What changed in this filing

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Item 1. Financial Statements

2021-11-03 compared with 2021-08-04 · 233 added, 166 removed, 1132 unchanged (26% of the section changed)

9 unchanged sentences

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data) June 30,

(in thousands, except share data) September 30,

2021 December 31,

8 unchanged sentences

Receivables from customers 414,244 214,478

Property, equipment and capitalized software (net of accumulated depreciation of $ 454,875 and $ 455,961 as of June 30, 2021 and December 31, 2020, respectively)

Property, equipment and capitalized software (net of accumulated depreciation of $ 470,524 and $ 455,961 as of September 30, 2021 and December 31, 2020, respectively)

103,963 113,590

1 unchanged sentence

Goodwill 1,148,926 1,148,926

Intangibles (net of accumulated amortization of $ 219,648 and $ 183,494 as of June 30, 2021 and December 31, 2020, respectively)

Intangibles (net of accumulated amortization of $ 236,581 and $ 183,494 as of September 30, 2021 and December 31, 2020, respectively)

402,912 454,499

Deferred tax assets 176,279 193,070

Other assets ($ 81,055 and $ 68,316 , at fair value, as of June 30, 2021 and December 31, 2020, respectively)

Other assets ($ 87,926 and $ 68,316 , at fair value, as of September 30, 2021 and December 31, 2020, respectively)

303,194 317,747

16 unchanged sentences

Stockholders' equity

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 127,725,595 and 125,627,277 shares, Outstanding — 118,475,086 and 122,012,180 shares at June 30, 2021 and December 31, 2020, respectively

Class B common stock (par value $ 0.00001 ), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at June 30, 2021 and December 31, 2020, respectively

Class C common stock (par value $ 0.00001 ), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 9,799,036 and 10,226,939 shares at June 30, 2021 and December 31, 2020, respectively

Class D common stock (par value $ 0.00001 ), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 60,091,740 and 60,091,740 shares at June 30, 2021 and December 31, 2020, respectively

Treasury stock, at cost, 9,250,509 and 3,615,097 shares at June 30, 2021 and December 31, 2020, respectively

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 127,872,786 and 125,627,277 shares, Outstanding — 113,220,345 and 122,012,180 shares at September 30, 2021 and December 31, 2020, respectively

Class B common stock (par value $ 0.00001 ), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at September 30, 2021 and December 31, 2020, respectively

Class C common stock (par value $ 0.00001 ), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 9,763,065 and 10,226,939 shares at September 30, 2021 and December 31, 2020, respectively

Class D common stock (par value $ 0.00001 ), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 60,091,740 and 60,091,740 shares at September 30, 2021 and December 31, 2020, respectively

Treasury stock, at cost, 14,652,441 and 3,615,097 shares at September 30, 2021 and December 31, 2020, respectively

( 392,468 ) ( 88,923 )

7 unchanged sentences

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data) June 30,

(in thousands, except share data) September 30,

2021 December 31,

6 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except share and per share data) 2021 2020 2021 2020

39 unchanged sentences

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three and Six Months Ended June 30, 2021 and 2020

Three and Nine Months Ended September 30, 2021 and 2020

Class A Common Stock Class C Common Stock Class D Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Virtu Financial Inc.

Stockholders' Equity Non-Controlling Interest Total Equity

Stockholders' Equity Noncontrolling Interest Total Equity

(in thousands, except share and interest data)

7 unchanged sentences

Net change in unrealized cash flow hedges gains (losses) — — — — — — — — — — 12,607 12,607 9,299 21,906

Dividends ($ 0.24 per share of Class A common stock and participating Restricted Stock Unit and Restricted Stock Awards) and distributions from Virtu Financial to non-controlling interest

Dividends ($ 0.24 per share of Class A common stock and participating Restricted Stock Unit and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest

— — — — — — — — — ( 30,147 ) — ( 30,147 ) ( 159,239 ) ( 189,386 )

9 unchanged sentences

Net change in unrealized cash flow hedges gains (losses) — — — — — — — — — — ( 4,115 ) ( 4,115 ) ( 3,091 ) ( 7,206 )

Dividends ($ 0.24 per share of Class A and Class B common stock and participating Restricted Stock Unit and Restricted Stock Awards) and distributions from Virtu Financial to non-controlling interest

Dividends ($ 0.24 per share of Class A and Class B common stock and participating Restricted Stock Unit and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest

— — — — — — — — — ( 29,483 ) — ( 29,483 ) ( 103,062 ) ( 132,545 )

2 unchanged sentences

Balance at June 30, 2021 127,725,595 $ 1 9,799,036 $ — 60,091,740 $ 1 ( 9,250,509 ) $ ( 253,587 ) $ 1,201,890 $ 648,893 $ ( 19,117 ) $ 1,578,081 $ 344,741 $ 1,922,822

Share based compensation 103,154 — — — — — — — 6,803 — 6,803 6,803

Repurchase of Class C common stock — ( 12,980 ) — — — — — ( 370 ) — ( 370 ) ( 370 )

Treasury stock purchases ( 17,954 ) — — — — — ( 5,401,932 ) ( 138,881 ) ( 496 ) — ( 139,377 ) ( 139,377 )

Stock options exercised 39,000 — — — — — — — 741 — 741 741

Net income — — — — — — — — — 70,507 — 70,507 52,631 123,138

Foreign exchange translation adjustment — — — — — — — — — ( 4,912 ) ( 4,912 ) ( 2,931 ) ( 7,843 )

Net change in unrealized cash flow hedges gains (losses) — — — — — — — — — 2,191 2,191 1,307 3,498

Dividends ($ 0.24 per share of Class A and Class B common stock and participating Restricted Stock Unit and Restricted Stock Award) and distributions from Virtu Financial to noncontrolling interest

— — — — — — — — — ( 28,336 ) — ( 28,336 ) ( 80,363 ) ( 108,699 )

Stockholders' Equity Non-Controlling Interest Total Equity

Stockholders' Equity Noncontrolling Interest Total Equity

(in thousands, except share and interest data)

Shares Amounts Shares Amounts Shares Amounts Shares Amounts Amounts

Issuance of common stock in connection with employee exchanges 22,991 — — — — — — — — — — — — —

Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges — — ( 22,991 ) — — — — — — — — — — —

Balance at September 30, 2021 127,872,786 $ 1 9,763,065 $ — 60,091,740 $ 1 ( 14,652,441 ) $ ( 392,468 ) $ 1,209,064 $ 690,568 $ ( 21,838 ) $ 1,485,328 $ 315,385 $ 1,800,713

Stockholders' Equity Noncontrolling Interest Total Equity

(in thousands, except share and interest data)

Shares Amounts Shares Amounts Shares Amounts Shares Amounts Amounts

Balance at December 31, 2019 120,435,912 $ 1 12,887,178 $ — 60,091,740 $ 1 ( 2,178,771 ) $ ( 55,005 ) $ 1,077,398 $ ( 90,374 ) $ ( 647 ) $ 931,374 $ 297,562 $ 1,228,936

6 unchanged sentences

Net change in unrealized cash flow hedges gains (losses) — — — — — — — — — — ( 31,468 ) ( 31,468 ) ( 24,134 ) ( 55,602 )

Dividends ($ 0.24 per share of Class A common stock and participating Restricted Stock Unit and Restricted Stock Awards) and distributions from Virtu Financial to non-controlling interest

Dividends ($ 0.24 per share of Class A common stock and participating Restricted Stock Units and Restricted Stock Awards) and distributions from Virtu Financial to noncontrolling interest

— — — — — — — — — ( 29,602 ) — ( 29,602 ) ( 19,165 ) ( 48,767 )

