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What changed in Virtu Financial, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Virtu Financial, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+344 added−316 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-16)

Top changes in Virtu Financial, Inc.'s 2024 10-K

344 paragraphs added · 316 removed · 272 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

47 edited+6 added−8 removed113 unchanged
Biggest changeThese proposals include, but are not limited to, (i) Proposed Rule 615 of Regulation NMS, which proposes to dramatically change the U.S. equities market structure, the routing, handling and potentially the amount, character, and cost of retail order flow, (ii) Regulation Best Execution, which would impose best execution requirements on broker-dealers which would be distinct from, but overlapping with, FINRA’s existing best execution rule (Rule 5310), (iii) proposed rule amendments to minimum pricing increments under Rule 612 or Regulation NMS, access fee caps under Rule 610 of Regulation NMS, acceleration of implementation of certain Market Data Infrastructure Rules, and amendment to the odd-lot information definition adopted under the MDI rules (collectively referred to as the “tick size, access fees and infostructure rule proposals”), (iv) proposed amendments to Rule 605 of Regulation NMS, along with a series of amendments to the definition of Exchange and Alternative Trading Systems (ATS), which would expand the scope of exchange and ATS registration and compliance requirements.
Biggest changeAdditional recent proposals which have not been adopted include (i) Proposed Rule 615 of Regulation NMS, which proposes to dramatically change the U.S. equities market structure, the routing, handling and potentially the amount, character, and cost of retail order flow, (ii) Regulation Best Execution, which would impose best execution requirements on broker-dealers which would be distinct from, but overlapping with, FINRA’s existing best execution rule (Rule 5310), (iii) a series of amendments to the definition of Exchange and Alternative Trading Systems (ATS), which would expand the scope of exchange and ATS registration and compliance requirements, and (iv) a proposal to restrict volume based tiered pricing by equity exchanges in certain cases.
Regulators may propose market structure changes particularly considering the continued regulatory, 13 congressional and media scrutiny of U.S. equities market structure, the retail trading environment in the U.S., wholesale market making and the relationships between retail broker-dealers and market making firms, including but not limited to payment for order flow arrangements, other remuneration arrangements such as profit-sharing relationships and exchange fee and rebate structures, ATSs and off-exchange trading more generally, high frequency trading, short selling, market fragmentation, colocation, and access to market data feeds.
Regulators may propose market structure changes particularly considering the continued regulatory, congressional and media scrutiny of U.S. equities market structure, the retail trading environment in the U.S., wholesale market making and the relationships between retail broker-dealers and market making firms, including but not limited to payment for order flow arrangements, other remuneration arrangements such as profit-sharing relationships and exchange fee and rebate 13 structures, ATSs and off-exchange trading more generally, high frequency trading, short selling, market fragmentation, colocation, and access to market data feeds.
We connect 10 to exchanges and other electronic venues through a network of co‑location facilities around the world that are monitored 24 hours a day, five days a week, by our staff of experienced network professionals; ◦ Our clearing system captures trades in real-time and performs automated reconciliations of trades and positions, corporate action processing, options exercises, securities lending and inventory management, allowing us to effectively manage operational risk; and ◦ Software developed to support our market making systems performs daily profit and loss and position reconciliations.
We connect to exchanges and other electronic venues through a network of co‑location facilities around the world that are monitored 24 hours a day, five days a week, by our staff of experienced network professionals; ◦ Our clearing system captures trades in real-time and performs automated reconciliations of trades and positions, corporate action processing, options exercises, securities lending and inventory management, allowing us to effectively manage operational risk; and ◦ Software developed to support our market making systems performs daily profit and loss and position reconciliations.
At the moment when a trade is executed, our systems capture and deliver this information back to the source, in most cases within a fraction of a second, and the trade record is written into our clearing 6 system, where it flows through a chain of control accounts that allow us to automatically and efficiently reconcile trades, positions and payments until the final settlement occurs.
At the moment when a trade is executed, our systems capture and deliver this information back to the source, in most cases within a fraction of a second, and the trade record is written into our clearing system, where it flows through a chain of control accounts that allow us to automatically and efficiently reconcile trades, positions and payments until the final settlement occurs.
The SEC, FINRA, CFTC, NFA, U.S. state securities regulators, the European Securities and Markets Authority (“ESMA”) in the European Union, the CBI in Ireland, FCA in the U.K., Banque de France in France, MAS in Singapore, SFC in Hong Kong, ASX and ASIC in Australia, CIRO and OSC in Canada, other SROs and other U.S. and foreign governmental regulatory bodies promulgate numerous rules and regulations that may impact our business.
The SEC, FINRA, CFTC, NFA, U.S. state securities regulators, the European Securities and Markets Authority (“ESMA”) in the European Union, the CBI in Ireland, FCA in the U.K., Banque de France in France, MAS in Singapore, SFC in Hong Kong, ASIC in Australia, CIRO and OSC in Canada, other SROs and other U.S. and foreign governmental regulatory bodies promulgate numerous rules and regulations that may impact our business.
We use the latest technology to create and deliver liquidity to global markets and innovative trading solutions and analytics tools to our clients. We interact directly 5 with hundreds of retail brokers, Registered Investment Advisors, private client networks, sell-side brokers, and buy-side institutions. We have two operating segments: Market Making and Execution Services, and one non-operating segment: Corporate.
We use the latest technology to create and deliver liquidity to global markets and innovative trading solutions and analytics tools to our clients. We interact directly with hundreds of retail brokers, Registered Investment Advisors, private client networks, sell-side brokers, and buy-side institutions. We have two operating segments: Market Making and Execution Services, and one non-operating segment: Corporate.
Our algorithms and order routers help portfolio managers and traders to trade orders quickly, comprehensively and cost‑efficiently from our EMS or our Order Management System (“OMS”) and most third‑party trading platforms. Our institutional sales 8 traders offer portfolio trading and single stock sales trading which provides execution expertise for program, block and riskless principal trades in global equities and ETFs.
Our algorithms and order routers help portfolio managers and traders to trade orders quickly, comprehensively and cost‑efficiently from our EMS or our Order Management System (“OMS”) and most third‑party trading platforms. Our institutional sales traders offer portfolio trading and single stock sales trading which provides execution expertise for program, block and riskless principal trades in global equities and ETFs.
TCA is also available for foreign exchange transactions (FX TCA) and for corporate and sovereign bond trading (FI TCA). 9 Corporate Our Corporate segment contains investments principally in strategic financial services-oriented opportunities and maintains corporate overhead expenses and all other income and expenses that are not attributable to our operating segments. Risk Management We are acutely focused on risk management.
TCA is also available for foreign exchange transactions (FX TCA) and for corporate and sovereign bond trading (FI TCA). Corporate Our Corporate segment contains investments principally in strategic financial services-oriented opportunities and maintains corporate overhead expenses and all other income and expenses that are not attributable to our operating segments. Risk Management We are acutely focused on risk management.
Key automated controls include: ◦ Our technical operations system continuously monitors our network and the proper functioning of each of our trading centers around the world; ◦ Our market making system continuously evaluates the listed securities and other financial products in which we provide bid and offer quotes and changes its bids and offers to reflect changes in market conditions.
Key automated controls include: 10 ◦ Our technical operations system continuously monitors our network and the proper functioning of each of our trading centers around the world; ◦ Our market making system continuously evaluates the listed securities and other financial products in which we provide bid and offer quotes and changes its bids and offers to reflect changes in market conditions.
We believe that market participants benefit from the increased liquidity, lower overall trading costs and execution transparency that Virtu provides. Our execution services and client solutions products are designed to be transparent, because we believe transparency makes markets more efficient and helps investors make better, more informed decisions.
We believe that market participants benefit from the increased liquidity, lower overall trading costs and execution transparency that Virtu provides. 5 Our execution services and client solutions products are designed to be transparent, because we believe transparency makes markets more efficient and helps investors make better, more informed decisions.
Our Options and Other market making includes our activity on all of the U.S. options exchanges of which we are a member (i.e., Cboe, ISE and NYSE Arca) and on the U.S. futures exchanges, as well as our activity in cryptocurrencies. Our cryptocurrency market making includes spot, perpetuals, futures, and ETFs and takes place across 55 venues and exchanges.
Our Options and Other market making includes our activity on all of the U.S. options exchanges of which we are a member (i.e., Cboe, ISE, and NYSE Arca) and on the U.S. futures exchanges, as well as our activity in cryptocurrencies. Our cryptocurrency market making includes spot, perpetuals, futures, and ETFs and takes place across over 55 venues and exchanges.
Leveraging the scalability and low costs of our platform, we are able to test and rapidly deploy new liquidity provisioning strategies, expand to new securities, asset classes and geographies and increase transaction volumes at little incremental cost.
Leveraging the scalability and low costs of our platform, we are able to test and rapidly deploy new liquidity provisioning strategies, expand to new securities, asset classes and geographies and increase transaction volumes at little 6 incremental cost.
Our Investor Relations Department can be contacted at Virtu Financial, Inc., 163 3 Broadway, New York, NY, 10019, Attn: Investor Relations, e-mail: investor_relations@virtu.com. 16 From time to time, we use our website, public conference calls, and social media channels, including our Twitter account (twitter.com/virtufinancial), our LinkedIn account (linkedin.com/company/virtu-financial), and our Instagram account (instagram.com/virtu.financial), as additional means of disclosing public information to investors, the media and others interested in us.
Our Investor Relations Department can be contacted at Virtu Financial, Inc., 163 3 Broadway, New York, NY, 10019, Attn: Investor Relations, e-mail: investor_relations@virtu.com. 16 From time to time, we use our website, public conference calls, and social media channels, including our X account (x.com/virtufinancial), our LinkedIn account (linkedin.com/company/virtu-financial), and our Instagram account (instagram.com/virtu.financial), as additional means of disclosing public information to investors, the media and others interested in us.
In 2023, our Execution Services segment did not have any client that accounted for more than 10% of our total commissions earned. Clients may access a broad range of products and services that includes electronic execution services in global equities via algorithmic trading, order routing and an execution management system (“EMS”) as well as internal crossing through our registered ATSs.
In 2024, our Execution Services segment did not have any client that accounted for more than 10% of our total commissions earned. Clients may access a broad range of products and services that includes electronic execution services in global equities via algorithmic trading, order routing and an execution management system (“EMS”) as well as internal crossing through our registered ATSs.
Securities and Exchange Commission (“SEC”) registered exchanges and other market centers around the world, including the New York Stock Exchange (“NYSE”), the Nasdaq, NYSE Arca, Cboe BATS, Chicago Stock Exchange, the Member's Exchange (“MEMX”), the TSX in Canada, Bovespa in Brazil and BMV in Mexico, as well as other ATSs and more than 20 private liquidity pools.
Securities and Exchange Commission (“SEC”) registered exchanges and other market centers around the world, including the New York Stock Exchange (“NYSE”), the Nasdaq, NYSE Arca, Cboe BATS, Chicago Stock Exchange, the Members Exchange (“MEMX”), the TSX in Canada, Bovespa in Brazil and BMV in Mexico, as well as other ATSs and more than 20 private liquidity pools.
In the U.S., we conduct our business from our headquarters in New York City and our offices in Boston, Austin, Texas, Chicago, Short Hills, New Jersey, and Palm Beach Gardens, Florida. Abroad, we conduct our business through trading centers located in London, Dublin, Paris, Singapore, Hong Kong, Toronto, and Sydney.
In the U.S., we conduct our business from our headquarters in New York City and our offices in Boston, Austin, Texas, Chicago, Short Hills, New Jersey, Rye Brook, New York, and Palm Beach Gardens, Florida. Abroad, we conduct our business through trading centers located in London, Dublin, Paris, Singapore, Hong Kong, Toronto, and Sydney.
We engage in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, ATSs and other market centers. As a complement to electronic market making, our cash trading business handles specialized orders and transacts on the OTC Link ATS operated by OTC Markets Group Inc.
We engage in principal trading in the Market Making segment direct to clients as well as on exchanges, ATSs and other market centers. As a complement to electronic market making, our cash trading business handles specialized orders and transacts on the OTC Link ATS operated by OTC Markets Group Inc.
We also 7 actively trade precious metals, including gold, silver, platinum and palladium, as well as base metals such as aluminum and copper.
We also actively trade precious metals, including gold, silver, platinum and palladium, as well as base metals such as aluminum and copper.
Market Making Our Market Making segment principally consists of market making in the cash, futures, and options markets across global equities, fixed income, currencies, cryptocurrencies, and commodities.
Business Segments Market Making Our Market Making segment principally consists of market making in the cash, futures, and options markets across global equities, fixed income, currencies, cryptocurrencies, and commodities.
The Conditional Session accepts conditional orders with price/size priority, and is only available to our subsidiaries. POSIT provides continuous crossing of non‑displayed (or dark) equity orders and price improvement opportunities within the published best bid and offer price. POSIT Alert is a block crossing mechanism within POSIT.
The Conditional Session accepts conditional orders with price/size priority, and is only available to our subsidiaries. POSIT provides continuous crossing of non‑displayed (or dark) equity orders and price improvement opportunities within the published best bid and offer price. In the U.S., POSIT Alert is a block crossing mechanism within POSIT ATS.
We trade these products on a variety of specialized exchanges, direct to counterparties, and other trading venues, including BrokerTec, eSpeed, DealerWeb, Bloomberg, Tradeweb, MarketAxess, and BGC’s Fenics UTS. Our Currencies market making, including spot, futures and forwards, comprises our activity in over 80 currencies, including deliverable, non-deliverable, fiat, and digital currencies, across dozens of venues and direct to counterparties.
We trade these products on a variety of specialized exchanges, direct to counterparties, and other trading venues, including BrokerTec, eSpeed, DealerWeb, Bloomberg, Tradeweb, MarketAxess, and BGC’s Fenics UST. 7 Our Currencies market making, including spot, futures and forwards, comprises our activity in over 80 currency pairs, including deliverable, non-deliverable, fiat, and digital currencies, across dozens of venues and direct to counterparties.
RFQ‑hub is available as a stand‑alone platform and is also integrated with Triton. In May 2022, we formed a consortium of strategic partners and investors to own and support the growth of the RFQ-hub business.
RFQ‑hub is available as a stand‑alone platform and can also be integrated with Triton in certain regions. In May 2022, we formed a consortium of strategic partners and investors to own and support the growth of the RFQ-hub business.
As a result of the completion of the IPO, the Reorganization Transactions, the July 2017 Private Placement (as defined below), and certain other secondary offerings and permitted exchanges by current and former employees of Virtu Financial Units for shares of the Company’s Class A Common Stock, the Company holds an approximately 57.8% interest in Virtu Financial at December 31, 2023.
As a result of the completion of the IPO, the Reorganization Transactions, the July 2017 Private Placement (as defined below), and certain other secondary offerings and permitted exchanges by current and former employees of Virtu Financial Units for shares of the Company’s Class A Common Stock, the Company holds an approximately 56.9% interest in Virtu Financial at December 31, 2024.
Failure to comply with any laws, rules or regulations could result in administrative or court proceedings, censures, fines, penalties, judgments, disgorgement, restitution and censures, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses and/or business activities, the issuance of cease‑and‑desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons.
Failure to comply with any laws, rules or regulations could result in administrative or court proceedings, censures, fines, penalties, judgments, disgorgement, restitution and censures, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses and/or business activities, the issuance of cease‑and‑desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons and could negatively impact our reputation with clients or prospective clients and, in turn, impact our revenues.
MiFID II also imposed additional requirements on trading platforms, such as additional technological requirements, clock synchronization, microsecond processing granularity, pre-trade risk controls, transaction reporting requirements and limits on the ratio of unexecuted orders to trades. The MiFID II regime is currently under review, with European Union authorities proposing to make further changes to the regime.
MiFID II also imposed additional requirements on trading platforms, such as additional technological requirements, clock synchronization, microsecond processing granularity, pre-trade risk controls, transaction reporting requirements and limits on the ratio of unexecuted orders to trades. The MiFID II regime has been under review, with European Union authorities making further changes to the regime.
Virtu ITG Australia Limited is a market participant of the Australian Securities Exchange (“ASX”) and Chi-X Australia Limited, and is also a holder of an Australian Financial Services License issued by the ASIC. Virtu ITG Australia Limited’s principal regulators are the ASX and ASIC.
Virtu ITG Australia Limited is a market participant of the Australian Securities Exchange (“ASX”) and Chi-X Australia Limited, and is also a holder of an Australian Financial Services License issued by the ASIC, which is its principal regulator.
Human Capital Resources As of February 2, 2024, we had approximately 975 employees, located in nine countries around the world, all of whom were employed on a full‑time basis and in good standing. The approximate regional representation of our workforce is as follows: 71% Americas, 19% EMEA and 10% APAC. None of our employees are covered by collective bargaining agreements.
Human Capital Resources As of February 14, 2025, we had approximately 969 employees, located in twelve countries around the world, all of whom were employed on a full‑time basis and in good standing. The approximate regional representation of our workforce is as follows: 70% Americas, 19% EMEA and 11% APAC. None of our employees are covered by collective bargaining agreements.
We conduct our APAC market making activities, including much of our market making in cryptocurrency products from Singapore and through our Singapore subsidiary, Virtu Financial Singapore Pte. Ltd. Virtu Financial Singapore Pte. Ltd. is registered with the MAS for an investment incentive arrangement.
We conduct our APAC market making activities, including much of our market making in cryptocurrency products from Singapore and through our Singapore subsidiary, Virtu Financial Singapore Pte. Ltd. Virtu Financial Singapore Pte. Ltd. is 12 registered with the MAS for an investment incentive arrangement and licensed by the MAS to deal in certain capital markets instruments.
VETL's Paris branch is registered with the Banque de France. VETL also operates a multi-lateral trading facility (“MTF”) 12 in Ireland and Virtu ITG UK Limited (“VIUK”), a U.K. investment firm, operates a MTF in the U.K. VIUK is an investment firm which is authorized and regulated by the FCA.
VETL also operates a multi-lateral trading facility (“MTF”) in Ireland and Virtu ITG UK Limited (“VIUK”), a U.K. investment firm, operates a MTF in the U.K. VIUK is an investment firm which is authorized and regulated by the FCA.
The Founder Post-IPO Member controls approximately 86.5% of the combined voting power of our outstanding common stock as of December 31, 2023.
The Founder Post-IPO Member controls approximately 87.0% of the combined voting power of our outstanding common stock as of December 31, 2024.
The Dodd‑Frank Act includes the “Volcker Rule,” which significantly limits the ability of banks and their affiliates to engage in proprietary trading, and Title VII, which provides a framework for the regulation of the swap markets.
The Dodd‑Frank Act, which has been implemented through extensive rulemaking by the SEC, the CFTC, and other governmental agencies, includes the “Volcker Rule,” which significantly limits the ability of banks and their affiliates to engage in proprietary trading, and Title VII, which provides a framework for the regulation of the swap markets.
