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VF

Virtu Financial, Inc. (VIRT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a high-quality upside quarter: Total revenues were $999.6M and GAAP diluted EPS was $1.65, with Normalized Adjusted EPS of $1.53; Adjusted Net Trading Income (ANTI) was $567.7M and Adjusted EBITDA was $369.4M with a 65.1% margin .
  • Versus consensus: EPS beat S&P Global’s Primary EPS consensus of $1.372* with $1.53 Normalized Adjusted EPS and $1.65 GAAP diluted; revenue beat $512.8M* consensus with $999.6M reported; EBITDA exceeded $311.9M* consensus with $369.4M reported. Management attributed strength to elevated volatility and strong execution across Market Making and VES .
  • Year-over-year momentum was broad-based: revenues +44.2% YoY to $999.6M, trading income, net +53.1% YoY to $652.8M, Adjusted EBITDA +69.8% YoY to $369.4M; dividend maintained at $0.24 and buybacks of $66.3M (1.7M shares) .
  • Strategic catalyst: leadership transition announced—CTO Aaron Simons to become CEO; underscores technology-driven growth vectors (crypto, ETF block, options, overnight trading) likely to shape narrative and positioning .

What Went Well and What Went Wrong

  • What Went Well

    • Elevated volatility and client activity drove “outstanding results,” with ANTI at $568M ($9.2M/day) and Normalized Adjusted EPS of $1.53; Market Making delivered $451M and VES $116M ANTI, both recent highs .
    • Growth initiatives hit an all-time high ($1.3M/day, 15% of ANTI/day), led by ETF block, global digital assets, and options market making; management emphasized continued share gains and client list expansion, especially in ETFs and crypto .
    • Expense discipline: Adjusted EBITDA margin reached 65% (highest since Q1 2022), adjusted cash OpEx ~$198M; compensation ratio 19% cash/23% incl. stock; buybacks $66M in Q2, $135M YTD, $1.4B since inception .

  • What Went Wrong

    • Brokerage, exchange and clearance fees rose with activity (Q2: $202.1M) and interest/dividends expense was elevated ($165.2M), partially offsetting revenue leverage .
    • Execution Services grew YoY but sequential growth lagged broad volume trends; management cited underlying mix and unique events (e.g., Liberation Day/tariff news) and reiterated multi-asset product push to support momentum .
    • Continued reliance on macro volatility (tariffs, crypto product cycle) to amplify opportunity set; management acknowledged cyclicality and focused on diversifying with VES, ETF block, options, and credit/rates to smooth earnings through cycles .

Financial Results

Company-reported performance (USD):

MetricQ2 2024Q1 2025Q2 2025
Total revenues ($USD Millions)$692.985 $837.869 $999.573
Trading income, net ($USD Millions)$426.395 $589.983 $652.796
Adjusted Net Trading Income ($USD Millions)$385.082 $497.140 $567.723
Net income ($USD Millions)$128.117 $189.635 $292.976
Diluted EPS ($USD)$0.71 $1.08 $1.65
Normalized Adjusted EPS ($USD)$0.83 $1.30 $1.53
Adjusted EBITDA ($USD Millions)$217.522 $319.939 $369.449
Adjusted EBITDA Margin %56.5% 64.4% 65.1%

Estimates vs actual (Q2 2025):

MetricConsensus (S&P Global)Actual (Company-reported)
Primary EPS ($USD)1.372*GAAP diluted: 1.65
Normalized Adjusted EPS ($USD)n/a1.53
Revenue ($USD Millions)512.805*999.573
EBITDA ($USD Millions)311.916*Adjusted EBITDA: 369.449

Values with asterisks (*) retrieved from S&P Global.

Segment breakdown:

SegmentQ2 2024 Total Revenues ($MM)Q2 2025 Total Revenues ($MM)Q2 2024 Adjusted NTI ($MM)Q2 2025 Adjusted NTI ($MM)
Market Making$569.783 $786.593 $285.564 $451.469
Execution Services$127.059 $214.488 $99.518 $116.254
Corporate$(3.857) $(1.508) ——

KPIs and operating metrics:

KPIQ4 2024Q1 2025Q2 2025
GAAP Net income margin %21.1% 22.6% 29.3%
EBITDA margin %56.8% 56.9% 72.0%
Adjusted EBITDA margin %61.9% 64.4% 65.1%
Adjusted NTI per day ($MM/day)$7.3 $8.3 $9.2
Share buybacks ($MM; shares)$57.1; 1.7M $48.1; 1.3M $66.3; 1.7M
Dividend per share$0.24 $0.24 $0.24
Debt-to-LTM Adjusted EBITDA (x)——1.5x
Cash, cash equivalents & restricted cash ($MM)——$789.8
Long-term debt outstanding (principal, $MM)——$1,769.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ3 2025 payable Sep 15, 2025$0.24 $0.24 Maintained
Formal revenue/EPS guidanceFY/QuarterlyNone disclosedNone disclosed—
VES run-rate (management aspiration)Through-cycle~$1.7–$1.9M/day recent performance “Could grow to consistent $2M/day” Strategic target reiterated

