Virtu's Q3 2025 Earnings Call: Contradictions Emerge on Capital Deployment, M&A Strategy, and Options Market Expansion

Date of Call: October 29, 2025

Financials Results

• EPS: $1.05 normalized adjusted EPS; adjusted net trading income (ANTI) $467M, or $7.4M/day

Guidance:

• Target to trend toward the higher end of prior ANTI range ($6M–$10M/day), aiming to approach ~$10M/day through the cycle.
• Build trading capital base via retained earnings and debt (raised over $500M in 2025), dialing back repurchases while maintaining the dividend.
• Invest in infrastructure, talent and multi-asset capabilities (options, crypto, ETF block, VES) to drive growth; no specific quarter-by-quarter revenue guidance provided.

Business Commentary:

• Capital Deployment and Growth Strategy Shift:
• Virtu Financial raised over $500 million of new trading capital in 2025 and immediately deployed it, indicating a significant change in the company's strategic focus.

• This strategic shift emphasizes growth initiatives across various asset classes, including crypto, options, ETF block, and rates, with a goal to double the P&L over time by increasing the capital base.

• Strong Financial Performance:

• The firm reported normalized adjusted EPS of $1.05 and adjusted net trading income (ANTI) of $467 million, equivalent to $7.4 million per day.

• This performance was driven by favorable market conditions and a renewed focus on growth, particularly in global equities, cryptos, currencies, and commodities.

• VES Segment Growth:

• Virtu Execution Services (VES) reported ANTI of $123 million or $1.9 million per day, marking its best quarter since early 2021 and its sixth consecutive quarter of increased ANTI.

• Growth was attributed to strong performance across various asset classes and a focus on expanding VES's product set to include multi-asset class capabilities.

• Retail Market Impact:

• Market Making segment's ANTI was $344 million or $5.1 million per day, despite a 26% sequential decline in revenue.
• The decline was attributed to reduced 605 quoted spread opportunities and a focus on retail trading, while performance in proprietary market-making and crypto contributed positively.

Sentiment Analysis:

Overall Tone: Positive

• Management reported normalized adjusted EPS $1.05 and ANTI $467M ($7.4M/day), highlighted VES's best quarter since early 2021, and stated a clear strategic pivot to 'focus on growing' by investing in infrastructure, talent and capital to trend toward the higher end of the $6M–$10M/day ANTI range.

Q&A:

• Question from Patrick Moley (Piper Sandler & Co.): Can you break down the growth focus (existing vs new areas) and how much capital you plan to build and implications for capital returns?
  Response: Pursuing broad growth across existing and new asset classes (notably crypto, options and ETF block); raised >$500M of trading capital in 2025 and will retain/dial back buybacks to grow the capital base over time to expand the P&L.

• Question from Alexander Blostein (Goldman Sachs): Why is the firm pivoting to growth now and can you accelerate market share in core businesses?
  Response: Now is right because major integrations and new business-line builds are complete, freeing talent and scalable technology to redeploy into both core and new markets.

• Question from Alexander Blostein (Goldman Sachs): Will pursuing growth require a larger OpEx lift or can you leverage existing footprint for high incremental margins?
  Response: Expect strong positive operating leverage—will hire and retain top talent but incremental revenue should come in at attractive margins.

• Question from Unknown Analyst (Bank of America): Timeline for customer market making in options and will M&A be part of the roadmap?
  Response: No immediate plan to enter customer market making; focus first on excelling in trading options and consider M&A only if clearly accretive.

• Question from Unknown Analyst (Bank of America): 605 quoted spread opportunity declined 3% sequentially but Market Making revenue fell 26%—how reconcile?
  Response: Retail/605 metrics were down, but overall Market Making performed well thanks to strength in crypto, commodities and VES; retail weakness understates the firm's global, multi-asset performance.

• Question from Christopher Allen (Citigroup): What impact did the capital you raised have this quarter and which initiatives drove sequential improvement?
  Response: Debt raise (Sept 23) was late in quarter; management says incremental dollars this period earned ~95% return on capital; standout contributors were crypto, options, ETF block and continued VES growth.

• Question from Christopher Allen (Citigroup): Will increased capital deployment fund new strategies or simply scale existing ones?
  Response: Both—management will scale existing strategies and develop new ones within historical risk parameters, leveraging existing infrastructure while adding capital and talent.

• Question from Daniel Fannon (Jefferies): Will putting more capital to work increase quarter-to-quarter variability or produce more consistent results?
  Response: Goal is to trend toward the high end of the ANTI range; business remains inherently volatile so quarter-to-quarter noise is expected even as the long-term trend aims higher.