We believe that our scalable technology allows us to access new markets and increase volumes with limited incremental costs. 11 Intellectual Property and Other Proprietary Rights We rely on federal, state and international laws that govern trade secrets, trademarks, domain names, patents, copyright and contract law to protect our intellectual property and proprietary technology.
Intellectual Property and Other Proprietary Rights We rely on federal, state and international laws that govern trade secrets, trademarks, domain names, patents, copyright and contract law to protect our intellectual property and proprietary technology.
Agency-based, Execution-only Trading Our clients may access a broad range of products and services that includes electronic execution services in global equities via algorithmic trading, order routing and an EMS as well as internal crossing through our registered ATSs.
The segment also includes the results of our capital markets business, in which we act as an agent for issuers in connection with at-the-market offerings and buyback programs. 8 Agency-based, Execution-only Trading Our clients may access a broad range of products and services that includes electronic execution services in global equities via algorithmic trading, order routing and an EMS as well as internal crossing through our registered ATSs.
Our POSIT and MatchIt ATSs compete with various national and regional securities exchanges, ATSs, Electronic Communication Networks, MTFs and systematic internalizers for trade execution services. Our EMS, OMS, connectivity and RFQ services compete with offerings from independent vendors, agency‑only firms and other sell‑side firms.
Our POSIT and MatchIt ATSs compete with various national and regional securities exchanges, ATSs, Electronic Communication Networks, MTFs and systematic internalizers for trade execution services.
Our energy, commodities and currency market making and trading activities are primarily conducted through Virtu Financial Global Markets LLC. We conduct our European, Middle Eastern and African (“EMEA”) market making activities from Dublin and through our subsidiary Virtu Financial Ireland Limited (“VFIL”), which is authorized as an “Investment Firm” with the CBI.
We conduct our European, Middle Eastern and African (“EMEA”) market making activities from Dublin and through our subsidiary Virtu Financial Ireland Limited (“VFIL”), which is authorized as an “Investment Firm” with the CBI. We conduct our EMEA execution services trading activity from Dublin, London, and Paris through our subsidiary Virtu Europe Trading Limited (“VETL”) (f/k/a Virtu ITG Europe Limited).
Analytics Our trading analytics suite helps enable portfolio managers and traders to analyze execution performance before the trade happens (pre‑trade) and during trading (real‑time) by providing trading analytics and risk models that help them perform predictive analysis, manage risk, change strategy and reduce trading costs.
We also offer a comprehensive research payment account solution, enabling clients to unbundle research and execution payments to comply with the European Markets in Financial Instruments Directive (“MiFID”) II regulations. 9 Analytics Our trading analytics suite helps enable portfolio managers and traders to analyze execution performance before the trade happens (pre‑trade) and during trading (real‑time) by providing trading analytics and risk models that help them perform predictive analysis, manage risk, change strategy and reduce trading costs.
We use the services of prime brokers, primarily in other asset classes, who provide us direct market access to markets and often cross‑margining and margin financing in return for execution and clearing fees. We continually monitor the credit quality of our prime brokers and rely on large multinational banks for most of our execution and clearing needs globally.
Our activities in U.S. equities are both self‑cleared and rely on fully-disclosed clearing arrangements with third-party clearing firms. We use the services of prime brokers, primarily in other asset classes, who provide us direct market access to markets and often cross‑margining and margin financing in return for execution and clearing fees.
Further, in light of the U.K.’s withdrawal of its membership from the E.U., which is commonly referred to as “Brexit,” the passporting regime under MiFID II, which enables firms to provide services to countries across the E.U., no longer encompasses the U.K.
These changes at the ‘Level 1’ legislative level include a substantial number of ‘Level 2’ measures, including by means of regulatory technical standards and implementing technical standards, that are yet to be developed. 14 Further, in light of the U.K.’s withdrawal of its membership from the E.U., which is commonly referred to as “Brexit,” the passporting regime under MiFID II, which enables firms to provide services to countries across the E.U., no longer encompasses the U.K.
Regulation We conduct our U.S. equities and options market making and provide execution services through VAL, our SEC‑registered broker‑dealer. VAL is regulated by the SEC and its designated examining authority is the Financial Industry Regulatory Authority, Inc. (“FINRA”). VAL is also registered as a floor trader firm with the Commodity Futures Trading Commission (“CFTC”).
VAL is regulated by the SEC and its designated examining authority is the Financial Industry Regulatory Authority, Inc. (“FINRA”). VAL is also registered as a floor trader firm with the Commodity Futures Trading Commission (“CFTC”). We are a full clearing member of the National Securities Clearing Corporation (“NSCC”) and the Depository Trust & Clearing Corporation (“DTCC”).
We also provide algorithmic trading and order routing that combine technology, access to our differentiated liquidity and support from experienced professionals to help clients execute trades. The segment also includes the results of our capital markets business, in which we act as an agent for issuers in connection with at-the-market offerings and buyback programs.
We also provide algorithmic trading and order routing that combine technology, access to our differentiated liquidity and support from experienced professionals to help clients execute trades.
As an equal opportunity employer, all qualified applicants receive consideration without regard to race, national origin, gender, gender identity, sexual orientation, protected veteran status, disability, age or any other legally protected status. We seek to create an inclusive, equitable, culturally competent, and supportive environment where our management and employees model behavior that enriches our workplace.
As an equal opportunity employer, all qualified applicants receive consideration without regard to race, national origin, gender, gender identity, sexual orientation, protected veteran status, disability, age or any other legally protected status. Regulation We conduct our U.S. equities and options market making and provide execution services through VAL, our SEC‑registered broker‑dealer.
The SEC and other SROs have enacted and are actively considering rules that may affect our operations and profitability. Specifically, the SEC has proposed several rule changes focused on equity market structure reform.
The SEC and other SROs have recently enacted and considered rules that may affect our operations and profitability.
We conduct our EMEA execution services trading activity from Dublin, London, and Paris through our subsidiary Virtu Europe Trading Limited (“VETL”) (f/k/a Virtu ITG Europe Limited). VETL is authorized and regulated by the CBI as an “Investment Firm” and maintains branch offices in London and Paris. The London branch office of VETL is authorized and regulated by the FCA.
VETL is authorized and regulated by the CBI as an “Investment Firm” and maintains branch offices in London and Paris. The London branch office of VETL is authorized and regulated by the FCA. VETL’s Paris branch is registered with the Banque de France.
Some of our competitors in market making and execution services are larger than we are and have more captive order flow in certain assets. Technology and software innovation is a primary focus for us, rather than relying solely on the speed of our network.
Technology and software innovation is a primary focus for us, rather than relying solely on the speed of our network. We believe that our scalable technology allows us to access new markets and increase volumes with limited incremental costs.
These changes and others may impose additional technological, operational and compliance costs on us and creates uncertainty with regard to their effects. On July 21, 2010, the Dodd‑Frank Act was enacted in the U.S. Implementation of the Dodd‑Frank Act has been accomplished through extensive rulemaking by the SEC, the CFTC and other governmental agencies.
These recently adopted and potential additional changes and others may impose additional technological, operational and compliance costs on us and create uncertainty with regard to their effects.
The Council of the European Union further published an Information Note with respect to the “Proposal for a Regulation (EU) of the European 14 Parliament and of the Council of amending Regulation (EU) No 600/2014 as regards enhancing data transparency, removing obstacles to the emergence of consolidated tapes, optimizing the trading obligations and prohibiting receiving payments for forwarding client orders” and the “Proposal for the Directive (EU) 2023/ of the European Parliament and of the Council of amending Directive 2014/65/EU on markets in financial instruments”, dated October 18, 2023, which includes the final compromise texts for each proposed regulation.
On February 28, 2024, Directive (EU) 2024/790 amending MiFID II and Regulation (EU) 2024/791 amending Regulation (EU) No 600/2014 (also known as “MiFIR”) as regards enhancing data transparency, removing obstacles to the emergence of consolidated tapes, optimizing the trading obligations and prohibiting receiving payment for order flow were each adopted.
Proposed changes to Regulation ATS would revise the format of Form ATS required to be filed and would impose additional disclosures and costs to rewrite and refile those forms. Recently adopted amendments to the definitions of “dealer” and “government securities dealer” under the Exchange Act are expected to increase the scope and breadth of these registrant categories.
Proposed changes to Regulation ATS would revise the format of Form ATS required to be filed and would impose additional disclosures and costs to rewrite and refile those forms. Further, on April 23, 2024, the Federal Trade Commission (FTC) announced a final rule banning most non-compete clauses in employer-employee contracts.
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We also offer a comprehensive research payment account solution, enabling clients to unbundle research and execution payments to comply with the European Markets in Financial Instruments Directive (“MiFID”) II regulations.
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In April 2024, the Company entered into a Unit Purchase Agreement to sell a 49% interest in RFQ-hub, and the transaction is expected to close in 2025, subject to the satisfaction of certain closing conditions, including the receipt of specified regulatory approvals. See Note 3 “Business Held for Sale” for further details.
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In 2020, we formed a Diversity and Inclusion Committee (now known as the Diversity, Equity and Inclusion Committee, the “DE&I Committee”) to help further these goals and objectives.
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Our EMS, OMS, connectivity and RFQ services compete with offerings from independent vendors, agency‑only firms and other sell‑side firms. 11 Some of our competitors in market making and execution services are larger than we are and have more captive order flow in certain assets.
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The DE&I Committee has focused on broadening recruitment efforts, increasing awareness of diversity and inclusiveness related issues through internal trainings and communications, and internal and external mentorship, including mentorships with New York City high school students.
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We continually monitor the credit quality of our prime brokers and rely on large multinational banks for most of our execution and clearing needs globally. Our energy, commodities and currency market making and trading activities are primarily conducted through Virtu Financial Global Markets LLC.
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Additionally, we have hosted an annual Women's Winternship program since 2019, which provides a week-long internship program aimed at introducing sophomore-level female college students to a career path in financial services and features instructors across the Company from various business lines and disciplines.
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Specifically, the SEC under the previous administration (i) adopted rule amendments to minimum pricing increments under Rule 612 of Regulation NMS, access fee caps under Rule 610 of Regulation NMS, acceleration of the implementation of certain Market Data Infrastructure Rules, and an amendment to the odd-lot information definition adopted under the MDI rules (collectively referred to as the “tick size, access fees and infostructure rule proposals”), which have a compliance date commencing in November 2025, (ii) adopted amendments to Rule 605 of Regulation NMS, which has a compliance date on or about December 15, 2025, (iii) approved a funding model submitted by several exchanges in relation to the Consolidated Audit Trail (CAT) which provides for fee collection commencing November 2024 but is currently subject to legal challenge, and (iv) adopted rules to amend the definitions of “dealer” and “government securities dealer” within the Exchange Act, which would have broadened the scope of these registrant categories, though this rule was recently vacated by the United States District Court.
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We are a full clearing member of the National Securities Clearing Corporation (“NSCC”) and the Depository Trust & Clearing Corporation (“DTCC”). Our activities in U.S. equities are both self‑cleared and rely on fully-disclosed clearing arrangements with third-party clearing firms.
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The final rule was scheduled to become effective on September 4, 2024, but it was enjoined by a federal district court in September 2024 on the grounds that the rule exceeds the FTC’s authority. The FTC is appealing the ruling, and therefore its implementation has not yet been definitively resolved.
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In its communication on “The European economic and financial system: fostering openness, strength and resilience” of January 19, 2021, the European Commission confirmed its intention to propose to make changes with a view to improving simplifying and further harmonizing capital markets’ transparency as part of the review of the MiFID II and MiFIR framework.
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The two acts entered into force on March 28, 2024, with the MiFIR amending regulation applying from that date, and the MiFID II amendments requiring adoption by Member States by September 29, 2025.
Removed
On December 21, 2022, the Council of the European Union published the texts of its general approach on the proposed regulation to amend MiFIR “as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimizing the trading obligations and amending Regulation (EU) No 575/2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012” and on the proposed directive “amending Directive 2014/65/EU on markets in financial instruments and amending Directive 2013/36/EU on access of the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC”, each dated December 16, 2022; as well as publishing an “I” item note, also dated December 16, 2022, inviting the Council’s Permanent Representatives Committee to agree the text of the mandate for negotiations with European Parliament on the basis of the published general approaches, with a view to reaching agreement at first reading.
Removed
The Information Note details the draft overall compromise package as agreed by the Permanent Representatives’ Committee, with the Council of the European Union inviting the European Parliament to adopt its position at first reading in accordance with the compromise package, with a view to reaching an agreement and adopting the act at first reading.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+25 added−8 removed285 unchanged
Biggest changeBusiness and Operations • Our revenues and profitability depend on trading volume, volatility, retail participation and other characteristics in the markets in which we operate and the order flow with which we interact and therefore are subject to factors beyond our control, are prone to significant fluctuations and are difficult to predict. • We are dependent upon our trading counterparties, clients and clearing houses to perform their obligations to us. • We may incur losses in our market making activities and our execution services businesses due to failures of our customized trading platform, due to market risk or from a lack of perfect information. • The valuation of the securities we hold at any particular time may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period. • We face substantial competition and other competitive dynamics which could harm our financial performance. • Our market making business is concentrated in U.S. equities; accordingly, our operating results may be negatively impacted by changes that affect the U.S. equity markets. • We could lose significant sources of revenues if we lose any of our larger clients or sources of order flow or lose access to an important exchange or other trading venue or if we fail to adapt to proposed new regulations, should they become final rules. • We are subject to liquidity risk in our operations. • Self‑clearing and other elements of our trade processing expose us to operational, financial and liquidity risks. • We have a substantial amount of indebtedness, which could negatively impact our business and financial condition, and may limit our flexibility in operating our business. • We depend on our technology and our results may be negatively impacted if we cannot remain competitive. • Our reliance on our computer systems and software could expose us to material financial and reputational harm if any of our computer systems or software were subject to any material disruption or corruption. • We could be the target of a significant cyber-attack, threat or incident that impairs internal systems, results in adverse consequences to information our system process, store or transmit or causes reputation or monetary damages as a consequence. • Our business may be harmed by computer and communication systems malfunctions, human error, failures and delays. • Failure or poor performance of third‑party software, infrastructure or systems could adversely affect our business. • The use of open source software may expose us to additional risks. • We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business. • Fluctuations in currency exchange rates could negatively impact our earnings. • We may incur material losses on foreign exchange transactions entered into on behalf of clients and be exposed to material liquidity risk due to counterparty defaults or errors. • We may experience risks associated with future growth or expansion of our operations or acquisitions, strategic investments or dispositions of businesses, and we may never realize the anticipated benefits of such activities. • Our future efforts to sell shares of our common stock or raise additional capital may be inhibited by regulations. • We are dependent on the continued service of certain key executives, the loss or diminished performance of whom could have a material adverse effect on our business and our success depends, in part, on our ability to identify, recruit and retain skilled management and technical personnel. • We may be subject to increased risks or business disruption, incur losses or suffer reputational harm in relation to or as a result of climate change. • Cryptocurrency is an emerging asset class that carries unique risk, including the risk of financial loss. 17 Legal and Regulatory • Regulatory and legal uncertainties could harm our business. • Pending, proposed and other potential changes in laws and rules may adversely impact our business. • Non‑compliance with applicable laws or regulatory requirements could subject us to sanctions and could negatively impact our reputation, prospects, revenues and earnings. • We are subject to risks relating to litigation and potential securities law liability. • Proposed legislation in the European Union, the U.S. and other jurisdictions that would impose taxes on certain financial transactions could have a material adverse effect on our business and financial results. • We are exposed to risks associated with our international operations and expansion and failure to comply with laws and regulations applicable to such operations may increase costs, reduce profits, limit growth or subject us to liability. • Brexit continues to pose a risk of negatively impacting the global economy, financial markets and our business. • In connection with our historical acquisitions, the Company is subject to potential liabilities that could materially and adversely affect our business.
Biggest changeBusiness and Operations • Our revenues and profitability depend on trading volume, volatility, retail participation and other characteristics in the markets in which we operate and the order flow with which we interact and therefore are subject to factors beyond our control, are prone to significant fluctuations and are difficult to predict. • We are dependent upon our trading counterparties, clients and clearing houses to perform their obligations to us. • We may incur losses in our market making activities and our execution services businesses due to failures of our customized trading platform, due to market risk or from a lack of perfect information. • The valuation of the securities we hold at any particular time may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period. • We face substantial competition and other competitive dynamics which could harm our financial performance. • Our market making business is concentrated in U.S. equities; accordingly, our operating results may be negatively impacted by changes that affect the U.S. equity markets. • We could lose significant sources of revenues if we lose any of our larger clients or sources of order flow or lose access to an important exchange or other trading venue or if we fail to adapt to proposed new regulations, should they become final rules. • We are subject to liquidity risk in our operations. • Self‑clearing and other elements of our trade processing expose us to operational, financial and liquidity risks. • We have a substantial amount of indebtedness, which could negatively impact our business and financial condition, and may limit our flexibility in operating our business. • We depend on our technology and our results may be negatively impacted if we cannot remain competitive. • Artificial intelligence and machine learning are new and emerging technologies and could ultimately cause harm to our business. • Our reliance on our computer systems and software could expose us to material financial and reputational harm if any of our computer systems or software were subject to any material disruption or corruption. • We could be the target of a significant cyber-attack, threat or incident that impairs internal systems, results in adverse consequences to information our system process, store or transmit or causes reputation or monetary damages as a consequence. • Our business may be harmed by computer and communication systems malfunctions, human error, failures and delays. • Failure or poor performance of third‑party software, infrastructure or systems could adversely affect our business. • The use of open source software may expose us to additional risks. • We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business. • Fluctuations in currency exchange rates could negatively impact our earnings. • We may incur material losses on foreign exchange transactions entered into on behalf of clients and be exposed to material liquidity risk due to counterparty defaults or errors. • We may experience risks associated with future growth or expansion of our operations or acquisitions, strategic investments or dispositions of businesses, and we may never realize the anticipated benefits of such activities. • Our future efforts to sell shares of our common stock or raise additional capital may be inhibited by regulations. • We are dependent on the continued service of certain key executives, the loss or diminished performance of whom could have a material adverse effect on our business and our success depends, in part, on our ability to identify, recruit and retain skilled management and technical personnel. 17 • We may be subject to increased risks or business disruption, incur losses or suffer reputational harm in relation to or as a result of climate change. • Cryptocurrency is an emerging asset class that carries unique risk, including the risk of financial loss.
Failure to maintain the required minimum capital may subject our regulated subsidiaries to a fine, requirement to cease conducting business, suspension, revocation of registration or expulsion by the applicable regulatory authorities, reputational harm and ultimately could require the relevant entity’s liquidation.
Failure to maintain the required minimum capital may subject our regulated subsidiaries to a fine, the requirement to cease conducting business, suspension, revocation of registration or expulsion by the applicable regulatory authorities, reputational harm, and ultimately could require the relevant entity’s liquidation.
Our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the communities in which we are located. This may include a disruption involving electrical, satellite, undersea cable or other communications, internet, transportation or other services facilities used by us, our employees or third parties with which we conduct business.
