Virtu Financial (VIRT) 26 Jan 232022 Q4 Earnings call transcript

Ladies and gentlemen, welcome to the Virtu Financial 2022 Fourth Quarter Results Call. My name is Glenn, and I'll be the moderator for today's call. [Operator Instructions].

I will now hand you over to your host, Andrew Smith, Head of Investor Relationship. Andrew, please go ahead.

good and Glenn, you, morning, everyone. Thank for you joining us. Thank

Executive released and this Co-President are Our our call, fourth Lee, on and morning Deputy were results Chief Cifu, and Douglas On quarter Co-Chief available Operating Molluso, Ms. this our Chief have Financial Mr. Mr. Officer; Officer; Joseph we Cindy our morning's our website. Officer.

with remarks questions. your and take We then prepared will begin

include are, forward-looking regarding a subject statements, actual represent note may First, call from is conditions few and belief and Today's that differ financial Virtu's be company's what assumptions future risks, indicated may events may outside therefore, statements. reminders. to current our which these control. in and materially which uncertainties, results the Please forward-looking

available. forward-looking any statements presently as undertake forward-looking that note made on this to any and filings. are we our to important becomes Form information to update contained is available do We in call and information statements company, in based annual to to disclaimers the of factors and description not public other revise on you new the or XX-K It encourage press risk you release report, refer our review

measures to supplemental non-GAAP to we EBITDA and not trading as GAAP reported in refer superior to EBITDA accordance may as margin. financial certain in adjusted and call, today's adjusted net During should measures measures, considered be addition net adjusted with adjusted including measures, income, income, These GAAP. to non-GAAP as

how measures a information this portion on as non-GAAP uses to of these call find supplemental as explanation [ to additional as the deems why an manage measures. of direct as well how with materials this meaningful term equivalent We be GAAP management ] you'll well listeners as well information consult of information -- why in we to -- the we our earnings the where this Investor website, to as referred reconciliation

over turn With to the like Doug. call that, I'll

Thank XXXX full our performance, everyone. milestones initiatives my will and and strategic today. and you and In for I joining good toward on remarks and we've Thank year morning, business today, financial made key quarter you, Andrew, focus fourth progress us the goals. XXXX Virtu's

remarks, my our details performance. provide will on and additional Following Cindy Joe

our and summarized $X.XX are to on results, adjusted full trading X. share XXXX, million million in net quarter for full generated per fourth Total per $X.X day fourth the adjusted Turning the year day of which in including year, EPS We Slide income $X.X including quarter. quarter. $X was the per fourth in

which for per segment, net of from day our receive platforms trading million retail flow Market business customer where adjusted business. Making earned average proprietary Our an $X.X as our we Market noncustomer XXX-plus or well in income Making XXXX, as comprises wholesale

the retail opportunity making from retail quarter, In as the market decreased participation witnessed the our customers fourth the spread less and business significantly opportunity and we quality receive our desirable. was of ebbed customer overall flow

conjunction of cash in XX-plus Making consequence, past We term other over business As noted more viewed significant long-term the generates. has the years. our as we a of our be before, than variable be the with over Market business businesses should have can parts and which extremely it to profitable the durable value our flow on and bullish be remain proven customer long

in around particularly overall strong ongoing across as investments quarter our noncustomer a initiatives, growth options year Our market continue making perform well. classes experienced our provides as business, liquidity as which globally, strong well to asset a

deployed results one efforts that generates and our making business and businesses. improvements market in to market While were quarter's increased strategies internalization we often entire Market making improve customer by segment, noncustomer the benefits of this that our integration existing making both means across our Making businesses to driven market

we quarter, the although business, the own fourth or even in internal performed metrics making market customer than our projected. was in line For our better opportunity down

to historical ways We deteriorate. have -- and capture more these continue we But historic didn't every opportunity we to metrics, on of improve environment. every focus rate in have and capture

share to our market give To options gas, perspective, making of of market specifically year-over-year market spots noncustomer not business quarter performance, from continued historic often is noting globally. of up alone as wholesale significant well from that was the A fourth XX% remains our energy helpful worth gauge the a natural include and it's our XXXX. some the business third additional noncustomer 'XX thriving ranges. as couple while share And our in in within 'XX you bright and flat in to growth business

our to Turning Execution Services segment.

was trading the from million day the income third quarter, Our adjusted flat quarter. per fourth in net $X.X essentially

delivered year, XX% more results variable million market of recurring full making ante. VES In our that or inherently is day compared total VES the more nature For $X.X revenue include per to in general, the businesses.

we Given of Services believe our year. this the the Execution particularly and Europe, buy-side with declining line in segment wallet quarter the contraction full engagement, the performed in opportunity institutional execution and

