | $686 | | Other | $16,372 | $10,973 | | Total Digital assets held | $101,471 | $82,796 | - **50.0 million PYTH tokens**, with a fair value of **$5.3 million**, are subject to selling restrictions that unlock annually between 2026 and 2027[125](index=125&type=chunk) [12. Derivative Instruments](index=32&type=section&id=12.%20Derivative%20Instruments) The Company uses derivatives for trading and hedging, with non-hedging instruments generating a **$212.3 million net gain** and hedging instruments (interest rate swaps) a **$1.8 million gain** for H1 2025 | (in thousands) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :--- | :--- | :--- | | **Derivative Assets (not designated as hedging instruments):** | | | | Equities futures | $11,673 | $(541) | | Commodity futures | $48,791 | $5,096 | | Currency forwards | $473,991 | $716,970 | | **Derivative Liabilities (not designated as hedging instruments):** | | | | Equities futures | $2,763 | $527 | | Currency forwards | $456,325 | $681,878 | | **Derivative Liabilities (designated as hedging instruments):** | | | | Interest rate swaps | $859 | $2,572 | | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net gain (loss) from derivative instruments not designated as hedging instruments:** | | | | Futures | $26,385 | $27,702 | | Currency forwards | $161,964 | $1,459 | | Options | $26,987 | $33,318 | | Terminated interest rate swaps | $(3,035) | $(23,082) | | Total | $212,301 | $45,083 | | **Net gain (loss) from derivative instruments designated as hedging instruments:** | | | | Interest rate swaps | $1,822 | $13,525 | [13. Variable Interest Entities](index=33&type=section&id=13.%20Variable%20Interest%20Entities) The Company holds noncontrolling interests in several unconsolidated VIEs, with maximum loss exposure limited to its equity investment carrying value of **$68.3 million** at June 30, 2025 - The Company holds noncontrolling interests in several joint ventures (VIEs) for communication networks, derivatives trading technology, an equities exchange, and a cryptocurrency trading platform[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - The Company's maximum exposure to loss from these nonconsolidated VIEs is limited to its equity investment carrying value of **$68.3 million** at June 30, 2025[137](index=137&type=chunk)[138](index=138&type=chunk) [14. Revenues from Contracts with Customers](index=34&type=section&id=14.%20Revenues%20from%20Contracts%20with%20Customers) Total revenue from contracts with customers increased to **$153.9 million** for Q2 2025 and **$305.2 million** for H1 2025, primarily from commissions and workflow technology, with **$11.0 million** in deferred revenue | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues from contracts with customers:** | | | | | | Commissions, net | $118,881 | $91,915 | $233,627 | $177,327 | | Workflow technology | $25,433 | $24,194 | $52,504 | $48,112 | | Analytics | $9,545 | $9,992 | $19,035 | $19,273 | | Total revenue from contracts with customers | $153,859 | $126,101 | $305,166 | $244,712 | | **Timing of revenue recognition:** | | | | | | Services transferred at a point in time | $981,229 | $675,120 | $1,801,159 | $1,300,309 | | Services transferred over time | $18,344 | $17,865 | $36,283 | $35,515 | - Deferred revenue related to contracts with customers was **$11.0 million** at June 30, 2025, up from **$8.1 million** at December 31, 2024[147](index=147&type=chunk) [15. Income Taxes](index=37&type=section&id=15.%20Income%20Taxes) The income tax provision was **$54.0 million** (15.6% effective rate) for Q2 2025 and **$88.1 million** (15.4% effective rate) for H1 2025, with a full valuation allowance against **$10.0 million** in non-U.S. NOL deferred tax assets | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Provision for income taxes | $54,044 | $27,268 | $88,145 | $55,780 | | Effective tax rate | 15.6% | 17.6% | 15.4% | 18.9% | - Current income tax receivables were **$39.6 million** at June 30, 2025, up from **$13.2 million** at December 31, 2024[151](index=151&type=chunk) - The Company has non-U.S. net operating losses of **$53.6 million** at June 30, 2025, with related deferred tax assets of **$10.0 million**, against which a full valuation allowance is recorded[154](index=154&type=chunk) - Unrecognized tax benefits totaled **$23.4 million** as of June 30, 2025, all of which would affect the effective tax rate if recognized[157](index=157&type=chunk) [16. Commitments, Contingencies and Guarantees](index=38&type=section&id=16.