What changed in this filing

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Item 1. Financial Statements

2023-07-28 compared with 2023-04-28 · 267 added, 173 removed, 1079 unchanged (29% of the section changed)

9 unchanged sentences

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data) March 31,

(in thousands, except share data) June 30,

2023 December 31,

8 unchanged sentences

Receivables from customers 130,623 80,830

Property, equipment and capitalized software (net of accumulated depreciation of $ 442,632 and $ 460,763 as of March 31, 2023 and December 31, 2022, respectively)

Property, equipment and capitalized software (net of accumulated depreciation of $ 341,375 and $ 460,763 as of June 30, 2023 and December 31, 2022, respectively)

95,735 85,194

1 unchanged sentence

Goodwill 1,148,926 1,148,926

Intangibles (net of accumulated amortization of $ 334,033 and $ 318,013 as of March 31, 2023 and December 31, 2022, respectively)

Intangibles (net of accumulated amortization of $ 350,053 and $ 318,013 as of June 30, 2023 and December 31, 2022, respectively)

289,440 321,480

Deferred tax assets 134,549 146,801

Other assets ($ 82,215 and $ 78,965 , at fair value, as of March 31, 2023 and December 31, 2022, respectively)

Other assets ($ 73,435 and $ 78,965 , at fair value, as of June 30, 2023 and December 31, 2022, respectively)

299,348 303,916

9 unchanged sentences

Tax receivable agreement obligations 215,542 238,758

Deferred tax liabilities 367 343

Accounts payable, accrued expenses and other liabilities 379,815 448,635

5 unchanged sentences

Stockholders' equity

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 134,714,394 and 133,071,754 shares, Outstanding — 96,259,605 and 98,549,464 shares at March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022, respectively

Class C common stock (par value $ 0.00001 ), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 8,856,531 and 9,030,066 shares at March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022, respectively

Treasury stock, at cost, 38,454,789 and 34,522,290 shares at March 31, 2023 and December 31, 2022, respectively

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 134,725,247 and 133,071,754 shares, Outstanding — 94,004,647 and 98,549,464 shares at June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, respectively

Class C common stock (par value $ 0.00001 ), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 8,856,531 and 9,030,066 shares at June 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, respectively

Treasury stock, at cost, 40,720,600 and 34,522,290 shares at June 30, 2023 and December 31, 2022, respectively

( 1,071,784 ) ( 954,637 )

4 unchanged sentences

stockholders' equity 1,275,100 1,341,899

Noncontrolling interest 277,201 309,528

Virtu Financial, Inc.

1 unchanged sentence

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data) March 31,

(in thousands, except share data) June 30,

2023 December 31,

Noncontrolling interest 329,756 309,528

Total equity 1,552,301 1,651,427

4 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended March 31,

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

(in thousands, except share and per share data) 2023 2022 2023 2022

39 unchanged sentences

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three Months Ended March 31, 2023, and 2022

Three and Six Months Ended June 30, 2023, and 2022

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.

14 unchanged sentences

Balance at March 31, 2023 134,714,394 $ 1 8,856,531 $ — 60,091,740 $ 1 ( 38,454,789 ) $ ( 1,030,205 ) $ 1,323,219 $ 987,852 $ 24,750 $ 1,305,618 $ 329,756 $ 1,635,374

Share based compensation 20,000 — — — — — — — 12,050 — — 12,050 — 12,050

Treasury stock purchases ( 9,147 ) — — — — — ( 2,265,811 ) ( 41,579 ) — ( 165 ) — ( 41,744 ) — ( 41,744 )

Net income — — — — — — — — — 16,702 — 16,702 12,842 29,544

Foreign exchange translation adjustment — — — — — — — — — — 1,503 1,503 1,024 2,527

Net change in unrealized cash flow hedges gains — — — — — — — — — — 4,879 4,879 3,323 8,202

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

— — — — — — — — — ( 23,908 ) — ( 23,908 ) ( 69,744 ) ( 93,652 )

Balance at June 30, 2023 134,725,247 $ 1 8,856,531 $ — 60,091,740 $ 1 ( 40,720,600 ) $ ( 1,071,784 ) $ 1,335,269 $ 980,481 $ 31,132 $ 1,275,100 $ 277,201 $ 1,552,301

Virtu Financial, Inc.

and Subsidiaries

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three and Six Months Ended June 30, 2023, and 2022

15 unchanged sentences

Balance at March 31, 2022 132,872,351 $ 1 9,053,155 $ — 60,091,740 $ 1 ( 27,235,407 ) $ ( 781,286 ) $ 1,246,983 $ 897,387 $ 16,019 $ 1,379,105 $ 319,637 $ 1,698,742

Share based compensation — — — — — — — — 9,411 — — 9,411 — 9,411

Repurchase of Class C common stock — — ( 1,800 ) — — — — — ( 52 ) — — ( 52 ) — ( 52 )

Treasury stock purchases — — — — — — ( 1,762,756 ) ( 47,486 ) — — — ( 47,486 ) — ( 47,486 )

Stock options exercised 22,000 — — — — — — — 418 — — 418 — 418

Net income — — — — — — — — — 85,167 — 85,167 63,729 148,896

Foreign exchange translation adjustment — — — — — — — — — — ( 10,773 ) ( 10,773 ) ( 9,037 ) ( 19,810 )

Net change in unrealized cash flow hedges losses — — — — — — — — — — 8,580 8,580 5,482 14,062

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

— — — — — — — — — ( 26,067 ) — ( 26,067 ) ( 76,906 ) ( 102,973 )

Issuance of common stock in connection with employee exchanges 21,289 — — — — — — — — — — — — —

Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges — — ( 21,289 ) — — — — — — — — — — —

Contributions from noncontrolling interests — $ — — $ — — $ — — $ — $ — $ — $ — $ — $ 39,200 $ 39,200

Balance at June 30, 2022 132,915,640 $ 1 9,030,066 $ — 60,091,740 $ 1 ( 28,998,163 ) $ ( 828,772 ) $ 1,256,760 $ 956,487 $ 13,826 $ 1,398,303 $ 342,105 $ 1,740,408