• Question from Daniel Fannon (Jefferies): Timing—will investment in people/strategies lag revenue opportunity or be in line?
  Response: Mostly in line—investments should largely coincide with revenue opportunities; no multi-year lag required to see results, though environment-driven noise will persist.

• Question from Kenneth Worthington (JPMorgan): With recent stock declines, how will opportunistic buybacks factor into capital management?
  Response: Priority is allocating incremental capital to grow the trading business; opportunistic buybacks are not the primary focus though not ruled out and vesting-share neutrality may be considered.

• Question from Kenneth Worthington (JPMorgan): How is Virtu positioned for tokenized/on-chain assets and what incremental infrastructure is needed?
  Response: Positioned to participate—already active in many crypto markets and some on-chain interactions, partnering on initiatives (PIT foundation, Canton); existing technology is adaptable to tokenization.

• Question from Michael Cyprys (Morgan Stanley): What's changed regarding scaling capital vs earnings and what roles are you hiring?
  Response: Management believes the firm is now ready—scaled infrastructure and completed integrations—so they can deploy more capital; hiring focus is developers, quants and traders.

• Question from Michael Cyprys (Morgan Stanley): How will you prioritize capital allocation and which areas will drive meaningful contribution to doubling earnings?
  Response: Allocation will be flexible and market-driven; expect capital to flow to more capital-intensive growth areas (crypto, ETF block, commodities, FX) while capital-efficient businesses (U.S. equities/605) continue to grow.

Contradiction Point 1

Capital Deployment and Growth Opportunities

It involves the strategic focus on capital deployment and growth opportunities, which are crucial for investor expectations and future business expansion.

Can you identify the key growth opportunities and highlight the areas with the most significant potential? - Patrick Moley (Piper Sandler)

2025Q3: The firm raised over $500 million in new trading capital in 2025, which has been deployed immediately. Long-term plans include growing the P&L by potentially doubling the capital base. - Aaron Simons(CEO & Director)

Can you introduce Aaron Simons, including his responsibilities and accomplishments at Virtu? - Kenneth Worthington (JPMorgan)

2025Q2: We continue to focus on long-term growth and are excited about the opportunities ahead, which we expect to drive both organic and acquisition-related growth. - Douglas A. Cifu (Co-founder, CEO & Director)

Contradiction Point 2

M&A Strategy and Shareholders' Value

It involves the company's approach to M&A and its commitment to creating shareholder value, which are critical considerations for investors.

Are there timeline or M&A plans for options market-making? - Unknown Analyst (Bank of America)

2025Q3: Future M&A will be considered if it creates shareholder value. Current focus is on internal growth, and the firm is ready to allocate capital as needed. - Joseph Molluso(Co-President & Co-COO)

What are Virtu's M&A opportunities in the evolving crypto ecosystem? - Alexander Blostein (Goldman Sachs)

2025Q2: Virtu evaluates opportunities based on return on capital. Recent acquisitions have been accretive, and future opportunities will be considered based on the best use of capital. - Joseph A. Molluso (Co-President & Co-COO)

Contradiction Point 3

Capital Raising and Deployment

It involves the company's strategy for raising and deploying capital, which significantly impacts the company's growth and financial outlook.

Can you outline key growth opportunities and identify the most significant areas for growth? How much capital will you allocate, and how will this impact long-term capital return priorities? - Patrick Moley (Piper Sandler)

2025Q3: The firm raised over $500 million in new trading capital in 2025, which has been deployed immediately. - Aaron Simons(CEO & Director)

Where are you on continuous improvement relative to opportunities, and how do current conditions impact this? - Chris Allen (Citi)

2025Q1: We raised $350 million of new trading capital for the year. We have seen a strong correlation between the amount of capital we have on the balance sheet and the performance of the business. - Douglas Cifu (Chief Executive Officer)

Contradiction Point 4

Expansion into Options Market Making

It addresses the company's strategy and timeline for entering the options market making business, which could have implications for revenue growth and market positioning.

Do you have any timelines or M&A plans for options market-making? - Unknown Analyst (Bank of America)

2025Q3: The focus is on excelling at trading options, not specifically on customer market making in options. Infrastructure and relationships will dictate market entry. - Aaron Simons(CEO & Director)