We about are as well bullish progress ahead. and opportunities the VES'

business we platform. products assets new as global VES' clients well our highly to from as of to to the more KCG scalable technology continue opportunities the as future adding and built holds acquisitions cross-selling about revenue part across and We're growth subscription onboard multi-asset execution of have the platform. We our regions, excited ITG, and

at pleased businesses few have nonexistent ago. only performed in or a in the the are of are we beginning us improve market the are infancy days Overall, how to the fruit. early capture given our efforts some we we years new we customer seeing against how and our modest that are enhanced opportunity and market opportunities bear has to business, rates XXXX, deployed In our very making in XXXX

become full technology, we fourth are opportunity. new opportunities, more of the and expand XXXX Our products of efficient abilities to to ongoing performance the investments revenue result start each and to more the quarter, in XXXX deploying capture and in year incremental existing the strategies from people, integration, our making address innovation ongoing in is

focused the EBITDA and XX% a adjusted cost EBITDA remain and a realized always, for quarter. relentlessly on As full fourth the margin margin year XX% adjusted we in

our our venues initiatives. business geographies. with focus growth options, well year as very efforts we to record in XXXX In issues of liquid expanded build the We our a and decision as classes some early remain our footings. Reviewing asset in as our as pleased across most across we've in had options

for our market-wide consecutive options ante U.S., in the growing second over In year. the while X.X% options were was XXXX, volumes up business XXX% up from

global -- we multiyear size continue the given of early effort. of this innings opportunity, However, a cross-asset growing the ourselves in we consider

business in to income in desk. adjusted complements opportunity way global overall. lower build ETF, related making the activities, our up success growing income net our continue that same desk fixed fixed In our despite options equities ETF our income make to XXXX business to market we was growing and Block business. enhances progress Block ETF In our Block Closely our our investment our trading is

and to these to other addition us our In and and opportunities. resource realize actively investments develop growing to talent allocation, continue help hire we

you recent crypto growth the Crypto, we say Virtu. crypto that today, bankruptcy opportunity. I notwithstanding about and In of aftermath a around off of a the long-term as the the to would expect managed to talked continue kicked previously as continuing events, events industry from this view as by risk growth we and turmoil the FTX proud quarter, I'm initiative,

fiat when several X-figure FTX Although we coin not an across did news the and and material acted had approximate balances venues, realize losses. we deployed any broke, quickly

is the compared Finally, some include to with academics as did consistent proposals I anything know have remains In as industry and not numerous latest will you proposals. broader new and the position preceded, as and SEC's rhetoric, commentators. on questions our short, same the the the well which

wholesale investors level of Main service, from leverage to of receives Today's XX,XXX competitive many, this a offerings investor on many immediate, over Virtu of enjoy commission-free and hundreds retail an brokers intensely execution service executions myriad like landscape others. and competitive providers retail thanks who securities. of Street

is It ever investors capital reduce engagement clear in proposal directly that more our individual markets. their the and hurt would SEC's than

for to worse and the execution harm would fair on cost increase less transparent proposals quality, and top addition SEC's increased and liquidity less average investors institutional retail for a In of investor, costs landscape issuers. and the also

proposal with to everyday which of the degree that process, likely engagement internally comment investors. that withstand any motivated haphazard is to take in a could as proposal the is is ignores and we that rulemaking, resulted Further abbreviated extremely a It Sadly, importantly, period empirical the disregards in real before, unlikely cost problem. in politically solution analysis search has theoretical of a lack believe of the we upcoming approach ] inconsistent, years. have noted several [ an stakeholders, in experimental evidence any scrutiny an and

average orders like retail and for like accept that would price retail commitment today's several are while be business mentioned Lastly, compete they be rules necessarily we would by providers terrible Remember, the our these times, scale our all for as proposed for part providing have broker Virtu terrible to not improvement wholesalers of wholesalers service customers. Virtu. as immediately by filling I investor

payment be do the transaction retail options, other fact, for on send order dramatically we improvement internalize. would auction. not fees required Under exchange under fees, significant we able including in SEC to internalize mandate will proposal These Today, reduced price we incur an to and the be and would costs exchange, flow, SEC orders not proposal. we be to flow to, do we and

to orders of thousands in could retail at and part at companies clients, of the daily to wholesale we to route which mid-cap of as substantial would our exchanges savings service tens small internalize this also simply expense come offer the of we savings We listed investors. overall a but ourselves now

wholesalers So plan be suggests and and the this that worst, benefit a trade-off aspects position. neutral of will at to analysis we exchanges under stand of preliminary in key the the may

follow. we sure issues in further to Q&A will the these discuss I'm

some For now, provide details Joseph? the Joe will additional quarter. about

as outcomes of finally, and ETF as touched up particular, I'll in options provide we of review the information for Block and overall. Thank of growth Virtu you. initiatives. well expenses grid discuss review we stack Doug growth on versus as some expected and our the where drivers capital

