What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-28 compared with 2024-07-26 · 215 added, 178 removed, 1243 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,

2024 December 31,

3 unchanged sentences

Securities purchased under agreements to resell 708,773 1,512,114

Receivables from broker-dealers and clearing organizations ($ 27,682 and $ — at fair value, as of June 30, 2024 and December 31, 2023, respectively)

Receivables from broker-dealers and clearing organizations ($ 41,837 and $ — at fair value, as of September 30, 2024 and December 31, 2023, respectively)

1,194,193 737,724

3 unchanged sentences

Receivables from customers 169,565 106,245

Property, equipment and capitalized software (net of accumulated depreciation of $ 352,877 and $ 367,779 as of June 30, 2024 and December 31, 2023, respectively)

Property, equipment and capitalized software (net of accumulated depreciation of $ 369,697 and $ 367,779 as of September 30, 2024 and December 31, 2023, respectively)

93,899 100,365

1 unchanged sentence

Goodwill 1,148,926 1,148,926

Intangibles (net of accumulated amortization of $ 404,829 and $ 381,973 as of June 30, 2024 and December 31, 2023, respectively)

Intangibles (net of accumulated amortization of $ 416,677 and $ 381,973 as of September 30, 2024 and December 31, 2023, respectively)

214,971 257,520

1 unchanged sentence

Assets of business held for sale 4,637 —

Other assets ($ 112,137 and $ 84,521 , at fair value, as of June 30, 2024 and December 31, 2023, respectively)

Other assets ($ 105,162 and $ 84,521 , at fair value, as of September 30, 2024 and December 31, 2023, respectively)

327,137 303,720

4 unchanged sentences

Securities sold under agreements to repurchase 1,045,811 1,795,994

Payables to broker-dealers and clearing organizations ($ 43,768 and $ 7,661 , at fair value, as of June 30, 2024 and December 31, 2023, respectively)

Payables to broker-dealers and clearing organizations ($ 88,318 and $ 7,661 , at fair value, as of September 30, 2024 and December 31, 2023, respectively)

619,640 1,167,712

11 unchanged sentences

Stockholders' equity

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 136,591,706 and 134,901,037 shares, Outstanding — 87,439,686 and 89,092,686 shares at June 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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 8,607,998 shares at June 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 49,152,020 and 45,808,351 shares at June 30, 2024 and December 31, 2023, respectively

Class A common stock (par value $ 0.00001 ), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 137,223,462 and 134,901,037 shares, Outstanding — 86,392,168 and 89,092,686 shares at September 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, respectively

Class C common stock (par value $ 0.00001 ), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 8,575,052 and 8,607,998 shares at September 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 50,831,294 and 45,808,351 shares at September 30, 2024 and December 31, 2023, respectively

( 1,282,210 ) ( 1,166,299 )

4 unchanged sentences

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data) June 30,

(in thousands, except share data) September 30,

2024 December 31,

9 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) 2024 2023 2024 2023

39 unchanged sentences

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three and Six Months Ended June 30, 2024 and 2023

Three and Nine Months Ended September 30, 2024 and 2023

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.

20 unchanged sentences

Balance at June 30, 2024 136,591,706 $ 1 8,607,998 $ — 60,091,740 $ 1 ( 49,152,020 ) $ ( 1,233,432 ) $ 1,394,091 $ 1,061,574 $ 8,709 $ 1,230,944 $ 197,880 $ 1,428,824

Share based compensation 204,193 — — — — — — — 13,297 $ — — 13,297 — 13,297

Repurchase of Class C common stock — ( 1,849 ) — — — — — ( 52 ) $ — — ( 52 ) — ( 52 )

Treasury stock purchases ( 57,204 ) — — — — — ( 1,679,274 ) ( 48,778 ) — ( 1,641 ) — ( 50,419 ) — ( 50,419 )

Stock options exercised 453,670 — — — — — — — 8,620 — — 8,620 — 8,620

Net income — — — — — — — — — 59,952 — 59,952 59,071 119,023

Foreign exchange translation adjustment — — — — — — — — — — 3,455 3,455 3,380 6,835

Net change in unrealized cash flow hedges gains — — — — — — — — — — ( 11,200 ) ( 11,200 ) ( 8,368 ) ( 19,568 )