8 unchanged sentences

Net change in unrealized cash flow hedges gains (losses) — — — — — — — — — — ( 5,242 ) ( 5,242 ) ( 3,895 ) ( 9,137 )

Dividends ($ 0.24 per share of Class A and Class B common stock and participating Restricted Stock Unit and Restricted Stock Award) and distributions from Virtu Financial to non-controlling interest

Dividends ($ 0.24 per share of Class A and Class B common stock and participating Restricted Stock Units and Restricted Stock Award) and distributions from Virtu Financial to noncontrolling interest

— — — — — — — — — ( 30,201 ) — ( 30,201 ) ( 145,211 ) ( 175,412 )

2 unchanged sentences

Balance at June 30, 2020 124,654,210 $ 1 10,526,939 $ — 60,091,740 $ 1 ( 2,178,771 ) $ ( 55,005 ) $ 1,128,977 $ 259,873 $ ( 39,567 ) $ 1,294,280 $ 406,727 $ 1,701,007

Share based compensation 234,981 — — — — — — — 10,568 — — 10,568 — 10,568

Treasury stock purchases ( 79,570 ) — — — — — — — — ( 2,418 ) — ( 2,418 ) — ( 2,418 )

Stockholders' Equity Noncontrolling Interest Total Equity

(in thousands, except share and interest data)

Shares Amounts Shares Amounts Shares Amounts Shares Amounts Amounts

Stock options exercised 189,704 — — — — — — — 3,604 — — 3,604 — 3,604

Net income — — — — — — — — — 116,709 — 116,709 82,999 199,708

Foreign exchange translation adjustment — — — — — — — — — — 4,213 4,213 3,599 7,812

Net change in unrealized cash flow hedges gains (losses) — — — — — — — — — — 151 151 163 314

Dividends ($ 0.24 per share of Class A and Class B common stock and participating Restricted Stock Unit and Restricted Stock Award) and distributions from Virtu Financial to noncontrolling interest

— — — — — — — — — ( 30,347 ) — ( 30,347 ) ( 83,441 ) ( 113,788 )

Issuance of common stock in connection with employee exchanges 60,000 — — — — — — — — — — — — —

Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges — — ( 60,000 ) — — — — — — — — — — —

Balance at September 30, 2020 125,059,325 $ 1 10,466,939 $ — 60,091,740 $ 1 ( 2,178,771 ) $ ( 55,005 ) $ 1,143,149 $ 343,817 $ ( 35,203 ) $ 1,396,760 $ 410,047 $ 1,806,807

See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2021 2020

9 unchanged sentences

Deferred taxes 16,791 22,204

Gain on sale of MATCHNow — ( 58,652 )

Other ( 15,093 ) ( 14,750 )

18 unchanged sentences

Acquisition of property and equipment ( 16,326 ) ( 21,717 )

Investment in joint ventures ( 4,956 ) ( 4,716 )

Net cash used in investing activities ( 42,738 ) ( 36,693 )

Proceeds from sale of MATCHNow — 60,592

Other investing activities ( 18,960 ) ( 7,968 )

Net cash provided by (used in) investing activities ( 65,440 ) 3,444

Cash flows from financing activities

Dividends to stockholders and distributions from Virtu Financial to non-controlling interest ( 321,931 ) ( 224,179 )

Dividends to stockholders and distributions from Virtu Financial to noncontrolling interest ( 430,630 ) ( 337,966 )

Repurchase of Class C common stock ( 1,693 ) —

11 unchanged sentences

Supplementary disclosure of cash flow information

Nine Months Ended September 30,

(in thousands) 2021 2020

Cash paid for interest $ 115,890 $ 137,750

Cash paid for taxes 130,565 207,387

Six Months Ended June 30,

(in thousands) 2021 2020

Non-cash investing activities

9 unchanged sentences

VFI is a Delaware corporation whose primary asset is its ownership interest in Virtu Financial LLC (“Virtu Financial”).

As of June 30, 2021, VFI owned approximately 63.6 % of the membership interests of Virtu Financial.

As of September 30, 2021, VFI owned approximately 62.6 % of the membership interests of Virtu Financial.

VFI is the sole managing member of Virtu Financial and operates and controls all of the businesses and affairs of Virtu Financial and its subsidiaries (the “Group”).

41 unchanged sentences

As sole managing member of Virtu Financial, the Company exerts control over the Group’s operations.

The Company consolidates Virtu Financial and its subsidiaries’ financial statements and records the interests in Virtu Financial that the

Company does not own as noncontrolling interests.

consolidates Virtu Financial and its subsidiaries’ financial statements and records the interests in Virtu Financial that the Company does not own as noncontrolling interests.

All intercompany accounts and transactions have been eliminated in consolidation.

2 unchanged sentences

Effective for the quarter ended March 31, 2021, the Company changed the presentation of its Condensed Consolidated Statements of Changes in Equity and Condensed Consolidated Statements of Cash Flows.

As a result, the Company combined $ 30.2 million of Dividends to stockholders and $ 145.2 million of Distribution from Virtu Financial to non-controlling interest, and $ 59.8 million of Dividends to stockholders and $ 164.4 million of Distribution from Virtu Financial to non-controlling interest into one line, Dividends to stockholders and distribution from Virtu Financial to non-controlling interest for the three and six months ended June 30, 2020, respectively.

Dividends and distributions from Virtu Financial to non-controlling interest both represent cash payments by the Company to its equity owners which reduce Total equity.

As a result, the Company combined $ 30.3 million of Dividends to stockholders and $ 83.4 million of Distribution from Virtu Financial to noncontrolling interest, and $ 90.1 million of Dividends to stockholders and $ 247.8 million of Distribution from Virtu Financial to noncontrolling interest into one line, Dividends to stockholders and distribution from Virtu Financial to noncontrolling interest for the three and nine months ended September 30, 2020, respectively.

Dividends and distributions from Virtu Financial to noncontrolling interest both represent cash payments by the Company to its equity owners which reduce Total equity.

Summary of Significant Accounting Policies

6 unchanged sentences

The Company adopted this ASU on January 1, 2021 and it did not have a material impact on its condensed consolidated financial statements.

Accounting Pronouncements, Not Yet Adopted as of June 30, 2021

Accounting Pronouncements, Not Yet Adopted as of September 30, 2021

Reference Rate Reform - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

11 unchanged sentences

The Company is currently evaluating the impact of the new standard on its Condensed Consolidated Financial Statements and related disclosures.

Sale of MATCHNow

In May 2020, the Company entered into a Securities Purchase Agreement ("SPA") with Cboe Global Markets, Inc.

(“CBOE”) pursuant to which the Company agreed to sell 100 % of the outstanding interests in TriAct Canada Marketplace LP

and TCM Corp., which operate an equities alternative trading system (“MATCHNow”) in Canada.

Pursuant to the terms of the SPA, the Company also agreed to enter into a licensing agreement for the licensing of certain software and intellectual property used in support of MATCHNow.

On August 4, 2020 (the "MATCHNow Closing Date"), the Company completed the sale of MATCHNow to CBOE for total gross proceeds of $ 60.6 million in cash, with additional contingent consideration of up to approximately $ 23.0 million.

The Company incurred one-time transaction costs including professional fees related to the sale of $ 2.5 million, which were recorded in Transaction advisory fees and expenses on the Condensed Consolidated Statements of Comprehensive Income.

The Company recognized a gain on sale of $ 58.7 million, which was recorded in Other, net on the Condensed Consolidated Statements of Comprehensive Income for the year ended September 30, 2020.