the constituted dramatically on day in its average On $XXX,XXX in XX% well, XX% overall $XXX,XXX as growth, our growth of ante, and contribution. doubling These Ante options initiatives and XXXX. day per from were quarter grew respectively. fourth numbers global per

activity. did, significantly While our we in markets our many fourth like we crypto others, reduce presence maintained quarter, in the the

bullish many as remain the future on facing the custody as of area our and joint we -- validation venture. remain We crypto the excited best-in-class about a and EDX, settlement remain model. crypto growth space EDX's in We and of challenges clearing view

the in especially given year-over-year the marketplace and the talent, becoming On year, at most with year in decades for $XXX cash that significant environment operating We a million. tense. consider the we expenses ended this were expenses, accomplishment flat inflationary early

in right same. year expenses would range XXXX, Our for is more to such be this. on of as where it the The in we outlook is constant. the cash relatively of a compensation ratio at XX.X% expect expenses Other remain

You expect a ranges ratios other fluctuate the categories. within see the major you continuation for compensation on our and Slide trend of expense the materials to X supplemental our can in

marked note by to and a fourth in quarter. due You swing operations foreign valuation increase quarter. our this to expense foreign this is a subsidiaries will related in expense $X This million exchange administrative the increase that

overall. because For pound small. a euro million. strength FX an to dollar year, We amounts translation the the and of benefit be to out call the was $X given however, But sterling it generally the they full significant this year, don't Virtu benefit the overall was versus these of tend

Additionally, we was in translating approximately estimate reduced, into amount million. $XX pounds that dollars earned revenue of euro the and and revenue was we

largely So amounts offset these significantly did earnings. not impact and so

relatively to would X% of remain to we In XXXX, terms our to for X%. up expect flat operating guidance cash expense expenses

public On our the over capital our capital maintained results long as we Slide our which volatile steadily and We debt, efficiently you $X.XX the for X, now see dividend, relatively capital steady see X have remained year. constant paid despite we has years. And remained our you annual as can term. payout and can on the manage trading expenses, throughout the

quarter. fourth addition, our $XX stock in million In own the we repurchased in

in full the stock, $XXX XX.X representing repurchased we year, million For million shares.

share repurchase XXX.X have ranges program we share remain well almost we million our dividend program. provided in in and as period-end our past. We our payout of now both net the shares, X share as public the XX% since to have is company years beginning committed with consistent the our count Our buyback repurchased of

in were January have We really pleased to debt very took long-term rates our refinanced interest before off.

have year-end, termed XXXX, $X.X rate of maturities $XXX billion subject but As of to is out cap. and we to all, a million,

interest pretax debt favorable outcome to So X.XX% of at blended rate our represents total a us. a

turn I'll to that, it the with details financial opening before over to questions. And call Cindy review to your the

morning, performance. supplemental of summary Good Slide our On quarterly Joe. our everyone. of we materials, X a you, provided Thank

For or our direct which adjusted represents per our a totaled of the expenses, income, $X.X gains which fourth net trading day, million year-over-year. XX% net decrease quarter XXXX, trading trading is $XXX million

Market net day. income million trading per income million million or $X.X adjusted per adjusted million or Making net trading was Execution $XXX day. $X.X was Services $XX

quarter our EPS $X. full fourth $X.XX adjusted was and normalized EPS was Our normalized XXXX XXXX adjusted year

$XXX EBITDA million Adjusted the the which XX% XXXX respectively. million was and quarter for was year, XX% compared a year, fourth for of full to decrease $XXX prior and

year XX% from and which was XX% in full adjusted EBITDA down Our margin XXXX. is

expense summary X, of operating we our a Slide provided On results.

was year which XXXX of $X which adjusted lower quarter expenses For operating a expenses, compared decrease $XXX full XXXX. year-over-year. to X% million were the fourth of $XXX million, The operating was recorded we XXXX, million

We helped environment. to control expenses during cost expense operating continue efficient structure an which us maintain inflationary the and disciplined to our has management,

the expense $XX million the to million Financing prior quarter. fourth quarter interest in $XX was compared for XXXX year fourth

the we entered to were of the rate blended for around prior With swap long-term able a in interest contracts the years, debt in keep benefit aggregate. rate interest X.XX% we

demonstrate We and our year million adequate. of continued million XXXX. repurchase $XX commitment shares, total X.X $XXX to shareholders. dividend share per remains our full the and of or return We our $XXX of quarter The share shares million or dividend. we remain a inception repurchase million XXXX QX policy program is our shares capitalization capital combination XX.X to million to repurchased committed have $X.XX today. Our Since program, back bought million in in XX.X which our