%20Commitments%2C%20Contingencies%20and%20Guarantees) The Company is involved in legal and regulatory proceedings, including an agreement in principle to settle an SEC action with no material impact, and ongoing stockholder class actions and derivative complaints - In June 2025, the Company reached an agreement in principle to settle an SEC action regarding information access barriers, with no material impact expected on the Company or its business[158](index=158&type=chunk) - The Company is defending against stockholder class actions and derivative complaints alleging false statements and breaches of fiduciary duties related to the SEC investigation[159](index=159&type=chunk) - Regulatory focus includes U.S. equities market structure, retail trading, payment for order flow, digital assets, and non-compete clauses, with recent rule changes and proposals potentially affecting the Company's business[167](index=167&type=chunk)[168](index=168&type=chunk) [17. Leases](index=41&type=section&id=17.%20Leases) Operating lease right-of-use assets decreased to **$156.5 million** and liabilities to **$207.6 million** at June 30, 2025, with total operating lease cost of **$38.3 million** for H1 2025 | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $156,511 | $175,046 | | Operating lease liabilities | $207,645 | $229,825 | | Finance lease liabilities | $19,234 | $23,095 | | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Operating lease cost | $38,281 | $40,095 | | Sublease income | $6,642 | $9,382 | | Total Finance lease cost | $4,603 | $5,951 | | (in thousands) | Operating Leases | Finance Leases | | :--- | :--- | :--- | | Total lease payments | $236,377 | $20,985 | | Less imputed interest | $(28,732) | $(1,751) | | Total lease liability | $207,645 | $19,234 | [18. Cash](index=42&type=section&id=18.%20Cash) Total cash, cash equivalents, and restricted or segregated cash decreased to **$789.8 million** at June 30, 2025, from **$914.0 million** at December 31, 2024 | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $752,101 | $872,513 | | Cash restricted or segregated under regulations and other | $37,706 | $41,478 | | Total cash, cash equivalents and restricted cash | $789,807 | $913,991 | [19. Capital Structure](index=42&type=section&id=19.%20Capital%20Structure) The Founder Member controls **87.1%** of voting power, the share repurchase program was expanded to **$1.72 billion** with **$323.7 million** remaining, and AOCI increased to **$2.2 million** at June 30, 2025 - The Founder Member controls approximately **87.1%** of the combined voting power of common stock[177](index=177&type=chunk) - The share repurchase program was expanded to **$1.72 billion** and extended through April 24, 2026, with **$323.7 million** remaining capacity as of June 30, 2025[181](index=181&type=chunk) - AOCI increased to **$2.2 million** at June 30, 2025, from a loss of **$(7.1) million** at December 31, 2024, primarily due to foreign exchange translation adjustments and changes in unrealized cash flow hedges[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [20. Share-based Compensation](index=44&type=section&id=20.%20Share-based%20Compensation) All outstanding stock options were exercised by June 30, 2025, with **$121.8 million** in unrecognized share-based compensation expense for unvested RSUs to be recognized over **1.4 years** - All stock options outstanding at December 31, 2024 (**813,750 options**) were exercised by June 30, 2025[188](index=188&type=chunk) | | Number of RSUs and RSAs | Weighted Average Fair Value | | :--- | :--- | :--- | | At December 31, 2024 | 5,564,532 | $21.77 | | Granted (1) | 3,282,979 | $39.41 | | Forfeited | (155,915) | $25.72 | | Vested | (2,712,652) | $24.93 | | At June 30, 2025 | 5,978,944 | $29.92 | - Total unrecognized share-based compensation expense related to unvested RSUs was **$121.8 million** at June 30, 2025, to be recognized over a weighted average period of **1.4 years**[191](index=191&type=chunk) [21. Regulatory Requirement](index=46&type=section&id=21.