What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-07-28 · 215 added, 161 removed, 1185 unchanged (24% 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,

2023 December 31,

8 unchanged sentences

Receivables from customers 148,445 80,830

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)

Property, equipment and capitalized software (net of accumulated depreciation of $ 350,220 and $ 460,763 as of September 30, 2023 and December 31, 2022, respectively)

92,124 85,194

1 unchanged sentence

Goodwill 1,148,926 1,148,926

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

Intangibles (net of accumulated amortization of $ 366,020 and $ 318,013 as of September 30, 2023 and December 31, 2022, respectively)

273,473 321,480

Deferred tax assets 132,361 146,801

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

Other assets ($ 74,911 and $ 78,965 , at fair value, as of September 30, 2023 and December 31, 2022, respectively)

299,664 303,916

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 — 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

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 134,865,978 and 133,071,754 shares, Outstanding — 91,455,446 and 98,549,464 shares at September 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 September 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 — 8,607,998 and 9,030,066 shares at September 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 September 30, 2023 and December 31, 2022, respectively

Treasury stock, at cost, 43,410,532 and 34,522,290 shares at September 30, 2023 and December 31, 2022, respectively

( 1,120,501 ) ( 954,637 )

8 unchanged sentences

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data) June 30,

(in thousands, except share data) September 30,

2023 December 31,

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (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) 2023 2022 2023 2022

39 unchanged sentences

Condensed Consolidated Statements of Changes in Equity (Unaudited)

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

Three and Nine Months Ended September 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.

22 unchanged sentences

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

Share based compensation 144,783 — — — — — — — 11,634 $ — — 11,634 — 11,634

Repurchase of Class C common stock — — ( 214,176 ) — — — — — ( 3,596 ) $ — — ( 3,596 ) — ( 3,596 )

Treasury stock purchases ( 38,409 ) — — — — — ( 2,689,932 ) ( 48,717 ) — ( 703 ) — ( 49,420 ) — ( 49,420 )

Net income — — — — — — — — — 61,915 — 61,915 55,678 117,593

Foreign exchange translation adjustment — — — — — — — — — — ( 2,339 ) ( 2,339 ) ( 1,666 ) ( 4,005 )

Net change in unrealized cash flow hedges gains — — — — — — — — — — ( 4,466 ) ( 4,466 ) ( 3,180 ) ( 7,646 )

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

— — — — — — — — — ( 23,492 ) — ( 23,492 ) ( 82,719 ) ( 106,211 )

Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges 34,357 — — — — — — — — — — — — —

Issuance of tax receivable agreements in connection with employee exchange — — ( 34,357 ) — — — — — $ — $ — $ — $ — $ — $ —

Balance at September 30, 2023 134,865,978 $ 1 8,607,998 $ — 60,091,740 $ 1 ( 43,410,532 ) $ ( 1,120,501 ) $ 1,343,307 $ 1,018,201 $ 24,327 $ 1,265,336 $ 245,314 $ 1,510,650

Virtu Financial, Inc.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Equity (Unaudited)

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

Three and Nine Months Ended September 30, 2023, and 2022

28 unchanged sentences

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

Share based compensation 131,892 — — — — — — — 9,159 — — 9,159 — 9,159

Treasury stock purchases ( 35,006 ) — — — — — ( 3,439,813 ) ( 80,596 ) — ( 823 ) — ( 81,419 ) — ( 81,419 )

Stock options exercised — — — — — — — — — — — — — —

Net income — — — — — — — — — 40,007 — 40,007 39,867 79,874

Foreign exchange translation adjustment — — — — — — — — — — ( 11,161 ) ( 11,161 ) ( 7,366 ) ( 18,527 )

Net change in unrealized cash flow hedges gains — — — — — — — — — — 18,513 18,513 12,218 30,731

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

— — — — — — — — — ( 25,337 ) — ( 25,337 ) ( 61,981 ) ( 87,318 )

Virtu Financial, Inc.

and Subsidiaries

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three and Nine Months Ended September 30, 2023, and 2022

Stockholders' Equity Noncontrolling Interest Total Equity

(in thousands, except share and interest data)

Shares Amounts Shares Amounts Shares Amounts Shares Amounts Amounts

Balance at September 30, 2022 133,012,526 $ 1 9,030,066 $ — 60,091,740 $ 1 ( 32,437,976 ) $ ( 909,368 ) $ 1,265,919 $ 970,334 $ 21,178 $ 1,348,065 $ 324,843 $ 1,672,908