Q&A. over Now to call I operator would the like for to the turn

We question [Operator from first from Instructions] our Piper Rich Repetto have Sandler.

in of changed mentioned the flow. with you opportunity or about lot And know retail you the If I have flow? that And line Doug, a and a bit little nature understand is you the performed one that I retail there's any the guess question guess, first the do I on things to of opportunity. better. analytics, you two could just

about there Your help much peers also that would reported channel be? the checks profitability, But flow same. improve change the one two that things -- what of was or the in order might if they would that

much. Yes. It's great a it question, appreciate Rich, I very and

aggregate obviously, terms in then as been these upfront and very that of XXX are number we a metrics shares of we've and obviously, our receive think lot I metric. public about, of the

in we basically of sum over and -- what we So that do within of linearly set. here is spread the that quarters, bid started think that, couple historically, orders if the opportunity last correlated And opportunity the down at measure subsegment that it business, offer And of spreads them. receive as will, receive that of that time we the opportunity the the all to or we break our volatility. of you with very the

retail received. flow was the customer volatility, spread that So in the sum higher the higher you

down it in I the X.X be quarter. that if quarters, speculating egregious, was the quarter, that just broken last reasons correlation has you that, and fourth over will, would particularly For

-- than the what so within volatility than the would market was opportunity otherwise opportunity the And have was vastly the projected. different making vastly volatility customer otherwise different

and invest check So have out. flow and competitive we of dollars wholesalers. our metrics flow. improve of And the to monetize those obviously We our being We ability X to more increase to against other share all that. tens in of and continue tens how invested to technology market measure or millions capture and X measure to we're obviously and

in of the that receiving. beholden end day, orders to business somewhat we're particularly But we the that at the are

obviously, sum had widened said quarters and has -- there's we've quarter. spread significantly, been have where And so outsized as we

So our that is obviously, much a business, which will of definition Making more be subsegment, volatile. Market segment, by

surprised upside. decreased This disappointing, opportunity. is, that. we therefore, where will, if guys unfortunately, quarters were a to quarter see there we've when you where the other we we're get But And you

what we haul. that incredibly we long a the the service is, think for So what run love provide ran we XX to we brokers been say said business. last years, over continue It's it's We great retail when it have Knight XXX and it. We profitable to business. always and will to terrific continue

the to a in bit the that quarter-by-quarter. context challenging love It's of company that we business. So a report a public be business can just needs

next have question from We our from Chris Allen Citi.

Maybe on mix a Just don't on of diminishing. you reasons opportunity the reasons, set you speculate sophistication it's give but Or follow-up kind retail increasing is Rich's it some I the flow question. brokers? speculation on of know us retail between investors? the maybe could for

efforts customer rate, Maybe making what capture mentioned And fruit. could color with January some some improve in in you are. those also, efforts market you give just opportunity us the bearing to it's on enhanced

sure. retail years that orders, business, answer is mean, not smaller idea guys Yes, Look, the I I have that business, correlated going and to was XX-odd that most, than on smarter typically ago market. with point in Chris, think, the easiest whole are retail created me you're wider the the the behind which

So as internalize investor of will institutional -- get markets excuse much a improve and them desires absorb enhanced compared et service, retail market and maker, price kind me, those you have those that. experience, you an orders, cetera, investor that give better as them, to larger a can

the larger flow et mix it and sliding that mix more quarter, of that maybe more of be correlated you with the a it into of more "retail a marketplace, quarter, to more -- investors you tended the for maker. market In might the In the the be as cetera." brokers, say, makes were challenge and institutional business have

need that and I've all a go small, week, regardless regard and month, to times, the have being is Under up whatever the in we many current -- flow in to selection some construction, ecosystem of elixir the large, magic don't is. what way, continues doing maker. choice. to for market yang of that results during don't have the a the of negative the that P&L a a comes yin as is and day, We a day, it and times, take We our with negative if said medium many stock that stock stock the a terms

we've the the Knight spread the so softer, quarters. lot XXXX, you, the acquired outsized flow seen best significantly give you. where we've can a that's the quarters and had and can like What where probably sum quarters since And we've is tell I when true, first this we seen business, I is customer opposite larger, is answer

So again, I repeat continue the incredibly bullish an business long to time, be about and mantra, which this at we very look it. is we period over of

In lower investments for about replatforming to we've of of historically. we've Virtu which migrating what a legacy enhancements is terms that enhanced done we've well, talked more But as It's we've the performant. and latent flow, internalization flow infrastructure, made our of to monetization significantly lot the all flow. the of and increase the Obviously, to this right? opportunities

both internalizing get to very, own who our making our very noncustomer making but to keen available flow, are against access market So it also to investors institutional it it.