A summary of the carrying value of MATCHNow and gain on sale of MATCHNow is as follows:

(in thousands)

Total sale proceeds received $ 60,592

Total carrying value of MATCHNow as of MATCHNow Closing Date ( 1,940 )

Gain on sale of MATCHNow 58,652

Transaction costs ( 2,453 )

Gain on sale of MATCHNow, net of transaction costs $ 56,199

Contingent consideration may be earned based on the future performance of MATCHNow following the MATCHNow Closing Date.

Deferred payments will be assessed quarterly until December 31, 2022 and recorded in Other, net on the Condensed Consolidated Statements of Comprehensive Income when the contingency is resolved and payments become payable by CBOE.

In addition, the Company entered into a Transition Services Agreement ("TSA") with CBOE, pursuant to which the Company agreed to provide certain telecom and general and administrative services for a defined period.

Income from performing services under the TSA are recorded in Other, net on the Condensed Consolidated Statements of Comprehensive Income.

With the licensing of certain software and intellectual property associated with MATCHNow, the Company performed an assessment of impairment of long-lived intangible assets acquired in connection with the ITG acquisition, of which MATCHNow technology was a component.

No impairment was recognized for the three and nine months ended September 30, 2020.

Earnings per Share

The below table contains a reconciliation of net income (loss) before noncontrolling interest to net income (loss) available for common stockholders:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2021 2020 2021 2020

5 unchanged sentences

The calculation of basic and diluted earnings per share is presented below:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except for share or per share data) 2021 2020 2021 2020

6 unchanged sentences

Basic earnings (loss) per share $ 0.59 $ 0.92 $ 3.04 $ 4.31

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except for share or per share data) 2021 2020 2021 2020

13 unchanged sentences

Tax receivable payments are expected to range from approximately $ 0.9 million to $ 21.7 million per year over the next 15 years.

At June 30, 2021 and December 31, 2020, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 189.2 million and $ 199.1 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $ 254.7 million and $ 271.2 million, respectively.

The amounts recorded as of June 30, 2021 and December 31, 2020 are based on best estimates available at the respective dates and may be subject to change after the filing of the Company’s U.S.

At September 30, 2021 and December 31, 2020, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 184.3 million and $ 199.1 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $ 254.7 million and $ 271.2 million, respectively.

The amounts recorded as of September 30, 2021 and December 31, 2020 are based on best estimates available at the respective dates and may be subject to change after the filing of the Company’s U.S.

federal and state income tax returns for the years in which tax savings were realized.

4 unchanged sentences

and one non-operating segment:

As of June 30, 2021 and December 31, 2020, the Company’s total amount of goodwill recorded was $ 1,148.9 million.

No goodwill impairment was recognized during the three and six months ended June 30, 2021 and 2020.

The following table presents the details of goodwill by segment as of June 30, 2021 and December 31, 2020:

As of September 30, 2021 and December 31, 2020, the Company’s total amount of goodwill recorded was $ 1,148.9 million.

No goodwill impairment was recognized during the three and nine months ended September 30, 2021 and 2020.

The following table presents the details of goodwill by segment as of September 30, 2021 and December 31, 2020:

(in thousands) Market Making Execution Services Corporate Total

Balance as of period-end $ 755,292 $ 393,634 $ — $ 1,148,926

As of June 30, 2021 and December 31, 2020, the Company's total amount of intangible assets recorded was $ 418.3 million and $ 454.5 million, respectively.

Acquired intangible assets consisted of the following as of June 30, 2021 and December 31, 2020:

As of June 30, 2021

As of September 30, 2021 and December 31, 2020, the Company's total amount of intangible assets recorded was $ 402.9 million and $ 454.5 million, respectively.

Acquired intangible assets consisted of the following as of September 30, 2021 and December 31, 2020:

As of September 30, 2021

(in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives

6 unchanged sentences

ETF buyer relationships 950 ( 950 ) — 9

Other $ 1,500 $ — $ 1,500 Indefinite

$ 639,493 $ ( 236,581 ) $ 402,912

8 unchanged sentences

ETF buyer relationships 950 ( 876 ) 74 9

Other $ — $ — $ — Indefinite

$ 637,993 $ ( 183,494 ) $ 454,499

Amortization expense relating to finite-lived intangible assets was approximately $ 18.1 million and $ 19.0 million for the three months ended June 30, 2021 and 2020, respectfully, and $ 36.2 million and $ 37.9 million for the six months ended June 30, 2021 and 2020, respectively.

Amortization expense relating to finite-lived intangible assets was approximately $ 16.9 million and $ 18.3 million for the three months ended September 30, 2021 and 2020, respectfully, and $ 53.1 million and $ 56.2 million for the nine months ended September 30, 2021 and 2020, respectively.

This is included in Amortization of purchased intangibles and acquired capitalized software in the accompanying Condensed Consolidated Statements of Comprehensive Income.

3 unchanged sentences

Receivables from/Payables to Broker-Dealers and Clearing Organizations

The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at June 30, 2021 and December 31, 2020:

(in thousands) June 30, 2021 December 31, 2020

The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at September 30, 2021 and December 31, 2020:

(in thousands) September 30, 2021 December 31, 2020

Due from prime brokers $ 557,316 $ 697,293

11 unchanged sentences

Total payables to broker-dealers and clearing organizations $ 1,094,971 $ 876,446

Included as a deduction from “Due from prime brokers” and “Net equity with futures commission merchants” is the outstanding principal balance on all of the Company’s prime brokerage credit facilities (described in Note 8 "Borrowings") of approximately $ 201.8 million and $ 134.7 million as of June 30, 2021 and December 31, 2020, respectively.

Included as a deduction from “Due from prime brokers” and “Net equity with futures commission merchants” is the outstanding principal balance on all of the Company’s prime brokerage credit facilities (described in Note 9 "Borrowings") of approximately $ 202.5 million and $ 134.7 million as of September 30, 2021 and December 31, 2020, respectively.

The loan proceeds from the credit facilities are available only to meet the initial margin requirements associated with the Company’s ordinary course futures and other trading positions, which are held in the Company’s trading accounts with an affiliate of the respective financial institutions.

3 unchanged sentences

The Company is permitted to sell or repledge securities received as collateral and use these securities to secure repurchase agreements, enter into securities lending transactions or deliver these securities to counterparties or clearing organizations to cover short positions.

At June 30, 2021 and December 31, 2020, substantially all of the securities received as collateral have been repledged.

The fair value of the collateralized transactions at June 30, 2021 and December 31, 2020 are summarized as follows:

(in thousands) June 30, 2021 December 31, 2020

At September 30, 2021 and December 31, 2020, substantially all of the securities received as collateral have been repledged.

The fair value of the collateralized transactions at September 30, 2021 and December 31, 2020 are summarized as follows:

(in thousands) September 30, 2021 December 31, 2020

Securities received as collateral:

3 unchanged sentences

In the normal course of business, the Company pledges qualified securities with clearing organizations to satisfy daily margin and clearing fund requirements.

Financial instruments owned and pledged, where the counterparty has the right to repledge, at June 30, 2021 and December 31, 2020 consisted of the following:

(in thousands) June 30, 2021 December 31, 2020

Financial instruments owned and pledged, where the counterparty has the right to repledge, at September 30, 2021 and December 31, 2020 consisted of the following:

(in thousands) September 30, 2021 December 31, 2020

Equities $ 947,661 $ 734,024

3 unchanged sentences

The following summarizes the Company's short-term borrowing balances outstanding, net of related debt issuance costs, with each described in further detail below.

June 30, 2021

September 30, 2021

(in thousands) Borrowing Outstanding Deferred Debt Issuance Cost Short-term Borrowings, net

29 unchanged sentences

These balances are included within Short-term borrowings on the Condensed Consolidated Statements of Financial Condition.