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

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2023 2022

25 unchanged sentences

Accounts payable, accrued expenses and other liabilities ( 50,970 ) ( 48,377 )

Net cash used in operating activities ( 148,382 ) ( 255,185 )

Net cash (used in) provided by operating activities ( 26,384 ) 57,622

Cash flows from investing activities

2 unchanged sentences

Other investing activities ( 6,860 ) 45,018

Net cash used in investing activities ( 35,783 ) ( 35,030 )

Net cash (used in) provided by investing activities ( 55,136 ) 4,003

Cash flows from financing activities

8 unchanged sentences

Debt issuance costs ( 3,888 ) ( 35,882 )

Contributions from noncontrolling interests — 39,200

Net cash used in financing activities ( 215,090 ) ( 307,830 )

4 unchanged sentences

Supplementary disclosure of cash flow information

Cash paid for interest $ 96,572 $ 49,277

Virtu Financial, Inc.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2023 2022

Cash paid for interest $ 225,332 $ 104,765

Cash paid for taxes 15,345 86,495

10 unchanged sentences

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

As of March 31, 2023, VFI owned approximately 59.5 % of the membership interests of Virtu Financial.

As of June 30, 2023, VFI owned approximately 58.9 % 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”).

47 unchanged sentences

The Company adopted this ASU on January 1, 2023 and it did not have a material impact on its condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted as of March 31, 2023

Liabilities - Supplier Finance Programs - In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) .

This ASU requires new quantitative and qualitative disclosure requirements for a buyer who enters into supplier financing programs.

The Company adopted this ASU on January 1, 2023 and it did not have a material impact on its condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted as of June 30, 2023

Fair Value Measurement - In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 326) .

3 unchanged sentences

The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements.

Liabilities - Supplier Finance Programs - In September 2022, the FASB issued ASU 2022-03, Liabilities—Supplier Finance Programs (Subtopic 405-50) .

This ASU requires new quantitative and qualitative disclosure requirements for a buyer who enters into supplier financing programs.

This ASU is effective for periods beginning after December 15, 2023.

The Company is currently evaluating the impact of this ASU but does not expect it to have a material impact on its condensed consolidated financial statements.

Leases - Common Control Arrangements - In March 2023, the FASB issued ASU 2023-01, Leases—Common Control Arrangements (Topic 842) .

8 unchanged sentences

The below table contains a reconciliation of Net income before income taxes and noncontrolling interest to Net income available for common stockholders:

Three Months Ended March 31,

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

(in thousands) 2023 2022 2023 2022

5 unchanged sentences

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

Three Months Ended March 31,

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

(in thousands, except for share or per share data) 2023 2022 2023 2022

6 unchanged sentences

Basic earnings per share $ 0.16 $ 0.78 $ 0.73 $ 1.78

Three Months Ended March 31,

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

(in thousands, except for share or per share data) 2023 2022 2023 2022

6 unchanged sentences

Diluted earnings per share (1) $ 0.16 $ 0.78 $ 0.73 $ 1.77

(1) The dilutive impact of unexercised stock options excludes from the computation of EPS 54,618 options for the three months ended June 30, 2023, and 17,647 options for the six months ended June 30, 2023 because inclusion of the options would have been anti-dilutive.

Tax Receivable Agreements

2 unchanged sentences

Subsequent adjustments of the tax receivable agreements obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within income before taxes and noncontrolling interests in the Condensed Consolidated Statements of Comprehensive Income.

The Company made its first payment of $ 7.0 million in February 2017, and subsequent payments of $ 12.4 million in September 2018, $ 13.3 million in March 2020, $ 16.5 million in April 2021, and $ 21.3 million in March 2022.

Tax receivable payments are expected to range from approximately $ 36.4 thousand to $ 22.0 million per year over the next 15 years.

At March 31, 2023 and December 31, 2022, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 156.9 million and $ 162.1 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $ 238.8 million for both periods.

The amounts recorded as of March 31, 2023 and December 31, 2022 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 June 30, 2023 and December 31, 2022, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 151.8 million and $ 162.1 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $ 215.5 million and $ 238.8 million for June 30, 2023 and December 31, 2022, respectively.

The amounts recorded as of June 30, 2023 and December 31, 2022 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 March 31, 2023 and December 31, 2022, the Company’s total amount of goodwill recorded was $ 1,148.9 million.

No goodwill impairment was recognized during the three months ended March 31, 2023 and 2022.

The following table presents the details of goodwill by segment as of March 31, 2023 and December 31, 2022:

As of June 30, 2023 and December 31, 2022, 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, 2023 and 2022.

The following table presents the details of goodwill by segment as of June 30, 2023 and December 31, 2022:

(in thousands) Market Making Execution Services Corporate Total

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

As of March 31, 2023 and December 31, 2022, the Company's total amount of intangible assets recorded was $ 305.5 million and $ 321.5 million, respectively.

Acquired intangible assets consisted of the following as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

As of June 30, 2023 and December 31, 2022, the Company's total amount of intangible assets recorded was $ 289.4 million and $ 321.5 million, respectively.

Acquired intangible assets consisted of the following as of June 30, 2023 and December 31, 2022:

As of June 30, 2023

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

19 unchanged sentences

$ 639,493 $ ( 318,013 ) $ 321,480

Amortization expense relating to finite-lived intangible assets was approximately $ 16.0 million, and $ 16.5 million for the three months ended March 31, 2023, and 2022, respectively.

Amortization expense relating to finite-lived intangible assets was approximately $ 16.0 million and $ 16.3 million for the three months ended June 30, 2023, and 2022, respectively, and $ 32.0 million, and $ 32.8 million for the six months ended June 30, 2023, and 2022, 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 March 31, 2023 and December 31, 2022:

(in thousands) March 31, 2023 December 31, 2022

The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at June 30, 2023 and December 31, 2022:

(in thousands) June 30, 2023 December 31, 2022

Due from prime brokers $ 966,509 $ 560,111

12 unchanged sentences

(1) The Company presents its balances, including outstanding principal balances on all broker credit facilities, on a net-by-counterparty basis within receivables from and payables to broker-dealers and clearing organizations when the criteria for offsetting are met .