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

— — — — — — — — — ( 22,192 ) — ( 22,192 ) ( 65,013 ) ( 87,205 )

Issuance of common stock in connection with employee exchanges 31,097 — — — — — — — — — — — — —

Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges — — ( 31,097 ) — — — — — — — — — — —

Balance at September 30, 2024 137,223,462 $ 1 8,575,052 $ — 60,091,740 $ 1 ( 50,831,294 ) $ ( 1,282,210 ) $ 1,415,956 $ 1,097,693 $ 964 $ 1,232,405 $ 186,950 $ 1,419,355

Virtu Financial, Inc.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Equity (Unaudited)

Three and Six Months Ended June 30, 2024 and 2023

Three and Nine Months Ended September 30, 2024 and 2023

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

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) 2024 2023

25 unchanged sentences

Accounts payable, accrued expenses and other liabilities 26,928 ( 31,268 )

Net cash provided by (used in) operating activities 95,408 ( 26,384 )

Net cash provided by operating activities 207,509 143,691

Cash flows from investing activities

5 unchanged sentences

Dividends to stockholders and distributions from Virtu Financial to noncontrolling interest ( 247,889 ) ( 251,867 )

Repurchase of Class C common stock — ( 424 )

Purchase of treasury stock ( 132,942 ) ( 184,382 )

12 unchanged sentences

Supplementary disclosure of cash flow information

Cash paid for interest $ 426,757 $ 370,761

Virtu Financial, Inc.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2024 2023

Cash paid for interest $ 285,693 $ 225,332

Cash paid for taxes 32,576 33,595

1 unchanged sentence

Share-based and accrued incentive compensation to developers relating to capitalized software 14,931 14,665

Non-cash financing activities

Repurchase of Class C common stock ( 52 ) ( 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, 2024, VFI owned approximately 57.4 % of the membership interests of Virtu Financial.

As of September 30, 2024, VFI owned approximately 57.2 % 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”).

39 unchanged sentences

GAAP have been condensed or omitted in accordance with SEC rules and regulations.

The Condensed Consolidated Financial Statements of the Company include its equity interests in Virtu Financial and its

subsidiaries.

Condensed Consolidated Financial Statements of the Company include its equity interests in Virtu Financial and its subsidiaries.

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

14 unchanged sentences

The Company adopted this ASU on January 1, 2024, and it did not have a material impact on its Condensed Consolidated Financial Statements.

Accounting Pronouncements Not Yet Adopted as of June 30, 2024

Accounting Pronouncements Not Yet Adopted as of September 30, 2024

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

18 unchanged sentences

This ASU is effective for periods beginning after December 15, 2024.

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 and related disclosures.

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 and related disclosures.

Codification Improvements - In March 2024, the FASB issued ASU 2024-02, Codification Improvements.

5 unchanged sentences

(“MarketAxess”) pursuant to which the Company has agreed to sell a 49 % interest in the multi-asset request-for-quote communication platform JV, RFQ-hub Holdings LLC (“RFQ-hub Holdings,” or collectively with its wholly owned or controlled subsidiaries, “RFQ-hub”, which includes RFQ-hub Americas LLC, or “RAL”).

The sale is subject to various closing conditions including the receipt of certain regulatory approvals and is expected to close in the third quarter of 2024.

The sale is anticipated to close in the fourth quarter of 2024 but remains subject to various closing conditions including the receipt of certain regulatory approvals.

Upon the closing of the sale, the Company will retain a minority stake in RFQ-hub.

1 unchanged sentence

(in thousands)

Business assets and liabilities held for sale as of June 30, 2024:

Business assets and liabilities held for sale as of September 30, 2024:

Receivables from broker-dealers and clearing organizations $ 138

Property, equipment and capitalized software (net) 919

2 unchanged sentences

Liabilities $ ( 1,184 )

Total carrying value of RFQ-hub as of June 30, 2024:

Total carrying value of RFQ-hub as of September 30, 2024:

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) 2024 2023 2024 2023

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) 2024 2023 2024 2023

6 unchanged sentences

Basic earnings per share $ 0.65 $ 0.63 $ 1.95 $ 1.36

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) 2024 2023 2024 2023

6 unchanged sentences

Diluted earnings per share (1) $ 0.64 $ 0.63 $ 1.95 $ 1.36

(1) Excluded from the computation of diluted Earnings per share were — and 54,618 unexercised stock options for three months ended June 30, 2024 and 2023, respectively, and — and 17,647 unexercised stock options for the six months ended June 30, 2024 and 2023, respectively, because inclusion of the options would have been anti-dilutive.