At June 30, 2021

At September 30, 2021

(in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net

11 unchanged sentences

Interest expense is included within Interest and dividends expense in the accompanying Condensed Consolidated Statements of Comprehensive Income.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2021 2020 2021 2020

6 unchanged sentences

The Company’s international securities clearance and settlement activities are funded with operating cash or with short-term bank loans in the form of overdraft facilities.

At June 30, 2021, there was $ 18.5 million associated with international settlement activities outstanding under these facilities at a weighted average interest rate of approximately 2.3 %.

At September 30, 2021, there was $ 136.7 million associated with international settlement activities outstanding under these facilities at a weighted average interest rate of approximately 1.2 %.

At December 31, 2020, there was $ 28.7 million associated with international settlement activities outstanding under these facilities at a weighted average interest rate of approximately 2.4 %.

3 unchanged sentences

The proceeds of these facilities are used to meet margin requirements associated with the products traded by the Company in the ordinary course, and amounts borrowed are collateralized by the Company’s trading accounts with the applicable financial institution.

At June 30, 2021

At September 30, 2021

(in thousands) Weighted Average

12 unchanged sentences

(1) Outstanding borrowings are included with Receivables from/Payables to broker-dealers and clearing organizations within the Condensed Consolidated Statements of Financial Condition.

Interest expense in relation to the facilities was approximately $ 1.1 million and $ 1.3 million for the three months ended June 30, 2021 and 2020 , and $ 2.1 million and $ 2.6 million for the six months ended June 30, 2021 and 2020, respectively.

Interest expense in relation to the facilities was approximately $ 1.4 million and $ 1.2 million for the three months ended September 30, 2021 and 2020 , and $ 3.5 million and $ 3.8 million for the nine months ended September 30, 2021 and 2020, respectively.

Long-Term Borrowings

The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable:

At June 30, 2021

At September 30, 2021

(in thousands) Maturity

28 unchanged sentences

VFH is also subject to contingent principal prepayments based on excess cash flow and certain other triggering events.

Borrowings under the Amended Credit Agreement are guaranteed by Virtu Financial and

VFH’s material non-regulated domestic restricted subsidiaries and secured by substantially all of the assets of VFH and the guarantors, in each case, subject to certain exceptions.

Borrowings under the Amended Credit Agreement are guaranteed by Virtu Financial and VFH’s material non-regulated domestic restricted subsidiaries and secured by substantially all of the assets of VFH and the guarantors, in each case, subject to certain exceptions.

Under the Amended Credit Agreement, the term loans will mature on March 1, 2026.

The term loans amortize in annual installments equal to 1.0 % of the original aggregate principal amount of the term loans.

As of June 30, 2021, $ 1,600 million was outstanding under the First Lien Term Loan Facility.

As of September 30, 2021, $ 1,600 million was outstanding under the First Lien Term Loan Facility.

The revolving commitments will terminate on March 1, 2022.

There were no outstanding borrowings under the First Lien Revolving Facility as of June 30, 2021 or December 31, 2020.

There were no outstanding borrowings under the First Lien Revolving Facility as of September 30, 2021 or December 31, 2020.

The Amended Credit Agreement contains certain customary covenants and events of default, including relating to a change of control.

13 unchanged sentences

In December 2019, the maturity date of the SBI Bonds was extended to January 2023.

The principal balance was ¥ 3.5 billion ($ 31.5 million) as of June 30, 2021 and ¥ 3.5 billion ($ 33.9 million) as of December 31, 2020.

The Company recorded a gain of $ 0.1 million during both the three months ended June 30, 2021 and 2020, and a gain of $ 2.4 million and a loss of $ 0.2 million during the six months ended June 30, 2021 and 2020, respectively, due to changes in foreign currency rates.

As of June 30, 2021, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

(in thousands) June 30, 2021

The principal balance was ¥ 3.5 billion ($ 31.5 million) as of September 30, 2021 and ¥ 3.5 billion ($ 33.9 million) as of December 31, 2020.

The Company had a gain of $ 0.1 million and a loss of $ 0.8 million during the three months ended September 30, 2021, and 2020, respectively, and a gain of $ 2.4 million and a loss of $ 1.0 million during the nine months ended September 30, 2021 and 2020, respectively, due to changes in foreign currency rates.

As of September 30, 2021, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

(in thousands) September 30, 2021

Remainder of 2021 $ —

14 unchanged sentences

Consequently, such financial instruments are classified as Level 2.

Fair value measurements for those items measured on a recurring basis are summarized below as of June 30, 2021:

June 30, 2021

Fair value measurements for those items measured on a recurring basis are summarized below as of September 30, 2021:

September 30, 2021

(in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value

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The JNX Investment is included within Level 3 of the fair value hierarchy.

As of June 30, 2020 and 2021, the fair value of the JNX Investment was determined using a weighted average of valuations using 1) the discounted cash flow method, an income approach;

As of September 30, 2020 and 2021, the fair value of the JNX Investment was determined using a weighted average of valuations using 1) the discounted cash flow method, an income approach;

2) a market approach based on average enterprise value/EBITDA ratios of comparable companies;

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The table below presents information on the valuation techniques, significant unobservable inputs and their ranges for the JNX Investment:

June 30, 2021

September 30, 2021

(in thousands) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average

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The following presents the changes in the Company's Level 3 financial instruments measured at fair value on a recurring basis:

Three Months Ended June 30, 2021

(in thousands) Balance at March 31, 2021 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2021 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2021

Three Months Ended September 30, 2021

(in thousands) Balance at June 30, 2021 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at September 30, 2021 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2021

Other assets:

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Total $ 78,313 $ — $ 7,004 $ — $ — $ 85,317 $ 7,004

(1) Total realized and unrealized gains/(losses) includes gains and losses realized on the SBI Bonds (see Note 8 "Borrowings" for more details) due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the SBI Investment.

Three Months Ended June 30, 2020

(in thousands) Balance at March 30, 2020 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2020 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2020

(1) Total realized and unrealized gains/(losses) includes gains and losses realized on the SBI Bonds (see Note 9 "Borrowings" for more details) due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment.

Three Months Ended September 30, 2020

(in thousands) Balance at June 30, 2020 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at September 30, 2020 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2020

Other assets:

2 unchanged sentences

Six Months Ended June 30, 2021

(in thousands) Balance at December 31, 2020 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2021 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2021

Nine Months Ended September 30, 2021

(in thousands) Balance at December 31, 2020 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at September 30, 2021 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2021

Other assets:

2 unchanged sentences

Six Months Ended June 30, 2020

(in thousands) Balance at December 31, 2019 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2020 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2020

Nine Months Ended September 30, 2020

(in thousands) Balance at December 31, 2019 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at September 30, 2020 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2020

Other assets:

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The fair value of the Company’s long-term borrowings is based on quoted prices from the market for similar instruments, and is categorized as Level 2 in the fair value hierarchy.

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of June 30, 2021:

June 30, 2021

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of September 30, 2021:

September 30, 2021

Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

48 unchanged sentences

In the tables below, the amounts of financial instruments owned that are not offset in the Condensed Consolidated Statements of Financial Condition, but could be netted against financial liabilities with specific counterparties under legally enforceable master netting agreements in the event of default, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these financial instruments.

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of June 30, 2021 and December 31, 2020:

June 30, 2021

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of September 30, 2021 and December 31, 2020:

September 30, 2021

Gross Amounts of Recognized Assets Amounts Offset in the Condensed Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Condensed Consolidated Statements of Financial Condition Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition

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The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged:

June 30, 2021

September 30, 2021

Remaining Contractual Maturity

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Derivative Instruments

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at June 30, 2021 and December 31, 2020:

(in thousands) June 30, 2021 December 31, 2020

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at September 30, 2021 and December 31, 2020:

(in thousands) September 30, 2021 December 31, 2020

Derivatives Assets Financial Statements Location Fair Value Notional Fair Value Notional

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Amounts included in receivables from and payables to broker-dealers and clearing organizations represent net variation margin on long and short futures contracts as well as amounts receivable or payable on interest rate swaps.