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 $ 285.1 million and $ 212.9 million as of March 31, 2023 and December 31, 2022, 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 8 "Borrowings") of approximately $ 140.6 million and $ 212.9 million as of June 30, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022, substantially all of the securities received as collateral have been repledged.

The fair value of the collateralized transactions at March 31, 2023 and December 31, 2022 are summarized as follows:

(in thousands) March 31, 2023 December 31, 2022

At June 30, 2023 and December 31, 2022, substantially all of the securities received as collateral have been repledged.

The fair value of the collateralized transactions at June 30, 2023 and December 31, 2022 are summarized as follows:

(in thousands) June 30, 2023 December 31, 2022

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 March 31, 2023 and December 31, 2022 consisted of the following:

(in thousands) March 31, 2023 December 31, 2022

Financial instruments owned and pledged, where the counterparty has the right to repledge, at June 30, 2023 and December 31, 2022 consisted of the following:

(in thousands) June 30, 2023 December 31, 2022

Equities $ 1,285,503 $ 957,443

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.

March 31, 2023

June 30, 2023

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

19 unchanged sentences

On March 20, 2020, VAL entered into a Loan Agreement (the “Founder Member Loan Facility”) with TJMT Holdings LLC (the “Founder Member”), as lender and administrative agent, providing for unsecured term loans from time to time (the “Founder Member Loans”) in an aggregate original principal amount not to exceed $ 300 million.

The Founder Member Loans were available to be borrowed in one or more borrowings on or after March 20, 2020 and prior to September 20, 2020 (the

"Founder Member Loan Term").

The Founder Member Loans were available to be borrowed in one or more borrowings on or after March 20, 2020 and prior to September 20, 2020 (the "Founder Member Loan Term").

The Founder Member Loan Facility Term expired as of September 20, 2020 without VAL having borrowed any Founder Member Loans at any time.

5 unchanged sentences

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

At March 31, 2023

At June 30, 2023

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

4 unchanged sentences

$ 1,060,000 $ 115,000 $ ( 3,279 ) $ 111,721

(1) $ 0.2 million of deferred debt issuance costs are included within Other assets on the Consolidated Statement of Financial Condition

At December 31, 2022

7 unchanged sentences

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

Three Months Ended March 31,

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

(in thousands) 2023 2022 2023 2022

5 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 March 31, 2023, there was no balance associated with international settlement activities outstanding under these facilities.

At June 30, 2023, there was no balance associated with international settlement activities outstanding under these facilities.

At December 31, 2022, there was $ 3.9 million associated with international settlement activities outstanding under these facilities at a weighted average interest rate of approximately 3.8 %.

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 March 31, 2023

At June 30, 2023

(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 $ 3.5 million and $ 1.6 million for the three months ended March 31, 2023 and 2022, respectively.

Interest expense in relation to the facilities was $ 3.6 million and $ 1.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 7.1 million and $ 3.3 million for the six months ended June 30, 2023 and 2022, respectively.

Long-Term Borrowings

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

At March 31, 2023

At June 30, 2023

(in thousands) Maturity

15 unchanged sentences

In connection with the ITG Acquisition, Virtu Financial, VFH, and Impala Borrower LLC (the "Acquisition Borrower") entered into a credit agreement, with the lenders party thereto, Jefferies Finance LLC, as administrative agent and Jefferies Finance LLC and RBC Capital Markets, as joint lead arrangers and joint bookrunners (the "Acquisition Credit Agreement").

On January 13, 2022 (the “Credit Agreement Closing Date”), Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”), entered into the Credit Agreement, with the lenders party thereto, JPMorgan Chase Bank, N.A.

On January 13, 2022 (the “Credit Agreement Closing Date”), Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”), entered into a credit agreement with the lenders party thereto, JPMorgan Chase Bank, N.A.

as administrative agent and JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc, Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp., as joint lead arrangers and bookrunners (the “Credit Agreement”).

10 unchanged sentences

The revolving commitments will terminate on January 13, 2025.

As of March 31, 2023, $ 1,782 million was outstanding under the term loans, and there were no amounts outstanding under the first lien revolving facility.

As of June 30, 2023, $ 1,782 million was outstanding under the term loans, and there were no amounts outstanding under the first lien revolving facility.

In October 2019, the Company entered into a five-year $ 525 million floating-to-fixed interest rate swap agreement.

13 unchanged sentences

In December 2022, the maturity of the SBI Bonds was extended to 2026.

The principal balance was ¥ 3.5 billion ($ 26.3 million) as of March 31, 2023 and ¥ 3.5 billion ($ 26.7 million) as of December 31, 2022.

The Company had a gain of $ 0.3 million, and a gain of $ 2.0 million, during the three months ended March 31, 2023 and 2022, respectively, due to changes in foreign currency rates.

As of March 31, 2023, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

(in thousands) March 31, 2023

The principal balance was ¥ 3.5 billion ($ 24.3 million) as of June 30, 2023 and ¥ 3.5 billion ($ 26.7 million) as of December 31, 2022.

The Company had a gain of $ 2.1 million and a gain of $ 3.0 million for the three months ended June 30, 2023 and 2022, respectively, and a gain of $ 2.4 million, and a gain of $ 4.9 million, during the six months ended June 30, 2023 and 2022, respectively, due to changes in foreign currency rates.