(1) Excluded from the computation of diluted Earnings per share were 68,988 and 34,622 unexercised stock options for the three and nine months ended September 30, 2023, respectively, because inclusion of the options would have been anti-dilutive.

There were none excluded for the three and nine months ended September 30, 2024.

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 payments totaling $ 114.0 million from February 2017 through March 2024.

The Company made payments totaling $ 114.0 million from February 2017 through September 2024.

Tax receivable payments are expected to range from approximately $ 0.1 million to $ 22.0 million per year over the next 15 years.

At June 30, 2024 and December 31, 2023, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 125.1 million and $ 135.7 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $ 196.3 million and $ 216.5 million for June 30, 2024 and December 31, 2023, respectively.

The amounts recorded as of June 30, 2024 and December 31, 2023 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, 2024 and December 31, 2023, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $ 119.6 million and $ 135.7 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $ 196.3 million and $ 216.5 million at September 30, 2024 and December 31, 2023, respectively.

The amounts recorded as of September 30, 2024 and December 31, 2023 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, 2024 and December 31, 2023, 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, 2024 and 2023.

The following table presents the details of goodwill by segment as of June 30, 2024 and December 31, 2023:

As of September 30, 2024 and December 31, 2023, 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, 2024 and 2023.

The following table presents the details of goodwill by segment as of September 30, 2024 and December 31, 2023:

(in thousands) Market Making Execution Services Corporate Total

1 unchanged sentence

As described in Note 3 “Business Held for Sale”, the Company reclassified an aggregated net carrying amount of $ 3.5 million ($ 7.5 million of gross carrying amount net of $ 4.0 million accumulated amortization) from Intangible assets to Assets of business held for sale.

As of June 30, 2024 and December 31, 2023, the Company's total amount of intangible assets recorded was $ 226.8 million and $ 257.5 million, respectively.

Acquired intangible assets consisted of the following as of June 30, 2024 and December 31, 2023:

As of June 30, 2024

As of September 30, 2024 and December 31, 2023, the Company's total amount of intangible assets recorded was $ 215.0 million and $ 257.5 million, respectively.

Acquired intangible assets consisted of the following as of September 30, 2024 and December 31, 2023:

As of September 30, 2024

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

19 unchanged sentences

$ 639,493 $ ( 381,973 ) $ 257,520

Amortization expense relating to finite-lived intangible assets was approximately $ 12.2 million and $ 16.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 26.8 million and $ 32.0 million for the six months ended June 30, 2024 and 2023, respectively.

Amortization expense relating to finite-lived intangible assets was approximately $ 11.8 million and $ 16.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 38.7 million and $ 48.0 million for the nine months ended September 30, 2024 and 2023, 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, 2024 and December 31, 2023:

(in thousands) June 30, 2024 December 31, 2023

The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at September 30, 2024 and December 31, 2023:

(in thousands) September 30, 2024 December 31, 2023

Due from prime brokers $ 494,186 $ 208,639

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 9 “Borrowings”) of approximately $ 119.3 million and $ 175.3 million as of June 30, 2024 and December 31, 2023, respectively.

Included as a deduction from “Due from prime brokers” and “Net equity with futures commission merchants” is the outstanding principal balance on all of the Company’s prime brokerage credit facilities (described in Note 9 “Borrowings”) of approximately $ 143.9 million and $ 175.3 million as of September 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, substantially all of the securities received as collateral have been repledged.

The fair value of the collateralized transactions at June 30, 2024 and December 31, 2023 are summarized as follows:

(in thousands) June 30, 2024 December 31, 2023

At September 30, 2024 and December 31, 2023, substantially all of the securities received as collateral have been repledged.