The following table summarizes the net gain (loss) from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in total revenues, and from those designated as hedging instruments under ASC 815, which are recorded in other comprehensive income in the accompanying Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2021 and 2020.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) Financial Statements Location 2021 2020 2021 2020

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The Company and its JV partners each pay monthly fees for the use of the microwave communication networks in connection with their respective trading activities, and the JVs may sell excess bandwidth that is not utilized by the JV members to third parties.

As of June 30, 2021, the Company held noncontrolling interests of 10 % and 50 %, respectively, in these JVs.

As of September 30, 2021, the Company held noncontrolling interests of 10 % and 50 %, respectively, in these JVs.

The Company has an interest in a JV that offers derivatives trading technology and execution services to broker-dealers, professional traders and select hedge funds.

As of June 30, 2021, the Company held approximately a 10 % noncontrolling interest in this JV.

As of September 30, 2021, the Company held approximately a 10 % noncontrolling interest in this JV.

The Company has an interest in a JV that is developing a member-owned equities exchange with the goal of increasing competition and transparency, while reducing fixed costs and simplifying execution of equity trading in the U.S.

As of June 30, 2021, the Company held approximately a 14.1 % noncontrolling interest in this JV.

As of September 30, 2021, the Company held approximately a 14.1 % noncontrolling interest in this JV.

The Company's four JVs meet the criteria to be considered VIEs, which it does not consolidate.

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The Company’s exposure to the obligations of these VIEs is generally limited to its interests in each respective JV, which is the carrying value of the equity investment in each JV.

The following table presents the Company’s nonconsolidated VIEs at June 30, 2021:

The following table presents the Company’s nonconsolidated VIEs at September 30, 2021:

Carrying Amount Maximum Exposure to Loss VIEs' assets

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Disaggregation of Revenues

The following tables present the Company’s revenue from contracts with customers disaggregated by service, by timing of revenue recognition, reconciled to the Company’s segments, for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(in thousands) Market Making Execution Services Corporate Total

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Total revenues $ 409,290 $ 132,549 $ 2,505 $ 544,344

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

(in thousands) Market Making Execution Services Corporate Total

10 unchanged sentences

Total revenues $ 474,598 $ 182,680 $ ( 1,166 ) $ 656,112

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(in thousands) Market Making Execution Services Corporate Total

10 unchanged sentences

Total revenues $ 1,635,555 $ 459,918 $ 10,408 $ 2,105,881

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

(in thousands) Market Making Execution Services Corporate Total

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Remaining Performance Obligations and Revenue Recognized from Past Performance Obligations

As of June 30, 2021 and 2020, the aggregate amount of the transaction price allocated to the performance obligations relating to workflow technology and analytics revenues that are unsatisfied (or partially unsatisfied) was not material.

The Company recognized $ 0.6 million and $ 0.7 million of revenue related to performance obligations satisfied in previous period for the three months ended June 30, 2021 and 2020, respectively.

As of September 30, 2021 and 2020, the aggregate amount of the transaction price allocated to the performance obligations relating to workflow technology and analytics revenues that are unsatisfied (or partially unsatisfied) was not material.

The Company recognized $ 0.5 million and $ 0.6 million of revenue related to performance obligations satisfied in previous period for the three months ended September 30, 2021 and 2020, respectively.

Contract Assets and Contract Liabilities

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The Company records a contract liability when payment is received prior to the time at which the satisfaction of the service obligation occurs.

Receivables related to revenues from contracts with customers amounted to $ 50.6 million and $ 57.3 million as of June 30, 2021 and December 31, 2020, respectively.

Receivables related to revenues from contracts with customers amounted to $ 49.1 million and $ 57.3 million as of September 30, 2021 and December 31, 2020, respectively.

The Company did not identify any contract assets.

There were no impairment losses on receivables as of June 30, 2021.

There were no impairment losses on receivables as of September 30, 2021.

Deferred revenue primarily relates to deferred commissions allocated to analytics products and subscription fees billed in advance of satisfying the performance obligations.

Deferred revenue related to contracts with customers was $ 12.7 million and $ 9.3 million as of June 30, 2021 and December 31, 2020, respectively.

The Company recognized revenue of $ 7.2 million and $ 7.6 million for the three months ended June 30, 2021 and 2020 respectively, and $ 15.2 million and $ 15.1 million during the six months ended June 30, 2021 and 2020, respectively that had been initially recorded as deferred revenue.

Deferred revenue related to contracts with customers was $ 10.0 million and $ 9.3 million as of September 30, 2021 and December 31, 2020, respectively.

The Company recognized revenue of $ 9.2 million and $ 8.6 million for the three months ended September 30, 2021 and 2020 respectively, and $ 24.4 million and $ 23.6 million during the nine months ended September 30, 2021 and 2020, respectively that had been initially recorded as deferred revenue.

The Company has not identified any costs to obtain or fulfill its contracts under ASC 606.

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taxation as partnerships.

Accordingly, for the three and six months ended June 30, 2021 and 2020, the income attributable to these noncontrolling interests was reported in the Condensed Consolidated Statements of Comprehensive Income, but the related U.S.

Accordingly, for the three and nine months ended September 30, 2021 and 2020, the income attributable to these noncontrolling interests was reported in the Condensed Consolidated Statements of Comprehensive Income, but the related U.S.

income tax expense attributable to these noncontrolling interests was not reported by the Company as it is the obligation of the individual partners.

The Company’s provisions for income taxes and effective tax rates were $ 26.1 million, 19.3 %, and $ 69.3 million, 17.1 % for the three months ended June 30, 2021 and 2020, respectively, and $ 106.7 million, 17.1 % and $ 147.2 million, 16.9 % for the six months ended June 30, 2021 and 2020, respectively.

The Company’s provisions for income taxes and effective tax rates were $ 22.0 million, 15.1 %, and $ 52.8 million, 20.9 % for the three months ended September 30, 2021 and 2020, respectively, and $ 128.6 million, 16.7 % and $ 200.0 million, 17.8 % for the nine months ended September 30, 2021 and 2020, respectively.

Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation.

Included in Other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2021 and December 31, 2020 are current income tax receivables of $ 43.0 million and $ 83.1 million, respectively.

The balances at June 30, 2021 and December 31, 2020 primarily comprised income tax benefits due to the Company from federal, state, local, and foreign tax jurisdictions based on income before taxes.

Included in Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition at June 30, 2021 and December 31, 2020 are current tax liabilities of $ 17.6 million and $ 37.9 million, respectively.

The balances at June 30, 2021 and December 31, 2020 primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes.

Included in Other assets on the Condensed Consolidated Statements of Financial Condition at September 30, 2021 and December 31, 2020 are current income tax receivables of $ 49.8 million and $ 83.1 million, respectively.

The balances at September 30, 2021 and December 31, 2020 primarily comprised income tax benefits due to the Company from federal, state, local, and foreign tax jurisdictions based on income before taxes.

Included in Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition at September 30, 2021 and December 31, 2020 are current tax liabilities of $ 12.6 million and $ 37.9 million, respectively.

The balances at September 30, 2021 and December 31, 2020 primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes.

Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the IPO (see Note 5 "Tax Receivable Agreements"), the Acquisition of KCG and the ITG Acquisition, differences in the valuation of financial assets and liabilities, and other temporary differences arising from the deductibility of compensation, depreciation, and other expenses in different time periods for book and income tax return purposes.

