Fourth Quarter 2022
Earnings Supplement
© 2022 Virtu Financial. All rights reserved.
Fourth Quarter & Full Year Highlights
FY 2022 | 4Q 2022 |
Notable Accomplishments
Adj. NTI1
$1,468M
Adj. NTI/day1,2
$5.8
Normalized Adj. EPS1
$3.00
Adj. EBITDA1
Adj. NTI1
$274M
Adj. NTI/day1,2
$4.4
Normalized Adj. EPS1
$0.37
Adj. EBITDA1
- Organic growth initiatives generated $579K per day of Adj. NTI1 in 4Q 2022 (13% of firmwide Adj. NTI)
o FY 2022 Adj. NTI1 per day of $614K (11% |
of firmwide Adj. NTI) |
▪ +12% vs FY 2021 |
• Repurchased 2.1M shares for $45M in 4Q |
2022 |
o Repurchased 16.2M shares for $461M in |
$859M | $125M | |||
Adj. EBITDA Margin1,3 | Adj. EBITDA Margin1,3 | |||
59% | 46% | |||
Debt to LTM Adj. EBITDA1 | Debt to LTM Adj. EBITDA1 | |||
2.1x | 2.1x | |||
FY 2022 |
- Cumulative repurchases of 32.8M shares for $910M, representing 13.1% of shares outstanding, net of issuances4,5
See endnotes at end of this supplement | 2 |
Key Financial Metrics
Annual | Quarterly | Comparison | ||||||||||||||||||||
FY | FY | FY | FY 2021 | FY'22 | 4Q 2022 v | FY'22 v | ||||||||||||||||
($M) | 2020 | 2021 | 2022 | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 3Q'22 | 4Q'21 | FY'21 | ||||||||
Total Adjusted Net Trading Income | 1,2 | $2,271 | $1,910 | $1,468 | $728 | $342 | $354 | $486 | $505 | $357 | $331 | $274 | ||||||||||
- 16% | - 43% | - 23% | ||||||||||||||||||||
Daily Average Adj. NTI | 1,2 | $9.0 | $7.6 | $5.8 | $11.9 | $5.4 | $5.5 | $7.6 | $8.1 | $5.8 | $5.2 | $4.4 | ||||||||||
1 | $1,782 | $1,428 | $1,058 | $575 | $232 | $249 | $372 | $382 | $254 | $238 | $185 | |||||||||||
Market Making Adj. NTI | - 21% | - 50% | - 26% | |||||||||||||||||||
Mark et Mak ing Daily Average Adj. NTI | 1 | $7.0 | $5.7 | $4.2 | $9.4 | $3.7 | $3.9 | $5.8 | $6.2 | $4.1 | $3.7 | $2.9 | ||||||||||
1,2 | $489 | $482 | $409 | $153 | $110 | $106 | $114 | $123 | $104 | $93 | $89 | |||||||||||
Execution Services Adj. NTI | - 2% | - 20% | - 15% | |||||||||||||||||||
Execution Services Daily Average Adj. NTI | 1,2 | $1.9 | $1.9 | $1.6 | $2.5 | $1.7 | $1.7 | $1.8 | $2.0 | $1.7 | $1.5 | $1.4 | ||||||||||
Adjusted Cash Operating Expenses | 1 | $623 | $609 | $609 | $163 | $145 | $144 | $157 | $161 | $148 | $150 | $149 | - 1% | - 5% | - 0% | |||||||
Total Adjusted Operating Expenses | 1 | $690 | $677 | $675 | $180 | $161 | $160 | $175 | $179 | $164 | $167 | $165 | - 2% | - 6% | - 0% | |||||||
1 | $1,648 | $1,301 | $859 | $565 | $197 | $211 | $328 | $344 | $209 | $181 | $125 | - 31% | - 62% | - 34% | ||||||||
Adjusted EBITDA | ||||||||||||||||||||||
Adjusted EBITDA Margin | 1,3 | 73% | 68% | 59% | 78% | 58% | 59% | 68% | 68% | 59% | 55% | 46% | - 9 pts | - 22 pts | - 10 pts | |||||||
Long-Term Debt (at end of period) | $1,670 | $1,630 | $1,824 | $1,667 | $1,632 | $1,633 | $1,630 | $1,829 | $1,826 | $1,824 | $1,824 | + 0% | + 12% | + 12% | ||||||||
Debt / LTM Adjusted EBITDA | 1 | 1.0x | 1.3x | 2.1x | 1.0x | 1.2x | 1.2x | 1.3x | 1.7x | 1.7x | 1.7x | 2.1x | + 24% | + 69% | + 69% | |||||||
Normalized Adjusted EPS | 1 | $5.76 | $4.57 | $3.00 | $2.04 | $0.63 | $0.70 | $1.19 | $1.27 | $0.73 | $0.61 | $0.37 | - 39% | - 69% | - 34% | |||||||
Daily Average Adj. NTI1 Trend
$14M $12M $10M $8M $6M $4M $2M
-
$12.7 | ||||||||||||||||||||||||||||||
$11.9 | ||||||||||||||||||||||||||||||
$10.6 | ||||||||||||||||||||||||||||||
$7.1 | $7.6 | $8.1 | ||||||||||||||||||||||||||||
$5.7 | $5.4 | $5.5 | $5.8 | $5.2 | ||||||||||||||||||||||||||
$3.8 | $3.9 | $4.1 | $4.4 | |||||||||||||||||||||||||||
$2.1 | $2.2 | $2.4 | $10.5 | $8.8 | $4.0 | $5.0 | $9.4 | $3.7 | $3.9 | $5.8 | $6.2 | $4.1 | $3.7 | $2.9 | ||||||||||||||||
$1.6 | $1.7 | $1.7 | $2.1 | $1.9 | $1.6 | $2.1 | $2.5 | $1.7 | $1.7 | $1.8 | $2.0 | $1.7 | $1.5 | $1.4 |
2Q'19 | 3Q'19 | 4Q'19 | 1Q'20 | 2Q'20 | 3Q'20 | 4Q'20 | 1Q'21 | 2Q'21 | 3Q'21 | 4Q'21 | 1Q'22 | 2Q'22 | 3Q'22 | 4Q'22 |
Execution Services | Market Making |