好的，我现在需要处理用户提供的这个任务。用户希望我作为专业的金融文章作者，总结并精简来自美股上市公司财报电话会议中的问题。用户特别指出，问题来自现场提问，因此表述可能冗长，我的任务是在不改变原意的前提下，将其简化为简洁、精准、符合美式英语习惯的版本，并且只输出问题，保留问号。首先，我需要仔细阅读用户提供的示例问题：“Are you adding new symbols, exchanges, or headcount to the non-customer Market Making business?” 这个问题询问的是是否在非客户做市业务中增加新符号、交易所或员工人数。用户希望简化这个问题，去掉冗长的部分，同时保持原意不变。接下来，我需要分析原问题的结构。原问题中的“Are you adding new symbols, exchanges, or headcount to the non-customer Market Making business?” 有几个部分可以简化。例如，“adding new symbols”可以简化为“adding new symbols”，但可能可以更简洁。不过，“symbols”在这里可能指的是金融工具或股票代码，所以可能需要保留。而“exchanges”可能指的是交易所，而“headcount”是员工人数。非客户做市业务（non-customer Market Making business）是特定的业务部门，可能需要保留这个术语，但可以检查是否有更简洁的表达方式。然后，考虑美式英语的读写习惯。例如，是否使用“headcount”还是“staffing”，但“headcount”在商业语境中是常用术语，可能更适合保留。另外，“Market Making”通常首字母大写，因为是专有名词，所以可能需要保持大写，但用户可能希望简化，但原问题中的“Market Making”已经是正确的写法，所以可能不需要修改。接下来，检查是否有冗余的词汇。原问题中的“Are you adding... to the non-customer Market Making business?” 可以简化为“Are you expanding the non-customer Market Making business with new symbols, exchanges, or headcount?” 但用户可能希望更直接，所以可能直接保留原结构，但去掉不必要的词。例如，原问题中的“adding new symbols, exchanges, or headcount to the non-customer Market Making business”已经比较直接，但可以进一步缩短。可能的简化版本是：“Are you adding new symbols, exchanges, or staff to the non-customer Market Making business?” 这里将“headcount”改为“staff”可能更简洁，但“headcount”在商业术语中更准确，所以可能需要保留。或者，是否可以将“adding new symbols, exchanges, or headcount”简化为“expanding with new symbols, exchanges, or headcount”？但原问题的结构是询问是否在添加这些元素，所以可能不需要改变动词结构。另一个可能性是：“Are you expanding the non-customer Market Making business by adding new symbols, exchanges, or headcount?” 但用户可能希望保持问题更直接，而不是用“expanding by adding”。原问题的结构是“Are you adding... to...”，所以可能不需要改变动词结构，只需要去除冗余的词。最终，用户提供的示例简化后的问题是：“Are you adding new symbols, exchanges, or headcount to the non-customer Market Making business?” 实际上，这个已经相当简洁了，但可能用户希望更简短。例如，“symbols”是否必要？或者是否可以将“adding”替换为更简洁的词？不过原问题中的结构已经很直接，可能不需要进一步简化。因此，可能用户的示例问题已经是最简形式，或者可能用户希望将“non-customer Market Making business”简化为“non-customer MM business”，但需要确认是否符合行业术语。例如，“MM”通常指做市商（Market Maker），所以缩写可能适用，但需要确保读者能理解。如果用户允许使用缩写，这可能更简洁，但原问题中没有使用缩写，所以可能需要保留全称。综上所述，原问题已经相对简洁，但可能需要检查是否有更简短的表达方式，同时保持准确。例如，“Are you expanding the non-customer Market Making business with new symbols, exchanges, or headcount?” 但原问题的结构是询问是否在添加这些元素，所以可能保持原结构更好。因此，最终的简化问题可能与原问题相同，但用户可能希望更简短。例如，去掉“adding”中的“new”是否可以？但“new”在这里是必要的，因为问题在于是否新增这些元素。所以可能无法去掉。因此，最终的简化版本可能就是用户提供的示例问题，但需要确认是否符合用户的要求。可能用户希望更简短，但原问题已经很直接，所以可能不需要进一步简化。因此，正确的简化后的问题就是用户提供的示例中的问题，但需要检查是否有 - Ken Worthington (J.P. Morgan)

2025Q1: We had $1.3 billion of average daily volume in options market making in 2024, which was more than a 2.5x increase from 2023 levels. - Douglas Cifu (Chief Executive Officer)

Contradiction Point 5

Capital Allocation and Growth Strategy

It involving changes in the company's strategic focus and capital allocation plans, which are crucial for investors and stakeholders.

What growth opportunities are you prioritizing, and where do you see the most significant growth potential? What capital allocation plans do you have, and how will they affect long-term capital return priorities? - Patrick Moley (Piper Sandler)

2025Q3: The firm raised over $500 million in new trading capital in 2025, which has been deployed immediately. Long-term plans include growing the P&L by potentially doubling the capital base. The firm will grow organically and incrementally. - Aaron Simons(CEO & Director)

What are your capital management priorities given a potential robust trading backdrop? - Alex Blostein (Goldman Sachs)

2024Q4: Buybacks remain the primary capital return focus. The current capital structure is efficient. We look at opportunities to reduce debt but remain focused on buybacks due to their effectiveness for our volatility. - Joseph Molluso(Co-President & Co-COO)