As of June 30, 2023, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

(in thousands) June 30, 2023

Remainder of 2023 $ —

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 March 31, 2023:

March 31, 2023

Fair value measurements for those items measured on a recurring basis are summarized below as of June 30, 2023:

June 30, 2023

(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

57 unchanged sentences

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

As of March 31, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022, 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;

2 unchanged sentences

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

March 31, 2023

June 30, 2023

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

9 unchanged sentences

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

Three Months Ended March 31, 2023

(in thousands) Balance at December 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at March 31, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at March 31, 2023

Three Months Ended June 30, 2023

(in thousands) Balance at March 31, 2023 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2023

Other assets:

2 unchanged sentences

(1) Total realized and unrealized gains/(losses) includes gains and losses 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 March 31, 2022

(in thousands) Balance at December 31, 2021 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at March 31, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at March 31, 2022

Three Months Ended June 30, 2022

(in thousands) Balance at March 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2022

Other assets:

2 unchanged sentences

Six Months Ended June 30, 2023

(in thousands) Balance at December 31, 2022 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2023

Other assets:

Equity investment $ 76,613 $ — $ ( 5,554 ) $ — $ — $ 71,059 $ ( 5,554 )

Total $ 76,613 $ — $ ( 5,554 ) $ — $ — $ 71,059 $ ( 5,554 )

Six Months Ended June 30, 2022

(in thousands) Balance at December 31, 2021 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2022

Other assets:

Equity investment $ 81,358 $ — $ ( 3,796 ) $ — $ — $ 77,562 $ ( 3,796 )

Total $ 81,358 $ — $ ( 3,796 ) $ — $ — $ 77,562 $ ( 3,796 )

Financial Instruments Not Measured at Fair Value

3 unchanged sentences

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 March 31, 2023:

March 31, 2023

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of June 30, 2023:

June 30, 2023

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

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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 March 31, 2023 and December 31, 2022:

March 31, 2023

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of June 30, 2023 and December 31, 2022:

June 30, 2023

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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Total $ 2,117,694 $ ( 493,237 ) $ 1,624,457 $ ( 1,485,087 ) $ ( 9,027 ) $ 130,343

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

(in thousands) Financial Instrument Collateral Counterparty Netting/ Cash Collateral Net Amount

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Securities sold under agreements to repurchase 627,549 — 627,549 ( 627,388 ) — 161

Interest rate swaps — — — — — —

Trading liabilities, at fair value:

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Total $ 2,189,669 $ ( 497,799 ) $ 1,691,870 $ ( 1,654,450 ) $ ( 12,989 ) $ 24,431

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 as of March 31, 2023 and December 31, 2022:

March 31, 2023

June 30, 2023

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 March 31, 2023 and December 31, 2022:

(in thousands) March 31, 2023 December 31, 2022

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at June 30, 2023 and December 31, 2022:

(in thousands) June 30, 2023 December 31, 2022

Derivatives Assets Financial Statement 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 initially recorded in other comprehensive income in the accompanying Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and 2022.

Three Months Ended March 31,

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

(in thousands) Financial Statements Location 2023 2022 2023 2022

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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 March 31, 2023, the Company held noncontrolling interests of 11.1 % and 50.0 %, respectively, in these JVs.

As of June 30, 2023, the Company held noncontrolling interests of 11.1 % and 50.0 %, 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 March 31, 2023, the Company held approximately a 9.8 % noncontrolling interest in this JV.

As of June 30, 2023, the Company held approximately a 9.8 % noncontrolling interest in this JV.

The Company has an interest in a JV that operates 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 March 31, 2023, the Company held approximately a 13.2 % noncontrolling interest in this JV.

As of June 30, 2023, the Company held approximately a 14.2 % noncontrolling interest in this JV.

In the second quarter of 2022, the Company invested in a JV that was formed for the purpose of developing and operating a cryptocurrency trading platform with the goal of increasing competition and transparency, while improving trading performance and reducing operational risk.

As of March 31, 2023, the Company held approximately a 9.3 % noncontrolling interest in this JV.

As of June 30, 2023, the Company held approximately a 9.3 % noncontrolling interest in this JV.

The Company's five JVs noted above 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 March 31, 2023:

The following table presents the Company’s nonconsolidated VIEs at June 30, 2023:

Carrying Amount Maximum Exposure to Loss VIEs' assets

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During the second quarter of 2022, the Company formed a JV to support the growth and expansion of a multi-asset request-for-quote communication platform.

As of March 31, 2023, the Company held a 51 % controlling interest in this entity.

As of June 30, 2023, the Company held a 51 % controlling interest in this entity.

This JV meets the criteria to be considered a VIE, and based on the standard for control set forth above, the Company consolidates this entity and records the interest that the Company does not own as noncontrolling interest in the Condensed Consolidated Financial Statements.

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Disaggregation of Revenues

The following tables present the Company’s revenue from contracts with customers disaggregated by service, and timing of revenue recognition, reconciled to the Company’s segments, for the three months ended March 31, 2023, and 2022:

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(in thousands) Market Making Execution Services Corporate Total

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Total revenues $ 405,250 $ 109,116 $ ( 7,512 ) $ 506,854

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

(in thousands) Market Making Execution Services Corporate Total

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Total revenues $ 432,595 $ 130,997 $ 41,146 $ 604,738

Six Months Ended June 30, 2023

(in thousands) Market Making Execution Services Corporate Total

Revenues from contracts with customers:

Commissions, net $ 16,334 $ 147,251 $ — $ 163,585

Workflow technology — 47,532 — 47,532

Analytics — 19,831 — 19,831

Total revenue from contracts with customers 16,334 214,614 — 230,948

Other sources of revenue 887,835 12,979 ( 4,529 ) 896,285

Total revenues $ 904,169 $ 227,593 $ ( 4,529 ) $ 1,127,233

Timing of revenue recognition:

Services transferred at a point in time $ 904,169 $ 191,419 $ ( 4,529 ) $ 1,091,059

Services transferred over time — 36,174 — 36,174

Total revenues $ 904,169 $ 227,593 $ ( 4,529 ) $ 1,127,233

Six Months Ended June 30, 2022

(in thousands) Market Making Execution Services Corporate Total

Revenues from contracts with customers:

Commissions, net $ 20,194 $ 199,187 $ — $ 219,381

Workflow technology — 51,270 — 51,270

Analytics — 20,344 20,344

Total revenue from contracts with customers 20,194 270,801 — 290,995

Other sources of revenue 958,964 11,941 44,100 1,015,005

Total revenues $ 979,158 $ 282,742 $ 44,100 $ 1,306,000

Timing of revenue recognition:

Services transferred at a point in time $ 979,158 $ 246,303 $ 44,100 $ 1,269,561

Services transferred over time — 36,439 — 36,439

Total revenues $ 979,158 $ 282,742 $ 44,100 $ 1,306,000

Remaining Performance Obligations and Revenue Recognized from Past Performance Obligations

As of March 31, 2023 and 2022, 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.