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) 2023 2022

25 unchanged sentences

Accounts payable, accrued expenses and other liabilities ( 31,268 ) ( 17,329 )

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

Net cash provided by operating activities 143,691 290,462

Cash flows from investing activities

2 unchanged sentences

Other investing activities ( 14,210 ) 38,668

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

Net cash used in investing activities ( 70,463 ) ( 10,980 )

Cash flows from financing activities

18 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2023 2022

3 unchanged sentences

Share-based and accrued incentive compensation to developers relating to capitalized software 14,665 12,863

Non-cash financing activities

Repurchase of Class C common stock ( 4,020 ) —

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

7 unchanged sentences

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

As of June 30, 2023, VFI owned approximately 58.9 % of the membership interests of Virtu Financial.

As of September 30, 2023, VFI owned approximately 58.4 % 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”).

43 unchanged sentences

For a detailed discussion of the Company's significant accounting policies, see Note 2 "Summary of Significant Accounting Policies" in our consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Goodwill represents the excess of the purchase price over the underlying net tangible and intangible assets of the Company’s acquisitions.

Goodwill is not amortized but is assessed for impairment on an annual basis and between annual assessments whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Goodwill is assessed at the reporting unit level, which is defined as an operating segment or one level below the operating segment.

The Company assesses goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events occur or certain circumstances exist.

In its impairment assessment as of July 1, 2023, the Company performed a quantitative assessment of each reporting unit and the estimated fair value of each of the reporting units exceeded its respective carrying value, and therefore goodwill was not impaired.

The estimated fair value of each reporting unit was based on valuation techniques the firm believes market participants would use to value these reporting units, and allocated the enterprise value to each reporting unit based on an estimate of relative fair value for each reporting unit.

The carrying value of each reporting unit reflects an allocation of total shareholders’ equity and represents the estimated amount of total shareholders’ equity required to support the activities of the applicable reporting unit under currently applicable regulatory capital requirements.

Accounting Pronouncements Recently Adopted

5 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 June 30, 2023

The FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock (SEC Update) in July 2023, and ASU 2023-04, Liabilities (Topic 405):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

121 (SEC Update) in August 2023.

These ASUs amend and supersede various SEC paragraphs across multiple topics within the Codification to conform to past SEC announcements and guidance issued by the SEC.

As the ASUs do not provide any new accounting standards, no transition or effective dates are associated with them.

As such, the Company considers these adopted as of September 30, 2023 with no material impact on its condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted as of September 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) .

11 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.

Business Combinations—Joint Venture Formations - In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60) .

This ASU provides updated guidance on accounting for the formation of joint ventures.

This ASU is effective prospectively for joint ventures formed on or after January 1, 2025..

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.

Earnings per Share

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 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 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) 2023 2022 2023 2022

6 unchanged sentences

Basic earnings per share $ 0.63 $ 0.38 $ 1.36 $ 2.17

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) 2023 2022 2023 2022

6 unchanged sentences

Diluted earnings per share (1) $ 0.63 $ 0.37 $ 1.36 $ 2.16

(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.

(1) The dilutive impact of unexercised stock options excludes from the computation of EPS 68,988 options for the three months ended September 30, 2023, and 34,622 options for the nine months ended September 30, 2023 because inclusion of the options would have been anti-dilutive.

Tax Receivable Agreements

4 unchanged sentences

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

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.

At September 30, 2023 and December 31, 2022, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 146.5 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 September 30, 2023 and December 31, 2022, respectively.

The amounts recorded as of September 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 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:

As of September 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 nine months ended September 30, 2023 and 2022.

The following table presents the details of goodwill by segment as of September 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 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

As of September 30, 2023 and December 31, 2022, the Company's total amount of intangible assets recorded was $ 273.5 million and $ 321.5 million, respectively.

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

As of September 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 $ 16.3 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.

Amortization expense relating to finite-lived intangible assets was approximately $ 16.0 million and $ 16.1 million for the three months ended September 30, 2023, and 2022, respectively, and $ 48.0 million, and $ 48.8 million for the nine months ended September 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 June 30, 2023 and December 31, 2022:

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

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

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

Due from prime brokers $ 1,089,555 $ 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 $ 140.6 million and $ 212.9 million as of June 30, 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 $ 93.6 million and $ 212.9 million as of September 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 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

At September 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 September 30, 2023 and December 31, 2022 are summarized as follows:

(in thousands) September 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 June 30, 2023 and December 31, 2022 consisted of the following:

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

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

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

Equities $ 1,386,049 $ 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.