%20Regulatory%20Requirement) Virtu Americas LLC maintained **$398.3 million** in regulatory capital with **$395.8 million** excess, and all foreign subsidiaries also met their capital requirements as of June 30, 2025 | (in thousands) | Regulatory Capital | Regulatory Capital Requirement | Excess Regulatory Capital | | :--- | :--- | :--- | :--- | | Virtu Americas LLC (U.S.) | $398,264 | $2,479 | $395,785 | | Virtu Financial Singapore Pte. Ltd. (Foreign) | $238,855 | $131,604 | $107,251 | | Virtu Financial Ireland Limited (Foreign) | $124,041 | $67,056 | $56,985 | - VAL had **$31.0 million** in special reserve bank accounts for customers and **$6.5 million** for proprietary accounts of brokers at June 30, 2025[195](index=195&type=chunk) - Virtu Financial Canada ULC resigned from CIRO membership effective January 22, 2025, and is no longer subject to its regulatory requirements[199](index=199&type=chunk) [22. Geographic Information and Business Segments](index=47&type=section&id=22.%20Geographic%20Information%20and%20Business%20Segments) The Company operates Market Making and Execution Services segments, both showing significant revenue growth for Q2 and H1 2025, with the U.S. remaining the largest revenue-generating region - Market Making segment revenues increased by **38.1%** to **$786.6 million** for Q2 2025 and **35.5%** to **$1.48 billion** for H1 2025[207](index=207&type=chunk)[209](index=209&type=chunk) - Execution Services segment revenues increased by **68.8%** to **$214.5 million** for Q2 2025 and **45.2%** to **$355.5 million** for H1 2025[207](index=207&type=chunk)[209](index=209&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues by Geographic Area:** | | | | | | United States | $816,973 | $563,937 | $1,526,082 | $1,086,006 | | Ireland | $108,048 | $66,303 | $192,742 | $129,322 | | Others | $74,552 | $62,745 | $118,618 | $120,496 | | Total revenues | $999,573 | $692,985 | $1,837,442 | $1,335,824 | [23. Related Party Transactions](index=49&type=section&id=23.%20Related%20Party%20Transactions) Net payables to affiliates were **$2.2 million** at June 30, 2025, with significant payments made to JNX for exchange fees and telecommunication JVs for network use during H1 2025 - Net payables to affiliates were **$2.2 million** at June 30, 2025, compared to **$0.1 million** at December 31, 2024[211](index=211&type=chunk) - Payments to JNX for trading activities were **$3.0 million** for Q2 2025 and **$5.5 million** for H1 2025[212](index=212&type=chunk) - Payments to telecommunication JVs for communication network use were **$7.2 million** for Q2 2025 and **$14.4 million** for H1 2025[214](index=214&type=chunk) - Payments to Members Exchange for regulatory and transaction fees were **$2.7 million** for Q2 2025 and **$5.4 million** for H1 2025[215](index=215&type=chunk) [24. Subsequent Events](index=50&type=section&id=24.%20Subsequent%20Events) Subsequent events include the signing of the OBBB Act, a **$0.24 per share dividend** declaration, and the appointment of Aaron Simons as the new CEO, effective August 1, 2025 - The One Big Beautiful Bill Act (OBBB) was signed into law on July 4, 2025, extending certain tax provisions, with the financial impact currently being evaluated but not expected to be material[216](index=216&type=chunk) - On July 30, 2025, a dividend of **$0.24 per share** of Class A and Class B Common Stock and participating Restricted Stock Units/Awards was declared, payable on September 15, 2025[217](index=217&type=chunk) - Aaron Simons was appointed Chief Executive Officer and elected to the Board of Directors, effective August 1, 2025, succeeding Douglas A. Cifu[218](index=218&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=51&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the Company's financial condition and results for Q2 and H1 2025, covering business overview, segment performance, key drivers, liquidity, and critical accounting policies [Overview](index=52&type=section&id=Overview) This overview describes Virtu as a leading financial services firm providing liquidity and trading solutions across global markets through its Market Making and Execution Services segments - Virtu is a leading financial services firm leveraging technology to provide liquidity and transparent trading solutions across global markets, including equities, ETFs, options, foreign exchange, futures, fixed income, and cryptocurrencies[224](index=224&type=chunk) - The Company operates **two segments**: Market Making and Execution Services, and a non-operating Corporate segment[229](index=229&type=chunk) - Market Making involves quoting two-sided markets in over **25,000 financial instruments** across **250 venues** in **40 countries**, profiting from bid/ask spreads, with performance impacted by trading volumes, volatility, and order flow[230](index=230&type=chunk)[231](index=231&type=chunk) - Execution Services offers client execution, trading venues, proprietary technology, workflow