See endnotes at end of this supplement | 3 |
Major Market Metrics
Annual | Quarterly | Comparison | ||||||||||||
FY | FY | FY | FY 2021 | FY'22 | 4Q 2022 v | FY'22 v | ||||||||
2020 | 2021 | 2022 | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 3Q'22 | 4Q'21 | FY'21 | |
Market Metrics (Average Daily) | ||||||||||||||
Volume Metrics | ||||||||||||||
US Equity Consolidated Volume (M shares) | 10,924 | 11,404 | 11,874 | 14,650 | 10,559 | 9,763 | 10,782 | 12,880 | 12,585 | 10,899 | 11,174 | + 3% | + 4% | + 4% |
US Equity Consolidated Notional Volume ($B) | $479 | $565 | $573 | $627 | $533 | $512 | $590 | $718 | $612 | $478 | $488 | + 2% | - 17% | + 1% |
IBKR Retail Equity Share Volume (M) | 1,326 | 3,041 | 1,299 | 5,019 | 2,721 | 2,689 | 1,821 | 1,548 | 1,292 | 1,171 | 1,190 | + 2% | - 35% | - 57% |
OCC ADV (M contracts) | 30 | 39 | 41 | 42 | 36 | 38 | 41 | 42 | 39 | 40 | 44 | + 9% | + 7% | + 6% |
CME FX ADV (K contracts) | 861 | 798 | 989 | 850 | 770 | 776 | 800 | 905 | 950 | 1,096 | 1,000 | - 9% | + 25% | + 24% |
Hotspot ADV FX ($B) | $35 | $34 | $40 | $37 | $33 | $32 | $33 | $42 | $39 | $40 | $40 | + 0% | + 23% | + 20% |
Volatility Metrics | ||||||||||||||
S&P 500 Average Implied Volatility (VIX) | 29.3 | 19.7 | 25.6 | 23.2 | 18.0 | 18.3 | 19.3 | 25.4 | 27.4 | 24.8 | 25.0 | + 1% | + 30% | + 30% |
S&P 500 Average Realized Volatility | 30.4 | 13.0 | 24.0 | 15.8 | 11.2 | 11.1 | 14.0 | 21.4 | 28.6 | 21.3 | 24.8 | + 16% | + 77% | + 84% |
Ratio: Realized Volatility / VIX | 104% | 66% | 94% | 68% | 62% | 61% | 73% | 84% | 104% | 86% | 99% | + 15% | + 36% | + 41% |
S&P 500 Intraday Volatility | 1.68% | 0.96% | 1.80% | 1.26% | 0.76% | 0.80% | 1.02% | 1.83% | 2.06% | 1.63% | 1.72% | + 6% | + 68% | + 89% |
SX5E Realized Volatility | 30.1 | 14.8 | 22.7 | 13.6 | 12.9 | 14.6 | 17.9 | 30.8 | 23.0 | 19.1 | 18.3 | - 4% | + 2% | + 54% |
NKY Realized Volatility | 24.1 | 18.5 | 20.2 | 20.1 | 19.1 | 16.2 | 18.8 | 25.0 | 19.7 | 18.6 | 17.8 | - 4% | - 5% | + 9% |
CVIX Realized Volatility | 66.7 | 29.3 | 54.3 | 32.1 | 25.0 | 30.3 | 29.8 | 61.9 | 55.0 | 58.4 | 42.1 | - 28% | + 42% | + 86% |
See endnotes at end of this supplement | 4 |
Organic Business Growth
CAGR | 2 | ||||||||||
+ 40% | |||||||||||
$806K/day | |||||||||||
$656K/day | $614K/day | $576K/day | $579K/day | ||||||||
$548K/day | |||||||||||
$501K/day | |||||||||||
1 | $296K/day | ||||||||||
Daily Average Adj. NTI from | $160K/day | ||||||||||
Organic Growth Initiatives | |||||||||||
FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | 1Q 2022 | 2Q 2022 | 3Q 2022 | 4Q 2022 | |||
Total Adj. NTI from Organic Growth Initiatives | 1 | $40M | $75M | $166M | $138M | $154M | $50M | $36M | $32M | $36M | |
1 | 3% | 7% | 7% | 7% | 11% | 10% | 10% | 10% | 13% | ||
% of Firmwide Adj. NTI |
- Options Market Making: We had another record year in options market making in 2022 as we continue to expand across venues, asset classes and geographies. We continue to view our investment in this business as a key long-term engine of growth.
- ETF Block: Revenues have maintained an upward trajectory as we continue to invest in fixed income and become a dealer in the corporate bond market in addition to our existing ETF Block business.
- Crypto Market Making: We continue to view crypto as a long-term growth opportunity, notwithstanding recent market events.
- EDX Markets: Our venture with Citadel Securities, Fidelity Digital and Charles Schwab to develop a crypto ecosystem to serve the interests of global investors is proceeding nicely. We believe EDX will accelerate the institutional adoption of crypto assets by providing a stable and resilient medium for investing in crypto across established global brokerage platforms.
See endnotes at end of this supplement | 5 |
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Virtu Financial Inc. published this content on 26 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2023 11:22:01 UTC.