Virtu Financial Inc. ((VIRT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Virtu Financial Inc. showcased a mixed sentiment, highlighting strong performances in Market Making and Virtu Execution Services (VES), alongside significant growth in the crypto and options sectors. However, the call also addressed challenges such as a decline in Market Making revenue and a strategic pivot away from share repurchases, as the company aims to expand its capital base to seize new growth opportunities.
Strong Adjusted Net Trading Income
Virtu Financial reported an impressive adjusted net trading income (ANTI) of $467 million, translating to $7.4 million per day. This was attributed to a favorable operating environment and the company’s renewed focus on growth, underscoring its robust financial health.
Market Making and VES Performance
The Market Making segment achieved an ANTI of $344 million, or $5.1 million per day, with notable strength across global equities, cryptos, currencies, and commodities. Meanwhile, VES reported an ANTI of $123 million, marking its best quarter since early 2021 and continuing a six-quarter streak of increased ANTI.
Crypto and Options Growth
Virtu Financial highlighted strong performance in its crypto and options segments, reflecting ongoing growth as part of its broader strategic initiatives. This focus indicates the company’s commitment to expanding in these high-potential areas.
Reduction in Share Repurchases
The company announced a strategic shift away from share repurchases to prioritize building its capital base. While this may affect immediate shareholder returns, it aligns with Virtu’s long-term growth objectives.
Market Making Revenue Decline
Despite overall positive results, the Market Making revenue experienced a 26% sequential decline, which was not entirely explained by the modest 3% decline in quoted spread opportunity. This suggests underlying challenges that the company may need to address.
Forward-Looking Guidance
Looking ahead, Virtu Financial’s guidance emphasized growth and capital allocation strategies. The company aims to trend towards the higher end of an ANTI range of $6 million to $10 million per day by investing in infrastructure, talent, and expanding its capital base. With over $500 million raised in 2025 through retained earnings and debt financing, Virtu is poised to capitalize on opportunities in crypto, options, and ETF blocks, while maintaining strong operating leverage and capital management.
In summary, Virtu Financial’s earnings call reflected a positive outlook with strong performances in key areas, despite some challenges. The company’s strategic focus on growth and capital expansion positions it well for future opportunities, particularly in the burgeoning crypto and options markets.