As of June 30, 2023 and 2022, 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.

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 $ 59.0 million and $ 56.1 million as of March 31, 2023 and December 31, 2022, respectively.

Receivables related to revenues from contracts with customers amounted to $ 55.8 million and $ 56.1 million as of June 30, 2023 and December 31, 2022, respectively.

The Company did not identify any contract assets.

There were no impairment losses on receivables as of March 31, 2023.

There were no impairment losses on receivables as of June 30, 2023.

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 $ 13.5 million and $ 9.6 million as of March 31, 2023 and December 31, 2022, respectively.

The Company recognized revenue of $ 6.9 million and $ 7.5 million during the three months ended March 31, 2023 and 2022, that had been recorded as deferred revenue in the respective prior year.

Deferred revenue related to contracts with customers was $ 14.0 million and $ 9.6 million as of June 30, 2023 and December 31, 2022, respectively.

The Company recognized the full amount of revenue during the six months ended June 30, 2023 and 2022, that had been recorded as deferred revenue in the respective prior year.

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 months ended March 31, 2023 and 2022, 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 six months ended June 30, 2023 and 2022, 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.

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subsidiaries are subject to foreign income taxes in the jurisdictions in which they operate.

The Company’s provisions for income taxes and effective tax rates were $ 24.7 million, and 18.3 %, and $ 41.8 million, and 17.3 % for the three months ended March 31, 2023 and 2022, respectively.

The Company’s provisions for income taxes and effective tax rates were $ 5.9 million, and 16.7 %, and $ 24.9 million, and 14.3 % for the three months ended June 30, 2023 and 2022, respectively and $ 30.6 million, and 18.0 %, and $ 66.7 million, and 16.0 % for the six months ended June 30, 2023 and 2022, 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 March 31, 2023 and December 31, 2022 are current income tax receivables of $ 40.6 million and $ 54.1 million, respectively.

The balances at March

31, 2023 and December 31, 2022 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 March 31, 2023 and December 31, 2022 are current tax liabilities of $ 13.2 million and $ 13.4 million, respectively.

The balances at March 31, 2023 and December 31, 2022 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 June 30, 2023 and December 31, 2022 are current income tax receivables of $ 48.3 million and $ 54.1 million, respectively.

The balances at June 30, 2023 and December 31, 2022 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, 2023 and December 31, 2022 are current tax liabilities of $ 9.3 million and $ 13.4 million, respectively.

The balances at June 30, 2023 and December 31, 2022 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 4 "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.

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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 March 31, 2023 and December 31, 2022, the Company did not have any U.S.

At June 30, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022, the Company recorded deferred income taxes related to state and local net operating losses of $ 0.4 million.

At June 30, 2023 and December 31, 2022, 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.

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

net operating losses of $ 66.1 million and $ 64.6 million at March 31, 2023 and December 31, 2022, respectively, and recorded a related deferred tax asset of $ 12.6 million and $ 12.4 million, respectively.

A valuation allowance of $ 12.6 million and $ 12.4 million was recorded against this deferred tax asset at March 31, 2023 and December 31, 2022, respectively as it is more likely than not that a substantial portion of this deferred tax asset will not be realized.

net operating losses of $ 66.9 million and $ 64.6 million at June 30, 2023 and December 31, 2022, respectively, and recorded a related deferred tax asset of $ 12.8 million and $ 12.4 million, respectively.

A valuation allowance of $ 12.8 million and $ 12.4 million was recorded against this deferred tax asset at June 30, 2023 and December 31, 2022, respectively as it is more likely than not that a substantial 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 March 31, 2023 and December 31, 2022 of $ 239.3 million, and recorded a related deferred tax asset of $ 44.9 million in both years.

A full valuation allowance was also recorded against this deferred tax asset at both March 31, 2023 and December 31, 2022 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 March 31, 2023 and December 31, 2022 because it is more likely than not that these deferred tax assets will be fully realized.

net operating losses at June 30, 2023 and December 31, 2022 of $ 239.3 million, and recorded a related deferred tax asset of $ 44.9 million in both years.

A full valuation allowance was also recorded against this deferred tax asset at both June 30, 2023 and December 31, 2022 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, 2023 and December 31, 2022 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 March 31, 2023, the Company’s tax years for 2015 through 2021 and 2016 through 2021 were subject to examination by U.S.

As of June 30, 2023, the Company’s tax years for 2015 through 2021 and 2016 through 2021 were subject to examination by U.S.

tax authorities, respectively.

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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 $ 6.7 million of unrecognized tax benefits as of March 31, 2023, 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 March 31, 2023.

The Company had $ 6.8 million of unrecognized tax benefits as of June 30, 2023, 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, 2023.

Commitments, Contingencies and Guarantees

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The Company and its subsidiaries are subject to several of these matters at the present time, including, among others, a matter in which the Company has been responding to requests for information from the U.S.

Securities and Exchange Commission in connection with an investigation of aspects of the Company’s information access barriers.

The Company is cooperating with this civil investigation and has engaged in settlement discussions in respect of the matter.

In the absence of a settlement, the Company currently believes it may receive a Wells Notice from the SEC.

The proposed action would be expected to allege violations of federal securities laws with respect to the Company’s information barriers policies and procedures for a specified time period in and around January 2018 to April 2019 and related statements made by the Company during such period.

The Company believes it would have meritorious defenses in the event of such an action and would plan to assert them.

Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, particularly in regulatory examinations or investigations or other proceedings in which substantial or indeterminate judgments, settlements, disgorgements, restitution, penalties, injunctions, damages or fines are sought, or where such matters are in the early stages, the Company cannot estimate losses or ranges of losses for such matters where there is only a reasonable possibility that a loss may be incurred, and utilizes its judgment in accordance with applicable accounting standards in booking any associated estimated liability.

It is not presently possible to determine the ultimate exposure to these matters and it is possible that the resolution of the outstanding matters will significantly exceed any estimated liabilities accrued by the Company.