and So considerable all frankly, quarters. quarter things, in But we progress the significant world prior borne has to this of beholden fruit those again, are made presented. somewhat opportunities and we've outside the and it

Got it.

spread Did the one on million quarter? by just did or $XX a quarter, that million Just the year the occur of in revenues. FX, over revenues $XX the the quick million $X offset this

I But that it FX and Chris, the $XX it's the working, back the and the then way that admin year or the if and otherwise than went year at the this so then quarter, all for million sterling started not all million pound the higher -- at below, $X.XX up. way like have been reval. $X because option it at that's quarter the ended think it started pound came third $X.XX, way to No, in was down second would and $X.XX this -- is the the

earnings. year full by the down offset of which $XX full million of year, reval a was it's the impact obviously, $X FX for quarter, And the coming each for this into the fourth lot brought it was it it okay? full terms quarter. because for a the wash quarter, million to higher So a million, million a year, benefit to million for $XX revenue, benefit a in So $XX be $XX a to than was negative benefit,

and So revenue. for downs year, the wash quarterly the ups basically offsetting and full it's a

year full a a wash. on it's So basis,

comes question next UBS. from Alex from Our Kramm

you think seeing made a but year? the I this very Yes, prepared heard so that, I maybe flesh institutional end and you're it of remarks can also out far set. bit. really you your I think at like on comment what briefly But never to started look opportunity obviously, sounds slow. that volumes, at the It if your the public speaks a side things little have you surprisingly about

little talk can how to bit obviously, that quarter. So about maybe what a the fourth you're and compares, you seeing

yes, yes. Yes,

update. to kernel You little never cease when I give miss the little a

-- noticing obviously for Alex, thank obviously an in So the making, quarter have color. kudos quarter. today's set we that. customer you, fourth it's some And it's since we business. Yes, for give But January early wanted the opportunity obviously, in quarter the challenged whatever, to making market our a I customer had in within to look, seen so improvement you. And market

what saw is quarter, which we but it is the better than It's meaningfully terrific. fourth been in certainly not dramatic,

As can and what of marketplace overall kind with look you volumes I'm you say, started that then the the in year. rest very of at of terms are. way the the happy we've institutional business

right? that in But and the in and or the wanted to some early see had everybody, customer equities making our in wins improvement in so we based in some and business. improvements seeing I nice I energies the quarter. guess, market early It's XX commodities indication, as caution we've Asian where well, obviously, And will some and really business on say, obviously days. that's I quarter, give trading we're

opportunities again, we've So internalization and improvements some internalizing our flows. -- our regard execution in to seen on with

far. going improvement that see the to little early -- very excited continue XXXX. -- to are And about we're see so be some very indications very, and So a bullish

Excellent. just one if quick okay. very for that's one Joe, Maybe

EBITDA But you're in I quarter, to think fourth but we I the debt-to-EBITDA people I to remind Can mid if is, debt, the environment, the this the here, think, you On terms again, trailing covenants, us just in we Xs. ask of if obviously, annualize somewhere are -- X.Xx. high there's I I if be of any improve issues should aware of? hopefully, in any going sort know again things stay think

we to No, no max. -- light have covenant we are the

are... We

There debt. is X maintenance our covenants in long-term

And cash all -- we sweep well, maturities as compounding value right? quarter, next are to buying rid the the when So got an The it plus we're That of going dedicate we to time to have is an not issue. XXXX. out quarter an termed back outsized stock. outsized of have by we Xx our obviously

Our Fannon next Jefferies. comes from question from Dan

on say, follow core legacy comments market wanted I to the I the should up making about Doug, business. or

If could of numbers year-over-year. But new of repeat said, the you also what initiatives. includes these some I that you think, flat

how -- what over business has about longer period? think maybe trended a to wanted that I So

for prospectively, -- business, what And that some it here. that that I context the maybe and customer how guess, thinking maybe does gave market around the year look prospects how business talk start of the is also about making but from just of the about you --

a Yes. we a fact we get the And that lot, report It's only a obviously, great segment. that question. given single question

hint I of of, how if this just you quarter, that important it of So in Dan, a a business was to did. more the will, thought context little give

that -- 'XX 'XX in that said fourth that to been scaled and of up class. is truly was from flat and XX% third lot it's and because the I to improve. beauty of a what it's in is to which it Look, during script was quarter, doing work the multi-asset the we've year yes, I thought right, the global, significant, business So

So is, a it's a like always the a little bit of use balloon water bit a waterbed. it's -- or little I analogy