June 30, 2023

September 30, 2023

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

27 unchanged sentences

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

At June 30, 2023

At September 30, 2023

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

11 unchanged sentences

$ 1,060,000 $ — $ — $ —

(1) $ 0.2 million of deferred debt issuance costs are included within Other assets on the consolidated statement of financial condition.

The following summarizes interest expense for the broker-dealer facilities.

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) 2023 2022 2023 2022

2 unchanged sentences

Committed facility 23 — 23 38

Overdraft facility $ 62 13 272 13

$ 1,914 $ 1,489 $ 5,672 $ 2,820

1 unchanged sentence

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

At September 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 June 30, 2023

At September 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 $ 3.6 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.

Interest expense in relation to the facilities was $ 3.3 million and $ 2.6 million for the three months ended September 30, 2023 and 2022, respectively, and $ 10.4 million and $ 5.9 million for the nine months ended September 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 June 30, 2023

At September 30, 2023

(in thousands) Maturity

28 unchanged sentences

The revolving commitments will terminate on January 13, 2025.

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.

As of September 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 ($ 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

The principal balance was ¥ 3.5 billion ($ 23.4 million) as of September 30, 2023 and ¥ 3.5 billion ($ 26.7 million) as of December 31, 2022.

The Company had a gain of $ 0.8 million and a gain of $ 1.6 million for the three months ended September 30, 2023 and 2022, respectively, and a gain of $ 3.3 million, and a gain of $ 6.5 million, during the nine months ended September 30, 2023 and 2022, respectively, due to changes in foreign currency rates.

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

(in thousands) September 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 June 30, 2023:

June 30, 2023

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

September 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 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;

As of September 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:

June 30, 2023

September 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 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

Three Months Ended September 30, 2023

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

Three Months Ended September 30, 2022

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

Nine Months Ended September 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 September 30, 2023 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2023

Other assets:

2 unchanged sentences

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

Nine Months Ended September 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 September 30, 2022 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2022

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, 2023:

June 30, 2023

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

September 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 June 30, 2023 and December 31, 2022:

June 30, 2023

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

September 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

Gross Amounts of Recognized Liabilities 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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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 June 30, 2023 and December 31, 2022:

June 30, 2023

September 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 June 30, 2023 and December 31, 2022:

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

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

(in thousands) September 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 and six months ended June 30, 2023 and 2022.

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 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 June 30, 2023, the Company held noncontrolling interests of 11.1 % and 50.0 %, respectively, in these JVs.

As of September 30, 2023, the Company held noncontrolling interests of 12.5 % 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 June 30, 2023, the Company held approximately a 9.8 % noncontrolling interest in this JV.

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

As of September 30, 2023, the Company held approximately a 13.5 % 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 June 30, 2023, the Company held approximately a 9.3 % noncontrolling interest in this JV.

As of September 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 June 30, 2023:

The following table presents the Company’s nonconsolidated VIEs at September 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 June 30, 2023, the Company held a 51 % controlling interest in this entity.

As of September 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 and six months ended June 30, 2023, and 2022:

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in thousands) Market Making Execution Services Corporate Total

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Total revenues $ 517,351 $ 112,453 $ 360 $ 630,164

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

(in thousands) Market Making Execution Services Corporate Total

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Total revenues $ 447,886 $ 119,599 $ ( 6,441 ) $ 561,044

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands) Market Making Execution Services Corporate Total

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Total revenues $ 1,421,522 $ 340,045 $ ( 4,171 ) $ 1,757,396

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(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, 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 September 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 $ 55.8 million and $ 56.1 million as of June 30, 2023 and December 31, 2022, respectively.

Receivables related to revenues from contracts with customers amounted to $ 52.7 million and $ 56.1 million as of September 30, 2023 and December 31, 2022, respectively.

The Company did not identify any contract assets.

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

There were no impairment losses on receivables as of September 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 $ 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.

Deferred revenue related to contracts with customers was $ 8.8 million and $ 9.6 million as of September 30, 2023 and December 31, 2022, respectively.

The Company recognized the full amount of revenue during the nine months ended September 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 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.

Accordingly, for the three and nine months ended September 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 $ 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.