In addition, there are numerous factors that result in a greater degree of complexity in class-action lawsuits as compared to other types of litigation.

There can be no assurance that these various legal proceedings will not significantly exceed any estimated liability accrued by the Company or have a material adverse effect on the Company’s results of operations in any future period, and a material judgment, fine or sanction could have a material adverse impact on the Company’s financial condition, results of operations and cash flows.

However, it is the opinion of management, after consultation with legal counsel that, based on information currently available, the ultimate outcome of these matters will not have a material adverse impact on the business, financial condition or operating results of the Company, although they might be material to the operating results for any particular reporting period.

The Company carries directors’ and officers’ liability insurance coverage and other insurance coverage for potential claims, including securities actions, against the Company and its respective directors and officers.

Securities and Exchange Commission in connection with an investigation of aspects of the Company’s internal information access barriers.

The Company has continued to cooperate with this civil investigation and engaged in settlement discussions.

The Company has been unable to reach a settlement and, consistent with its previous disclosure, has received a Wells Notice from the SEC, to which it has responded.

The Company expects the SEC to file an action against the Company alleging violations of federal securities laws with respect to the Company’s information barriers policies and procedures for a specified time period in and around January 2018 to April 2019 and related statements made by the Company during such period.

The Company believes it would have meritorious defenses in the event of such an action and intends to defend itself vigorously.

Specifically, the Company would plan to assert, among other defenses, that it maintained reasonable policies, procedures and controls to protect data during the period consistent with applicable law, that related statements made to clients and investors were true and accurate, and that the statute of limitations has expired with respect to certain claims.

In a matter related to the SEC investigation noted above, on May 19, 2023, the Company and certain of its current and former executive officers were named as defendants in Hiebert v.

Virtu Financial, Inc., No.

The complaint was filed by a purported stockholder in the Eastern District of New York on behalf of a putative class and asserts that the Company made materially false and misleading statements and omissions in its public filings in violation of federal securities laws.

The Company also received a request for information pursuant to Section 220 of the Delaware General Corporation Law from counsel for a purported stockholder.

The Company believes it has meritorious defenses against pending or contemplated claims that its public disclosures in relation to the SEC investigation were inadequate or misleading.

The Company maintains that such disclosures were true and accurate and compliant with applicable law and will defend itself vigorously.

On November 30, 2020, the Company was named as a defendant in In re United States Oil Fund, LP Securities Litigation , No.

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1:22-cv-10185.

The complaint alleges that defendants

engaged in market manipulation in the plaintiff’s stock during a period from 2018 to 2022.

The complaint alleges that defendants engaged in market manipulation in the plaintiff’s stock during a period from 2018 to 2022.

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 addition, there are numerous factors that result in a greater degree of complexity in class-action lawsuits as compared to other types of litigation.

Other Legal and Regulatory Matters

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equities market structure, the routing, handling and potentially the amount, character and cost of retail order flow, (ii) Regulation Best Execution, which would impose best execution requirements on broker-dealers which would be distinct from, but overlapping with, FINRA’s existing best execution rule (Rule 5310), (iii) proposed rule amendments to minimum pricing increments under Rule 612 or Regulation NMS, access fee caps under Rule 610 of Regulation NMS, acceleration of the implementation of certain Market Data Infrastructure Rules, and amendment to the odd-lot information definition adopted under the MDI rules (collectively referred to as the “tick size, access fees and infostructure rule proposals”), and (iv) amendments to Rule 605 of Regulation NMS, along with a series of amendments to the definition of Exchange and Alternative Trading Systems (ATS), which would expand the scope of exchange and ATS registration and compliance requirements.

Further, in 2023, the SEC proposed amendments to expand and update Regulation Systems Compliance and Integrity (SCI) and has indicated that additional rule proposals may be forthcoming.

If adopted, these or other potential rule changes could adversely affect the Company’s business or the Company’s industry.

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Lease assets and liabilities are summarized as follows:

(in thousands) Financial Statement Location March 31, 2023 December 31, 2022

(in thousands) Financial Statement Location June 30, 2023 December 31, 2022

Operating leases

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Weighted average remaining lease term

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The components of lease expense are as follows:

Three Months Ended March 31,

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

(in thousands) 2023 2022 2023 2022

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Total Finance lease cost $ 2,740 $ 2,082 $ 5,072 $ 4,068

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of March 31, 2023, are as follows:

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2023, 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) March 31, 2023 December 31, 2022

(in thousands) June 30, 2023 December 31, 2022

Cash and cash equivalents $ 698,674 $ 981,580

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The Founder Member controls approximately 85.8 % of the combined voting power of our common stock as a result of its ownership of our Class A, Class C and Class D Common Stock.

The Company holds approximately a 59.5 % interest in Virtu Financial at March 31, 2023.

The Company holds approximately a 58.9 % interest in Virtu Financial at June 30, 2023.

During the period prior to the Company's IPO and certain reorganization transactions consummated in connection with the 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 these reorganization transactions, all Class A-2 profits interests and Class B interests were reclassified into Virtu Financial Units.

As of March 31, 2023 and December 31, 2022, there were 4,289,305 and 4,462,840 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 173,535 and 305,910 of such Virtu Financial Units and corresponding Class C Common Stock were exchanged into Class A Common Stock, forfeited or repurchased during the three months ended March 31, 2023, and 2022, respectively.

As of June 30, 2023 and December 31, 2022, there were 4,289,305 and 4,462,840 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 173,535 and 328,999 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, 2023, and 2022, respectively.

Amended and Restated 2015 Management Incentive Plan

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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 March 31, 2023, the Company repurchased approximately 36.3 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 975.2 million.

As of March 31, 2023, the Company has approximately $ 244.8 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 June 30, 2023, the Company repurchased approximately 38.5 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 1,016.7 million.

As of June 30, 2023, the Company has approximately $ 203.3 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.