-- guide, on all don't you're and kind the don't I'm moves of if the it side great, and waterbeds, a a and You one side feels there's because water right? 'XXs, and you I sit of sit of of if know You remember push then right? and the 'XXs you back especially enough. it. on to [indiscernible], remember a I goes them heavier I if it sudden, old from it other -- if You get the kind a that, and forth, there's know

comes months, doing will and So there's ebbs is always business. couple where last no which quite our volatility weeks, And going within And then flows there's more and gas of quarters go in well the then gas declines years, energy natural and consistent and business is it period has and a significantly. where that to price through pretty did the energy have set opportunity frankly natural the back, be it over it we done recently. like

expertise some of look options you and commodities equities we and get we And business, Knight on work. obviously, quant that intelligence asset overall, the And so we into at individual business now integrated and and with the it of geographies. internalize the the classes and how we've fully

challenges XXXX, Yes. Have that XXXX. Knight we've last Have options Over in we improvement Of classes? we and introduced in it, we significant the from business? overall course. overall the been various grow in there sub-asset when From acquired through -- obviously, business. track XXXX seen help

thing of important is rates The have capture those overall that most in segments improved.

Our that longer continue in profitable the firms to be there. businesses continue "legacy no excited are maintained businesses. market be that and -- relevant line used we conga is we've our very to to very, to be easy It's those not these and in of There businesses". a share, about highly

if a continue narrow. So disciplined even into the of right? widen sense to bid then But can as bid and hiring spreads offer, as it's you and goes people you narrow about and in a maintaining of really and and because Vinnie technology, of be scaled base Viola efficient your improving wonderful and offer manage profitable firm makes widen said, lot execution an successful way, that expense everything

And we've still always in we well. do there's highly scaled well well feast, said do fairly that incredibly of as when times we've but built famines, this firm to

And I business. very little wanted more So quarter. just of color in happy that I'm with context this of to very, give a the the progress

knowing Understood. revenue similarly you're that been think what thinking just the the That's that comments flat. expense but your backdrop? and relationship to for that more about it Is think costs guess, -- being I we guess more about And what around prospects of thinking helpful. comp XXXX? Is with can expenses the the environment in the recent revenue I should fluctuate, fixed how it's we -- how Do or kind the say about that about your that does periods? about

good a It guidance. It expect expenses simplify a are kind I similar exceeded had question. that. guidance don't where in implies that's that I met to flat. would not that. because I -- multiple that year, to of years or just provide be doesn't we now imply just things we've does expense we No, imply if It

kind number. So I of like provide that feel we can

little and cash those up where expect would is is better, years. ratios cash XX.X%. environment now X comp the that there's then comp And levels. And markedly this comp for compensation is a compensation the at in the year XXXX I figure the ranges, cash can a the the we're ratio, XXXX bit. In ratios year, If history fluctuates see one enough you

in flexibility compensation So our discretionary. portion A the compensation of is great ratio. there's

guidance based going to a environment, not just that's is that So assume current but does environment the the continue. on it

Worthington from have JPMorgan. next our question We from Ken

flesh bit to a options crypto I wanted and out more.

then sort of what be going X XXX today? what have classes, point asset are you're you at road position, build-out point the you where built to if are be not for kind equities build-out? retail brokers you'll your in think you of do same win contracts map already, out? And in with fully a at you of the to in And terms those In

Yes, it's great a question.

in this So to really the option It me. ago, and market, began we reconstitute ago. but an basically we X XX excuse and way described continues. building based say before, a But an as I had building, options, market opposed journey to market, quote we the order-based the of I'll -- months approach years lot took as

options XX I there sure. embarrassed know, adding say, you exchanges, a plethora one. options And the there's day not And venues to I'm I'm be is United but as of there in to seems States. think every

of structure So of just understanding those. those the and having each market each to of connectivity

price you bit -- challenge. a know, a rata, been as some are time, is Some are of pro has

these to innings the everybody we're early that use calls, of to analogy use So in process. very seems the baseball on

infrastructure the have We built.

have and legacy some hired moved people. Virtu We

a And so there's in have we around team, very, both I very talented think of world. the a left. United But runway lot States the and

X a X and just I looking to are Ken, where think opportunity, did throw out somewhere I to by of increase even what we at we think Xx XXXX. could kind the by in that to business, number, we

but flows. we've the what although opportunity, single-name the in I think significant [ participate in is, options and auctions" and done take here will, options "retail index that really you just all it's beauty, the a I'll X just can the if just, say, without we ] market you dabbling having 'XX X 'XX retail in are of family, to is

doing now that. are we So

not which maker I'm auctions, question And fantastic sure market we of I'm options. for leads in more to the I'm wholesale as XXXX to roll a functionality because the had sitting rush very of options. being into in your is, in today. do have when the year going here We last We the a horizon. happy. it's out it on a to answer we that know part not

the if Asia. they're extraordinarily in volumes lot options look family in There's now market We're you XX example, large. for of Nikkei opportunities in India. NIFTY at the a the and And India, making

lot of for out playbook XXXX, global opportunity [indiscernible] this the we 'XX, from that build we call how a as there. use Vinnie it bunch built as XXXX, a Virtu business. great people 'XX, we'll So a of legacy and there's And for

we'll to So with to relative very bullish opportunities. prioritize opportunity very, the the and be I continue XXX business other