The Company’s provisions for income taxes and effective tax rates were $ 20.5 million, and 14.9 %, and $ 21.7 million, and 21.4 % for the three months ended September 30, 2023 and 2022, respectively and $ 51.1 million, and 16.6 %, and $ 88.4 million, and 17.1 % for the nine months ended September 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 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.

Included in Other assets on the Condensed Consolidated Statements of Financial Condition at September 30, 2023 and December 31, 2022 are current income tax receivables of $ 45.9 million and $ 54.1 million, respectively.

The balances at September 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 September 30, 2023 and December 31, 2022 are current tax liabilities of $ 7.5 million and $ 13.4 million, respectively.

The balances at September 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 June 30, 2023 and December 31, 2022, the Company did not have any U.S.

At September 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 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.

At September 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 $ 66.9 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.

net operating losses of $ 65.4 million and $ 64.6 million at September 30, 2023 and December 31, 2022, respectively, and recorded a related deferred tax asset of $ 12.3 million and $ 12.4 million, respectively.

A valuation allowance of $ 12.3 million and $ 12.4 million was recorded against this deferred tax asset at September 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 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.

net operating losses at September 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 September 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 September 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 June 30, 2023, the Company’s tax years for 2015 through 2021 and 2016 through 2021 were subject to examination by U.S.

As of September 30, 2023, the Company’s tax years for 2015 through 2022 and 2016 through 2022 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 $ 6.8 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.

The Company had $ 7.0 million of unrecognized tax benefits as of September 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 September 30, 2023.

Commitments, Contingencies and Guarantees

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In the ordinary course of business, the nature of the Company’s business subjects it to claims, lawsuits, regulatory examinations or investigations and other proceedings, any of which could result in the imposition of fines, penalties or other sanctions against the Company.

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 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.

The Company and its subsidiaries are subject to several of these matters at the present time.

As previously disclosed, the U.S.

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

The Company cooperated with this civil investigation and engaged in settlement discussions but has been unable to reach a settlement.

In September 2023, the SEC filed 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 has meritorious defenses and intends to defend itself vigorously.

Specifically, the Company plans 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.

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and (c) potential damages relating thereto.

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

The Company has made substantial productions of documents and other information in response to plaintiff's requests.

Though no substantive claim has been brought, the Company believes that any potential allegations of wrongdoing are without merit and is defending itself vigorously.

On October 17, 2022, the Company’s subsidiary, along with several other parties, was named as a defendant in Mallinckrodt PLC, et al.

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The plaintiff is seeking to unwind the transactions consummated under the program, alleging such transactions constituted fraudulent transfers by the debtor.

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

The Company believes it has meritorious defenses against any unwinding of transactions, which it has asserted, and will continue to defend itself vigorously.

On December 1, 2022, the Company’s subsidiary, along with several other parties, was named as a defendant in Northwest Biotherapeutics, Inc.

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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.

Further, in 2023, the SEC proposed amendments to expand and update Regulation Systems Compliance and Integrity (SCI) and to restrict volume based tiered pricing by equity exchanges in certain cases, approved an amendment to adopt a revised funding model for the Consolidated Audit Trail (CAT), 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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It is the Company's practice to cooperate and comply with the requests for information and documents.

Additional information regarding legal and regulatory risks is described within the “Risk Factors” section under the sub header of “Legal and Regulatory Risks” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission ("SEC") on February 17, 2023 (the "2022 Form 10-K").

As indicated above, the Company is currently the subject of various regulatory reviews and investigations by state, federal and foreign regulators and SROs, including the SEC and FINRA.

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Lease assets and liabilities are summarized as follows:

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

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

Operating leases

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

June 30, 2023 December 31, 2022

September 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 June 30, Six Months Ended June 30,

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

(in thousands) 2023 2022 2023 2022

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Total Finance lease cost $ 2,559 $ 1,945 $ 7,631 $ 6,012

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2023, are as follows:

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

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

Cash and cash equivalents $ 688,790 $ 981,580

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The Founder Member controls approximately 86.2 % 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 58.9 % interest in Virtu Financial at June 30, 2023.

The Company holds approximately a 58.4 % interest in Virtu Financial at September 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 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.

As of September 30, 2023 and December 31, 2022, there were 4,040,772 and 4,462,840 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 422,068 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 nine months ended September 30, 2023, and 2022, respectively.

Amended and Restated 2015 Management Incentive Plan

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On May 4, 2021, the Company's Board of Directors authorized the expansion of the Company's share repurchase program, increasing the total authorized amount by an additional $ 300 million in Class A Common Stock and Virtu Financial Units and extending the duration of the program through May 4, 2022.