Employee Exchanges

During the three months ended March 31, 2023, and 2022, 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 152,037 , and 71,641 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 six months ended June 30, 2023, and 2022, 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 152,037 , and 92,930 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

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Accumulated Other Comprehensive Income

The following table presents the changes in Other Comprehensive Income for the three months ended March 31, 2023, and 2022:

Three Months Ended March 31, 2023

The following table presents the changes in Other Comprehensive Income for the three and six months ended June 30, 2023, and 2022:

Three Months Ended June 30, 2023

(in thousands) AOCI Beginning Balance Amounts recorded

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Total $ 24,750 $ 13,917 $ ( 7,535 ) $ 31,132

(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, 2023, the Company expects approximately $ 30.1 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, 2022

(in thousands) AOCI Beginning Balance Amounts recorded

in AOCI Amounts reclassified from AOCI to income AOCI Ending Balance

Net change in unrealized cash flow hedges gains (losses) (1) $ 18,906 $ 6,391 $ 2,189 $ 27,486

Foreign exchange translation adjustment ( 2,887 ) ( 10,773 ) — ( 13,660 )

Total $ 16,019 $ ( 4,382 ) $ 2,189 $ 13,826

(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 March 31, 2023, the Company expects approximately $ 26.0 million to be reclassified from AOCI into earnings over the next 12 months.

Six Months Ended June 30, 2023

(in thousands) AOCI Beginning Balance Amounts recorded

in AOCI Amounts reclassified from AOCI to income AOCI Ending Balance

Net change in unrealized cash flow hedges gains (losses) (1) $ 44,925 $ 11,025 $ ( 13,980 ) $ 41,970

Foreign exchange translation adjustment ( 13,321 ) 2,483 — ( 10,838 )

Total $ 31,604 $ 13,508 $ ( 13,980 ) $ 31,132

(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, 2023, the Company expects approximately $ 30.1 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 March 31, 2022

Six Months Ended June 30, 2022

(in thousands) AOCI Beginning Balance Amounts recorded

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Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 17 "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 three months ended March 31, 2023 and 2022:

The following table summarizes activity related to stock options for the six months ended June 30, 2023 and 2022:

Options Outstanding Options Exercisable

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Forfeited or expired ( 5,000 ) — — ( 5,000 ) —

At March 31, 2022 1,543,776 $ 19.00 2.99 1,543,776 $ 19.00

At June 30, 2022 1,521,776 $ 19.00 2.74 1,521,776 $ 19.00

At December 31, 2022 1,521,776 $ 19.00 2.24 1,521,776 $ 19.00

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Forfeited or expired ( 10,000 ) — — — —

At March 31, 2023 1,521,776 $ 19.00 1.99 1,521,776 $ 19.00

At June 30, 2023 1,511,776 $ 19.00 1.74 1,521,776 $ 19.00

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

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Treasury zero-coupon issues.

The expected stock price volatility was

determined based on historical volatilities of comparable companies.

The expected stock price volatility was determined based on historical volatilities of comparable companies.

The expected dividend yield was determined based on estimated future dividend payments divided by the IPO stock price.

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2007 Omnibus Equity Compensation Plan

On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and the Assumed Awards.

On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and certain stock option awards, restricted stock unit awards, deferred stock unit awards and performance stock unit awards granted thereunder (" the Assumed Awards").

The Assumed Awards are subject to the same terms and conditions that were applicable to them under the Amended and Restated ITG 2007 Equity Plan, except that (i) the Assumed Awards relate to shares of the Company’s Class A Common Stock, (ii) the number of shares of Class A Common Stock subject to the Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as defined in the ITG Merger Agreement) and (iii) the performance share unit awards were converted into service-based vesting restricted stock unit awards that were no longer subject to any performance based vesting conditions.

Class A Common Stock, Restricted Stock Units and Restricted Stock Awards

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 17 "Capital Structure", subsequent to the IPO, shares of immediately vested Class A Common Stock, RSUs and RSAs were granted, with RSUs and RSAs vesting over a period of up to 4 years.

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 17 "Capital Structure", subsequent to the IPO, shares of immediately vested Class A Common Stock, restricted stock units ("RSUs") and restricted stock awards ("RSAs") were granted, with RSUs and RSAs vesting over a period of up to 4 years.

The fair value of the Class A Common Stock and RSUs was determined based on a volume weighted average price and the expense is recognized on a straight-line basis over the vesting period.

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

For the three months ended March 31, 2023 and 2022, respectively, there were 868,315 , and 580,710 shares of immediately vested Class A Common Stock granted as part of year-end compensation.

In addition, the Company accrued compensation expense of $ 5.9 million, and $ 6.0 million for the three months ended March 31, 2023 and 2022, 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 three months ended March 31, 2023, and 2022:

For the six months ended June 30, 2023 and 2022, respectively, there were 868,315 , and 580,710 shares of immediately vested Class A Common Stock granted as part of year-end compensation.

In addition, the Company accrued compensation expense of $ 6.1 million and $ 9.6 million for the three months ended June 30, 2023 and 2022, respectively, and $ 12.0 million, and $ 15.5 million for the six months ended June 30, 2023 and 2022, 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, 2023, and 2022:

Number of RSUs and RSAs Weighted

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Vested ( 1,669,030 ) 25.07

At March 31, 2022 3,818,931 $ 27.60

At June 30, 2022 4,185,060 $ 27.94

At December 31, 2022 3,954,833 $ 28.13

2 unchanged sentences

Vested ( 2,413,550 ) 23.59

At March 31, 2023 4,930,490 $ 25.18

At June 30, 2023 4,874,811 $ 24.18

(1) Excluded in the number of RSUs and RSAs are 37,500 participating RSAs where the grant date has not been achieved because the performance conditions have not been met.

The Company recognized $ 10.1 million, and $ 8.6 million for the three months ended March 31, 2023 and 2022, respectively, of compensation expense in relation to RSUs.

As of March 31, 2023 and December 31, 2022, total unrecognized share-based compensation expense related to unvested RSUs was $ 87.8 million and $ 54.6 million, respectively, and this amount is to be recognized over a weighted average period of 1.5 and 0.9 years, respectively.

The Company recognized $ 10.1 million and $ 9.5 million for the three months ended June 30, 2023 and 2022, respectively, and $ 20.2 million, and $ 18.1 million for the six months ended June 30, 2023 and 2022, respectively, of compensation expense in relation to RSUs.