We lacked opportunity work have not thus far. for and

to ability marketplace. And so optimistic participant our be in very be meaningful a to that I about continue

you roll line? And of this business XXXX look you're is to Or options year more where possibility of it XXXX, that want like, to that the there out? time getting terms that a be in can does a is much XXXX likely kind is of a likelihood it ready more be or to business that it the wholesaling

looking I increase in the look single is. not as wasn't we're to options, of it And I'm I really sure have business to go say today plenty opportunity where point there's family, denigrate not or dramatic the at where other that's really opportunity the where said, -- like Yes. you I here takes index but never. sitting the out opportunity there. name, And going as I never you. the opportunity data that in mean priorities. will if our at XXXX, you would the in

would say plans next So within No. to it's it our the something horizon. the X couple where -- or other, we're way quarters? I But head. on one never which definitively that's Is the going in

bit further And ahead simple. then the business? It crypto feels that's the case. crypto maybe or a like options more not lastly, Maybe further is behind is

fraud it's there's right? -- no, I there's complications in a there's a to see criminality, actually. and a a that lot options. you Because a of observation, don't coins I'm like obviously, a going and not highly there's there's lot lot obviously, it's lot a of great of simple, venues. crypto, And of No, right? it's -- regulated there So mean say environment

other But in to world the and don't obviously have have and the thanks you like forwards at United spot have ETFs more of chair you feels futures, you FX yes, do. more but it's you a have or FX, you the lot SEC, States, least jurisdictions It then ETFs, where order-based. in the

obviously, all, shutdown making venues. most, we're set FTX of spot the there. if obvious, have that the up, that not at venue to we infrastructure that state not back indeed, from of the means the criminality pulled and we So markets And

be you a great that execution and, and solution, like custodial unregulated then clearing. centralized equities best with disclosed plug-in -- the a particularly a in for feels and great will with Jamil think continue that, execution futures EDX the to ultimately is wild I'll and And will, be having And we maker market acts so at if because that marketplace, to the guys west ETFs. put quality and we in

That's really going to be the key to exploding or having investors have real assets. confidence in digital

EDX, think we're platform. right and have and there in proud to really honored solution, team I that Jamil an So and be investor the the very

next We Stanley. from from Cyprys question have our Morgan Michael

topic. If across remain look for options. very options robust volumes the continue the we with to sticking industry just Maybe

the do is? views from compared option how that for side could particularly to compress meaningfully be so X from durable How do think Just here across higher that. do now, has meaningfully industry? if prospects Why well, think? your X, lower you or we look And that on options the Do you volumes years out up you equities? any think curious see on you to held cash

actually a It's question. very great Yes. perceptive. It's

or daily retail weekly always options. case, think, think somewhat a trading, There's been retail the at good of excuse to in opposed you're when innovation, contracts, education me. get friends as will, of That's -- ], if has I some by Cboe [ there a a a to trader brokers. there's investor lot a seen from the opportunity, more There's but right, and really expirations, now way, day know you shift you've if my if innovation equities can in actually, been I you has more volume. options. And day driven leverage of you that will, been the of you or by cash CE

in macroeconomic goes, where we continues be you'll So don't question again, there. and a It's continued have right? prognosticate. job record that the I a there of more as think et see to are volumes hard people If and to then growth optimistic, to rebounds, inflation economy opportunity increase and and it's cetera,

and was opportunity was interest question that where index thing response in Ken's family. the the explosion it said XXXX. to to And of interesting an you that's that really last me, I in The was saw in

if in had that we that go opposed So Michael, lucky, our you as name. place to got we of kind targeted will, as first to single

up were that actually down XXXX. were names single like pretty wild, The dramatically. think I volumes in percent XX-ish so was And there

investors think making to decisions investment I and are now. So look broader family want on at get those, shorter-term exposure that to that options indices of

said, And daily because really and it's "Oh, to that of even trading that's go." complicated dynamic. right in monthly our a say, a I offers kind wheelhouse place good exposure As weekly or that's

curve sense. that you have a Obviously, makes have to volatility

have have You low to latency.

you that, You have all to York and and hedge have you priced setups understand it ability the a have delta of -- New makes and acute provide the that well and to and be in have whatnot. sense is and Chicago to to

as and order-based to and a fruit opposed the ability at really, kind well that an participant that in to of investments plays the Virtu XXXX. our So infrastructure multi-object our market-making bore in very we environment, environment be firm really built into options a in have quote

to about if term. perceptive voice, in very enthusiasm So you're you continue longer are because business sensing enthused I my very that be