2 unchanged sentences

Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically with appropriate consideration given to all positive and negative evidence related to the realization of the deferred tax assets.

At June 30, 2021 and December 31, 2020, the Company did not have any U.S.

At September 30, 2021 and December 31, 2020, the Company did not have any U.S.

federal net operating loss carryforwards and therefore the Company did not record a deferred tax asset related to federal net operating loss carryforwards.

At June 30, 2021 and December 31, 2020, the Company recorded deferred income taxes related to state and local net operating losses of $ 0.4 million.

At September 30, 2021 and December 31, 2020, the Company recorded deferred income taxes related to state and local net operating losses of $ 0.4 million.

These net operating losses will begin to expire in 2039.

1 unchanged sentence

As a result of the ITG Acquisition, the Company had non-U.S.

net operating losses at June 30, 2021 and December 31, 2020 of $ 74.0 million and $ 75.1 million, respectively, and recorded a related deferred tax asset of $ 14.9 million and $ 15.2 million, respectively.

A valuation allowance of $ 14.8 million and $ 15.1 million was recorded against this deferred tax asset at June 30, 2021 and December 31, 2020, respectively, as it is more likely than not that a portion of this deferred tax asset will not be realized.

net operating losses at September 30, 2021 and December 31, 2020 of $ 71.6 million and $ 75.1 million, respectively, and recorded a related deferred tax asset of $ 14.3 million and $ 15.2 million, respectively.

A valuation allowance of $ 14.3 million and $ 15.1 million was recorded against this deferred tax asset at September 30, 2021 and December 31, 2020, respectively, as it is more likely than not that a portion of this deferred tax asset will not be realized.

As a result of the Acquisition of KCG, the Company had non-U.S.

net operating losses at June 30, 2021 and December 31, 2020 of $ 239.3 million and $ 239.0 million, respectively, and recorded a related deferred tax asset of $ 44.9 million and $ 44.9 million, respectively.

A full valuation allowance was also recorded against this deferred tax asset at June 30, 2021 and December 31, 2020 as it is more likely than not that this deferred tax asset will not be realized.

No valuation allowance against the remaining deferred taxes was recorded as of June 30, 2021 and December 31, 2020 because it is more likely than not that these deferred tax assets will be fully realized.

net operating losses at September 30, 2021 and December 31, 2020 of $ 239.3 million and $ 239.0 million, respectively, and recorded a related deferred tax asset of $ 44.9 million and $ 44.9 million, respectively.

A full valuation allowance was also recorded against this deferred tax asset at September 30, 2021 and December 31, 2020 as it is more likely than not that this deferred tax asset will not be realized.

No valuation allowance against the remaining deferred taxes was recorded as of September 30, 2021 and December 31, 2020 because it is more likely than not that these deferred tax assets will be fully realized.

The Company is subject to taxation in U.S.

federal, state, local and foreign jurisdictions.

As of June 30, 2021, the Company’s tax years for 2015 through 2019 and 2017 through 2019 were subject to examination by U.S.

As of September 30, 2021, the Company’s tax years for 2015 through 2019 and 2017 through 2019 were subject to examination by U.S.

tax authorities, respectively.

5 unchanged sentences

Penalties, if any, are recorded in Operations and administrative expense and interest received or paid is recorded in Other, net or Operations and administrative expense in the Condensed Consolidated Statements of Comprehensive Income, respectively.

The Company had $ 8.4 million of unrecognized tax benefits as of June 30, 2021, all of which would affect the Company’s effective tax rate if recognized.

The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of June 30, 2021.

The Company had $ 8.3 million of unrecognized tax benefits as of September 30, 2021, all of which would affect the Company’s effective tax rate if recognized.

The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of September 30, 2021.

Commitments, Contingencies and Guarantees

13 unchanged sentences

The Company believes that the claims are without merit and is defending itself vigorously.

On August 31, 2021, the Company was named as a defendant in Alers v.

Robinhood Financial, LLC et al No.

The complaint was filed in federal district court in Florida on behalf of a putative class, and asserts claims against the Company and numerous other financial institutions alleging a breach of fiduciary duty by Robinhood and aiding and abetting thereof by the Company and other market making firms.

The complaint did not specify the amount of alleged damages.

The Company believes that the claims are without merit and is defending itself vigorously.

In October 2021, Robinhood and the market-maker defendants moved to transfer the case to the Northern District of California, or in the alternative, to dismiss the complaint.

Other Legal and Regulatory Matters

19 unchanged sentences

Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and general indemnifications.

The Company has also provided general indemnifications to its managers, officers, directors, employees, and agents against expenses, legal fees, judgments, fines, settlements, and other amounts actually and reasonably incurred by such persons under certain circumstances as more fully disclosed in its operating agreement.

disclosed in its operating agreement.

The overall maximum amount of the obligations (if any) cannot reasonably be estimated as it will depend on the facts and circumstances that give rise to any future claims.

2 unchanged sentences

Lease assets and liabilities are summarized as follows:

(in thousands) Financial Statement Location June 30, 2021 December 31, 2020

(in thousands) Financial Statement Location September 30, 2021 December 31, 2020

Operating leases

6 unchanged sentences

Weighted average remaining lease term and discount rate are as follows:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Weighted average remaining lease term

5 unchanged sentences

The components of lease expense are as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2021 2020 2021 2020

9 unchanged sentences

Total Finance lease cost $ 1,510 $ 2,765 $ 5,207 $ 9,177

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2021, are as follows:

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of September 30, 2021, are as follows:

(in thousands) Operating Leases Finance Leases

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as reported within the Condensed Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.

(in thousands) June 30, 2021 December 31, 2020

(in thousands) September 30, 2021 December 31, 2020

Cash and cash equivalents $ 683,836 $ 889,559

7 unchanged sentences

The Founder Member controls approximately 83.0 % of the combined voting power of our common stock as a result of its ownership of our Class C and Class D Common Stock.

The Company holds approximately a 63.6 % interest in Virtu Financial at June 30, 2021.

The Company holds approximately a 62.6 % interest in Virtu Financial at September 30, 2021.

During the period prior to the Reorganization Transactions and IPO, Class A-2 profits interests and Class B interests in Virtu Financial were issued to Employee Holdco (as defined below) on behalf of certain key employees and stakeholders.

In connection with the Reorganization Transactions, all Class A-2 profits interests and Class B interests were reclassified into Virtu Financial Units.

As of June 30, 2021 and December 31, 2020, there were 4,831,810 and 5,259,713 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 427,903 and 2,360,239 of such Virtu Financial Units and corresponding Class C Common Stock were exchanged into Class A Common Stock, forfeited or repurchased during the six months ended June 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, there were 4,795,839 and 5,259,713 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 463,874 and 2,420,239 of such Virtu Financial Units and corresponding Class C Common Stock were exchanged into Class A Common Stock, forfeited or repurchased during the nine months ended September 30, 2021 and 2020, respectively.

Amended and Restated 2015 Management Incentive Plan

15 unchanged sentences

The timing and amount of repurchase transactions are determined by the Company's management based on its evaluation of market conditions, share price, cash sources, legal requirements and other factors.

From the inception of the program through June 30, 2021, the Company repurchased approximately 7.1 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 198.6 million.

As of June 30, 2021, the Company has approximately of $ 271.4 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.

From the inception of the program through September 30, 2021, the Company repurchased approximately 12.5 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 337.5 million.

As of September 30, 2021, the Company has approximately $ 132.5 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.

Employee Exchanges

During the six months ended June 30, 2021 and 2020, pursuant to the exchange agreement by and among the Company, Virtu Financial and holders of Virtu Financial Units, certain current and former employees elected to exchange 382,281 and 2,360,239 units, respectively in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one -for-one basis for shares of Class A Common Stock.