technology, and analytics services, earning commissions as an agent[232](index=232&type=chunk) [Credit Agreement](index=54&type=section&id=Credit%20Agreement) The Company repriced its **$1.245 billion** Term B-1 Loans into Term B-2 Loans on February 19, 2025, with an interest rate swap fixing **$1.075 billion** of obligations at **6.92%** through November 2025 - On February 19, 2025, the Company entered into Amendment No. 2 to the First Amended Credit Agreement, repricing the **$1.245 billion** Term B-1 Loans into new Term B-2 Loans[237](index=237&type=chunk) - The Term B-2 Loans mature on June 21, 2031, and bear interest at SOFR or base rate plus **1.50%** or **2.50%**, depending on the Company's election[238](index=238&type=chunk) - An interest rate swap effectively fixes interest payment obligations on **$1.075 billion** of the Term B-2 Loans at **6.92%** through November 2025[239](index=239&type=chunk) [Indenture](index=54&type=section&id=Indenture) The Company completed an offering of **$500.0 million** in **7.50%** senior secured first lien notes due 2031, secured by first-priority liens on substantially all assets - On June 21, 2024, the Company completed the offering of **$500.0 million** aggregate principal amount of **7.50%** senior secured first lien notes due 2031[240](index=240&type=chunk) - The Notes are secured by first-priority perfected liens on substantially all of the Issuers' and guarantors' existing and future assets[240](index=240&type=chunk) [Second Amended and Restated 2015 Management Incentive Plan](index=55&type=section&id=Second%20Amended%20and%20Restated%202015%20Management%20Incentive%20Plan) The Management Incentive Plan was amended on June 2, 2025, to increase authorized shares and extend its expiration to June 2, 2035, with **7,581,500 stock options** exercised since the IPO - The plan was amended and restated on June 2, 2025, to increase authorized shares and extend the expiration date to June 2, 2035[241](index=241&type=chunk) - As of June 30, 2025, **7,581,500 stock options** have been exercised since the IPO[242](index=242&type=chunk) [Parent Company Financial Information](index=55&type=section&id=Parent%20Company%20Financial%20Information) Material differences between consolidated and parent company financial statements include cash, deferred tax assets, TRA obligations, noncontrolling interest, and corporate income tax provision - Material differences between consolidated and parent company financial statements include cash and cash equivalents (**$120.9 million**), deferred tax assets (**$114.4 million**), tax receivable agreement obligations (**$175.8 million**), noncontrolling interest, and corporate income tax provision[243](index=243&type=chunk) [Components of Our Results of Operations](index=56&type=section&id=Components%20of%20Our%20Results%20of%20Operations) Total revenues, operating expenses, net income, and EPS all increased significantly for Q2 and H1 2025, driven by higher trading income and commissions, reflecting improved profitability | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | **$999,573** | **$692,985** | **$1,837,442** | **$1,335,824** | | **Total operating expenses** | **$652,553** | **$537,600** | **$1,266,686** | **$1,040,619** | | **Income before income taxes and noncontrolling interest** | **$347,020** | **$155,385** | **$570,756** | **$295,205** | | **Net income** | **$292,976** | **$128,117** | **$482,611** | **$239,425** | | **Basic EPS** | **$1.65** | **$0.71** | **$2.74** | **$1.30** | | **Diluted EPS** | **$1.65** | **$0.71** | **$2.73** | **$1.30** | - Trading income, net, increased by **53.1%** to **$652.8 million** for Q2 2025 and **48.9%** to **$1.24 billion** for H1 2025, driven by higher trading volumes and opportunities[250](index=250&type=chunk)[284](index=284&type=chunk)[305](index=305&type=chunk) - Commissions, net and technology services, increased by **22.0%** to **$153.9 million** for Q2 2025 and **24.7%** to **$305.2 million** for H1 2025, due to higher client volumes and institutional engagement[252](index=252&type=chunk)[286](index=286&type=chunk)[307](index=307&type=chunk) - Brokerage, exchange, clearance fees and payments for order flow, net, increased by **34.0%** to **$202.1 million** for Q2 2025 and **45.9%** to **$424.0 million** for H1 2025, correlating with increased trading activity[256](index=256&type=chunk)[290](index=290&type=chunk)[312](index=312&type=chunk) - Employee compensation and payroll taxes increased by **28.9%** to **$136.2 million** for Q2 2025 and **23.7%** to **$255.5 million** for H1 2025, primarily due to higher accrued incentive compensation[258](index=258&type=chunk)[292](index=292&type=chunk)[314](index=314&type=chunk) - Debt issue cost related to debt refinancing, prepayment and commitment fees decreased significantly by **93.0%** to **$1.7 million** for Q2 2025 and **86.9%** to **$3.4 million** for H1 2025, due to the acceleration of costs in the prior year's refinancing[263](index=263&type=chunk)[299](index=299&type=chunk)[321](index=321&type=chunk) [Non-GAAP Financial Measures and Other Items](index=61&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Items) Non-GAAP financial measures, including Adjusted Net Trading Income, EBITDA, and Normalized Adjusted EPS, show significant improvements for Q2 and H1 2025, reflecting strong underlying business performance - Adjusted Net Trading Income increased by **47.4%** to **$567.7 million** for Q2 2025 and **41.6%** to **$1.06 billion** for H1 2025[275](index=275&type=chunk)[288](index=288&type=chunk)[310](index=310&type=chunk) - Adjusted EBITDA increased by **69.8%** to **$369.4 million** for Q2 2025 and **64.0%** to **$689.4 million** for H1 2025[275](index=275&type=chunk) - Normalized Adjusted EPS increased by **84.3%** to **$1.53** for Q2 2025 and **76.9%** to **$2.83** for H1 2025[277](index=277&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted Net Trading Income | $567,723 | $385,082 | $1,064,863 | $751,953 | | EBITDA | $408,654 | $231,325 | $691,677 | $426,834 | | Adjusted EBITDA | $369,449 | $217,522 | $689,388 | $420,354 | | Normalized Adjusted Net Income | $244,173 | $135,291 | $452,502 | $259,569 | | Normalized Adjusted EPS | $1.53 | $0.83 | $2.83 | $1.60 | [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains strong liquidity with **$752.1 million** in cash, supported by operating cash flows and credit facilities, and remains compliant with TRA and regulatory capital requirements for all subsidiaries - Cash and cash equivalents were **$752.1 million** as of June 30, 2025[325](index=325&type=chunk) - The Company's primary upcoming cash and liquidity needs include margin requirements from increased trading activities and expansion into new markets[328](index=328&type=chunk) - Tax receivable agreement payments are expected to range from **$0.1 million to $22.1 million** per year over the next 15 years[331](index=331&type=chunk) - The Company's U.S. and foreign subsidiaries are subject to regulatory capital requirements, and the Company was in compliance with all applicable covenants under its Credit Agreement as of June 30, 2025[333](index=333&type=chunk)[336](index=336&type=chunk)[351](index=351&type=chunk) - Net cash provided by operating activities was **$77.7 million** for H1 2025, down from **$95.4 million** for H1 2024[362](index=362&type=chunk)[363](index=363&type=chunk) - Net cash used in financing activities was **$207.8 million** for H1 2025, primarily due to dividends, treasury stock purchases, and net long-term debt repayments[362](index=362&type=chunk)[365](index=365&type=chunk) - The share repurchase program has **$323.7 million** remaining capacity as of June 30, 2025[367](index=367&type=chunk) [Critical Accounting Policies and Estimates](index=77&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for financial instrument valuation, revenue recognition, share-based compensation, income taxes, tax receivable agreements, and goodwill and intangible asset impairment assessments - Fair value measurements for financial instruments are classified into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[371](index=371&type=chunk) - Revenue recognition policies detail how trading income, interest/dividends, commissions, workflow technology, and analytics services are recognized, including point-in-time vs. over-time recognition and allocation for bundled arrangements[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) - Share-based compensation is measured at fair value using the Black-Scholes-Merton model for options and volume-weighted average price for RSUs, with expense recognized over the vesting period[383](index=383&type=chunk) - Income tax accounting involves assessing deferred tax asset realizability and recognizing tax benefits from uncertain tax positions based on a 'more likely than not' threshold[385](index=385&type=chunk)[386](index=386&type=chunk) - Goodwill is assessed for impairment annually (July 1st) using a qualitative assessment, and finite-lived intangible