As of June 30, 2023 and December 31, 2022, total unrecognized share-based compensation expense related to unvested RSUs was $ 74.7 million and $ 54.6 million, respectively, and this amount is to be recognized over a weighted average period of 1.3 and 0.9 years, 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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The Company's U.S.

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 March 31, 2023.

broker-dealer subsidiaries VAL and RFQ-Hub Americas LLC ("RAL"), are subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital as detailed in the table below.

RAL became a U.S.

broker-dealer in June 2023.

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 March 31, 2023 was as follows:

The regulatory capital and regulatory capital requirements of the Company's U.S.

subsidiaries as of June 30, 2023 was as follows:

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

Virtu Americas LLC $ 455,763 $ 1,577 $ 454,186

As of March 31, 2023, VAL had $ 34.0 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 $ 5.9 million of cash in reserve bank accounts for the benefit of proprietary accounts of brokers.

RFQ-Hub Americas LLC 2,111 5 2,106

As of June 30, 2023, VAL had $ 40.9 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 $ 5.9 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.

VAL's regulatory capital and regulatory capital requirements as of December 31, 2022 was as follows:

The regulatory capital and regulatory capital requirements of the Company's U.S.

subsidiaries as of December 31, 2022 was as follows:

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

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Foreign Subsidiaries

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 March 31, 2023 were as follows:

The Company’s foreign subsidiaries are subject to regulatory capital requirements set by local regulatory bodies, including the Canadian Investment Regulatory Organization ("CIRO"), 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, 2023 were as follows:

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

Virtu ITG Canada Corp (1) $ 11,994 $ 185 $ 11,809

Virtu Canada Corp (1) $ 11,516 $ 189 $ 11,327

Virtu Financial Canada ULC 2,682 189 2,493

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(1) Preliminary

As of March 31, 2023, Virtu Europe Trading Limited had $ 0.1 million of segregated funds on deposit for trade clearing and settlement activity, and Virtu ITG Hong Kong Ltd.

As of June 30, 2023, Virtu Europe Trading Limited had $ 0.1 million 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 months ended March 31, 2023, and 2022 :

Three Months Ended March 31,

The following table presents total revenues by geographic area for the three and six months ended June 30, 2023, and 2022 :

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

(in thousands) 2023 2022 2023 2022

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The Company is an active participant on all major global equity and futures exchanges and also trades on substantially all domestic electronic options exchanges.

complement to electronic market making, the cash trading business handles specialized orders and also transacts on the OTC Link ATS operated by OTC Markets Group Inc.

As a complement to electronic market making, the cash trading business handles specialized orders and also transacts on the OTC Link ATS operated by OTC Markets Group Inc.

The Execution Services segment comprises client-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker-dealers.

10 unchanged sentences

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 March 31, 2023, and 2022 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 June 30, 2023, and 2022 are summarized in the following table:

(in thousands) Market

Making Execution

Services Corporate Consolidated

Total revenue $ 405,250 $ 109,116 $ ( 7,512 ) $ 506,854

Income before income taxes and noncontrolling interest 43,741 ( 115 ) ( 8,159 ) 35,467

Total revenue 432,595 130,997 41,146 604,738

Income (loss) before income taxes and noncontrolling interest 125,446 7,887 40,451 173,784

The Company's Pre-tax earnings by segment for the six months ended June 30, 2023, and 2022 are summarized in the following table:

(in thousands) Market Making Execution Services Corporate Consolidated Total

5 unchanged sentences

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

As of March 31, 2023, and December 31, 2022 the Company had net payables to its affiliates of $ 0.4 million and receivables from its affiliates of $ 0.5 million, respectively.

As of June 30, 2023, and December 31, 2022 the Company had net payables to its affiliates of $ 1.8 million and receivables from its affiliates of $ 0.5 million, respectively.

The Company has held a minority interest in JNX since 2016 (see Note 9 "Financial Assets and Liabilities").

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

The Company paid $ 2.5 million and $ 3.8 million for the three months ended March 31, 2023 and 2022, respectively, to JNX for these trading activities.

The Company paid $ 3.4 million and $ 3.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 5.9 million and $ 7.5 million for the six months ended June 30, 2023 and 2022, respectively, to JNX for these trading activities.

The Company pays monthly use fees to two JVs in which it holds interests (see Note 11 "Variable Interest Entities").

These monthly fees are for the use of microwave communication networks operated by each of these JVs and are recorded within Communications and data processing on the Condensed Consolidated Statements of Comprehensive Income.

The Company made payments to these JVs of $ 6.3 million and $ 5.5 million for the three months ended March 31, 2023 and 2022, respectively.

The Company made payments to these JVs of $ 6.3 million and $ 5.5 million for the three months ended June 30, 2023 and 2022, respectively, and $ 12.6 million and $ 10.9 million for the six months ended June 30, 2023 and 2022, respectively.

The Company has an interest in Members Exchange, a member-owned equities exchange.

The Company pays regulatory and transaction fees and receives rebates from trading activities.

The Company received rebates of $ 0.1 million and made payments of $ 6.7 million for the three months ended March 31, 2023 and 2022, respectively.

The Company made payments of $ 0.1 million and received rebates of $ 6.2 million for the three months ended June 30, 2023 and 2022, respectively, and the Company made payments of $ 0.2 million and received rebates of $ 12.8 million for the six months ended June 30, 2023 and 2022, respectively.

In the second quarter of 2022, the Company formed a JV to support the growth and expansion of a multi-asset request-for-quote communication platform.

The Company consolidates this JV, and recorded noncontrolling interest of $ 39.2 million in the condensed consolidated statement of changes in equity as of March 31, 2023.

The Company consolidates this JV, and recorded noncontrolling interest of $ 39.2 million in the condensed consolidated statement of changes in equity as of June 30, 2022.

Refer to Note 11 "Variable Interest Entities" for further details.

1 unchanged sentence

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 April 20, 2023, 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 June 15, 2023 to holders of record as of June 1, 2023.

On July 26, 2023, 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, 2023 to holders of record as of September 1, 2023.

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