Our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the communities in which we are located. This may include a disruption involving electrical, satellite, undersea cable or other communications, internet, transportation or other services facilities used by us, our employees or third parties with which we conduct business.
These provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that stockholders may consider favorable, include the following, some of which may only become effective when the Founder Post-IPO Member or any of its affiliates or permitted transferees no longer beneficially own shares representing 25% of our issued and outstanding common stock (the “Triggering Event”): • the 10 vote per share feature of our Class B Common Stock and Class D Common Stock; • the division of our Board of Directors into three classes and the election of each class for three-year terms; • the sole ability of the Board of Directors to fill a vacancy created by the expansion of the Board of Directors; • advance notice requirements for stockholder proposals and director nominations; 38 • after the Triggering Event, provisions limiting stockholders' ability to call special meetings of stockholders, to require special meetings of stockholders to be called and to take action by written consent; • after the Triggering Event, in certain cases, the approval of holders of at least 75% of the shares entitled to vote generally on the making, alteration, amendment or repeal of our certificate of incorporation or by-laws will be required to adopt, amend or repeal our by-laws, or amend or repeal certain provisions of our certificate of incorporation; • after the Triggering Event, the required approval of holders of at least 75% of the shares entitled to vote at an election of the directors to remove directors, which removal may only be for cause; and • the ability of our Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board of Directors.
These provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that stockholders may consider favorable, include the following, some of which may only become effective when the Founder Post-IPO Member or any of its affiliates or permitted transferees no longer beneficially own shares representing 25% of our issued and outstanding common stock (the “Triggering Event”): • the 10 vote per share feature of our Class B Common Stock and Class D Common Stock; • the division of our Board of Directors into three classes and the election of each class for three-year terms; • the sole ability of the Board of Directors to fill a vacancy created by the expansion of the Board of Directors; • advance notice requirements for stockholder proposals and director nominations; • after the Triggering Event, provisions limiting stockholders’ ability to call special meetings of stockholders, to require special meetings of stockholders to be called and to take action by written consent; • after the Triggering Event, in certain cases, the approval of holders of at least 75% of the shares entitled to vote generally on the making, alteration, amendment or repeal of our certificate of incorporation or by-laws will be required to adopt, amend or repeal our by-laws, or amend or repeal certain provisions of our certificate of incorporation; • after the Triggering Event, the required approval of holders of at least 75% of the shares entitled to vote at an election of the directors to remove directors, which removal may only be for cause; and • the ability of our Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board of Directors.
We entered into three tax receivable agreements with the Virtu Post-IPO Members and the Investor Post-IPO Stockholders (one with the Founder Post-IPO Member, the Employee Trust, Virtu Employee Holdco and other post IPO investors, other than affiliates of Silver Lake Partners and affiliates of Temasek, another with the Investor Post-IPO Stockholders and the other with the Silver Lake Post-IPO Members) that provide for the payment by us to the Virtu Post-IPO Members and the Investor Post-IPO Stockholders (or their transferees of Virtu Financial Units or other assignees) of 85% of the amount of actual cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in Virtu Financial’s assets resulting from (a) the acquisition of equity interests in Virtu Financial from an affiliate of Silver Lake Partners and Temasek, and the Temasek Pre-IPO Member in the Reorganization Transactions (which represents the unamortized portion of the increase in tax basis in Virtu Financial’s assets resulting from a prior acquisition of interests in Virtu Financial by an affiliate of Silver Lake Partners and Temasek, and the Temasek Pre-IPO Member), (b) the purchases of Virtu Financial Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) from certain of the Virtu Post-IPO Members using a portion of the net proceeds from the IPO or in any subsequent offering (including, without limitation, the Secondary Offerings), (c) exchanges by the Virtu Post-IPO Members of Virtu Financial Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of our Class A Common Stock or Class B Common Stock, as applicable, or (d) payments under the tax receivable agreements, (ii) any net operating losses available to us as a result of the Mergers and (iii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreements.
We entered into three tax receivable agreements with the Virtu Post-IPO Members and the Investor Post-IPO Stockholders (one with the Founder Post-IPO Member, the Employee Trust, Virtu Employee Holdco and other post IPO investors, other than affiliates of Silver Lake Partners and affiliates of Temasek, another with the Investor Post-IPO Stockholders and the other with the Silver Lake Post-IPO Members) that provide for the payment by us to the Virtu Post-IPO Members and the Investor Post-IPO Stockholders (or their transferees of Virtu Financial Units or other assignees) of 85% of the 36 amount of actual cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in Virtu Financial’s assets resulting from (a) the acquisition of equity interests in Virtu Financial from an affiliate of Silver Lake Partners and Temasek, and the Temasek Pre-IPO Member in the Reorganization Transactions (which represents the unamortized portion of the increase in tax basis in Virtu Financial’s assets resulting from a prior acquisition of interests in Virtu Financial by an affiliate of Silver Lake Partners and Temasek, and the Temasek Pre-IPO Member), (b) the purchases of Virtu Financial Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) from certain of the Virtu Post-IPO Members using a portion of the net proceeds from the IPO or in any subsequent offering (including, without limitation, the Secondary Offerings), (c) exchanges by the Virtu Post-IPO Members of Virtu Financial Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of our Class A Common Stock or Class B Common Stock, as applicable, or (d) payments under the tax receivable agreements, (ii) any net operating losses available to us as a result of the Mergers and (iii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreements.
Our market making and 28 trading activities are characterized by substantial volumes, an emphasis on technology and certain other characteristics that are also commonly associated with high frequency trading and we engage in direct-to-client market making services across multiple asset classes primarily to sell-side clients including global, national and regional broker-dealers and banks and in the context of our market making and trading activities, we are party to various remuneration and rebate arrangements, including payment for order flow, profit-sharing relationships, and exchange fee and rebate structures.
Our market making and trading activities are characterized by substantial volumes, an emphasis on technology and certain other characteristics that are also commonly associated with high frequency trading and we engage in direct-to-client market making services across multiple asset classes primarily to sell-side clients including global, national and regional broker-dealers and banks and in the context of our market making and trading activities, we are party to various remuneration and rebate arrangements, including payment for order flow, profit-sharing relationships, and exchange fee and rebate structures.
Representative Peter DeFazio and former Senator Thomas Harkin introduced proposed legislation, a bill entitled the “Wall Street Trading and Speculators Tax Act,” which would have, subject to certain exceptions, imposed an excise tax on the purchase of a security, including equities, bonds, debentures, other debt and interests in derivative financial instruments, if the purchase occurred or was cleared on a trading facility in the U.S. and the purchaser or seller is a U.S. person.
Representative Peter DeFazio and former Senator Thomas Harkin introduced proposed legislation, a bill entitled the “Wall Street Trading and Speculators Tax Act,” which would have, subject to certain exceptions, imposed an excise tax on the purchase of a security, including equities, bonds, debentures, other debt and interests in derivative financial instruments, if the purchase occurred or was cleared on a trading facility in the U.S. and the purchaser or seller is a 32 U.S. person.
While we monitor the use of all open source software in our solutions, processes and technology and try to ensure that no open source software is used (i) in such a way as to require us to disclose the source code to the related solution when we do not wish to do so nor (ii) in connection with critical or fundamental elements of 25 our software or technology, such use may have inadvertently occurred in deploying our proprietary solutions.
While we monitor the use of all open source software in our solutions, processes and technology and try to ensure that no open source software is used (i) in such a way as to require us to disclose the source code to the related solution when we do not wish to do so nor (ii) in connection with critical or fundamental elements of our software or technology, such use may have inadvertently occurred in deploying our proprietary solutions.
In addition, the Founder Post-IPO Member’s significant ownership in us and resulting ability to effectively control us may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including 34 transactions in which you as a holder of shares of our Class A Common Stock might otherwise receive a premium for your shares over the then‑current market price.
In addition, the Founder Post-IPO Member’s significant ownership in us and resulting ability to effectively control us may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including transactions in which you as a holder of shares of our Class A Common Stock might otherwise receive a premium for your shares over the then‑current market price.
Regulators and exchanges may also introduce risk control and other technological requirements on our business that could result in 23 increased costs of compliance and divert our technological resources away from their primary strategy development and maintenance duties. The markets in which we compete are characterized by rapidly changing technology, evolving industry standards and changing trading systems, practices and techniques.
Regulators and exchanges may also introduce risk control and other technological requirements on our business that could result in increased costs of compliance and divert our technological resources away from their primary strategy development and maintenance duties. The markets in which we compete are characterized by rapidly changing technology, evolving industry standards and changing trading systems, practices and techniques.
If unsuccessful, such litigation could result in the loss of important intellectual property rights, require us to pay substantial damages, subject us to injunctions that prevent us from using certain intellectual property, require us to make admissions that affect our reputation in the marketplace and require us to enter into license agreements that may not be available on favorable terms or at all.
If unsuccessful, such litigation could result in the loss of important intellectual property rights, require us to pay substantial damages, subject us to injunctions that prevent us from using certain intellectual property, require us to make admissions that affect our reputation in the marketplace and require us to enter into license agreements that may not be 26 available on favorable terms or at all.
Our revenues and profitability depend in part on the level of trading activity of securities, derivatives and other financial products on exchanges and in other trading venues in the U.S. and abroad, which are directly affected by factors 18 beyond our control, including economic and political conditions, regulatory changes, emergencies and pandemics, broad trends in business and finance and changes in the markets in which such transactions occur.
Our revenues and profitability depend in part on the level of trading activity of securities, derivatives and other financial products on exchanges and in other trading venues in the U.S. and abroad, which are directly affected by factors beyond our control, including economic and political conditions, regulatory changes, emergencies and pandemics, broad trends in business and finance and changes in the markets in which such transactions occur.
In addition, changes in current laws or regulations or in governmental policies could negatively impact our operations, revenues and earnings. 30 Domestic and foreign stock exchanges, other SROs and state and foreign securities commissions can censure, fine, impose undertakings, issue cease‑and‑desist orders and suspend or expel a broker‑dealer or other market participant or any of its officers or employees.
In addition, changes in current laws or regulations or in governmental policies could negatively impact our operations, revenues and earnings. Domestic and foreign stock exchanges, other SROs and state and foreign securities commissions can censure, fine, impose undertakings, issue cease‑and‑desist orders and suspend or expel a broker‑dealer or other market participant or any of its officers or employees.
In addition, the varying compliance requirements of these different regulatory jurisdictions and other factors may limit our ability to successfully conduct or expand our business internationally and may increase our costs of investment. Expansion 32 into international locations involves substantial operational and execution risk. We may not be able to manage these costs or risks effectively.
In addition, the varying compliance requirements of these different regulatory jurisdictions and other factors may limit our ability to successfully conduct or expand our business internationally and may increase our costs of investment. Expansion into international locations involves substantial operational and execution risk. We may not be able to manage these costs or risks effectively.
We are subject to liquidity risk in our operations. We require liquidity to fund various ongoing obligations, including operating expenses, margin requirements, capital expenditures, debt service and dividend payments. Our main sources of liquidity are cash flow from the operations of our subsidiaries, our broker‑dealer revolving credit facilities (described under “Item 7.
We are subject to liquidity risk in our operations. We require liquidity to fund various ongoing obligations, including operating expenses, margin requirements, capital expenditures, debt service and dividend payments. Our main sources of liquidity are cash flow from the operations of our 21 subsidiaries, our broker‑dealer revolving credit facilities (described under “Item 7.
Any of these effects of the U.K.’s departure from the E.U., and others we cannot anticipate or that may evolve over time, could adversely affect our business, results of operations and financial condition. In connection with our historical acquisitions, the Company is subject to potential liabilities that could materially and adversely affect our business.
Any of these effects of the U.K.’s departure from the E.U., and others we cannot anticipate or that may evolve over time, could adversely affect our business, results of operations and financial condition. 33 In connection with our historical acquisitions, the Company is subject to potential liabilities that could materially and adversely affect our business.
Cifu, may not directly or indirectly engage in certain competitive activities until the third anniversary of the date on which such person ceases to be an officer, director or employee of ours. Our non‑employee directors are not subject to any such restriction. To the extent that the Founder Post-IPO Member, Mr.
Cifu, may not directly or indirectly engage in certain competitive activities until the third 35 anniversary of the date on which such person ceases to be an officer, director or employee of ours. Our non‑employee directors are not subject to any such restriction. To the extent that the Founder Post-IPO Member, Mr.
As a result, in such circumstances we could 36 make payments to the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders under the tax receivable agreements that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity.
As a result, in such circumstances we could make payments to the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders under the tax receivable agreements that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity.
Failure to establish and maintain effective internal control over financial reporting could have a material adverse effect on our business, financial condition, results of operations and cash flows, and stock price. 37 Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud.
Failure to establish and maintain effective internal control over financial reporting could have a material adverse effect on our business, financial condition, results of operations and cash flows, and stock price. Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud.
See Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” However, we are a holding company, with our principal asset being our direct and indirect equity interests in Virtu Financial, and we will have no independent means of generating revenue.
See Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” However, we are a holding company, with our principal asset 38 being our direct and indirect equity interests in Virtu Financial, and we will have no independent means of generating revenue.
Rising interest rates could also limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. We depend on our technology, and our future results may be negatively impacted if we cannot remain technologically competitive.
Rising interest rates could also limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. 23 We depend on our technology, and our future results may be negatively impacted if we cannot remain technologically competitive.
The varying compliance requirements of these different regulatory jurisdictions, which are often unclear, may limit our ability to continue existing international operations and further expand internationally. Certain of our subsidiaries are subject to regulatory capital rules of the SEC, FINRA, other SROs and foreign regulators.
The varying compliance requirements of these different regulatory jurisdictions, which are often unclear, may limit our ability to continue existing international operations and further expand internationally. 31 Certain of our subsidiaries are subject to regulatory capital rules of the SEC, FINRA, other SROs and foreign regulators.
These arrangements typically involve the delivery of securities or cash to a counterparty that is not processed through a central clearing facility in exchange for a simultaneous receipt of cash or securities. We may operate as either a principal or 26 agent in these transactions.
These arrangements typically involve the delivery of securities or cash to a counterparty that is not processed through a central clearing facility in exchange for a simultaneous receipt of cash or securities. We may operate as either a principal or agent in these transactions.
Increased competition or consolidation in the marketplace could reduce the bid/ask spreads on which our business and profitability depend, and may also reduce commissions paid by institutional clients for execution services, negatively impacting 20 our financial performance.
Increased competition or consolidation in the marketplace could reduce the bid/ask spreads on which our business and profitability depend, and may also reduce commissions paid by institutional clients for execution services, negatively impacting our financial performance.
Similarly, VFIL, VETL and VIUK, our regulated subsidiaries in Ireland and the U.K., are subject to change in control regulations promulgated by the CBI and/or the FCA, and other registered or regulated foreign subsidiaries may be subject to similar regulations in applicable jurisdictions.
Similarly, VFIL, VETL and VIUK, our regulated 27 subsidiaries in Ireland and the U.K., are subject to change in control regulations promulgated by the CBI and/or the FCA, and other registered or regulated foreign subsidiaries may be subject to similar regulations in applicable jurisdictions.
These provisions of the tax receivable agreements may result in situations where the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders have interests that differ from or are in addition to those of our other shareholders.
These provisions of the tax receivable agreements may result in situations where the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders have interests that differ from or are in addition to those of our other 37 shareholders.
These larger and better capitalized competitors may be better able to respond to changes in the market making industry, to compete for skilled professionals, to finance acquisitions, to fund internal growth, to manage costs and expenses and to compete for market share generally.
These larger and better capitalized competitors may be better able to respond to changes in the market making industry, to compete for skilled professionals, to finance acquisitions, to fund internal growth, to manage costs and expenses and to compete for market share 20 generally.
The Spanish FTT was applied to transactions from trade date of January 14, 2020, although it does contain certain exemptions, including in relation to market making activity. In 2013, U.S.
The Spanish FTT was applied to transactions from trade date of January 14, 2020, although it does contain certain exemptions, including in relation to market making activity. In 2013, former U.S.
Similarly, VFIL, VETL and VIUK are subject to change in control regulations promulgated by the CBI and/or the FCA. We may also be subject to similar restrictions in other jurisdictions in which we operate.
Similarly, VFIL, VETL and VIUK are subject to change in control 39 regulations promulgated by the CBI and/or the FCA. We may also be subject to similar restrictions in other jurisdictions in which we operate.
Although we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or may not cover any losses.
Although we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or may not 24 cover any losses.
More recently, in late 2018 and 2019 U.S. legislators, including U.S. Senators Kirsten Gillibrand and Brian Schatz, have announced proposals or plans that include a financial transaction fee.
More recently, in late 2018 and 2019 U.S. legislators, including U.S. Senators Kirsten Gillibrand and Brian Schatz, announced proposals or plans that include a financial transaction fee.
We also rely on certain third‑party software, third‑party computer systems and third‑party service providers, including clearing systems, exchange systems, alternate trading systems, order routing systems, internet service providers, communications facilities and other facilities.
We also rely on certain third‑party software, third‑party computer systems and third‑party service providers, including clearing systems, exchange systems, alternate trading systems, order routing systems, internet service providers, 25 communications facilities and other facilities.
Our ability to comply with all applicable laws and rules is largely dependent on our internal systems to ensure compliance, as well as our ability to attract and retain qualified compliance personnel.
Our ability to comply with all applicable laws and rules is largely dependent on our internal systems to endeavor to ensure compliance, as well as our ability to attract and retain qualified compliance personnel.
The loss of one or more larger clients could have an adverse effect on our revenues and profitability in the future. None of these clients is currently contractually obligated to utilize us for trade execution services and, accordingly, these clients may direct their trade execution activities to other execution providers or market centers at any time.
The loss of one or more larger clients could have an adverse effect on our revenues and profitability in the future. None of these clients is currently contractually obligated to utilize us for trade execution services and, accordingly, these clients may direct their trade execution business to other execution providers or market centers at any time.
The EU Financial Transaction Tax was initially intended to be implemented within those 11 European Union Member States in January 2014. In 2016, Estonia, one of the original members, withdrew its support for the proposal. As of December 31, 2023 such tax has not yet been implemented.
The EU Financial Transaction Tax was initially intended to be implemented within those 11 European Union Member States in January 2014. In 2016, Estonia, one of the original members, withdrew its support for the proposal. As of December 31, 2024, such tax has not yet been implemented.
Additionally, we are party to an uncommitted facility (the “Uncommitted Facility”), subject to a maximum borrowing limit of $400.0 million, under which we had no borrowings outstanding as of December 31, 2023. We are also a party to a $650.0 million broker-dealer revolving credit facility (the “Committed Facility”) under which we had no borrowings outstanding as of December 31, 2023.
Additionally, we are party to an uncommitted facility (the “Uncommitted Facility”), subject to a maximum borrowing limit of $400.0 million, under which we had no borrowings outstanding as of December 31, 2024. We are also a party to a $650.0 million broker-dealer revolving credit facility (the “Committed Facility”) under which we had no borrowings outstanding as of December 31, 2024.
Following recent regulatory attention on U.S. equities market structure, including the practice of wholesale market making and other forms of off exchange trading, the SEC has proposed the adoption of new Rule 615, which would dramatically change U.S. equities market structure, the routing, handling and potentially the amount, character and cost of retail order flow, and therefore may substantially diminish the volume of our transactions with retail client orders.
Following recent regulatory attention on U.S. equities market structure, including the practice of wholesale market making and other forms of off exchange trading, the SEC proposed the adoption of new Rule 615, which, if adopted, would dramatically change U.S. equities market structure, the routing, handling and potentially the amount, character and cost of retail order flow, and therefore may substantially diminish the volume of our transactions with retail client orders.
The occurrence of unforeseen or catastrophic events, including the emergence of a pandemic, such as COVID-19 or other widespread health emergency (or concerns over the possibility of such an emergency), vandalism, terrorist attacks, geopolitical and/or global conflict, war, extreme terrestrial or solar weather events or other natural disasters, could create economic and financial disruptions, and could lead to operational difficulties (including travel limitations) that could impair our ability to manage our businesses.
The occurrence of unforeseen or catastrophic events, including the emergence of a pandemic or other widespread health emergency (or concerns over the possibility of such an emergency), vandalism, terrorist attacks, geopolitical and/or global conflict, war, extreme terrestrial or solar weather events or other natural disasters, could create economic and financial disruptions, and could lead to operational difficulties (including travel limitations) that could impair our ability to manage our businesses.
Organization and Structure • We are a holding company and our principal asset is our 57.8% of equity interest in Virtu Financial, and we are accordingly dependent upon distributions from Virtu Financial to pay dividends, if any, taxes and other expenses. • We are controlled by the Founder Post‑IPO Member, whose interests in our business may be different than yours, and certain statutory provisions afforded to stockholders are not applicable to us. • We may be unable to remain in compliance with the covenants contained in our Credit Agreement and our obligation to comply with these covenants may adversely affect our ability to operate our business. • We are exempt from certain corporate governance requirements since we are a “controlled company” within the meaning of the Nasdaq rules, and as a result our stockholders do not have the protections afforded by these corporate governance requirements. • We are required to pay the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders for certain tax benefits we may claim, and the amounts we may pay could be significant.
Organization and Structure • We are a holding company and our principal asset is our 56.9% of equity interest in Virtu Financial, and we are accordingly dependent upon distributions from Virtu Financial to pay dividends, if any, taxes and other expenses. • We are controlled by the Founder Post‑IPO Member, whose interests in our business may be different than the interests of other shareholders, and certain statutory provisions afforded to stockholders are not applicable to us. • We may be unable to remain in compliance with the covenants contained in our Credit Agreement and our obligation to comply with these covenants may adversely affect our ability to operate our business. • We are exempt from certain corporate governance requirements since we are a “controlled company” within the meaning of the Nasdaq rules, and as a result our stockholders do not have the protections afforded by these corporate governance requirements. • We are required to pay the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders for certain tax benefits we may claim, and the amounts we may pay could be significant.
Our market making business is concentrated in U.S. equities; accordingly, our operating results may be negatively impacted by changes that affect the U.S. equity markets. The majority of our market making revenue for 2023 was derived from our market making in U.S. equities.
Our market making business is concentrated in U.S. equities; accordingly, our operating results may be negatively impacted by changes that affect the U.S. equity markets. The majority of our market making revenue for 2024 was derived from our market making in U.S. equities.
At the state level recently, the state of New Jersey has considered a bill in the state legislature providing for a financial transaction tax on trades processed on any server located in New Jersey, with other states, including New York, discussing similar measures.
At the state level, the state of New Jersey considered a bill in the state legislature providing for a financial transaction tax on trades processed on any server located in New Jersey, with other states, including New York, discussing similar measures.
Similarly, changes in applicable laws, regulations or rules promulgated by regulators or exchanges could conceivably prevent us from providing liquidity directly to clients or counterparties or other trading venue where we provide liquidity today.
Similarly, changes in applicable laws, regulations or rules promulgated by government administrations, regulators or exchanges could conceivably prevent us from providing liquidity directly to clients or counterparties or other trading venue where we provide liquidity today.
Because of our reliance on technology, we may be susceptible to various forms of cyber-attacks by third parties or insiders. Like other financial services firms, we and our third-party service providers have been the target of cyber-attacks.
Because of our reliance on technology, we may be susceptible to various forms of cyber-attacks by third parties or insiders. Like other financial services firms, we and our third-party service providers have been in the past and may in the future be the target of cyber-attacks.
Our cybersecurity measures may not detect or prevent all attempts to compromise our systems, including denial‑of‑service attacks, viruses, malicious software, ransomware, break‑ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by our systems or that we otherwise maintain or otherwise result in financial losses or damages to our firm.
Our cybersecurity measures may not detect or prevent all attempts to compromise our systems, including denial‑of‑service attacks, viruses, malicious software, attacks leveraging artificial intelligence tools or methods, ransomware, break‑ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by our systems or that we otherwise maintain or otherwise result in financial losses or damages to our firm.
The Founder Post‑IPO Member controls approximately 86.5% of the combined voting power of our common stock as a result of its ownership of our Class C and Class D Common Stock, each share of which is entitled to 1 vote and 10 votes, respectively, on all matters submitted to a vote of our stockholders.
The Founder Post‑IPO Member controls approximately 87.0% of the combined voting power of our common stock as a result of its ownership of our Class C and Class D Common Stock, each share of which is entitled to 1 vote and 10 votes, respectively, on all matters submitted to a vote of our stockholders.
We have filed a registration statement under the Securities Act registering 26,000,000 shares of our Class A Common Stock reserved for issuance under our Amended and Restated 2015 Management Incentive Plan, 5,070,530 of which are issuable, and we entered into the Registration Rights Agreement (as defined below) pursuant to which we granted demand and piggyback registration rights to the Founder Post-IPO Member, Temasek, another former stockholder, and piggyback registration rights to certain of the other Virtu Post-IPO Members.
We have filed a registration statement under the Securities Act registering 26,000,000 shares of our Class A Common Stock reserved for issuance under our Amended and Restated 2015 Management Incentive Plan, 2,606,625 of which are issuable, and we entered into the Registration Rights Agreement (as defined below) pursuant to which we granted demand and piggyback registration rights to the Founder Post-IPO Member, Temasek, another former stockholder, and piggyback registration rights to certain of the other Virtu Post-IPO Members.
We believe that our success in the past has largely been attributable to our technology, which has taken many years to develop. If technology equivalent to ours becomes more widely available for any reason, our operating results may be negatively impacted.
We believe that our success in the past has largely been attributable to our technology, which has taken many years and significant capital expenditures to develop. If technology equivalent to ours becomes more widely available for any reason, our operating results may be negatively impacted.
Risks Related to Our Organization and Structure We are a holding company and our principal asset is our 57.8% of equity interest in Virtu Financial, and we are accordingly dependent upon distributions from Virtu Financial to pay dividends, if any, taxes and other expenses.
Risks Related to Our Organization and Structure We are a holding company and our principal asset is our 56.9% of equity interest in Virtu Financial, and we are accordingly dependent upon distributions from Virtu Financial to pay dividends, if any, taxes and other expenses.
The retail trading environment in the U.S., relationships between broker-dealers and market making firms, short selling and “high frequency” and other forms of low latency or electronic trading strategies continue to be the focus of extensive regulatory scrutiny by federal, state and foreign regulators and SROs, and such scrutiny is likely to continue.
The retail trading environment in the U.S., relationships between broker-dealers and market making firms, short selling and “high frequency” and other forms of low latency or electronic trading strategies have continued to be the focus of extensive regulatory scrutiny by federal, state and foreign regulators and SROs, and such scrutiny may continue.
Our performance is substantially dependent on the performance of our senior management, including Douglas Cifu, our Chief Executive Officer, Joseph Molluso, our Co-President and Co-Chief Operating Officer, Brett Fairclough, our Co-President and Co-Chief Operating Officer, Sean Galvin, our Chief Financial Officer and Stephen Cavoli, our Executive Vice President, Global Head of Execution Services.
Our performance is substantially dependent on the performance of our senior management, including Douglas Cifu, our Chief Executive Officer, Joseph Molluso, our Co-President and Co-Chief Operating Officer, Brett Fairclough, our Co-President and Co-Chief Operating Officer, Cindy Lee, our Chief Financial Officer and Stephen Cavoli, our Executive Vice President, Global Head of Execution Services.
We have a substantial amount of indebtedness, which could negatively impact our business and financial condition, and may limit our flexibility in operating our business. As of December 31, 2023, we had an aggregate of $1,751.8 million outstanding indebtedness under our long-term borrowings.
We have a substantial amount of indebtedness, which could negatively impact our business and financial condition, and may limit our flexibility in operating our business. As of December 31, 2024, we had an aggregate of $1,767.3 million outstanding indebtedness under our long-term borrowings.
While our participation in this asset class has been limited thus far, changes in this regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government, may significantly affect or change the manner in which we currently conduct some aspects of our business or may significantly impact or limit our ability to increase our participation or could otherwise expose us to potential liability or losses.
Changes in this regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government, may significantly affect or change the manner in which we currently conduct some aspects of our business or may significantly impact or limit our ability to increase our participation or could otherwise expose us to potential liability or losses.
The Credit Agreement also provides for a revolving credit facility which allows us to borrow on a revolving basis, subject to maximum borrowing limit of $250.0 million, under which we had no borrowing outstanding as of December 31, 2023.
The Credit Agreement also provides for a revolving credit facility which allows us to borrow on a revolving basis, subject to maximum borrowing limit of $250.0 million, which was subsequently amended to $300.0 million, under which we had no borrowing outstanding as of December 31, 2024.
As the sole managing member of Virtu Financial, we cause Virtu Financial to make distributions to its equity holders, including the Founder Post-IPO Member, Virtu Employee Holdco, certain current and former members of management of the Company and their affiliates (the “Management Members”) and us, in amounts sufficient to fund dividends to our stockholders in accordance with our dividend policy and, as further described below, to cover all applicable taxes payable by us and any payments we are obligated to make under the tax receivable agreements we entered into as part of the Reorganization Transactions, but we are limited in our ability to cause Virtu Financial to make these and other distributions to us (including for purposes of paying corporate and other overhead expenses and dividends) under our Credit Agreement governing our First Lien Term Loan Facility (as defined below).
As the sole managing member of Virtu Financial, we cause Virtu Financial to make distributions to its equity holders, including the Founder Post-IPO Member, Virtu Employee Holdco, certain current and former members of management of the Company and their affiliates (the “Management Members”) and us, in amounts sufficient to fund dividends to our stockholders in accordance with our dividend policy and, as further described below, to cover all applicable taxes payable by us and any payments we are obligated to make under the tax receivable agreements we entered into as part of the Reorganization Transactions, but we are limited in our ability to cause Virtu Financial to make these and other distributions to us (including for purposes of paying corporate and other overhead expenses and dividends) under our Credit Agreement governing our $1,245.0 million in aggregate principal amount of Senior Secured First Lien Term B-1 Loans due 2031 (“First Lien Term B-1 Loan Facility”).
We are a holding company and our principal asset is our direct and indirect ownership of 57.8% of the Virtu Financial Units as of December 31, 2023. We have no independent means of generating revenue.
We are a holding company and our principal asset is our direct and indirect ownership of 56.9% of the Virtu Financial Units as of December 31, 2024. We have no independent means of generating revenue.
The remaining balance of 79,008,091 shares of Class A Common Stock outstanding as of December 31, 2023 (including shares issuable upon exchange and/or conversion, or vesting) are “restricted securities,” as that term is defined under Rule 144 of the Securities Act.
The remaining balance of 80,065,595 shares of Class A Common Stock outstanding as of December 31, 2024 (including shares issuable upon exchange and/or conversion, or vesting) are “restricted securities,” as that term is defined under Rule 144 of the Securities Act.
However, competitive forces often require us to match or improve upon the quotes that other market makers display, thereby narrowing bid/ask spreads, and to hold long or short positions in securities, futures or other financial instruments.
In our role as a market maker, we attempt to derive a profit from bid/ask spreads. However, competitive forces often require us to match or improve upon the quotes that other market makers display, thereby narrowing bid/ask spreads, and to hold long or short positions in securities, futures or other financial instruments.
We will have no obligation to distribute such cash (or other available cash) to our shareholders. No adjustments to the exchange ratio for Virtu Financial Units and corresponding shares of common stock will be made as a result of any cash distribution by us or any retention of cash by us, and in any event the ratio will remain one‑to‑one.
No adjustments to the exchange ratio for Virtu Financial Units and corresponding shares of 34 common stock will be made as a result of any cash distribution by us or any retention of cash by us, and in any event the ratio will remain one‑to‑one.
Each of these and other proposals may impose technological and compliance costs on us. Any of these laws, rules or regulations, as well as changes in legislation or regulation and changes in market customs and practices could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any of these laws, rules or regulations, as well as changes in legislation or regulation and changes in market customs and practices could have a material adverse effect on our business, financial condition, results of 29 operations and cash flows.
Of these shares, 83,725,007 shares sold in the IPO and the Secondary Offerings are freely tradable without further restriction under the Securities Act.
Of these shares, 79,128,972 shares sold in the IPO and the Secondary Offerings are freely tradable without further restriction under the Securities Act.
If our business activities decrease or we are unable to borrow additional funds in the future on terms that are acceptable to us, or at all, we could suffer a material adverse effect on our business, financial condition, results of operations and cash flows. 21 Self‑clearing and other elements of our trade processing operations expose us to significant operational, financial and liquidity risks.
If our business activities decrease or we are unable to borrow additional funds in the future on terms that are acceptable to us, or at all, we could suffer a material adverse effect on our business, financial condition, results of operations and cash flows.
Additionally, adoption or development of similar or more advanced technologies by our competitors may require that we devote substantial resources to the development of more advanced technology to remain competitive.
Additionally, adoption or development of similar or more advanced technologies by our competitors, including but not limited to artificial intelligence and related technologies, may require that we devote substantial resources to the development of more advanced technology to remain competitive.
Furthermore, we may from time to time develop large position concentrations in securities or other financial instruments of a single issuer or issuers engaged in a specific industry, or alternatively a single future or other financial instrument, which would result in the risk of higher trading losses than if our concentration were lower. 19 These risks may limit or restrict, for example, our ability to either resell securities we have purchased or to repurchase securities we have sold.
Furthermore, we may from time to time develop large position concentrations in securities or other financial instruments of a single issuer or issuers engaged in a specific industry, or alternatively a single future or other financial instrument, which would result in the risk of higher trading losses than if our concentration were lower.
Further, because cryptocurrency, along with other digital assets, is a new and emerging asset class with unique electronic exposure, there is a high degree of fraud, theft, cyberattacks and other forms of risk in the cryptocurrency space, and legal, regulatory and market standards around market conduct, transparency, custody, segregation of client assets, clearing and settlement for these assets, including when traded in spot, ETP/ETF, or other form, are all evolving or unsettled, which can increase risks for us and other market participants.
Moreover, if our systems fail at managing our inventory or customer orders, we could be left with excess inventory that increases our exposure to the volatility of the price of cryptocurrencies. 28 Further, because cryptocurrency, along with other digital assets, is a new and emerging asset class with unique electronic exposure, there is a high degree of fraud, theft, cyberattacks and other forms of risk in the cryptocurrency space, and legal, regulatory and market standards around market conduct, transparency, custody, segregation of client assets, clearing and settlement for these assets, including when traded in spot, ETP/ETF, or other form, are all evolving or unsettled, which can increase risks for us and other market participants.
An adverse resolution of any current or future lawsuits or claims against us could result in a negative perception of our Company and cause the market price of our common stock to decline or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows. 31 Proposed legislation in the European Union, the U.S. and other jurisdictions that would impose taxes on certain financial transactions could have a material adverse effect on our business and financial results.
An adverse resolution of any current or future lawsuits or claims against us could result in a negative perception of our Company and cause the market price of our common stock to decline or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.
Flaws in our strategies, order management system, risk management processes, latencies or inaccuracies in the market data that we use to generate our quotes, or human error in managing risk parameters or other strategy inputs, may lead to unexpected and unprofitable trades, which may result in material trading losses and could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Flaws in our strategies, order management system, risk management processes, latencies or inaccuracies in the market data that we use to generate our quotes, or human error in managing risk parameters or other strategy inputs, may lead to unexpected and unprofitable trades, which may result in material trading losses and could have a material adverse effect on our business, financial condition, results of operations and cash flows. 19 A significant portion of our revenues are derived from our trading as principal in our role as a formal or registered market maker and liquidity provider on various exchanges and markets, as well as direct to customer market making.
Accordingly, holders of our Class A Common Stock do not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq rules and corporate governance standards, and the ability of our independent directors to influence our business policies and affairs may be reduced. 35 We are required to pay the Virtu Post‑IPO Members and the Investor Post‑IPO Stockholders for certain tax benefits we may claim, and the amounts we may pay could be significant.
Accordingly, holders of our Class A Common Stock do not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq rules and corporate governance standards, and the ability of our independent directors to influence our business policies and affairs may be reduced.
General • Our stock price may be volatile. • We incur increased costs as a result of being a public company. • Our stock price and trading volume could decline as a result of inaccurate or unfavorable research, or the cessation of research coverage, about us or our business published by securities or industry analysts. • We may incur losses as a result of unforeseen or catastrophic events, including the emergence of another pandemic, social unrest, terrorist attacks, extreme weather events or other natural disasters. • Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates.
General • Our stock price may be volatile. • We incur increased costs as a result of being a public company. • Our stock price and trading volume could decline as a result of inaccurate or unfavorable research, or the cessation of research coverage, about us or our business published by securities or industry analysts. • We may incur losses as a result of unforeseen or catastrophic events, including the emergence of another pandemic, social unrest, terrorist attacks, extreme weather events or other natural disasters. • Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates. 18 Risks Related to Our Business and Operations Our revenues and profitability depend on trading volume, volatility, retail participation and other characteristics of the markets in which we operate and the order flow with which we interact, and therefore are subject to factors beyond our control, are prone to significant fluctuations and are difficult to predict.
Any disruption for any reason in the proper functioning or any corruption of our software or erroneous or corrupted data may cause us to make erroneous trades or suspend our services and could have a material adverse effect on our business, financial condition, results of operations and cash flows. 24 Although our systems and infrastructure are generally designed to accommodate additional growth without redesign or replacement, we may need to make significant investments in additional hardware and software to accommodate growth.
Any disruption for any reason in the proper functioning or any corruption of our software or erroneous or corrupted data may cause us to make erroneous trades or suspend our services and could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Though we take steps to mitigate the various cyber threats and devote significant resources to maintain and update our systems and networks, we may be unable to anticipate attacks or to implement adequate preventative measures. We are not aware of any material losses we have incurred relating to cyber-attacks or other information security breaches.
Though we take steps to mitigate the various cyber threats and devote significant resources to maintain and update our systems and networks, we may be unable to anticipate attacks or to implement adequate preventative measures.
As these rules are implemented and in certain cases impose more stringent capital and liquidity 29 requirements, certain of our lenders may revise the terms of our borrowing facilities or margin financing arrangements, reduce the amount of financing they provide, or cease providing us financing, each of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Developments in prudential rules could in certain cases lead to more stringent capital and liquidity requirements, which could also result in certain of our lenders revising the terms of our borrowing facilities or margin financing arrangements, reducing the amount of financing they provide, or ceasing to provide us financing, each of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
To the extent that we need funds and Virtu Financial is restricted from making such distributions to us, under applicable law or regulation, as a result of covenants in our Credit Agreement, we may not be able to obtain such funds on terms acceptable to us or at all and as a result could suffer a material adverse effect on our liquidity and financial condition. 33 Under the Third Amended and Restated Limited Liability Company Agreement of Virtu Financial (as amended, the “Amended and Restated Virtu Financial LLC Agreement”), Virtu Financial from time to time makes distributions in cash to its equity holders, including the Founder Post‑IPO Member, the trust that holds equity interests in Virtu Financial on behalf of certain employees of ours based outside the United States, which we refer to as the “Employee Trust”, Virtu Employee Holdco and us, in amounts sufficient to cover the taxes on their allocable share of the taxable income of Virtu Financial.
Under the Third Amended and Restated Limited Liability Company Agreement of Virtu Financial (as amended, the “Amended and Restated Virtu Financial LLC Agreement”), Virtu Financial from time to time makes distributions in cash to its equity holders, including the Founder Post‑IPO Member, the trust that holds equity interests in Virtu Financial on behalf of certain employees of ours based outside the United States, which we refer to as the “Employee Trust”, Virtu Employee Holdco and us, in amounts sufficient to cover the taxes on their allocable share of the taxable income of Virtu Financial.
As of December 31, 2023, we had 89,092,686 shares of Class A Common Stock outstanding and 4,940,674 shares of Class A Common Stock issuable pursuant to the Amended and Restated 2015 Management Incentive Plan (as defined below) upon the vesting of granted but unvested restricted stock units, excluding 5,070,530 shares of Class A Common Stock issuable pursuant to the Amended and Restated 2015 Management Incentive Plan but not yet granted, and 68,699,738 shares of Class A Common Stock issuable upon potential exchanges and/or conversions.
As of December 31, 2024, we had 84,976,325 shares of Class A Common Stock outstanding and 5,564,532 shares of Class A Common Stock issuable pursuant to the Amended and Restated 2015 Management Incentive Plan (as defined below) upon the vesting of granted but unvested restricted stock units, excluding 2,606,625 shares of Class A Common Stock issuable pursuant to the Amended and Restated 2015 Management Incentive Plan but not yet granted, and 68,653,710 shares of Class A Common Stock issuable upon potential exchanges and/or conversions.
The MiFID II regime is currently under review, with European Union authorities proposing to make further changes to the regime.
The MiFID II regime has been under review, with European Union authorities making further changes to the regime.
We cannot guarantee that these or other permitted outside activities will not impact his performance as Chief Executive Officer. 27 Our future success depends, in part, upon our continued ability to identify, attract, hire and retain highly qualified personnel, including skilled technical, management, product and technology, trading, sales and marketing personnel, all of whom are in high demand and are often subject to competing offers.
Our future success depends, in part, upon our continued ability to identify, attract, hire and retain highly qualified personnel, including skilled technical, management, product and technology, trading, sales and marketing personnel, all of whom are in high demand and are often subject to competing offers.
In addition, the analysts’ projections may have little or no relationship to the results we actually achieve and could cause our stock price to decline if we fail to meet their projections.
In addition, the analysts’ projections may have little or no relationship to the results we actually achieve and could cause our stock price to decline if we fail to meet their projections. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our stock price or trading volume could decline.
The credit agreement entered into on March 1, 2019 by and among Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”), Impala Borrower LLC (the “Acquisition Borrower”), a subsidiary of the Company, the lenders party thereto and Jefferies Finance LLC, as administrative agent (as amended on October 9, 2019 and as further amended from time to time, the “Acquisition Credit Agreement”) contained, and the refinancing credit agreement entered into on January 13, 2022 by and among VFH, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”), and any other existing or future indebtedness of ours may contain, a number of covenants that impose significant operating and financial restrictions on us, including restrictions on our and our restricted subsidiaries’ ability to, among other things: 22 • incur additional debt, guarantee indebtedness or issue certain preferred equity interests; • pay dividends on or make distributions in respect of, or repurchase or redeem, our equity interests or make other restricted payments; • prepay, redeem or repurchase certain debt; • make loans or certain investments; • sell certain assets; • create liens on our assets; • consolidate, merge or sell or otherwise dispose of all or substantially all of our assets; • enter into certain transactions with our affiliates; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • designate our subsidiaries as unrestricted subsidiaries.
Also, certain of our non-guarantor subsidiaries are party to various short-term credit facilities with various prime brokers and other financial institutions in an aggregate amount of $623.2 million under which we had $123.0 million in borrowings outstanding at December 31, 2024. 22 The credit agreement entered into on January 13, 2022 by and among VFH, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and subsequently amended on June 21, 2024 (the “Credit Agreement”), and any other existing or future indebtedness of ours may contain, a number of covenants that impose significant operating and financial restrictions on us, including restrictions on our and our restricted subsidiaries’ ability to, among other things: • incur additional debt, guarantee indebtedness or issue certain preferred equity interests; • pay dividends on or make distributions in respect of, or repurchase or redeem, our equity interests or make other restricted payments; • prepay, redeem or repurchase certain debt; • make loans or certain investments; • sell certain assets; • create liens on our assets; • consolidate, merge or sell or otherwise dispose of all or substantially all of our assets; • enter into certain transactions with our affiliates; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • designate our subsidiaries as unrestricted subsidiaries.
Potential events or disruptions of this nature include significant rainfall, flooding, increased frequency or intensity of wildfires, prolonged drought, rising sea levels and rising heat index.
Potential events or disruptions of this nature include significant rainfall, flooding, increased frequency or intensity of wildfires, prolonged drought, rising sea levels and rising heat index, any of which could result in operational risk to our Company or could cause broader market wide disruptions.
Our reliance on our computer systems and software could expose us to material financial and reputational harm if any of our computer systems or software were subject to any material disruption or corruption.
There can be no assurance that we will realize any potential improvements or enhancements in our business from these technologies. Our reliance on our computer systems and software could expose us to material financial and reputational harm if any of our computer systems or software were subject to any material disruption or corruption.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our stock price or trading volume could decline. 39 We may incur losses as a result of unforeseen or catastrophic events, including the emergence of another pandemic, terrorist attacks, geopolitical and/or global conflict, war, extreme weather events or other natural disasters.
We may incur losses as a result of unforeseen or catastrophic events, including the emergence of another pandemic, terrorist attacks, geopolitical and/or global conflict, war, extreme weather events or other natural disasters.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this item is set forth in the “Legal Proceedings” section in Note 14 “Commitments, Contingencies and Guarantees” to the Company’s Consolidated Financial Statements included in Part II Item 8 “Financial Statements and Supplementary Data”, which is incorporated by reference herein. ITEM 4. MINE SAFETY DISCLOSURES None. 43 PART II 44
Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this item is set forth in the “Legal Proceedings” section in Note 15 “Commitments, Contingencies and Guarantees” to the Company’s Consolidated Financial Statements included in Part II, Item 8 “Financial Statements and Supplementary Data”, which is incorporated by reference herein. ITEM 4. MINE SAFETY DISCLOSURES None. 43 PART II 44

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 43 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 45 I TEM 6. RESERVED 48 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 49 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 75 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 43 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 45 I TEM 6. RESERVED 48 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 49 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 76 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table contains information about the Company’s purchases of its Class A Common Stock and Class C Common Stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 Class A Common Stock / Virtu Financial Units repurchases 1,039,179 $ 18.01 1,008,207 $ 136,271,227 November 1, 2023 - November 30, 2023 Class A Common Stock / Virtu Financial Units repurchases 661,261 17.7 658,939 124,606,029 December 1, 2023 - December 31, 2023 Class A Common Stock / Virtu Financial Units repurchases 731,810 19.44 730,673 110,402,519 Total Common Stock / Virtu Financial Unit repurchases 2,432,250 $ 18.36 2,397,819 $ 110,402,519 (1) Includes the repurchase of 34,431 shares from employees in order to satisfy statutory tax withholding requirements upon the net settlement of equity awards for the three months ended December 31, 2023 During the year ended December 31, 2023, pursuant to the Exchange Agreement, certain current and former employees elected to exchange 186,394 units in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one-for-one basis for shares of Class A Common Stock.
Biggest changeThe following table contains information about the Company’s purchases of its Class A Common Stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 Class A Common Stock repurchases 666,538 $ 31.85 635,708 $ 475,055,810 November 1, 2024 - November 30, 2024 Class A Common Stock repurchases 518,675 34.7 518,675 457,056,187 December 1, 2024 - December 31, 2024 Class A Common Stock repurchases 518,886 36.50 517,749 438,159,344 Total Common Stock repurchases 1,704,099 $ 34.13 1,672,132 $ 438,159,344 (1) Includes the repurchase of 31,967 shares from employees in order to satisfy statutory tax withholding requirements upon the net settlement of equity awards for the three months ended December 31, 2024 During the year ended December 31, 2024, pursuant to the Exchange Agreement, certain current and former employees elected to exchange 43,391 units in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one-for-one basis for shares of Class A Common Stock.
On November 6, 2020, the Company's Board of Directors authorized a new share repurchase program of up to $100.0 million in Class A common stock and Virtu Financial Units by December 31, 2021. On February 11, 2021, the Company's Board of Directors authorized the expansion of the program to $170 million.
On November 6, 2020, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million in Class A common stock and Virtu Financial Units by December 31, 2021. On February 11, 2021, the Company’s Board of Directors authorized the expansion of the program to $170 million.
Additionally, on November 3, 2021 the Company's Board of Directors authorized the expansion of the program by an additional $750 million to $1,220 million total and extending the duration of the program through November 3, 2023, which was subsequently extended through December 31, 2024.
On November 3, 2021 the Company’s Board of Directors authorized the expansion of the program by an additional $750 million to $1,220 million total and extending the duration of the program through November 3, 2023, which was subsequently extended through December 31, 2024.
Dividend and Capital Return Policy Our Board of Directors has adopted a policy of returning excess cash to our stockholders. The Board of Directors declared and we paid quarterly cash dividends of $0.24 during the years ended December 31, 2023, 2022 and 2021.
Dividend and Capital Return Policy Our Board of Directors has adopted a policy of returning excess cash to our stockholders. The Board of Directors declared and we paid quarterly cash dividends of $0.24 during the years ended December 31, 2024, 2023, and 2022.
Our stock price performance shown in the graph below is not indicative of future stock price performance. The stock performance graph below compares the performance of an investment in our Class A Common Stock, from December 31, 2018 through December 31, 2023, with the S&P 500 Index and the NYSE ARCA Securities Broker/Dealer Index.
Our stock price performance shown in the graph below is not indicative of future stock price performance. The stock performance graph below compares the performance of an investment in our Class A Common Stock, from December 31, 2019 through December 31, 2024, with the S&P 500 Index and the NYSE Arca Securities Broker/Dealer Index.
Holders Based on information made available to us by the transfer agent, as of February 8, 2024, there are thirty-five stockholders of record of our Class A Common Stock, one of which was Cede & Co., a nominee for The Depository Trust Company, zero stockholders of record of our Class B Common Stock, six stockholders of record of our Class C Common Stock and one stockholder of record of our Class D Common Stock.
Holders Based on information made available to us by the transfer agent, as of February 19, 2025, there are forty-five stockholders of record of our Class A Common Stock, one of which was Cede & Co., a nominee for The Depository Trust Company, zero stockholders of record of our Class B Common Stock, six stockholders of record of our Class C Common Stock and one stockholder of record of our Class D Common Stock.
The Company has approximately $110.4 million of remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.
The Company has approximately $438.2 million of remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.
Equity Compensation Plan Information The following table provides information about shares of common stock available for future awards under all of the Company’s equity compensation plans as of December 31, 2023: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders Amended and Restated 2015 Management Incentive Plan 1,511,776 $ 19.00 5,070,530 Equity compensation plans not approved by security holders None — — — Total 1,511,776 $ 19.00 5,070,530 47 ITEM 6.
Equity Compensation Plan Information The following table provides information about shares of common stock available for future awards under all of the Company’s equity compensation plans as of December 31, 2024: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders Amended and Restated 2015 Management Incentive Plan 813,750 $ 19.00 2,606,625 Equity compensation plans not approved by security holders None — — — Total 813,750 $ 19.00 2,606,625 47
The Company may repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means. Repurchases may also be made 46 under Rule 10b5-1 plans. The timing and amount of repurchase transactions will be determined by the Company's management based on its evaluation of market conditions, share price, legal requirements and other factors.
Repurchases may also be made under Rule 10b5-1 plans. The timing and amount of repurchase transactions will be determined by the Company’s management based on its evaluation of market conditions, share price, legal requirements and other factors. The program may be suspended, modified or discontinued at any time without prior notice.
The program may be suspended, modified or discontinued at any time without prior notice. There are no assurances that any further repurchases will actually occur. From the inception of the program through December 31, 2023, the Company has repurchased approximately 43.6 million shares of Class A Common Stock and Virtu Financial Units for approximately $1,109.6 million.
There are no assurances that any further repurchases will actually occur. From the inception of the program through December 31, 2024, the Company has repurchased approximately 50.3 million shares of Class A Common Stock and Virtu Financial Units for approximately $1,281.8 million.
Index 12/31/2018 6/28/2019 12/31/2019 6/30/2020 12/31/2020 6/30/2021 12/31/2021 6/30/2022 12/30/2022 06/30/2023 12/29/2023 Virtu Financial Inc. 100.00 86.27 65.14 98.41 107.10 115.46 122.67 97.50 86.84 70.84 86.20 S&P 500 100.00 117.35 128.88 123.67 149.83 171.43 190.13 151.00 153.16 177.53 190.27 NYSE Arca Securities Broker/Dealer 100.00 112.57 122.35 114.54 159.09 197.66 205.13 160.65 189.23 198.74 234.81 Stock and Common Units Repurchases Pursuant to the exchange agreement (the “Exchange Agreement”) entered into on April 15, 2015 by and among the Company, Virtu Financial and holders of Virtu Financial Units, Virtu Financial Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) may be exchanged at any time for shares of our Class A Common Stock or Class B Common Stock, as applicable, on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.
Index 12/31/2019 6/30/2020 12/31/2020 6/30/2021 12/31/2021 6/30/2022 12/30/2022 6/30/2023 12/29/2023 06/28/2024 12/30/2024 Virtu Financial Inc. 100.00 151.08 164.42 177.26 188.33 149.69 133.33 108.76 132.35 144.56 234.78 S&P 500 100.00 95.96 116.26 133.02 147.52 117.17 118.84 137.75 147.64 169.01 182.83 NYSE Arca Securities Broker/Dealer 100.00 93.62 130.03 161.55 167.66 131.31 154.67 162.44 191.92 217.47 278.21 Stock and Common Units Repurchases Pursuant to the exchange agreement (the “Exchange Agreement”) entered into on April 15, 2015 by and among the Company, Virtu Financial and holders of Virtu Financial Units, Virtu Financial Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) may be exchanged at any time for shares of our Class A Common Stock or Class B Common Stock, as applicable, on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.
Added
On April 24, 2024, the Company’s Board of Directors authorized the expansion of the program by an additional $500 million to $1,720 million and extended the duration through 46 April 24, 2026. The Company may repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe Assumed Awards are subject to the same terms and conditions that were applicable to them under the Amended and Restated ITG 2007 Equity Plan, except that (i) the Assumed Awards relate to shares of the Company’s Class A Common Stock, (ii) the number of shares of Class A Common Stock subject to the Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as defined in the Agreement and Plan of Merger by and between the Company, Impala Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of the Company, and ITG, dated as of November 6, 2018, the “ITG Merger Agreement”) and (iii) the performance share unit awards were converted into service-based vesting restricted stock unit awards that were no longer subject to any performance based vesting conditions. 53 Components of Our Results of Operations The following table shows our i) Total revenue, ii) Total operating expenses, and iii) Income before income taxes and noncontrolling interest by segment for the years ended December 31, 2023, 2022, and 2021: (in thousands) Years Ended December 31, Market Making 2023 2022 2021 Total revenue $ 1,843,523 $ 1,812,839 $ 2,203,046 Total operating expenses 1,527,921 1,332,280 1,277,078 Income before income taxes and noncontrolling interest 315,602 480,559 925,968 Execution Services Total revenue 446,542 514,241 600,215 Total operating expenses 436,102 472,899 530,196 Income before income taxes and noncontrolling interest 10,440 41,342 70,019 Corporate Total revenue 3,308 37,732 8,224 Total operating expenses 4,219 2,835 7,307 Income before income taxes and noncontrolling interest (911) 34,897 917 Consolidated Total revenue 2,293,373 2,364,812 2,811,485 Total operating expenses 1,968,242 1,808,014 1,814,581 Income before income taxes and noncontrolling interest $ 325,131 $ 556,798 $ 996,904 The following table shows our results of operations for the years ended December 31, 2023, 2022, and 2021: 54 Years Ended December 31, (in thousands) 2023 2022 2021 Revenues: Trading income, net $ 1,301,344 $ 1,628,898 $ 2,105,194 Interest and dividends income 462,566 159,120 75,384 Commissions, net and technology services 455,598 529,845 614,489 Other, net 73,865 46,949 16,418 Total revenue 2,293,373 2,364,812 2,811,485 Operating Expenses: Brokerage, exchange, clearance fees and payments for order flow, net 508,358 619,168 745,434 Communication and data processing 230,760 219,505 211,988 Employee compensation and payroll taxes 394,039 390,947 376,282 Interest and dividends expense 500,467 231,060 139,704 Operations and administrative 98,972 86,069 88,149 Depreciation and amortization 63,306 66,377 67,816 Amortization of purchased intangibles and acquired capitalized software 63,960 64,837 69,668 Termination of office leases 455 6,982 28,138 Debt issue cost related to debt refinancing, prepayment and commitment fees 8,317 29,910 6,590 Transaction advisory fees and expenses 314 1,124 843 Financing interest expense on long-term borrowings 99,294 92,035 79,969 Total operating expenses 1,968,242 1,808,014 1,814,581 Income before income taxes and noncontrolling interest 325,131 556,798 996,904 Provision for income taxes 61,210 88,466 169,670 Net income $ 263,921 $ 468,332 $ 827,234 Selected Operating Margins GAAP Net income Margin (1) 11.5 % 19.8 % 29.4 % (1) Calculated by dividing Net income by Total revenue. 55 Net income available to stockholders and basic and diluted earnings per share are presented below: Years Ended December 31, (in thousands, except for share or per share data) 2023 2022 2021 Net income $ 263,921 $ 468,332 $ 827,234 Noncontrolling interest (121,885) (203,306) (350,356) Net income available for common stockholders $ 142,036 $ 265,026 $ 476,878 Earnings per share Basic $ 1.42 $ 2.45 $ 3.95 Diluted $ 1.42 $ 2.44 $ 3.91 Weighted average common shares outstanding Basic 94,076,165 103,997,767 117,339,539 Diluted 94,076,165 104,422,443 118,423,928 Total Revenues Revenues are generated through market marking activities, commissions and fees on execution services activities, which include recurring subscriptions on workflow technology and analytic products.
Biggest changeThe fair value of the stock option grants was determined through the application of the Black-Scholes-Merton model and was recognized on a straight-line basis over the vesting period. 53 Components of Our Results of Operations The following table shows our i) Total revenue, ii) Total operating expenses, and iii) Income before income taxes and noncontrolling interest by segment for the years ended December 31, 2024, 2023, and 2022: (in thousands) Years Ended December 31, Market Making 2024 2023 2022 Total revenue $ 2,374,096 $ 1,843,523 $ 1,812,839 Total operating expenses 1,783,044 1,527,921 1,332,280 Income (loss) before income taxes and noncontrolling interest 591,052 315,602 480,559 Execution Services Total revenue 507,230 446,542 514,241 Total operating expenses 445,470 436,102 472,899 Income (loss) before income taxes and noncontrolling interest 61,760 10,440 41,342 Corporate Total revenue (4,377) 3,308 37,732 Total operating expenses 3,465 4,219 2,835 Income (loss) before income taxes and noncontrolling interest (7,842) (911) 34,897 Consolidated Total revenue 2,876,949 2,293,373 2,364,812 Total operating expenses 2,231,979 1,968,242 1,808,014 Income (loss) before income taxes and noncontrolling interest $ 644,970 $ 325,131 $ 556,798 The following table shows our results of operations for the years ended December 31, 2024, 2023, and 2022: 54 Years Ended December 31, (in thousands) 2024 2023 2022 Revenues: Trading income, net $ 1,822,437 $ 1,301,344 $ 1,628,898 Interest and dividends income 462,070 462,566 159,120 Commissions, net and technology services 516,783 455,598 529,845 Other, net 75,659 73,865 46,949 Total revenue 2,876,949 2,293,373 2,364,812 Operating Expenses: Brokerage, exchange, clearance fees and payments for order flow, net 674,426 508,358 619,168 Communication and data processing 236,446 230,760 219,505 Employee compensation and payroll taxes 434,823 394,039 390,947 Interest and dividends expense 529,177 500,467 231,060 Operations and administrative 97,002 98,972 86,069 Depreciation and amortization 65,816 63,306 66,377 Amortization of purchased intangibles and acquired capitalized software 50,471 63,960 64,837 Termination of office leases 16,224 455 6,982 Debt issue cost related to debt refinancing, prepayment and commitment fees 29,479 8,317 29,910 Transaction advisory fees and expenses 313 314 1,124 Financing interest expense on long-term borrowings 97,802 99,294 92,035 Total operating expenses 2,231,979 1,968,242 1,808,014 Income before income taxes and noncontrolling interest 644,970 325,131 556,798 Provision for income taxes 110,435 61,210 88,466 Net income $ 534,535 $ 263,921 $ 468,332 Selected Operating Margins GAAP Net income Margin (1) 18.6 % 11.5 % 19.8 % (1) Calculated by dividing Net income by Total revenue. 55 Net income available to stockholders and basic and diluted earnings per share are presented below: Years Ended December 31, (in thousands, except for share or per share data) 2024 2023 2022 Net income $ 534,535 $ 263,921 $ 468,332 Noncontrolling interest (258,120) (121,885) (203,306) Net income available for common stockholders $ 276,415 $ 142,036 $ 265,026 Earnings per share Basic $ 2.98 $ 1.42 $ 2.45 Diluted $ 2.97 $ 1.42 $ 2.44 Weighted average common shares outstanding Basic 87,482,162 94,076,165 103,997,767 Diluted 87,821,576 94,076,165 104,422,443 Total Revenues Revenues are generated through market marking activities, commissions and fees on execution services activities, which include recurring subscriptions on workflow technology and analytic products.
Some of these limitations are: • they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments; • our EBITDA-based measures do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; 59 • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and our EBITDA-based measures do not reflect any cash requirement for such replacements or improvements; • they are not adjusted for all non-cash income or expense items that are reflected in our consolidated statements of cash flows; • they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; and • they do not reflect limitations on our costs related to transferring earnings from our subsidiaries to us.
Some of these limitations are: • they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments; 59 • our EBITDA-based measures do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and our EBITDA-based measures do not reflect any cash requirement for such replacements or improvements; • they are not adjusted for all non-cash income or expense items that are reflected in our consolidated statements of cash flows; • they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; and • they do not reflect limitations on our costs related to transferring earnings from our subsidiaries to us.
Rather than analyzing Trading income, net, in isolation, we evaluate it in the broader context of our Adjusted Net Trading Income, together with Interest and dividends income, Interest and dividends expense, Commissions, net and technology services and Brokerage, exchange, clearance fees and payments for order flow, net, each of which are described below. Interest and dividends income.
Rather than analyzing Trading income, net, in isolation, we evaluate it in the broader context of our Adjusted Net Trading Income, together with Interest and dividends income, Commissions, net and technology services, Interest and dividends expense, and Brokerage, exchange, clearance fees and payments for order flow, net, each of which are described below. Interest and dividends income.
We actively manage our liquidity, and we 65 maintain significant borrowing facilities through the securities lending markets and with banks and prime brokers. We have continually received the benefit of uncommitted margin financing from our prime brokers globally. These margin facilities are secured by securities in accounts held at the prime brokers.
We actively manage our liquidity, and we maintain significant borrowing facilities through the securities lending markets and with banks and prime brokers. We have continually received the benefit of uncommitted margin financing from our prime brokers globally. These margin facilities are 65 secured by securities in accounts held at the prime brokers.
In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity shall assess relevant events and circumstances, including the following: • general economic conditions; • limitations on accessing capital; • fluctuations in foreign exchange rates or other developments in equity and credit markets; • industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute 73 terms and relative to peers), a change in the market for an entity’s products or services, or a regulatory or political development; • cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; • overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; • other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation.
In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity shall assess relevant events and circumstances, including the following: • general economic conditions; • limitations on accessing capital; • fluctuations in foreign exchange rates or other developments in equity and credit markets; • industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for an entity’s products or services, or a regulatory or political development; • cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; • overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; • other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation.
Although we believe that the forward-looking statements contained in this Annual Report on Form 10-K are based on reasonable assumptions, you should be aware that many factors, including those described under the heading “Risk Factors” in this Annual Report on Form 10-K, could affect our actual financial results or results of operations and cash flows, and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to: • volatility in levels of overall trading activity; • dependence upon trading counterparties, clients and clearing houses performing their obligations to us; • failures of our customized trading platform; • risks inherent to the electronic market making business and trading generally; • recent SEC proposals focused on equity markets which may, if adopted, materially change U.S. equity market structure, including by reducing overall trading volumes, reducing off-exchange trading and market making opportunities, requiring additional tools, platforms and services to register as an ATS or exchange, and generally increasing the implicit and explicit cost as well as the complexity of the U.S. equities eco-system for all participants; • additionally, enhanced regulatory, congressional, and media scrutiny, including attention to electronic trading, wholesale market making and off-exchange trading, payment for order flow, and other market structure topics may result in additional potential changes in regulation or law which could have an adverse effect on our business as well as adversely impact the public's perception of us or of companies in our industry; • increased competition in market making activities and execution services; • dependence on continued access to sources of liquidity; • risks associated with self-clearing and other operational elements of our business, including but limited to risks related to funding and liquidity; • obligations to comply with applicable regulatory capital requirements; 49 • litigation or other legal and regulatory-based liabilities; • changes in laws, rules or regulations, including proposed legislation that would impose taxes on certain financial transactions in the European Union, the U.S.
Although we believe that the forward-looking statements contained in this Annual Report on Form 10-K are based on reasonable assumptions, you should be aware that many factors, including those described under the heading “Risk Factors” in this Annual Report on Form 10-K, could affect our actual financial results or results of operations and cash flows, and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to: • volatility in levels of overall trading activity; • dependence upon trading counterparties, clients and clearing houses performing their obligations to us; • failures of our customized trading platform; • risks inherent to the electronic market making business and trading generally; • SEC proposals under the prior administration focused on equity markets which may, if adopted, materially change U.S. equity market structure, including by reducing overall trading volumes, reducing off-exchange trading and market making opportunities, requiring additional tools, platforms and services to register as an ATS or exchange, and generally increasing the implicit and explicit cost as well as the complexity of the U.S. equities eco-system for all participants; • additionally, enhanced regulatory, congressional, and media scrutiny, including attention to electronic trading, wholesale market making and off-exchange trading, payment for order flow, and other market structure topics may result in additional potential changes in regulation or law which could have an adverse effect on our business as well as adversely impact the public’s perception of us or of companies in our industry; • increased competition in market making activities and execution services; • dependence on continued access to sources of liquidity; • risks associated with self-clearing and other operational elements of our business, including but limited to risks related to funding and liquidity; • obligations to comply with applicable regulatory capital requirements; 49 • litigation or other legal and regulatory-based liabilities; • changes in laws, rules or regulations, including proposed legislation that would impose taxes on certain financial transactions in the European Union, the U.S.
Credit Agreement On January 13, 2022 (the “Credit Agreement Closing Date”), Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”), entered into the Credit Agreement, with the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and JPMorgan Chase bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc, Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp., as joint lead arrangers and bookrunners (the “Credit Agreement”).
Credit Agreement On January 13, 2022 (the “Credit Agreement Closing Date”), Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”), entered into a credit agreement, with the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and JPMorgan Chase bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc, Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp., as joint lead arrangers and bookrunners (the “Original Credit Agreement”).
On January 13, 2022 (the “Credit Agreement Closing Date”), VFH and Virtu Financial entered into a credit agreement, with the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and JPMorgan Chase bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc, Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp., as joint lead arrangers and bookrunners (the “Credit Agreement”).
Credit Agreement On January 13, 2022 (the “Credit Agreement Closing Date”), VFH and Virtu Financial entered into a credit agreement, with the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and JPMorgan Chase bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc, Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp., as joint lead arrangers and bookrunners (the “Original Credit Agreement”).
For purposes of providing additional liquidity, we maintain a committed credit facility and an uncommitted credit facility for our wholly-owned U.S. broker-dealer subsidiary, as discussed in Note 8 “Borrowings” of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
For purposes of providing additional liquidity, we maintain a committed credit facility and an uncommitted credit facility for our wholly-owned U.S. broker-dealer subsidiary, as discussed in Note 9 “Borrowings” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
(and certain states therein) and other jurisdictions and other potential changes which could increase our corporate or other tax obligations in one or more jurisdictions; • obligations to comply with laws and regulations applicable to our operations in the U.S. and abroad; • need to maintain and continue developing proprietary technologies; • capacity constraints, system failures, and delays; • dependence on third-party infrastructure or systems; • use of open source software; • failure to protect or enforce our intellectual property rights in our proprietary technology; • failure to protect confidential and proprietary information; • failure to protect our systems from internal or external cyber threats that could result in damage to our computer systems, business interruption, loss of data, monetary payment demands or other consequences; • risks associated with international operations and expansion, including failed acquisitions or dispositions; • the effects of and changes in economic conditions (such as volatility in the financial markets, increased inflation, monetary conditions and foreign currency and continued or exacerbated exchange rate fluctuations, foreign currency controls and/or government mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets), political conditions (such as military actions and terrorist activities), and other global events such as fires, geopolitical conflicts, natural disasters, pandemics or extreme weather; • risks associated with potential growth and associated corporate actions; • risks associated with new and emerging asset classes and eco-systems in which we may participate, including digital assets, including risks related to volatility in the underlying assets, regulatory uncertainty, evolving industry practices and standards around custody, clearing and settlement, and other risks inherent in a new and evolving asset class; • inability to access, or delay in accessing, the capital markets to sell shares or raise additional capital; • loss of key executives and failure to recruit and retain qualified personnel; and • risks associated with losing access to a significant exchange or other trading venue.
(and certain states therein) and other jurisdictions and other potential changes which could increase our corporate or other tax obligations in one or more jurisdictions; • obligations to comply with laws and regulations applicable to our operations in the U.S. and abroad; • need to maintain and continue developing proprietary technologies; • capacity constraints, system failures, and delays; • dependence on third-party infrastructure or systems; • use of open source software; • failure to protect or enforce our intellectual property rights in our proprietary technology; • failure to protect confidential and proprietary information; • failure to protect our systems from internal or external cyber threats that could result in damage to our computer systems, business interruption, loss of data, monetary payment demands or other consequences; • risks associated with international operations and expansion, including failed acquisitions or dispositions; • the effects of and changes in economic conditions (such as volatility in the financial markets, increased inflation, monetary conditions and foreign currency and continued or exacerbated exchange rate fluctuations, foreign currency controls and/or government mandated pricing controls, as well as in trade, tariff, monetary, fiscal and tax policies in international markets), political conditions (such as military actions and terrorist activities), and other global events such as fires, geopolitical conflicts, natural disasters, pandemics or extreme weather; • risks associated with potential growth and associated corporate actions; • risks associated with new and emerging asset classes and eco-systems in which we may participate, including digital assets, including risks related to volatility in the underlying assets, regulatory uncertainty, evolving industry practices and standards around custody, clearing and settlement, and other risks inherent in a new and evolving asset class; • inability to access, or delay in accessing, the capital markets to sell shares or raise additional capital; • loss of key executives and failure to recruit and retain qualified personnel; • risks associated with losing access to a significant exchange or other trading venue; and • risks associated with changes in governmental administrations and agencies.
In addition, we offer workflow technology and analytics services to select third 56 parties. Revenues are derived from fees generated by matching sell-side and buy-side clients orders, and from analytic products delivered to the clients. Other, net. We have interests in multiple strategic investments and telecommunications joint ventures (“JVs”).
In addition, we offer workflow technology and analytics services to select third parties. Revenues are derived from fees generated by matching sell-side and buy-side clients orders, and from analytic products delivered to the clients. Other, net. We have interests in multiple strategic investments and telecommunications joint ventures (“JVs”).
Broker Dealer Credit Facilities, Short-Term Bank Loans, and Prime Brokerage Credit Facilities We maintain various broker-dealer facilities and short-term credit facilities as part of our daily trading operations. See Note 8 “Borrowings” of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for details on our various credit facilities.
Broker Dealer Credit Facilities, Short-Term Bank Loans, and Prime Brokerage Credit Facilities We maintain various broker-dealer facilities and short-term credit facilities as part of our daily trading operations. See Note 9 “Borrowings” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for details on our various credit facilities.
If an event of default occurs and is continuing, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts outstanding under the Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Credit Agreement.
If an event of default occurs and is continuing, the lenders under the Credit Agreement will be entitled to take various 68 actions, including the acceleration of amounts outstanding under the Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Credit Agreement.
We record as treasury stock shares repurchased from employees for the purpose of settling tax liabilities incurred upon the issuance of common stock, the vesting of RSUs or the exercise of stock options. 72 Income Taxes We conduct our business globally through a number of separate legal entities.
We record as treasury stock shares repurchased from employees for the purpose of settling tax liabilities incurred upon the issuance of common stock, the vesting of RSUs or the exercise of stock options. Income Taxes We conduct our business globally through a number of separate legal entities.
See Note 8 “Borrowings” in Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for more details. Leases We have lease arrangements, primarily for office space and technology and equipment.
See Note 9 “Borrowings” in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for more details. Leases We have lease arrangements, primarily for office space and technology and equipment.
The share repurchase program authorizes the Company to repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means. Repurchases are also permitted to be made under Rule 10b5-1 plans.
The share repurchase program authorizes the Company to repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means. Repurchases are also permitted to be made under Rule 10b5-1 70 plans.
The amendments included certain changes to collateral posting obligations and also had the effect of increasing the effective fixed 68 interest payment obligations to rates of 4.5%, with respect to the earlier maturing swap arrangement, and 4.6% with respect to the later maturing swap arrangement.
The amendments included certain changes to collateral posting obligations and also had the effect of increasing the effective fixed interest payment obligations to rates of 4.5%, with respect to the earlier maturing swap arrangement, and 4.6% with respect to the later maturing swap arrangement.
See Note 13 “Income Taxes” of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information. 58 Non-GAAP Financial Measures and Other Items To supplement our Consolidated Financial Statements presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), we use the following non-U.S.
See Note 14 “Income Taxes” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information. 58 Non-GAAP Financial Measures and Other Items To supplement our Consolidated Financial Statements presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), we use the following non-U.S.
We expect that future payments to certain direct or indirect equity holders of Virtu Financial described in Note 4 “Tax Receivable Agreements” of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K are expected to range from approximately $0.1 million to $22.1 million per year over the next 15 years.
We expect that future payments to certain direct or indirect equity holders of Virtu Financial described in Note 5 “Tax Receivable Agreements” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K are expected to range from approximately $0.1 million to $22.1 million per year over the next 15 years.
Virtu ITG Singapore Pte. Limited and Virtu Financial Singapore Pte. Ltd. have similar regulatory requirements and are regulated by the Monetary Authority of Singapore. See Note 20 “Regulatory Requirement” of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for a discussion of regulatory capital requirements of our regulated subsidiaries.
Virtu ITG Singapore Pte. Limited and Virtu Financial Singapore Pte. Ltd. have similar regulatory requirements and are regulated by the Monetary Authority of Singapore. See Note 21 “Regulatory Requirement” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for a discussion of regulatory capital requirements of our regulated subsidiaries.
Basis of Preparation Our Consolidated Financial Statements for the years ended December 31, 2023 and 2022 reflect our operations and those of our consolidated subsidiaries. 50 Overview We are a leading financial services firm that leverages cutting edge technology to deliver liquidity to the global markets and innovative, transparent trading solutions to our clients.
Basis of Preparation Our Consolidated Financial Statements for the years ended December 31, 2024 and 2023 reflect our operations and those of our consolidated subsidiaries. 50 Overview We are a leading financial services firm that leverages cutting edge technology to deliver liquidity to the global markets and innovative, transparent trading solutions to our clients.
In January 2022, in order to align the swap agreements with the Credit Agreement, the Company amended each of the swap agreements to align the floating rate term of such swap agreements to SOFR.
In January 2022, in order to align the swap agreements with the Original Credit Agreement, the Company amended each of the swap agreements to align the floating rate term of such swap agreements to SOFR.