The fair value of the collateralized transactions at September 30, 2024 and December 31, 2023 are summarized as follows:

(in thousands) September 30, 2024 December 31, 2023

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, 2024 and December 31, 2023 consisted of the following:

(in thousands) June 30, 2024 December 31, 2023

Financial instruments owned and pledged, where the counterparty has the right to repledge, at September 30, 2024 and December 31, 2023 consisted of the following:

(in thousands) September 30, 2024 December 31, 2023

Equities $ 1,971,268 $ 1,222,559

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, 2024

September 30, 2024

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

Broker-dealer credit facilities $ 110,000 $ ( 813 ) $ 109,187

Short-term bank loans 19,574 — 19,574

$ 129,574 $ ( 813 ) $ 128,761

18 unchanged sentences

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

At June 30, 2024

At September 30, 2024

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

5 unchanged sentences

(1) Interest rate for Borrowing Base A Loan and Borrowing Base B Loan under the Committed Facility was 6.25 % and 8.00 %, respectively.

There was no balance outstanding under Borrowing Base B Loan as of June 30, 2024.

There was no balance outstanding under Borrowing Base B Loan as of September 30, 2024.

At December 31, 2023

8 unchanged sentences

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

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

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

(in thousands) 2024 2023 2024 2023

6 unchanged sentences

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

At June 30, 2024 and December 31, 2023, there was no balance associated with international settlement activities outstanding under these facilities.

At September 30, 2024, there was $ 19.6 million short-term bank loans associated with international settlement activities outstanding under these facilities at a weighted average interest rate of approximately 5.2 %.

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

Outstanding short-term bank loan balances are included within Short-term borrowings on the Condensed Consolidated Statements of Financial Condition.

2 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, 2024

At September 30, 2024

(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 $ 2.4 million and $ 3.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 4.9 million and $ 7.1 million for the six months ended June 30, 2024 and 2023, respectively.

Interest expense in relation to the facilities was $ 2.4 million and $ 3.3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 7.4 million and $ 10.4 million for the nine months ended September 30, 2024 and 2023, 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, 2024

At September 30, 2024

(in thousands) Maturity

37 unchanged sentences

The Company simultaneously entered into a two-year $ 1,525.0 million floating-to-fixed interest rate swap agreement with the same counterparty (the “December 2023 Swap”).

The December 2023 Swap met the criteria to be considered and was designated as a qualifying cash flow hedge under ASC 815 as of December 2023, and it effectively fixed interest payment obligations on $ 1,525.0 million of principal under the First Lien Term Loan Facility at a rate of 7.5 % through November 2025, based on the interest rates set forth in the Credit Agreement.

The December 2023 Swap met the criteria to be considered and was designated as a qualifying cash flow hedge under

ASC 815 as of December 2023, and it effectively fixed interest payment obligations on $ 1,525.0 million of principal under the First Lien Term Loan Facility at a rate of 7.5 % through November 2025, based on the interest rates set forth in the Credit Agreement.

On June 21, 2024 (the “Amendment Effective Date”), the Company entered into Amendment No.

5 unchanged sentences

The New Term Loans are also subject to contingent principal payments based on excess cash flow and certain other triggering events.

As of June 30, 2024, $ 1,245.0 million was outstanding under the term loans, and there were no amounts outstanding under the first lien revolving facility.

As of September 30, 2024, $ 1,245.0 million was outstanding under the term loans, and there were no amounts outstanding under the first lien revolving facility.

In connection with its entry into the Amended Credit Agreement and the associated reduction in term loan balance, the Company partially terminated the December 2023 Swap, reducing the notional amount thereof from $ 1,525.0 million to $ 1,075.0 million and received $ 2.0 million in proceeds from the counterparty.

37 unchanged sentences

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

The principal balance was ¥ 3.5 billion ($ 21.8 million) as of June 30, 2024 and ¥ 3.5 billion ($ 24.8 million) as of December 31, 2023.

The Company had a gain of $ 1.4 million and $ 2.1 million during the three months ended June 30, 2024 and 2023, respectively, and a gain of $ 3.1 million and $ 2.4 million during the six months ended June 30, 2024 and 2023, respectively, due to changes in foreign currency rates.

As of June 30, 2024, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

(in thousands) June 30, 2024

The principal balance was ¥ 3.5 billion ($ 24.4 million) as of September 30, 2024 and ¥ 3.5 billion ($ 24.8 million) as of December 31, 2023.