During the nine months ended September 30, 2021 and 2020, pursuant to the exchange agreement by and among the Company, Virtu Financial and holders of Virtu Financial Units, certain current and former employees elected to exchange 405,272 and 2,420,239 units, respectively in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one -for-one basis for shares of Class A Common Stock.

Warrant Issuance

7 unchanged sentences

The fair value of the Warrant was determined using a Black-Scholes-Merton model, and was recorded as a debt issuance cost within Other Assets on the Condensed Consolidated Statements of Financial Condition and as an increase to Additional paid-in capital on the Condensed Consolidated Statements of Changes in Equity.

The balance was amortized on a straight-line basis from March 20, 2020 through September 20, 2020, the date on which the Founder Member Loan Facility expired, and recorded as expense within Debt issue cost related to debt refinancing, prepayment and commitment fees in the Condensed Consolidated Statements of Comprehensive Income.

The balance was amortized on a straight-line basis from March 20, 2020 through September 20, 2020, the date on which the Founder Member Loan Facility

expired, and recorded as expense within Debt issue cost related to debt refinancing, prepayment and commitment fees in the Condensed Consolidated Statements of Comprehensive Income.

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in Other Comprehensive Income (Loss) for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, 2021

The following table presents the changes in Other Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, 2021

(in thousands) AOCI Beginning Balance Amounts recorded

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(1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Condensed Consolidated Statements of Comprehensive Income.

As of June 30, 2021, the Company expects approximately $ 15.0 million to be reclassified from AOCI into earnings over the next 12 months.

As of September 30, 2021, the Company expects approximately $ 15.0 million to be reclassified from AOCI into earnings over the next 12 months.

The timing of the reclassification is based on the interest payment schedule of the long-term borrowings.

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

(in thousands) AOCI Beginning Balance Amounts recorded

3 unchanged sentences

Total $ ( 39,567 ) $ 2,416 $ 1,948 $ ( 35,203 )

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(in thousands) AOCI Beginning Balance Amounts recorded

4 unchanged sentences

(1) Amounts reclassified from AOCI to income are included within Financing interest expense on long-term borrowings on the Consolidated Statements of Comprehensive Income.

As of June 30, 2021, the Company expects approximately $ 15.0 million to be reclassified from AOCI into earnings over the next 12 months.

As of September 30, 2021, the Company expects approximately $ 15.0 million to be reclassified from AOCI into earnings over the next 12 months.

The timing of the reclassification is based on the interest payment schedule of the long-term borrowings.

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

(in thousands) AOCI Beginning Balance Amounts recorded

6 unchanged sentences

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 18 "Capital Structure", and in connection with the IPO, non-qualified stock options to purchase shares of Class A Common Stock were granted, each of which vests in equal annual installments over a period of four years from grant date and expires not later than 10 years from the date of grant.

The following table summarizes activity related to stock options for the six months ended June 30, 2021 and 2020:

The following table summarizes activity related to stock options for the nine months ended September 30, 2021 and 2020:

Options Outstanding Options Exercisable

4 unchanged sentences

Forfeited or expired — — — — —

At June 30, 2020 2,615,856 $ 19.00 4.74 2,615,856 $ 19.00

At September 30, 2020 2,426,152 $ 19.00 4.49 2,426,152 $ 19.00

At December 31, 2020 2,324,152 $ 19.00 4.24 2,324,152 $ 19.00

2 unchanged sentences

Forfeited or expired — — — — —

At June 30, 2021 1,916,155 $ 19.00 3.74 1,916,155 $ 19.00

At September 30, 2021 1,877,155 $ 19.00 3.49 1,877,155 $ 19.00

The expected life was determined based on an average of vesting and contractual period.

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Performance targets are based on the Company's adjusted EBITDA for certain future periods.

For the six months ended June 30, 2021 and 2020, respectively, there were 633,938 and 852,599 shares of immediately vested Class A Common Stock granted as part of year-end compensation.

In addition, the Company accrued compensation expense of $ 6.5 million and $ 8.7 million for the three months ended June 30, 2021 and 2020, respectively, and $ 11.5 million and $ 25.8 million for the six months ended June 30, 2021 and 2020, respectively, related to immediately vested Class A Common Stock expected to be awarded as part of year-end incentive compensation, which was included in Employee compensation and payroll taxes on the Condensed Consolidated Statements of Comprehensive Income and Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition.

The following table summarizes activity related to RSUs (including the Assumed Awards) and RSAs for the six months ended June 30, 2021 and 2020:

For the nine months ended September 30, 2021 and 2020, respectively, there were 633,938 and 967,526 shares of immediately vested Class A Common Stock granted as part of year-end compensation.

In addition, the Company accrued compensation expense of $ 6.3 million for the three months ended September 30, 2021 and reduced accrued compensation expense by $ 11.4 million for the three months ended September 30, 2020, and accrued compensation expense of $ 17.7 million and $ 14.4 million for the nine months ended September 30, 2021 and 2020, respectively, related to immediately vested Class A Common Stock expected to be awarded as part of year-end incentive compensation, which was included in Employee compensation and payroll taxes on the Condensed Consolidated Statements of Comprehensive Income and Accounts payable, accrued expenses and other liabilities on the Condensed Consolidated Statements of Financial Condition.

The following table summarizes activity related to RSUs (including the Assumed Awards) and RSAs for the nine months ended September 30, 2021 and 2020:

Number of RSUs and RSAs Weighted

4 unchanged sentences

Vested ( 2,124,843 ) 20.40

At June 30, 2020 3,979,091 $ 20.39

At September 30, 2020 3,778,317 $ 20.77

At December 31, 2020 3,393,084 $ 21.35

2 unchanged sentences

Vested ( 2,032,477 ) 23.27

At June 30, 2021 3,458,496 $ 23.89

At September 30, 2021 3,612,264 $ 24.05

(1) Excluded in the number of RSUs and RSAs are 350,000 participating RSAs where the grant date has not been achieved because the performance conditions have not been met.

The Company recognized $ 6.1 million and $ 7.8 million for the three months ended June 30, 2021 and 2020 and $ 13.9 million and $ 16.8 million for the six months ended June 30, 2021 and 2020, respectively, of compensation expense in relation to RSUs.

As of June 30, 2021 and December 31, 2020, total unrecognized share-based compensation expense related to unvested RSUs was $ 55.0 million and $ 37.1 million, respectively, and this amount is to be recognized over a weighted average period of 1.2 years and 1.0 year, respectively.

The Company recognized $ 6.7 million and $ 9.0 million for the three months ended September 30, 2021 and 2020 and $ 20.5 million and $ 25.8 million for the nine months ended September 30, 2021 and 2020, respectively, of compensation expense in relation to RSUs.

As of September 30, 2021 and December 31, 2020, total unrecognized share-based compensation expense related to unvested RSUs was $ 51.4 million and $ 37.1 million, respectively, and this amount is to be recognized over a weighted average period of 1.1 years and 1.0 year, respectively.

Awards in which the specific performance conditions have not been met are not included in unrecognized share-based compensation expense.

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Deferrals may also be directed to notional investments in certain of the employee investment opportunities.

No amounts have been recognized as compensation cost under the DCP as of June 30, 2021.

No amounts have been recognized as compensation cost under the DCP as of September 30, 2021.

Regulatory Requirement

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broker-dealer subsidiary, VAL, is subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital as detailed in the table below.

Pursuant to New York Stock Exchange ("NYSE") rules, VAL was also required to maintain $ 1.0 million of capital in connection with the operation of its designated market maker (“DMM”) business as of June 30, 2021.