See below a reconciliation of each of the Company's Non-GAAP Measures to the most directly comparable U.S. GAAP measure. The following table reconciles the Consolidated Statements of Comprehensive Income to arrive at Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, and Operating Margins for the years ended December 31, 2023, 2022, and 2021.
See below a reconciliation of each of the Company’s Non-GAAP Measures to the most directly comparable U.S. GAAP measure. The following table reconciles the Consolidated Statements of Comprehensive Income to arrive at Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, and Operating Margins for the years ended December 31, 2024, 2023, and 2022.
Cash Flows Our main sources of liquidity are cash flow from the operations of our subsidiaries, our broker-dealer credit facilities (as described above), margin financing provided by our prime brokers and cash on hand. The table below summarizes our primary sources and uses of cash for the years ended December 31, 2023, 2022, and 2021.
Cash Flows Our main sources of liquidity are cash flow from the operations of our subsidiaries, our broker-dealer credit facilities (as described above), margin financing provided by our prime brokers and cash on hand. The table below summarizes our primary sources and uses of cash for the years ended December 31, 2024, 2023, and 2022.
Consequently, our effective tax rate is dependent upon the geographic distribution of our earnings or losses and the tax laws and regulations of each legal jurisdiction in which we operate. Certain of our wholly owned subsidiaries are subject to income taxes in foreign jurisdictions. The provision for income tax is comprised of current tax and deferred tax.
Consequently, our effective tax rate is dependent upon the geographic distribution of our earnings or losses and the tax laws and regulations of each legal jurisdiction in which we operate. Certain of our wholly owned subsidiaries are subject to income taxes in foreign jurisdictions. The provision for income tax is composed of current tax and deferred tax.
Recent Accounting Pronouncements For a discussion of recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see Note 2 “Summary of Significant Accounting Policies” of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 74
Recent Accounting Pronouncements For a discussion of recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see Note 2 “Summary of Significant Accounting Policies” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 75
This increase was primarily attributable to higher interest expense incurred on cash collateral received driven by higher interest rates, as well as an increase in securities lending transactions and higher dividends expense with respect to securities sold, not yet purchased for the period compared to the same period during the prior year.
This increase was primarily attributable to higher interest expense incurred on cash collateral received driven by an increase in securities lending transactions, as well as higher dividends expense with respect to securities sold, not yet purchased for the period compared to the same period during the prior year.
Dividends are recorded on the ex-dividend date, and interest is recognized on an accrual basis. Commissions, net and Technology Services Commissions, net, which primarily comprise commissions and commission equivalents earned on institutional client orders, are recorded on a trade date basis, which is the point at which the performance obligation to the customer is satisfied.
Dividends are recorded on the ex-dividend date, and interest is recognized on an accrual basis. Commissions, Net and Technology Services Commissions, net, which primarily comprise commissions earned on institutional client orders, are recorded on a trade date basis, which is the point at which the performance obligation to the customer is satisfied.
The new interest rate swap met the criteria to be considered and was designated as a qualifying cash flow hedge under ASC 815 as of December 2023, and it effectively fixed interest payment obligations on $1,525 million of principal under the First Lien Term Loan Facility at rate of 7.5% through November 2025, based on the interest rates set forth in the Credit Agreement.
The December 2023 Swap met the criteria to be considered and was designated as a qualifying cash flow hedge under ASC 815 as of December 2023, and it effectively fixed interest payment obligations on $1,525.0 million of principal under the First Lien Term Loan Facility at a rate of 7.5% through November 2025, based on the interest rates set forth in the Original Credit Agreement.
Dividends income arises from holding market making positions over dates on which dividends are paid to shareholders of record. Commissions, net and technology services. We earn revenues on transactions for which we charge explicit commissions or commission equivalents, which include the majority of our institutional client orders.
Dividends income arises from holding market making positions over dates on which dividends are paid to shareholders of record. Commissions, net and technology services. We earn revenues on transactions for which we charge explicit commissions, which include the majority of our institutional client orders.
We record our pro-rata share of each JV’s earnings or losses within Other, net, while fees related to the use of communication services provided by the JVs are recorded within Communications and data processing. We have a noncontrolling investment (the “JNX Investment”) in Japannext Co., Ltd. (“JNX”), a proprietary trading system based in Tokyo.
We record our pro-rata share of our JVs’ earnings or losses within Other, net, while fees related to the use of communication services provided by the JVs are recorded within Communications and data processing. 56 We have a noncontrolling investment (the “JNX Investment”) in Japannext Co., Ltd. (“JNX”), a proprietary trading system based in Tokyo.
Our market structure expertise, broad diversification, and scalable execution technology enable us to provide competitive bids and offers in over 25,000 securities and other financial instruments, on over 235 venues, in 36 countries worldwide. We use the latest technology to create and deliver liquidity to the global markets and automate our market making, risk controls, and post-trade processes.
Our market structure expertise, broad diversification, and scalable execution technology enable us to provide competitive bids and offers in over 25,000 securities and other financial instruments, on over 250 venues, in 40 countries worldwide. We use the latest technology to create and deliver liquidity to the global markets and automate our market making, risk controls, and post-trade processes.
Other, net can also include gains on sales of strategic investments and businesses, as well as revenues from service agreements related to the sale of businesses. Operating Expenses Brokerage, exchange, clearance fees and payments for order flow, net.
Other, net can also include gains on sales of strategic investments and businesses, settlement fund recoveries, as well as revenues from service agreements related to the sale of businesses. Operating Expenses Brokerage, exchange, clearance fees and payments for order flow, net.
The Credit Agreement provides (i) a senior secured first lien term loan in an aggregate principal amount of $1,800.0 million, drawn in its entirety on the Credit Agreement Closing Date, the proceeds of which were used by VFH to repay all amounts outstanding under the Acquisition Credit Agreement, to pay fees and expenses in connection therewith, to fund share repurchases under the Company’s repurchase program and for general corporate purposes, and (ii) a $250.0 million senior secured first lien revolving facility to VFH, with a $20.0 million letter of credit subfacility and a $20.0 million swingline subfacility.
The Original Credit Agreement provides (i) a senior secured first lien term loan in an aggregate principal amount of $1,800.0 million, drawn in its entirety on the Credit Agreement Closing Date, the proceeds of which were used by VFH to repay all amounts outstanding under the previous credit agreement entered into in relation to the ITG Acquisition, to pay fees and expenses in connection therewith, to fund share repurchases under the Company’s repurchase program and for general corporate purposes, and (ii) a $250.0 million senior secured first lien revolving facility to VFH, with a $20.0 million letter of credit subfacility and a $20.0 million swingline subfacility.
Our trading income, net, results from gains and losses associated with trading strategies, which are designed to capture small bid/ask spreads, while hedging risks. Trading income, net, accounted for 57% and 69% of our total revenues for the years ended December 31, 2023 and 2022, respectively. Interest and dividends income.
Our trading income, net, results from gains and losses associated with trading strategies, which are designed to capture small bid/ask spreads, while hedging risks. Trading income, net, accounted for 63% and 57% of our total revenues for the years ended December 31, 2024 and 2023, respectively. Interest and dividends income.
Subsequently, the Company's Board of Directors authorized expansions of the share repurchase program on February 11, 2021 to $170.0 million, on May 4, 2021 to $470.0 million (and extended the duration through May 4, 2022), on November 3, 2021 to $1,220.0 million (and extended the duration through November 3, 2023, and on November 2, 2023, further extended the program through December 31, 2024).
Subsequently, the Company’s Board of Directors authorized expansions of the share repurchase program on February 11, 2021 to $170.0 million, on May 4, 2021 to $470.0 million (and extended the duration through May 4, 2022), on November 3, 2021 to $1,220.0 million (and extended the duration through November 3, 2023, and on November 2, 2023, further extended the program through December 31, 2024), and on April 24, 2024 to $1,720 million (and extended the duration through April 24, 2026).
Share-based awards issued for compensation in connection with or subsequent to the Reorganization Transactions and the IPO pursuant to our Amended and Restated 2015 Management Incentive Plan, and assumed pursuant to the Amended and Restated ITG 2007 Equity Plan, were in the form of stock options, Class A Common Stock, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”).
Share-based awards issued for compensation in connection with or subsequent to the Reorganization Transactions and the IPO pursuant to our Amended and Restated 2015 Management Incentive Plan were in the form of stock options, Class A Common Stock, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”).
For discussion around our results of operations for the year ended December 31, 2022 and for a comparison of our results of operations for the year ended December 31, 2022 and year ended December 31, 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for fiscal year ended December 31, 2022, filed with the SEC on February 17, 2023.
For discussion around our results of operations for the year ended December 31, 2023 and for a comparison of our results of operations for the year ended December 31, 2023 and year ended December 31, 2022, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024.
This decrease was primarily attributable to lower Trading income, net and Commissions, net and technology services, as noted above, and higher Interest and dividends expense, as noted below, partially offset by an increase in Interest and dividends income, as described above, and lower Brokerage, exchange, clearance fees and payments for order flow, net as described below.
This increase was primarily attributable to higher Trading income, net and Commissions, net and technology services, as noted above, partially offset by higher Brokerage, exchange, clearance fees and payments for order flow, net and Interest and dividends expense as described below.
The Company therefore dedesignated those cash flow hedges under ASC 815, and the amounts in AOCI related to the terminated swaps are to be amortized through interest expense. The Company simultaneously entered into a two-year $1,525 million floating-to-fixed interest rate swap agreement with the same counterparty.
The Company therefore dedesignated those cash flow hedges under ASC 815, and the amounts in AOCI related to the terminated swaps are amortized through interest expense. The Company simultaneously entered into a two-year $1,525.0 million floating-to-fixed interest rate swap agreement with the same counterparty (the “December 2023 Swap”).
The following table shows the total revenues by segment for the years ended December 31, 2023 and 2022.
The following table shows the total revenues by segment for the years ended December 31, 2024 and 2023.
As of December 31, 2023, there was no outstanding principal balance on our broker-dealer facilities, and the outstanding aggregate short-term credit facilities with various prime brokers and other financial institutions from which the Company receives execution or clearing services was approximately $175.3 million, which was netted within Receivables from broker-dealers and clearing organizations on the Consolidated Statements of Financial Condition of Part II Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
As of December 31, 2024, there was an outstanding principal balance on our broker-dealer facilities of $10.0 million, and the outstanding aggregate short-term credit facilities with various prime brokers and other financial institutions from which the Company receives execution or clearing services was approximately $123.0 million, which was netted within Receivables from broker-dealers and clearing organizations on the Consolidated Statements of Financial Condition of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management’s discussion and analysis covers the years ended December 31, 2023, and 2022 should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2023, which are included in Item 8, of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management’s discussion and analysis covers the years ended December 31, 2024 and 2023 should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2024, which are included in Part II, Item 8 of this Annual Report on Form 10-K.
These two interest rate swaps met the criteria to be considered and were designated as qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and they effectively fixed interest payment obligations on $525.0 million and $1,000.0 million of principal under the Acquisition First Lien Term Loan Facility at rates of 4.3% and 4.4% through September 2024 and January 2025, respectively, based on the interest rates set forth in the Acquisition Credit Agreement.
These two interest rate swaps met the criteria to be considered and were designated as qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and they effectively fixed interest payment obligations on $525.0 million and $1,000.0 million of principal under the previous first lien term loan facility in relation to the ITG Acquisition at rates of 4.3% and 4.4% through September 2024 and January 2025, respectively.
As of December 31, 2023, a total of $216.5 million has been recorded for amounts due pursuant to tax receivable agreements in the Consolidated Financial Statements representing management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement, as savings are realized as a result of favorable tax attributes.
As of December 31, 2024, a total of $196.6 million has been recorded for amounts due pursuant to tax receivable agreements in the Consolidated Financial Statements representing management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement, as savings are realized as a result of favorable tax attributes.
Investing Activities Net cash used in investing activities, which includes cash used with respect to capitalized software and cash used in the acquisition of property and equipment, was $94.5 million for the year ended December 31, 2023, compared with net cash used in investing activities of $29.5 million for the year ended December 31, 2022.
Investing Activities Net cash used in investing activities, which includes cash used with respect to capitalized software and cash used in the acquisition of property and equipment, was $61.8 million for the year ended December 31, 2024, compared with net cash used in investing activities of $94.5 million for the year ended December 31, 2023.
Our largest finite-lived intangible asset is customer relationships, which is being amortized over an estimated useful life of ten years. Had we used a shorter estimated useful life of seven years, the Company would have recorded an additional $21.7 million of amortization expense for the years ended December 31, 2023, 2022, and 2021, respectively.
Our largest finite-lived intangible asset is customer relationships, which is being amortized over an estimated useful life of ten to twelve years. Had we used a shorter estimated useful life of seven years, the Company would have recorded an additional $18.4 million, $21.7 million, and $21.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Liquidity and Capital Resources General As of December 31, 2023, we had $820.4 million in Cash and cash equivalents. This balance is maintained primarily to support operating activities, for capital expenditures and for short-term access to liquidity, and for other general corporate purposes.
Liquidity and Capital Resources General As of December 31, 2024, we had $872.5 million in Cash and cash equivalents. This balance is maintained primarily to support operating activities, for capital expenditures and for short-term access to liquidity, and for other general corporate purposes.
As a result of the refinancing or early termination of our long-term borrowings, we accelerate the capitalized debt issue cost and the discount on the term loan that would otherwise be amortized or accreted over the life of the term loan.
Debt issue cost related to debt refinancing, prepayment and commitment fees. As a result of the refinancing or early termination of our long-term borrowings, we accelerate the capitalized debt issue cost and the discount on the term loan that 57 would otherwise be amortized or accreted over the life of the term loan.
The timing and amount of repurchase transactions are determined by the Company's management based on its evaluation of market conditions, share price, cash sources, legal requirements and other factors. From the inception of the program through December 31, 2023, the Company repurchased approximately 43.6 million shares of Class A Common Stock and Virtu Financial Units for approximately $1,109.6 million.
The timing and amount of repurchase transactions are determined by the Company’s management based on its evaluation of market conditions, share price, cash sources, legal requirements and other factors. From the inception of the program through December 31, 2024, the Company repurchased approximately 50.3 million shares of Class A Common Stock and Virtu Financial Units for approximately $1,281.8 million.
(2) Calculated by dividing Net Income by Adjusted Net Trading Income. (3) Calculated by dividing EBITDA by Adjusted Net Trading Income.
(2) Calculated by dividing Net Income by Adjusted Net Trading Income. 60 (3) Calculated by dividing EBITDA by Adjusted Net Trading Income. (4) Calculated by dividing Adjusted EBITDA by Adjusted Net Trading Income.
Our actual results may differ from these estimates under different assumptions or conditions. 70 Valuation of Financial Instruments Due to the nature of our operations, substantially all of our financial instrument assets, comprised of financial instruments owned, securities purchased under agreements to resell, and receivables from brokers, dealers and clearing organizations are carried at fair value based on published market prices and are marked to market daily, or are assets which are short-term in nature and are reflected at amounts approximating fair value.
Valuation of Financial Instruments Due to the nature of our operations, substantially all of our financial instrument assets, comprised of financial instruments owned, securities purchased under agreements to resell, and receivables from brokers, dealers and clearing organizations are carried at fair value based on published market prices and are marked to market daily, or are assets which are short-term in nature and are reflected at amounts approximating fair value.
We have capitalized and therefore excluded employee compensation and benefits related to software development of $40.4 million and $35.5 million for the years ended December 31, 2023 and 2022, respectively. Interest and dividends expense.
We have capitalized and therefore excluded employee compensation and benefits related to software development of $44.7 million and $40.4 million for the years ended December 31, 2024 and 2023, respectively. Interest and dividends expense.
The change in net cash provided by operating activities was primarily attributable to lower net income, as well as decreases in noncash adjustments for the year ended December 31, 2023 compared to the prior period.
The change in net cash provided by operating activities was primarily attributable to higher net income as well as movements in noncash adjustments for the year ended December 31, 2024 compared to the prior period.
As of December 31, 2023, the Company has approximately of $110.4 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.
As of December 31, 2024, the Company has approximately of $438.2 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.
We evaluate this category, representing direct costs associated with transacting our business, in the broader context of our Adjusted Net Trading Income. Communication and data processing. Communication and data processing expense increased $11.3 million, or 5.1%, to $230.8 million for the year ended December 31, 2023, compared to $219.5 million for the year ended December 31, 2022.
We evaluate this category, representing direct costs associated with transacting our business, in the broader context of our Adjusted Net Trading Income. Communication and data processing. Communication and data processing expense increased $5.6 million, or 2.4%, to $236.4 million for the year ended December 31, 2024, compared to $230.8 million for the year ended December 31, 2023.
Contractual Obligations Our expected material cash requirements include the following contractual obligations: Debt As of December 31, 2023, we had $1,727.0 million of outstanding principal on our First Lien Term Loan Facility. Each year, we are required to repay $18.0 million of this balance, with the remaining principal due in 2029.
Contractual Obligations Our expected material cash requirements include the following contractual obligations: Debt As of December 31, 2024, we had $1,245.0 million of outstanding principal on our First Lien Term B-1 Loan Facility. Each year, we are required to repay $12.5 million of this balance, with the remaining principal due in 2031.
Revenues from commissions attributable to analytic products under bundled arrangements are recognized over the course of the year as the performance obligations for those analytics products are satisfied. Trading income, net. Trading income, net represents revenue earned from bid/ask spreads.
Revenues from connectivity fees are recognized and billed to clients on a monthly basis. Revenues from commissions attributable to analytic products under bundled arrangements are recognized over the course of the year as the performance obligations for those analytics products are satisfied. Trading income, net. Trading income, net represents revenue earned from bid/ask spreads.
As indicated above, rather than analyzing interest and dividends expense in isolation, we generally evaluate it in the broader context of our Adjusted Net Trading Income. 64 Operations and administrative. Operations and administrative expense increased $12.9 million, or 15.0%, to $99.0 million for the year ended December 31, 2023, compared to $86.1 million for the year ended December 31, 2022.
As indicated above, rather than analyzing interest and dividends expense in isolation, we generally evaluate it in the broader context of our Adjusted Net Trading Income. 64 Operations and administrative. Operations and administrative expense decreased $2.0 million, or 2.0%, to $97.0 million for the year ended December 31, 2024, compared to $99.0 million for the year ended December 31, 2023.
The increase was primarily driven by increase in Interest and dividends expense, offset in part, by lower Brokerage, exchange, clearance fees and payments for order flow, net, and lower Debt issue cost related to debt refinancing, prepayment and commitment fees. Brokerage, exchange, clearance fees and payments for order flow, net.
The increase was primarily driven by increases in Brokerage, exchange, clearance fees and payments for order flow, net, Interest and dividends expense, Employee compensation and payroll taxes, and Debt issue cost related to debt refinancing, prepayment and commitment fees. Brokerage, exchange, clearance fees and payments for order flow, net.
If, after assessing the totality of such events or circumstances, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further goodwill impairment testing is necessary.