On November 3, 2021 the Company's Board of Directors authorized another expansion of the program by an additional $ 750 million to $ 1,220 million and extending the duration of the program through November 3, 2023.

The share repurchase program authorizes the Company to repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means.

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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 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.

From the inception of the program through September 30, 2023, the Company repurchased approximately 41.2 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 1,065.6 million.

As of September 30, 2023, the Company has approximately $ 154.4 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, 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.

During the nine months ended September 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 186,394 , 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 and six months ended June 30, 2023, and 2022:

Three Months Ended June 30, 2023

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

Three Months Ended September 30, 2023

(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, 2023, the Company expects approximately $ 30.1 million to be reclassified from AOCI into earnings over the next 12 months.

As of September 30, 2023, the Company expects approximately $ 32.8 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

Three Months Ended September 30, 2022

(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 Consolidated Statements of Comprehensive Income.

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(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 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.

As of September 30, 2023, the Company expects approximately $ 32.8 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, 2022

Nine Months Ended September 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 six months ended June 30, 2023 and 2022:

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

Options Outstanding Options Exercisable

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

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

At September 30, 2022 1,521,776 $ 19.00 2.49 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 ) — — ( 10,000 ) —

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

At September 30, 2023 1,511,776 $ 19.00 1.49 1,511,776 $ 19.00

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

12 unchanged sentences

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

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:

For the nine months ended September 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 $ 5.9 million and $ 8.9 million for the three months ended September 30, 2023 and 2022, respectively, and $ 17.9 million, and $ 24.4 million for the nine months ended September 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 nine months ended September 30, 2023, and 2022:

Number of RSUs and RSAs Weighted

4 unchanged sentences

Vested ( 1,800,922 ) 25.14

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

At September 30, 2022 4,086,929 $ 27.94

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

2 unchanged sentences

Vested ( 2,558,333 ) 23.63

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

At September 30, 2023 4,975,336 $ 23.81

(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 $ 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.

The Company recognized $ 9.7 million and $ 9.2 million for the three months ended September 30, 2023 and 2022, respectively, and $ 29.8 million, and $ 27.3 million for the nine months ended September 30, 2023 and 2022, respectively, of compensation expense in relation to RSUs.

As of September 30, 2023 and December 31, 2022, total unrecognized share-based compensation expense related to unvested RSUs was $ 67.2 million and $ 54.6 million, respectively, and this amount is to be recognized over a weighted average period of 1.1 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.

8 unchanged sentences

broker-dealer in June 2023.

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, 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.

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

subsidiaries as of June 30, 2023 was as follows:

subsidiaries as of September 30, 2023 was as follows:

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

1 unchanged sentence

RFQ-Hub Americas LLC 1,858 5 1,853

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.

As of September 30, 2023, VAL had $ 31.3 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 $ 6.0 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.

6 unchanged sentences

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:

The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of September 30, 2023 were as follows:

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

11 unchanged sentences

(1) Preliminary

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.

As of September 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.

20 unchanged sentences

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, 2023, and 2022 :

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, 2023, and 2022 :

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

(in thousands) 2023 2022 2023 2022

26 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 June 30, 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 September 30, 2023, and 2022 are summarized in the following table:

(in thousands) Market

5 unchanged sentences

Income (loss) before income taxes and noncontrolling interest 99,276 8,993 ( 6,663 ) 101,606

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

The Company's Pre-tax earnings by segment for the nine months ended September 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 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.

As of September 30, 2023, and December 31, 2022 the Company had net payables to its affiliates of $ 3.0 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 $ 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 paid $ 2.4 million and $ 3.2 million for the three months ended September 30, 2023 and 2022, respectively, and $ 8.4 million and $ 10.7 million for the nine months ended September 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 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 made payments to these JVs of $ 12.6 million and $ 10.5 million for the three months ended September 30, 2023 and 2022, respectively, and $ 25.2 million and $ 21.4 million for the nine months ended September 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 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.

The Company made payments of $ 2.2 million and received rebates of $ 2.3 million for the three months ended September 30, 2023 and 2022, respectively, and the Company made payments of $ 2.4 million and received rebates of $ 15.1 million for the nine months ended September 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 June 30, 2022.

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

On November 2, 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 December 15, 2023 to holders of record as of December 1, 2023, and extended the duration of the Company's share repurchase program through December 31, 2024.

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