The required amount is determined under the exchange rules as the greater of (i) $ 1 million or (ii) $ 75,000 for every 0.1 % of NYSE transaction dollar volume in each of the securities for which the Company is registered as the DMM.

VAL's regulatory capital and regulatory capital requirements as of June 30, 2021 was as follows:

VAL's regulatory capital and regulatory capital requirements as of September 30, 2021 was as follows:

(in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital

Virtu Americas LLC $ 484,482 $ 1,725 $ 482,757

As of June 30, 2021, VAL had $ 57.4 million of cash in special reserve bank accounts for the benefit of customers pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements, and $ 8.8 million of cash in reserve bank accounts for the benefit of proprietary accounts of brokers.

As of September 30, 2021, VAL had $ 60.9 million of cash in special reserve bank accounts for the benefit of customers pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements, and $ 8.8 million of cash in reserve bank accounts for the benefit of proprietary accounts of brokers.

The balances are included within Cash restricted or segregated under regulations and other on the Condensed Consolidated Statements of Financial Condition.

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The Company’s foreign subsidiaries are subject to regulatory capital requirements set by local regulatory bodies, including the Investment Industry Regulatory Organization of Canada (“IIROC”), the Central Bank of Ireland ("CBI"), the Financial Conduct Authority ("FCA") in the United Kingdom, the Australian Securities and Investments Commission ("ASIC"), the Securities and Futures Commission in Hong Kong ("SFC"), and the Monetary Authority of Singapore ("MAS").

The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of June 30, 2021 were as follows:

The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of September 30, 2021 were as follows:

(in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital

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(1) Preliminary

As of June 30, 2021, Virtu ITG Europe Limited and Virtu ITG Canada Corp had $ 0.3 million and $ 0.4 million, respectively, of segregated funds on deposit for trade clearing and settlement activity, and Virtu ITG Hong Kong Ltd.

As of September 30, 2021, Virtu ITG Europe Limited and Virtu ITG Canada Corp had $ 0.2 million and $ 0.4 million, respectively, of segregated funds on deposit for trade clearing and settlement activity, and Virtu ITG Hong Kong Ltd.

had $ 30 thousand of segregated balances under a collateral account control agreement for the benefit of certain customers.

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The revenues are attributed to countries based on the locations of the subsidiaries.

The following table presents total revenues by geographic area for the three and six months ended June 30, 2021 and 2020 :

Three Months Ended June 30, Six Months Ended June 30,

The following table presents total revenues by geographic area for the three and nine months ended September 30, 2021 and 2020 :

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2021 2020 2021 2020

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Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments.

The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the three months ended June 30, 2021 and 2020 and are summarized in the following table:

The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the three months ended September 30, 2021 and 2020 and are summarized in the following table:

(in thousands) Market

Making Execution

Services Corporate

(1) Consolidated

Services Corporate Consolidated

Total revenue $ 409,290 $ 132,549 $ 2,505 $ 544,344

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Income (loss) before income taxes and noncontrolling interest 161,732 102,029 ( 11,246 ) 252,515

The Company's Pre-tax earnings by segment for the six months ended June 30, 2021 and 2020 are summarized in the following table:

The Company's Pre-tax earnings by segment for the nine months ended September 30, 2021 and 2020 are summarized in the following table:

(in thousands) Market Making Execution Services Corporate Consolidated Total

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The Company incurs expenses and maintains balances with its affiliates in the ordinary course of business.

As of June 30, 2021, and December 31, 2020 the Company had net receivables from its affiliates of $ 2.4 million and $ 2.3 million, respectively.

As of September 30, 2021, and December 31, 2020 the Company had net payables to its affiliates of $ 0.8 million and net receivables from its affiliates of $ 2.3 million, respectively.

The Company has held a minority interest in JNX since 2016 (see Note 10 "Financial Assets and Liabilities").

The Company pays exchange fees to JNX for the trading activities conducted on its proprietary trading system.

The Company paid $ 3.4 million and $ 6.0 million for the three months ended June 30, 2021 and 2020, respectively, and $ 6.3 million and $ 9.7 million for the six months ended June 30, 2021 and 2020, respectively, to JNX for these trading activities.

The Company paid $ 2.9 million and $ 4.1 million for the three months ended September 30, 2021 and 2020, respectively, and $ 9.1 million and $ 13.8 million for the nine months ended September 30, 2021 and 2020, respectively, to JNX for these trading activities.

The Company makes payments to two JVs (see Note 12 "Variable Interest Entities") to fund the construction of the microwave communication networks, and to purchase microwave communication networks, which are recorded within Communications and data processing on the Condensed Consolidated Statements of Comprehensive Income.

The Company made payments of $ 4.7 million both for the three months ended June 30, 2021 and 2020, and $ 9.3 million and $ 9.4 million for the six months ended June 30, 2021 and 2020, respectively, to these JVs.

The Company made payments of $ 10.5 million and $ 4.7 million the three months ended September 30, 2021 and 2020, respectively, and $ 19.9 million and $ 14.0 million for the nine months ended September 30, 2021 and 2020, respectively, to these JVs.

The Company purchases network connections services from affiliates of Level 3 Communications (“Level 3”).

Temasek and its affiliates have a significant ownership interest in Level 3.

The Company paid $ 0.3 million for both the three months ended June 30, 2021 and 2020, respectively, and $ 0.7 million and $ 0.8 million for the six months ended June 30, 2021 and 2020, respectively, to Level 3 for these services.

The Company paid $ 0.5 million and $ 0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $ 1.2 million for both the nine months ended September 30, 2021 and 2020, respectively, to Level 3 for these services.

The Company makes commission-sharing arrangement ("CSA") payments to affiliates of DBS Group Holdings ("DBS").

Temasek and its affiliates have a significant ownership interest in DBS.

Payments for the three and six months ended June 30, 2021 were immaterial.

The Company made payments of $ 0.2 million for the three and six months ended June 30, 2020.

Payments for the three and nine months ended September 30, 2021 were immaterial.

The Company made payments of $ 13.0 thousand and $ 0.2 million for the three and nine months ended September 30, 2020, respectively.

Ordinal Holdings I, LP is a stockholder in the Company with board representation.

On August 12, 2021, the Company entered into a Purchase Agreement with Ordinal Holdings I, LP to repurchase 1.5 million shares of the Company's Class A common stock for $ 39.2 million in accordance with the Company's previously disclosed share repurchase program.

See Note 18 "Capital Structure" for a further discussion of the Company's share repurchase program.

Subsequent Events

The Company has evaluated subsequent events for adjustment to or disclosure in its condensed consolidated financial statements through the date of this report, and has not identified any recordable or disclosable events, not otherwise reported in these condensed consolidated financial statements or the notes thereto, except for the following:

On August 4, 2021, the Company’s Board of Directors declared a dividend of $ 0.24 per share of Class A Common Stock and Class B Common Stock and per participating Restricted Stock Unit and Restricted Stock Award that will be paid on September 15, 2021 to holders of record as of September 1, 2021.

On November 3, 2021, the Company’s Board of Directors declared a dividend of $ 0.24 per share of Class A Common Stock and Class B Common Stock and per participating Restricted Stock Unit and Restricted Stock Award that will be paid on December 15, 2021 to holders of record as of December 1, 2021.

On November 3, 2021, the Company's Board of Directors authorized the expansion of the Company's current share repurchase program, increasing the total authorized amount by $ 750 million to $ 1,220 million and extended the duration through November 3, 2023.

Since the inception of the program through November 3, 2021, the company repurchased approximately 13.4 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 361.4 million.

As of November 3, 2021, the Company has approximately $ 858.6 million remaining capacity for future purchase of shares of Class A Common Stock and Virtu Financial Units under the program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements