Virtu Financial, Inc. · NYSE:VIRT
Virtu Financial — Q1 2024 Earnings Presentation
26 slides from Virtu Financial's earnings presentation, Apr 24, 2024
Slide 1: First Quarter 2024 Earnings Supplement
Presentation Title in First Quarter 2024 Title Case Earnings Supplement Presentation subtitle in sentence case Presenter Name Event name xx Month 201x © 201X Virtu Financial. All rights reserved. Not to be reproduced or retransmitted without permission. Compliance #XXXX-XXXX © 2024 Virtu Financial.
Slide 2: Performance Highlights
Performance Highlights 1Q 2024 Key Financials Commentary & Highlights Normalized • Market Making and VES each performed Adj. NTI1 Adj. NTI/day1,2 Adj. EPS1 well against the backdrop of a mixed $367M $6.0M $0.76 environment Adj. EBITDA Debt to LTM • Growth initiatives generated a record Adj. EBITDA1
Slide 3: Key Financial Metrics
Key Financial Metrics Annual Quarterly Comparison FY FY FY FY FY 2023 FY 2024 1Q 2024 v ($M) 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 4Q'23 1Q'23 Total Adjusted Net Trading Income 1,2 $2,271 $1,910 $1,468 $1,211 $373 $279 $298 $261 $367 + 45% - 0% Daily Average Adj. NTI 1,2 $9.0 $7.6 $5.8 $4.8 $6.0 $4.5 $
Slide 4: Major Market Metrics
Major Market Metrics Annual Quarterly Comparison FY FY FY FY FY 2023 FY 2024 1Q 2024 v 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 4Q'23 1Q'23 Market Metrics (Average Daily) Volume Metrics US Equity Consolidated Volume (M shares) 10,924 11,404 11,874 11,035 11,784 10,756 10,442 11,168 11,767 + 5% - 0% US Equ
Slide 5: Organic Business Growth
Organic Business Growth $1,003K per day $641K $611K $668K per day $540K per day per day $495K $489K per day per day $399K per day $424K 1 per day Daily Average Adj. NTI from $255K per day $161K per day Organic Growth Initiatives per day FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 1Q'23 2Q'23 3Q'23 4Q'23 1Q'
Slide 6: Virtu Long-Term Catalysts to Drive Value
Virtu Long-Term Catalysts to Drive Value Illustrative Range of Outcomes Based on Current Expense Base & 1Q24 Share Count Virtu ANTI Full Year Full Year 1 1 per Day ANTI Adj. EPS1,2 Through- $5.0M $ 1,255M $2.08 Daily Average $6.0M $ 1,506M $3.23 the-Cycle $7.0M $ 1,757M $4.40 Pro Forma ANTI3 since F
Slide 7: Significant Earnings Leverage from Organic Growth Initiatives & Share Buybacks
Significant Earnings Leverage from Organic Growth Initiatives & Share Buybacks Our operating expense positions us for consistent, through-the-cycle earnings production while organic growth initiatives and share buybacks continue to have a significant impact on bottom-line earnings growth Additional
Slide 8: Crypto ETF Opportunity
Crypto ETF Opportunity Virtu makes markets, creates and redeems ETFs, and buys and sells spot bitcoin Growing Market Opportunity • New Products: 11 spot bitcoin ETFs were approved and began trading on January 10, 2024, and several additional products – including bitcoin ETF options and ether ETFs –
Slide 9: Capital Management
Capital Management We continue to return capital to shareholders through dividends and share repurchases Steady Payout in All Environments Share Buybacks2,3 Dividends declared per share and Adjusted EPS1, quarterly Shares outstanding and share repurchases, quarterly $1.44 Weighted 10.0 Avg. Share 19
Slide 10: Update on Share Buybacks
Update on Share Buybacks Cumulative Shares Repurchased to Date 1,2 60M 17.4% 17.4% 20% 16.2% 50M 14.8% 12.9% 13.6% 45.6M 15% 40M 11.8% 38.5M 41.2M 43.6M 9.1% 10.0% 36.3M 30M 30.3M 32.3M 10% 26.8M 5.2% 5.6% 25.1M 20M 2.7% 16.1M 5% 10M 1.0% 12.5M 0.8% 7.1M 1.4M 3.7M - 0% Cumulative Shares Repurchased
Slide 11: Operating Expenses and Long-Term Debt
Operating Expenses and Long-Term Debt Disciplined focus on expense management Operating Expense Results Annual Quarterly Adjusted Operating Expenses FY FY FY FY FY 2023 2023 2023 2023 2024 ($M) 20192 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q Adj. Cash Compensation1 $230 $321 $314 $315 $320 $85 $78 $80 $77
Slide 12: GAAP Reconciliations and Other Information
GAAP Reconciliations and Other Information
Slide 13: Share Count Roll Forward
Share Count Roll Forward 2021 2022 2023 Grand (M shares) 4Q 2020 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Total Total Total Total Beginning of Period Shares 197.1 195.6 186.1 171.7 170.2 167.9 165.2 171.7 162.7 197.1 Shares Repurchased - 1.44 - 14.71 - 16.34 - 4.91 - 2.27 - 2.90 - 2.40 - 12.48 - 1.96
