Virtu Financial, Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Highlights (Q2 2020 vs. Q1 & Q2 2019)

  • Adjusted Net Trading Income (ANT): $669 million in Q2 2020, averaging $10.6 million per day. Although down 17% from Q1 2020 (record quarter), still significantly higher (+~80%) compared to Q2 2019 and well above 2018/2019 averages.
  • Adjusted EBITDA: $486 million; EBITDA margin at 72.6% (an all-time high).
  • Adjusted EPS: $1.73 per share.
  • Debt Reduction: $188 million repaid in Q1. Additional $100 million repayment expected in Q3, including $27 million from the MatchNow sale.
  • Continued Strong Performance into Q3: July ANT averaged $6.7 to $7 million per day — about 75% higher than 2019 daily average and nearly 70% more than 2018.

Market Trends & Volume Insights

  • Retail Trading Surge: U.S. retail trading volumes accounted for up to 20% of total market volumes in Q2, double historical norms. Virtu captured ~30% of that flow.
  • U.S. Equity Average Daily Volumes: Up 80% YoY (vs. Q2 2019) and 13% QoQ (vs. Q1 2020).
  • S&P Volatility: Average realized S&P 500 volatility in Q2 was 32 — down 44% QoQ but still 3x Q2 2019 levels and 130% above full-year 2018/2019 averages.

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Operator: Good morning, and welcome to the Virtu Financial 2020 Second Quarter Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Ms. Debbie Belevan. Please go ahead, madam. Deborah Belevan: Thank you, operator, and good morning, everyone. Thanks for joining us. Our second quarter results were released this morning and are available on our website. Today's call may include forward-looking statements, which represent Virtu's current belief regarding future events and are, therefore, subject to risks, assumptions and uncertainties which may be outside the company's control. On today's call, we'll have Mr. Douglas Cifu, our Chief Executive Officer; and Mr. Joe Molluso, co-President and co-Chief Operating Officer. They will begin with prepared remarks and then take your questions. Please note that our actual results and financial conditions may differ materially from what's indicated in these forward-looking statements. It's important to note that any forward-looking statements made on this call are based upon information presently available to the company, and we do not undertake to update or revise any forward-looking statements as new information becomes available. We refer you to the disclaimers in our press release and encourage you to rev

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