If, after assessing the totality of such events or circumstances, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further goodwill impairment testing is necessary. 74 If further testing is necessary, the fair value of the reporting unit is compared to its carrying value; if the fair value of the reporting unit is less than its carrying value, a goodwill impairment loss is recorded, equal to the excess of the reporting unit’s carrying amount over its fair value (not to exceed the total goodwill allocated to that reporting unit).
Amortization of purchased intangibles and acquired capitalized software decreased $0.8 million, or 1.2%, to $64.0 million for the year ended December 31, 2023, compared to $64.8 million for the year ended December 31, 2022. This decrease was primarily attributable to certain intangible assets being fully amortized in 2022. Termination of office leases.
Amortization of purchased intangibles and acquired capitalized software. Amortization of purchased intangibles and acquired capitalized software decreased $13.5 million, or 21.1%, to $50.5 million for the year ended December 31, 2024, compared to $64.0 million for the year ended December 31, 2023. This decrease was primarily attributable to certain intangible assets being fully amortized in 2023 and during 2024.
As of December 31, 2023, we had borrowings under our prime brokerage credit facilities of approximately $175.3 million, no borrowings under our broker dealer facilities, and long-term debt outstanding in an aggregate principal amount of approximately $1,751.8 million.
As of December 31, 2024, we had borrowings under our prime brokerage credit facilities of approximately $123.0 million, borrowings under our broker dealer facilities of $10.0 million, and long-term debt outstanding in an aggregate principal amount of approximately $1,767.3 million.
We also provide OMS and related software products and connectivity services to customers and recognize license fee revenues and monthly connectivity fees. License fee revenues, generated for the use of our OMS and other software products, are fixed and recognized at the point in time at which the customer is able to use and benefit from the license.
License fee revenues, generated for the use of our OMS and other software products, are fixed and recognized at the point in time at which the customer is able to use and benefit from the license.
In addition, a commitment fee accrues at a rate of 0.50% per annum on the average daily unused amount of the revolving facility, with step-downs to 0.375% and 0.25% per annum based on VFH’s first lien leverage ratio, and is payable quarterly in arrears.
In addition, a commitment fee accrues at a rate of 0.50% per annum on the average daily unused amount of the revolving facility, with step-downs to 0.375% and 0.25% per annum based on VFH’s first lien leverage ratio, and is payable quarterly in arrears. In October 2019, the Company entered into a five-year $525.0 million floating-to-fixed interest rate swap agreement.
Debt issue cost related to debt refinancing, prepayment and commitment fees. Expense from debt issue cost related to debt refinancing, prepayment and commitment fees decreased $21.6 million, or 72.2%, to $8.3 million for the year ended December 31, 2023, compared to $29.9 million for the year ended December 31, 2022.
Debt issue cost related to debt refinancing, prepayment and commitment fees. Expense from debt issue cost related to debt refinancing, prepayment and commitment fees increased $21.2 million, or 255.4%, to $29.5 million for the year ended December 31, 2024, compared to $8.3 million for the year ended December 31, 2023.
Our provision for income taxes and effective tax rate was $61.2 million and 18.8% for the year ended December 31, 2023, compared to a provision for income taxes and effective tax rate of $88.5 million and 15.9% for the year ended December 31, 2022.
Our provision for income taxes and effective tax rate was $110.4 million and 17.1% for the year ended December 31, 2024, compared to a provision for income taxes and effective tax rate of $61.2 million and 18.8% for the year ended December 31, 2023.
Transaction advisory fees and expenses were $0.3 million for the year ended December 31, 2023, compared to $1.1 million for the year ended December 31, 2022. These expenses were primarily incurred in relation to our strategic investment portfolio. Financing interest expense on long term borrowings.
Transaction advisory fees and expenses. Transaction advisory fees and expenses were insignificant for the years ended December 31, 2024 and December 31, 2023. These expenses, when incurred, are primarily in relation to our strategic investment portfolio. Financing interest expense on long term borrowings.
The estimates that we make are based upon historical factors, current circumstances and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis.
The estimates that we make are based upon historical factors, current circumstances and the experience and judgment of management. We evaluate our assumptions and estimates on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Years Ended December 31, (in thousands) 2023 2022 2021 Reconciliation of Trading income, net to Adjusted Net Trading Income Trading income, net $ 1,301,344 $ 1,628,898 $ 2,105,194 Interest and dividends income 462,566 159,120 75,384 Commissions, net and technology services 455,598 529,845 614,489 Brokerage, exchange, clearance fees and payments for order flow, net (508,358) (619,168) (745,434) Interest and dividends expense (500,467) (231,060) (139,704) Adjusted Net Trading Income $ 1,210,683 $ 1,467,635 $ 1,909,929 Reconciliation of Net Income to EBITDA and Adjusted EBITDA Net income $ 263,921 $ 468,332 $ 827,234 Financing interest expense on long-term borrowings 99,294 92,035 79,969 Debt issue cost related to debt refinancing, prepayment, and commitment fees 8,317 29,910 6,590 Depreciation and amortization 63,306 66,377 67,816 Amortization of purchased intangibles and acquired capitalized software 63,960 64,837 69,668 Provision for income taxes 61,210 88,466 169,670 EBITDA $ 560,008 $ 809,957 $ 1,220,947 Severance 8,793 8,070 6,112 Transaction advisory fees and expenses 314 1,124 843 Termination of office leases 455 6,982 28,138 Other (65,536) (34,229) (10,558) Share based compensation 63,933 67,219 55,751 Adjusted EBITDA $ 567,967 $ 859,123 $ 1,301,233 Selected Operating Margins GAAP Net income Margin (1) 11.5 % 19.8 % 29.4 % Non-GAAP Net income Margin (2) 21.8 % 31.9 % 43.3 % EBITDA Margin (3) 46.3 % 55.2 % 63.9 % Adjusted EBITDA Margin (4) 46.9 % 58.5 % 68.1 % (1) Calculated by dividing Net Income by Total Revenue.
Years Ended December 31, (in thousands) 2024 2023 2022 Reconciliation of Trading income, net to Adjusted Net Trading Income Trading income, net $ 1,822,437 $ 1,301,344 $ 1,628,898 Interest and dividends income 462,070 462,566 159,120 Commissions, net and technology services 516,783 455,598 529,845 Brokerage, exchange, clearance fees and payments for order flow, net (674,426) (508,358) (619,168) Interest and dividends expense (529,177) (500,467) (231,060) Adjusted Net Trading Income $ 1,597,687 $ 1,210,683 $ 1,467,635 Reconciliation of Net Income to EBITDA and Adjusted EBITDA Net income $ 534,535 $ 263,921 $ 468,332 Financing interest expense on long-term borrowings 97,802 99,294 92,035 Debt issue cost related to debt refinancing, prepayment, and commitment fees 29,479 8,317 29,910 Depreciation and amortization 65,816 63,306 66,377 Amortization of purchased intangibles and acquired capitalized software 50,471 63,960 64,837 Provision for income taxes 110,435 61,210 88,466 EBITDA $ 888,538 $ 560,008 $ 809,957 Severance 7,930 8,793 8,070 Transaction advisory fees and expenses 313 314 1,124 Termination of office leases 16,224 455 6,982 Other (69,795) (65,536) (34,229) Share based compensation 75,475 63,933 67,219 Adjusted EBITDA $ 918,685 $ 567,967 $ 859,123 Selected Operating Margins GAAP Net income Margin (1) 18.6 % 11.5 % 19.8 % Non-GAAP Net income Margin (2) 33.5 % 21.8 % 31.9 % EBITDA Margin (3) 55.6 % 46.3 % 55.2 % Adjusted EBITDA Margin (4) 57.5 % 46.9 % 58.5 % (1) Calculated by dividing Net Income by Total Revenue.
The term loan borrowings and revolver borrowings under the Credit Agreement bear interest at a per annum rate equal to, at the Company’s election, either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) an adjusted term Secured Overnight Financing Rate (“SOFR”) rate with an interest period of one month plus 1.00% and (d)(1) in the case of term loan borrowings, 1.50% and (2) in the case of revolver borrowings, 1.00%, plus, (x) in the case of term loan borrowings, 2.00% and (y) in the case of revolver borrowings, 1.50% or (ii) the greater of (a) an adjusted term SOFR rate for the interest period in effect and (b) (1) in the case of term loan borrowings, 0.50% and (2) in the case of revolver borrowings, 0.00%, plus, (x) in the case of term loan borrowings, 3.00% and (y) in the case of revolver borrowings, 2.50%.
The New Term Loans will bear interest, at the Company’s election, at either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) term SOFR for a borrowing with an interest period of one month plus 1.00% and (d) 1.00%, plus, in each case, 1.75%, or (ii) the greater of (x) term SOFR for the interest period in effect and (y) 0%, plus, in each case, 2.75%.
Brokerage, exchange, clearance fees and payments for order flow, net, decreased $110.8 million, or 17.9%, to $508.4 million for the year ended December 31, 2023, compared to $619.2 million for the year ended December 31, 2022. These costs vary period to period based upon the level and composition of our trading activities.
Brokerage, exchange, clearance fees and payments for order flow, net, increased $166.0 million, or 32.7%, to $674.4 million for the year ended December 31, 2024, compared to $508.4 million for the year ended December 31, 2023. These costs vary period to period based upon the level and composition of our trading activities.
Years Ended December 31, Net cash provided by (used in): 2023 2022 2021 Operating activities $ 491,777 $ 706,803 $ 1,171,626 Investing activities (94,484) (29,530) (87,349) Financing activities (585,032) (735,745) (957,859) Effect of exchange rate changes on cash and cash equivalents 4,957 (24,239) (12,470) Net increase (decrease) in cash and cash equivalents $ (182,782) $ (82,711) $ 113,948 Operating Activities Net cash provided by operating activities was $491.8 million for the year ended December 31, 2023, compared to net cash provided by operating activities of $706.8 million for the year ended December 31, 2022.
Years Ended December 31, Net cash provided by (used in): 2024 2023 2022 Operating activities $ 598,991 $ 491,777 $ 706,803 Investing activities (61,847) (94,484) (29,530) Financing activities (469,565) (585,032) (735,745) Effect of exchange rate changes on cash and cash equivalents (9,048) 4,957 (24,239) Net increase (decrease) in cash and cash equivalents $ 58,531 $ (182,782) $ (82,711) Operating Activities Net cash provided by operating activities was $599.0 million for the year ended December 31, 2024, compared to net cash provided by operating activities of $491.8 million for the year ended December 31, 2023.
(4) Calculated by dividing Adjusted EBITDA by Adjusted Net Trading Income. 60 The following table reconciles Net Income to arrive at Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS for the years ended December 31, 2023, 2022, and 2021: Years Ended December 31, (in thousands, except share and per share data) 2023 2022 2021 Reconciliation of Net Income to Normalized Adjusted Net Income Net income $ 263,921 $ 468,332 $ 827,234 Provision for income taxes 61,210 88,466 169,670 Income before income taxes 325,131 556,798 996,904 Amortization of purchased intangibles and acquired capitalized software 63,960 64,837 69,668 Debt issue cost related to debt refinancing, prepayment, and commitment fees 8,317 29,910 6,590 Severance 8,793 8,070 6,112 Transaction advisory fees and expenses 314 1,124 843 Termination of office leases 455 6,982 28,138 Other (65,536) (34,229) (10,558) Share based compensation 63,933 67,219 55,751 Normalized Adjusted Net Income before income taxes 405,367 700,711 1,153,448 Normalized provision for income taxes (1) 97,286 168,171 276,827 Normalized Adjusted Net Income $ 308,081 $ 532,540 $ 876,621 Weighted Average Adjusted shares outstanding (2) 167,782,513 177,688,188 191,958,870 Basic earnings per share $ 1.42 $ 2.45 $ 3.95 Normalized Adjusted EPS $ 1.84 $ 3.00 $ 4.57 (1) Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 24% for all periods presented.
The following table reconciles Net Income to arrive at Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS for the years ended December 31, 2024, 2023, and 2022: Years Ended December 31, (in thousands, except share and per share data) 2024 2023 2022 Reconciliation of Net Income to Normalized Adjusted Net Income Net income $ 534,535 $ 263,921 $ 468,332 Provision for income taxes 110,435 61,210 88,466 Income before income taxes 644,970 325,131 556,798 Amortization of purchased intangibles and acquired capitalized software 50,471 63,960 64,837 Debt issue cost related to debt refinancing, prepayment, and commitment fees 29,479 8,317 29,910 Severance 7,930 8,793 8,070 Transaction advisory fees and expenses 313 314 1,124 Termination of office leases 16,224 455 6,982 Other (69,795) (65,536) (34,229) Share based compensation 75,475 63,933 67,219 Normalized Adjusted Net Income before income taxes 755,067 405,367 700,711 Normalized provision for income taxes (1) 181,217 97,286 168,171 Normalized Adjusted Net Income $ 573,850 $ 308,081 $ 532,540 Weighted Average Adjusted shares outstanding (2) 161,845,371 167,782,513 177,688,188 Basic earnings per share $ 2.98 $ 1.42 $ 2.45 Normalized Adjusted EPS $ 3.55 $ 1.84 $ 3.00 (1) Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 24% for all periods presented.
Operating Expenses Our operating expenses increased $160.2 million, or 8.9%, to $1,968.2 million for the year ended December 31, 2023, compared to $1,808.0 million for the year ended December 31, 2022.
Operating Expenses Our operating expenses increased $263.8 million, or 13.4%, to $2,232.0 million for the year ended December 31, 2024, compared to $1,968.2 million for the year ended December 31, 2023.
The SEC and FINRA impose rules that require notification when regulatory capital falls below certain pre-defined criteria. These rules also dictate the ratio of debt-to-equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances.
These rules also dictate the ratio of debt-to-equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances.
Workflow technology revenues consist of order and trade execution management and order routing services we provide through our front-end workflow solutions and network capabilities. 71 We provide trade order routing from our execution management system (“EMS”) to our execution services offerings, with each trade order routed through the EMS representing a separate performance obligation that is satisfied at a point in time.
We provide trade order routing from our execution management system (“EMS”) to our execution services offerings, with each trade order routed through the EMS representing a separate performance obligation, which is the trade date for that trade order routed, that is satisfied at a point in time.
Adjusted Net Trading Income Adjusted Net Trading Income, which is a non-GAAP measure, decreased $257.0 million, or 17.5%, to $1,210.7 million for the year ended December 31, 2023, compared to $1,467.6 million for the year ended December 31, 2022.
Adjusted Net Trading Income Adjusted Net Trading Income, which is a non-GAAP measure, increased $387.0 million, or 32.0%, to $1,597.7 million for the year ended December 31, 2024, compared to $1,210.7 million for the year ended December 31, 2023.
To the extent that we are unable to make payments under the tax receivable agreements for any reason (including because our Credit Agreement restricts the ability of our subsidiaries to make distributions to us) such payments will be deferred and will accrue interest until paid. 66 Regulatory Capital Requirements Our principal U.S. subsidiary, Virtu Americas LLC (“VAL”) is subject to separate regulation and capital requirements in the U.S. and other jurisdictions.
To the extent that we are unable to make payments under the tax receivable agreements for any reason (including because our Credit Agreement restricts the ability of our subsidiaries to make distributions to us) such payments will be deferred and will accrue interest until paid.
VAL is a registered U.S. broker-dealer, and its primary regulators include the SEC and the Financial Industry Regulatory Authority (“FINRA”). In June 2023 our U.S. subsidiary RFQ-Hub Americas LLC (“RAL”) became a registered U.S. broker-dealer and as such is subject to regulation and capital requirements from its primary regulators, the SEC and FINRA.
Regulatory Capital Requirements Our principal U.S. subsidiary, Virtu Americas LLC (“VAL”) is subject to separate regulation and capital requirements in the U.S. and other jurisdictions. VAL is a registered U.S. broker-dealer, and its primary regulators include the SEC and the Financial Industry Regulatory Authority (“FINRA”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe fair value of these financial instruments at December 31, 2023 and December 31, 2022 was $7.4 billion and $4.6 billion, respectively, in long positions and $6.1 billion and $4.2 billion, respectively, in short positions.
Biggest changeThe fair value of these financial instruments at December 31, 2024 and December 31, 2023 was $7.8 billion and $7.4 billion, respectively, in long positions and $6.4 billion and $6.1 billion, respectively, in short positions.
Our primary currency translation exposures historically relate to net investments in subsidiaries having functional currencies denominated in the Euro, Pound Sterling, and Canadian dollar. 76 Financial Instruments with Off Balance Sheet Risk We enter into various transactions involving derivatives and other off-balance sheet financial instruments. These financial instruments include futures, forward contracts, swaps, and exchange-traded options.
Our primary currency translation exposures historically relate to net investments in subsidiaries having functional currencies denominated in the Euro, Pound Sterling, and Canadian dollar. 77 Financial Instruments with Off Balance Sheet Risk We enter into various transactions involving derivatives and other off-balance sheet financial instruments. These financial instruments include futures, forward contracts, swaps, and exchange-traded options.
It is possible that the recovery amount could be less than the total cash and other equity deposited. 75 Interest Rate Risk, Derivative Instruments In the normal course of business, we utilize derivative financial instruments in connection with our proprietary trading activities.
It is possible that the recovery amount could be less than the total cash and other equity deposited. 76 Interest Rate Risk, Derivative Instruments In the normal course of business, we utilize derivative financial instruments in connection with our proprietary trading activities.
Our customer market making activities involve the taking of position risks. The risks at any point in time are limited by the notional size of positions as well as other factors. The overall portfolio risks are quantified using internal risk models and monitored by the Company's Chief Risk Officer, the independent risk group and senior management.
Our customer market making activities involve the taking of position risks. The risks at any point in time are limited by the notional size of positions as well as other factors. The overall portfolio risks are quantified using internal risk models and monitored by the Company’s senior trading personnel, the independent risk group and senior management.
The impact of any translation of our foreign denominated earnings to the U.S. dollar is mitigated, however, through the impact of daily hedging practices that are employed by the company. Approximately 16.2% and 19.1% of our total revenues for the years ended December 31, 2023 and 2022, respectively, were denominated in non-U.S. dollar currencies.
The impact of any translation of our foreign denominated earnings to the U.S. dollar is mitigated, however, through the impact of daily hedging practices that are employed by the company. Approximately 17.9% and 16.2% of our total revenues for the years ended December 31, 2024 and 2023, respectively, were denominated in non-U.S. dollar currencies.
We estimate that a hypothetical 10% adverse change in the value of the U.S. dollar relative to our foreign denominated earnings would have resulted in decreases in total revenues of $37.3 million and $45.1 million for the years ended December 31, 2023 and 2022, respectively.
We estimate that a hypothetical 10% adverse change in the value of the U.S. dollar relative to our foreign denominated earnings would have resulted in decreases in total revenues of $51.4 million and $37.3 million for the years ended December 31, 2024 and 2023, respectively.

Other VIRT 10-K year-over-year comparisons