assets are amortized over their estimated useful lives (e.g., customer relationships **10-12 years**)[389](index=389&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=82&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Company manages market risks from financial instrument values, interest rates, and currency rates through proprietary risk management tools, continuous monitoring, and hedging strategies, minimizing capital at risk - Market risks include changes in financial instrument values due to market prices, interest rates, and currency rates[398](index=398&type=chunk) - Market making strategies aim to minimize capital at risk by limiting notional size and hedging positions across various instruments (securities, derivatives, currencies, commodities)[399](index=399&type=chunk) - Proprietary risk management tools are used for continuous (intraday) monitoring, with systems designed to 'lockdown' strategies generating revenues outside preset limits[401](index=401&type=chunk) - Derivative financial instruments (futures, forwards, swaps, options) are used for trading and to hedge interest rate risk on long-term borrowings and foreign exchange risk on net investments[406](index=406&type=chunk)[407](index=407&type=chunk)[413](index=413&type=chunk) - Approximately **16.9%** of total revenues for H1 2025 were non-U.S. dollar denominated, with foreign currency risk mitigated through daily hedging practices[411](index=411&type=chunk)[412](index=412&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=84&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during Q2 2025 - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[415](index=415&type=chunk) - No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025[418](index=418&type=chunk) [PART II - OTHER INFORMATION](index=85&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides disclosures on legal proceedings, risk factors, equity sales, defaults, and other information, along with a comprehensive list of exhibits [ITEM 1. LEGAL PROCEEDINGS](index=85&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal proceedings information is incorporated by reference from Note 16, detailing ongoing litigations and regulatory matters, including a recent SEC action settlement - Legal proceedings information is detailed in Note 16 'Commitments, Contingencies and Guarantees'[420](index=420&type=chunk) [ITEM 1A. RISK FACTORS](index=85&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to Risk Factors have occurred since the Company's 2024 Annual Report on Form 10-K - No material changes to Risk Factors since the 2024 Form 10-K[421](index=421&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=85&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During H1 2025, **350,858 Virtu Financial Units** were exchanged for Class A Common Stock, and the share repurchase program was expanded to **$1.72 billion** with **$323.7 million** remaining capacity - **350,858 Virtu Financial Units** were exchanged for Class A Common Stock by employees during the six months ended June 30, 2025[422](index=422&type=chunk) | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | | April 1, 2025 - April 30, 2025 | 574,135 | $37.01 | $368,811,688 | | May 1, 2025 - May 31, 2025 | 565,133 | $41.46 | $345,712,155 | | June 1, 2025 - June 30, 2025 | 543,710 | $41.60 | $323,712,519 | | Total Common Stock repurchases | 1,682,978 | $39.99 | | - The share repurchase program was expanded to **$1.72 billion** and extended through April 24, 2026, with **$323.7 million** remaining capacity as of June 30, 2025[425](index=425&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=86&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities occurred during the reporting period [ITEM 4. MINE SAFETY DISCLOSURES](index=86&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) No mine safety disclosures are required for this reporting period [ITEM 5. OTHER INFORMATION](index=86&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 and H1 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three and six months ended June 30, 2025[428](index=428&type=chunk) [ITEM 6. EXHIBITS](index=87&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, the Management Incentive Plan, CEO/CFO certifications, and XBRL data files - Exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated By-laws, Virtu Financial, Inc. Second Amended and Restated 2015 Management Incentive Plan, CEO/CFO certifications, and XBRL Instance Document[429](index=429&type=chunk)