Share repurchase program remaining capacity: $302.8M as of July 28, 2025 (not formal guidance but informs capital return capacity) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Digital assets/cryptoStrong Q4; building 24/7 capabilities and broader venue/connectivity; ETF/futures/perps footprint expanding Continued expansion; elevated volatility post-tariff; product roadmap includes streaming to institutions (VF Crypto) “Expanding capabilities” across tokens/venues; legislative tailwinds (stablecoin, tokenization); institutional demand building Accelerating
ETF block franchiseRecord activity in Q4; client onboarding and distribution broadened Strong activity, record RFQs; global build-out (Europe) All-time highs; elevated client demand around tariff news; share gains continue; EU build-out focus Strengthening
Execution Services (VES)Best since Q1 2022; multi-asset Triton/analytics adoption; profitability improved 7th straight quarter of increasing NTI; target path to $2M/day Recent highs (~$1.9M/day); management reiterates strategic path to ~$2M/day run-rate Improving consistency
Overnight equity tradingNot highlightedDiscussed early days of institutional use; Virtu first-mover experience; retail-led now Early but promising; 24/7 liquidity provision; potential institutional adoption over 6–36 months Emerging opportunity
Regulatory/macro (tariffs, Rule 611, crypto clarity)New SEC/FTC posture viewed positively; more IPOs, M&A clarity expected Post-April tariffs drove unprecedented volumes/volatility; infrastructure performed well Elevated volatility from tariffs/macro; constructive path on stablecoins/tokenization; potential changes to Order Protection Rule (Rule 611) Constructive tailwinds
Options & single-name optionsBuild-out (dozens of names), tech/core requirements rising Continued expansion across geographies Strong contribution alongside ETFs/crypto; enhancements extended capability Growing

Management Commentary

  • “We realized outstanding results across our businesses in the second quarter… $568 million in Adjusted net trading income… and $1.53 in Adjusted EPS” .
  • “Growth initiatives were particularly strong this quarter, reaching an all-time high of $1.3 million per day… led by ETF block, global digital assets, and options” .
  • “VES recorded $116 million in Adjusted net trading income… we believe that the VES business could grow to a consistent $2 million per day through the cycle” .
  • On stablecoins/tokenization: “Broader crypto adoption… creates new products that need liquidity and order routing, playing directly to our 24x7 market making strengths” .
  • Leadership transition: “Aaron Simons… will be stepping into the CEO role… This transition represents continuity of our core values and culture” .

Q&A Highlights

  • Market structure: Potential Rule 611 changes viewed as neutral-to-slight positive (reduced overhead from fewer low-share venues), best execution remains core .
  • Capital allocation/M&A: Past five years prioritized buybacks (~$1.4B at ~$26/share); open to future deals if returns exceed buybacks .
  • Crypto/stablecoins: VF Crypto institutional streaming offering; tailwinds from legislation; expansion across coins/venues with 24/7 coverage .
  • Tokenized equities: Early, likely overseas-focused; Virtu positioned to provide two-sided liquidity and creation/redemption mechanics .
  • Overnight equity trading: Retail-driven today; institutional adoption seen as inevitable as liquidity builds and best-execution frameworks mature .

Estimates Context

  • Q2 2025 beat: Primary EPS consensus 1.372* vs GAAP diluted EPS 1.65 and Normalized Adjusted EPS 1.53; Revenue consensus $512.8M* vs company’s $999.6M; EBITDA consensus $311.9M* vs Adjusted EBITDA $369.4M. Magnitude of beats across EPS/revenue/EBITDA should prompt upward revisions to forward estimates and models focused on ANTI and margin conversion .
  • Forward context: Management reiterated VES’s path to ~$2M/day and highlighted sustained tailwinds from digital assets and tokenization, which could influence estimate trajectories for ANTI and margins through-cycle .
    Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Upside quality: Broad-based revenue and margin strength with 65.1% Adjusted EBITDA margin and $9.2M/day ANTI, supported by disciplined OpEx and robust platform breadth .
  • Secular vectors: ETF block, crypto, options, and overnight trading are compounding; VES is approaching ~$2M/day through-cycle with multi-asset Triton/analytics as differentiators .
  • Capital returns: Dividend maintained ($0.24) and ongoing buybacks ($66.3M in Q2; $302.8M remaining capacity), with leverage at ~1.5x LTM Adjusted EBITDA, preserving flexibility .
  • Macro/regulatory: Volatility from tariffs aided Q2; constructive crypto and tokenization frameworks present multi-year tailwinds; potential changes to Rule 611 likely modestly positive on cost base .
  • Leadership continuity: CEO transition to CTO Aaron Simons reinforces tech-first execution; investors should monitor pace of product rollouts (VF Crypto, multi-asset Triton, ETF block EU) under new leadership .
  • Modeling updates: Raise ANTI/margin assumptions given Q2 beats; incorporate higher VES contribution and growth initiatives mix; ensure revenue definition alignment between S&P and company reported (Virtu’s reported “Total revenues” vs S&P consensus conventions) .