Virtu Financial, Inc. Q4 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Virtu Financial Q4 2020 Earnings Summary

  • Q4 Net Trading Income: $456 million ($7.1 million/day), up 75% YoY and outperforming Q3 2020 by 25%.
  • Q4 Normalized Adjusted EPS: $1.18, representing strong quarterly profitability.
  • Market Making Segment: $321 million adjusted net trading income ($5 million/day), up 109% YoY.
  • Execution Services Segment: $135 million adjusted net trading income ($2.1 million/day), down 26% YoY, but up 29% vs. Q3 2020.
  • Q4 Adjusted EBITDA: $344 million, up 200% YoY. Adjusted EBITDA margin reached 75.4%.
  • Full Year 2020 Revenue Trends:
    • Adjusted net trading income: $2.27B ($9 million/day), up 131% YoY.
    • Adjusted EPS (normalized): $5.76.
  • Cost Discipline: Maintained adjusted compensation ratios of 14.1% (cash) and 16.7% (total) of trading income.
  • Debt Reduction: $289 million in long-term debt paid down in 2020. Total debt reduced to $1.67 billion.
  • Share Buyback Program: Increased authorization from $100 million to $170 million. $15 million already repurchased.
  • Dividend: Maintained $0.24 quarterly dividend, paid consistently over 22 quarters.

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Operator: Good day and welcome to the Virtu Financial 2020 Fourth Quarter Earnings Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Deborah Belevan, Head of Investor Relations. Please go ahead. Deborah Belevan: Thank you, operator and good morning everyone. Thanks for joining us. Our fourth quarter and full year results were released this morning and are available on our website. On this morning’s call, we will have Mr. Douglas Cifu, our CEO; Mr. Joe Molluso, our Co-President and Chief Operating Officer; and Sean Galvin, our Chief Financial Officer. They will begin with some prepared remarks and then we will take your questions. Just a few reminders, today’s call may include forward-looking statements, which represent Virtu’s current belief regarding future events and therefore, subject to risks, assumptions and uncertainties, which maybe outside the company’s control. 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 on 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 review the description of risk factors contained in our annual report and Fo

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