Slide 14: GAAP Balance Sheet
GAAP Balance Sheet Assets As of: ($M) 12/31/19 12/31/20 12/31/21 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 Cash and cash equivalents $732 $890 $1,071 $982 $769 $699 $689 $820 $400 Cash & securities segregated under regulations & other 41 117 49 57 40 47 38 35 30 Securities borrowed 1,929 1,4
Slide 15: GAAP Income Statement
GAAP Income Statement Annual Quarterly Income Statement FY FY FY FY FY FY FY 2023 FY 2024 ($mm) 2018 20191 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q Trading income, net $1,267 $912 $2,493 $2,105 $1,629 $1,301 $413 $306 $316 $267 $408 Commissions, net and technology services 184 499 601 614 530 456 121 110
Slide 16: Adjusted EBITDA & Normalized Adjusted EPS
Adjusted EBITDA & Normalized Adjusted EPS (excludes ITG prior to 3/1/19) Annual Quarterly Income Statement FY FY FY FY FY FY FY 2023 FY 2024 ($mm) 1 2018 2019 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q Adjusted Net Trading Income $1,020 $975 $2,271 $1,910 $1,468 $1,211 $373 $279 $298 $261 $367 Adj. EBITDA /
Slide 17: Adjusted Net Trading Income Reconciliation
Adjusted Net Trading Income Reconciliation Operating Segments Adjusted Net Trading Income Reconciliation Total ($M) 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Trading income, net $522 $396 $397 $313 $413 $306 $316 $267 $408 Commissions, net and technology services 155 13
Slide 18: Adjusted Net Trading Income Reconciliation: Organic Growth Initiatives
Adjusted Net Trading Income Reconciliation Organic Growth Initiatives Organic Growth Initiatives Adjusted Net Trading Income Reconciliation Annual Quarterly ($M) 2018 2019 2020 2021 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Trading income, net $36 $65 $241 $144 $180 $58 $39 $44 $43 $88 Commission
Slide 19: Adjusted Operating Expense Reconciliation
Adjusted Operating Expense Reconciliation Annual Quarterly Adjusted Operating Expenses Reconciliation FY FY FY FY FY 2023 FY 2024 ($M) 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q Employee compensation and payroll taxes $394 $376 $391 $394 $103 $96 $97 $98 $101 (-) Cash Compensation Adjustments 1 (72) (62) (7
Slide 20: Disclaimer
Disclaimer Cautionary Statement Regarding Forward Looking Statements This presentation may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Virtu Financial, Inc.’s (“Virtu’s”, the “Company’s
Slide 21: End Notes
End Notes These notes refer to metrics and/or defined terms presented on: Slide 2 Performance Highlights 1. This reflects a non-GAAP measure. Please refer to slides at the end of this presentation for reconciliation to the equivalent GAAP measure. Prior period reconciliations available https://ir.vi
Slide 22: End Notes
End Notes These notes refer to metrics and/or defined terms presented on: Slide 6 Virtu Long-Term Catalysts to Drive Value 1. This reflects a non-GAAP measure. Ranges shown for illustrative purposes only and are not meant to reflect actual performance and therefore no quantitative reconciliation of
Slide 23: End Notes
End Notes These notes refer to metrics and/or defined terms presented on: Slide 7 Historical Growth Track Record 1. This reflects a non-GAAP measure. Please refer to slides at the end of this presentation for reconciliation to the equivalent GAAP measure. Prior period reconciliations available https
Slide 24: End Notes
End Notes These notes refer to metrics and/or defined terms presented on: Slide 8 Crypto ETF Opportunity 1. Historical AUM normalized to Bitcoin prices as of 4/23/2024. Slide 9 Capital Management 1. This reflects a non-GAAP measure. Please refer to slides at the end of this presentation for reconcil
Slide 25: End Notes
End Notes These notes refer to metrics and/or defined terms presented on: Slide 11 Operating Expenses and Long-Term Debt 1. This reflects a non-GAAP measure. Please refer to slides at the end of this presentation for reconciliation to the equivalent GAAP measure. Prior period reconciliations availab
Slide 26: End Notes
End Notes These notes refer to metrics and/or defined terms presented on: Slide 14 GAAP Balance Sheet 1. This reflects a non-GAAP measure, and it reflects the assets bracketed above less the liabilities bracketed above. Trading Capital at 3/31/24 also includes digital assets with a fair value of $80