Great. that? what face expanding How just drilling single-name today you little Well, on in year side? Maybe follow-up a that ago? the the here, tickers what does topic be of about tickers? the bit that do take? compare some a you to able guys side. might are hurdles overcoming given in options. a same markets question that many single-name enthusiasm, How do And maybe to in more on more you are actions And on How think you making the to

today. Yes, so dozens is answer mean it's great I question. a the

we in an the side to it. a business as be clearly there's to opposed Look, blunt, do so capability side. that risk -- lot it's have of And the to index more

is volatility. options index obviously, mean, I

lines your if up challenging going can money. corporate screw you options, could operational nature an wholesaling goes issue, be to can be more -- comments a have it You market so and the service on curve, But the to particularly object much business. actions single in things make those my to maker much of you it back lose earlier you're along

choose. to wholesaler, and As you don't an options pick get

that trade to the have have single but -- choose. lot, and you the market names hats infrastructure a Citadel, multitude which maker pick a off still of risk a incumbents, lot X-sided different of a handful built don't with to Susquehanna, won't in ability X,XXX others be object the a So lot a and of strikes, to there's

still risk business. lot there's that so a in And of

way be to therefore, we're built -- an valuable focus. and here to XX% with obvious shift the going not focused going everything on always and I that's done. can we're opportunity the don't we've most but we've going today hard it's first, this okay, complete our but Virtu. at once that, an we're mean sit and to answer, well, answer, give most of to to we So do what addressable kind me say, and the opportunity is for We're

a there But the see I overseas before, the -- X, name. a Asian in that and index opportunities in is so are they single significant are multi that mentioned family the opportunity in there's markets so the meaningful there Xx as -- we X,

broker partners profitable now, I a obviously, was focused blocking we will us on XXXX. highly while it we're like into, would and And get for business tackling. right that's and our that So think the us in in thankfully, that be business, to

We from have Rich follow-up Repetto Piper question Sandler. from a

I with had ask a all on this question. option, just to Doug, talk and get back

directed market So one with proposal, was look And out and the sort structure. of this SEC market options a Susquehannas popped about it's also flow. the makers the whole the and that these are, that Citadels of besides I on options they different, you mentioned that big like have the in come then are flow, also took at getting order hard thing exchanges things

in get if primary you it? options important a to maker, whatever exchange that a those guess route? be that is, market is think you you maker, same So could the do has the and Certainly calls if each question model that market progress Susquehanna went how I easy designated to or it designations and decide sort hard to Citadel route, go could you be of if that

world And being, Look, maker Yes. We designated is obviously, that a where other auctions. not know you responders a of certainly, to -- maker. to lot a part you invited market are become we with Wholesalers at we've will the do if, And them important. when the always question. of options of ], acquire market a in. be marketplace, [ great business we lot need we main will, and in and designated bins if become Cboe. it's studied Others it, a exchanges the have friends say, if as and we will

for a years, every that with really that. We've business able for now be do XX been partners to obligations. global We've pretty have up will good lived our name. and always confidence got I exchanges to we good of brand degree we've

to able development right? So we we part I business, a don't business this the have have will already that, done that do concern of and be

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of to that order for one equities a that market firm We're the cash and now going there We're mean cash XX%, Citadel. going between that I there is think those I a and wholesaling. add of Street chair a of the to the is falsehoods competition be Jane And is that has has family. complete to -- equities in complement to inaccurate. the years started the propagated firms. called as the ecosystem we It's this that index wholesale of Virtu is great market value just hopefully today It's the marketplace. as room are duopoly somehow in XX% ago factually the X in SEC

part that of just, not is and Gensler exaggerated So lies, say again, be exaggerated, marketplace. nice I'll but the

And a are markets that to brokers. are extremely these service we so the And important providing thing retail competitive. is

I've Rich, the with You rang, New Exchange, seen experience, news based on somebody end reports week, the York our there wasn't based and Stock on on saw When other really the right? this the phone made line what, sense. know a price the for were to and this executed up going right saying, clients your make orders we're and you, picking to we're you at that priced of going sure make that it

industry. These That's He the meaningful the business. it a rents as rents. service. our We're a service, providing very lie about aren't describes big in

and with service portion that that's the want understand and And understand In that. the right? what to a will fact, And that being offer prove. efforts own he either data through of the spread, of compensated doesn't for bid our the bundle services doesn't or narrative

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it the water vivid analogy mind. I it, Got and get image in it earlier. thank you left a bedding Doug. my for And

I later. a can talk shouldn't comment as probably we call, is Rich, about but this public Yes. that

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