Virtu Financial, Inc. · NYSE:VIRT
Virtu Financial — Q4 2023 Earnings Presentation
22 slides from Virtu Financial's earnings presentation, Jan 25, 2024
Slide 1: Fourth Quarter 2023 Earnings Supplement
Presentation Title in Fourth Title CaseQuarter 2023 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 © 2023 Virtu Financial.
Slide 2: Performance Highlights
Performance Highlights 4Q 2023 Key Financials Commentary & Highlights Normalized • Market Making responded to materially Adj. NTI1 Adj. NTI/day1,2 Adj. EPS1 lower opportunity set and performed in- $261M $4.1M $0.27 line; VES outperformed a lower opportunity set as well Adj. EBITDA Debt to LTM Adj. E
Slide 3: Key Financial Metrics
Key Financial Metrics Annual Quarterly Comparison FY FY FY FY FY 2022 FY 2023 4Q 2023 v FY'23 v ($M) 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 3Q'23 4Q'22 FY'22 Total Adjusted Net Trading Income 1,2 $2,271 $1,910 $1,468 $1,211 $505 $357 $331 $274 $373 $279 $298 $261 - 12% - 5% - 17% Daily Average
Slide 4: Major Market Metrics
Major Market Metrics Annual Quarterly Comparison FY FY FY FY FY 2022 FY 2023 4Q 2023 v FY'23 v 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 3Q'23 4Q'22 FY'22 Market Metrics (Average Daily) Volume Metrics US Equity Consolidated Volume (M shares) 10,924 11,404 11,874 11,035 12,880 12,585 10,899 11,174
Slide 5: Organic Business Growth
Organic Business Growth $806K per day $667K $641K $611K per day $540K per day $494K $581K $573K per day per day $488K per day $488K per day per day $398K per day $423K per day per day per day $255K $161K per day Daily Average Adj. NTI1 from per day Organic Growth Initiatives FY'18 FY'19 FY'20 FY'21
Slide 6: 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 Weighted $1.44 10.0 Avg. Share 19
Slide 7: Update on Share Buybacks
Update on Share Buybacks Cumulative Shares Repurchased to Date1,2 60M 17.4% 20% 16.2% 50M 14.8% 12.9% 13.6% 15% 11.8% 41.2M 43.6M 40M 38.5M 9.1% 10.0% 36.3M 30M 30.3M 32.3M 10% 25.1M 26.8M 5.2% 5.6% 20M 2.7% 16.1M 5% 10M 1.0% 12.5M 0.8% 7.1M 1.4M 3.7M - 0% Cumulative Shares Repurchased % of Shares O
Slide 8: Operating Expenses and Long-Term Debt
Operating Expenses and Long-Term Debt Disciplined focus on expense management Operating Expense Results Annual Quarterly Adjusted Operating Expenses FY FY FY FY FY 2022 2022 2022 2022 2023 2023 2023 2023 ($M) 20192 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Adj. Cash Compensation1 $230 $321 $314 $3
Slide 9: GAAP Reconciliations and Other Information
GAAP Reconciliations and Other Information
Slide 10: Analysis at Various Levels of ANTI
Analysis at Various Levels of ANTI Target Available ($M) Full Year Cash OpEx Adj. EBITDA 1,3 Adj. EPS for Buybacks ANTI/Day1 Adj. NTI 1 Total 1,2 EBITDA1,2 Margin 1,2 Annually4 FY 2023 share $5.00 M $1,255 $643 $612 49% $2.09 $50-$120 buybacks well $6.00 M $1,506 $643 $863 57% $3.25 $120-$160 ahead
Slide 11: Share Count Roll Forward
Share Count Roll Forward 2021 2022 Grand (M shares) 4Q 2020 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Total Total Total Beginning of Period Shares 197.1 195.6 186.1 179.1 177.3 173.9 186.1 171.7 170.2 167.9 165.2 197.1 Shares Repurchased - 1.44 - 14.71 - 8.90 - 1.76 - 3.44 - 2.
Slide 12: GAAP Balance Sheet
GAAP Balance Sheet Assets Liabilities and Equity 12/31/2023 12/31/2023 ($M) ($M) Cash and cash equivalents $820 Short-term borrowings, net - Cash and securities segregated under regulations and other 35 Securities loaned 1,329 Securities borrowed 1,722 Securities sold under agreements to repurchase
Slide 13: GAAP Income Statement
GAAP Income Statement Annual Quarterly Income Statement FY FY FY FY FY FY FY 2022 FY 2023 ($mm) 2018 20191 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Trading income, net $1,267 $912 $2,493 $2,105 $1,629 $1,301 $522 $396 $397 $313 $413 $306 $316 $267 Commissions, net and technology services 184 499
Slide 14: Adjusted EBITDA & Normalized Adjusted EPS
Adjusted EBITDA & Normalized Adjusted EPS Annual Quarterly Income Statement FY FY FY FY FY FY FY 2022 FY 2023 ($mm) 2018 20191 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Adjusted Net Trading Income $1,020 $975 $2,271 $1,910 $1,468 $1,211 $505 $357 $331 $274 $373 $279 $298 $261 Adj. EBITDA / Adj. EP
Slide 15: Adjusted Net Trading Income Reconciliation
Adjusted Net Trading Income Reconciliation Operating Segments Adjusted Net Trading Income Reconciliation Total ($M) 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Trading income, net $522 $396 $397 $313 $413 $306 $316 $267 Commissions, net and technology services 155 136 121 118 121
Slide 16: Adjusted Net Trading Income Reconciliation: Organic Growth Initiatives
Adjusted Net Trading Income Reconciliation Organic Growth Initiatives Organic Growth Initiatives Adjusted Net Trading Income Reconciliation Annual Quarterly ($M) 2018 2019 2020 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Trading income, net $36 $65 $241 $144 $53 $41 $42 $44
Slide 17: Adjusted Operating Expense Reconciliation
Adjusted Operating Expense Reconciliation Annual Quarterly Adjusted Operating Expenses Reconciliation FY FY FY FY FY 2022 FY 2023 ($M) 2020 2021 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Employee compensation and payroll taxes $394 $376 $391 $394 $103 $99 $103 $86 $103 $96 $97 $98 (-) Cash Compensation Adju
Slide 18: 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 19: 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 20: End Notes—continued
End Notes—continued These notes refer to metrics and/or defined terms presented on: Slide 6 Capital Management 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 21: End Notes—continued
End Notes—continued These notes refer to metrics and/or defined terms presented on: Slide 8 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 reconciliation
Slide 22: End Notes—continued
End Notes—continued These notes refer to metrics and/or defined terms presented on: Slide 12 GAAP Balance Sheet 1. This reflects a non-GAAP measure, and it reflects the assets bracketed above less the liabilities bracketed above. Prior period reconciliations available at https://ir.virtu.com/financi