The Company had a loss of $ 2.6 million and a gain of $ 0.8 million during the three months ended September 30, 2024 and 2023, respectively, and a gain of $ 0.4 million and a gain of $ 3.3 million during the nine months ended September 30, 2024 and 2023, respectively, due to changes in foreign currency rates.

As of September 30, 2024, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:

(in thousands) September 30, 2024

Remainder of 2024 $ —

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, 2024:

June 30, 2024

Fair value measurements for those items measured on a recurring basis are summarized below as of September 30, 2024:

September 30, 2024

(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

16 unchanged sentences

Receivables from broker dealers and clearing organizations:

Interest rate swap $ — $ 5,612 $ — $ — $ 5,612

Receivables linked to digital assets 41,837 41,837

9 unchanged sentences

Payables to broker dealers and clearing organizations:

Interest rate swap $ — $ 7,410 $ — $ — $ 7,410

Payables linked to digital assets — 80,908 — — 80,908

34 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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, 2024

September 30, 2024

(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, 2024

(in thousands) Balance at March 31, 2024 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2024 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2024

Three Months Ended September 30, 2024

(in thousands) Balance at June 30, 2024 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at September 30, 2024 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2024

Other assets:

3 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, 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:

3 unchanged sentences

Six Months Ended June 30, 2024

(in thousands) Balance at December 31, 2023 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at June 30, 2024 Change in Net Unrealized Gains / (Losses) on Investments still held at June 30, 2024

Nine Months Ended September 30, 2024

(in thousands) Balance at December 31, 2023 Purchases Total Realized and Unrealized Gains / (Losses) (1) Net Transfers into (out of) Level 3 Settlement Balance at September 30, 2024 Change in Net Unrealized Gains / (Losses) on Investments still held at September 30, 2024

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:

7 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 June 30, 2024:

June 30, 2024

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of September 30, 2024:

September 30, 2024

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

46 unchanged sentences

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

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of June 30, 2024 and December 31, 2023:

June 30, 2024

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of September 30, 2024 and December 31, 2023:

September 30, 2024

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

4 unchanged sentences

Receivables from broker-dealers and clearing organizations:

Interest rate swaps 5,612 — 5,612 — — 5,612

Trading assets, at fair value:

8 unchanged sentences

Securities sold under agreements to repurchase 1,045,811 — 1,045,811 ( 1,044,546 ) 1,265

Payable to broker-dealers and clearing organizations:

Interest rate swaps 7,410 — 7,410 — — 7,410

Trading liabilities, at fair value:

23 unchanged sentences

Total $ 3,475,372 $ ( 336,311 ) $ 3,139,061 $ ( 3,087,370 ) $ ( 34,423 ) $ 17,268

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, 2024 and December 31, 2023:

June 30, 2024

September 30, 2024

Remaining Contractual Maturity

20 unchanged sentences

Derivative Instruments

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at June 30, 2024 and December 31, 2023:

(in thousands) June 30, 2024 December 31, 2023

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at September 30, 2024 and December 31, 2023:

(in thousands) September 30, 2024 December 31, 2023

Derivatives Assets Financial Statement Location Fair Value Notional Fair Value Notional

6 unchanged sentences

Currency forwards Financial instruments owned 274,749 36,748,890 377,279 33,579,641

Derivative instruments designated as hedging instruments:

Interest rate swap Receivables from broker-dealers and clearing organizations 5,612 1,075,000 — —

Derivatives Liabilities Financial Statement Location Fair Value Notional Fair Value Notional

9 unchanged sentences

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, 2024 and 2023.

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 2024 2023 2024 2023

19 unchanged sentences

The Company will be considered to have a controlling financial interest and will consolidate a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company has interests in two joint ventures (“JV”) that build and maintain microwave communication networks in the U.S., Europe, and Asia.

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, 2024, the Company held noncontrolling interests of 12.5 % and 50.0 %, respectively, in these JVs.

The Company has an interest in a joint venture (“JV”) that builds and maintains communication networks and related assets globally.

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

As of September 30, 2024, the Company held a noncontrolling interest of 50.0 % in the JV.

The Company previously held a noncontrolling interest of 12.5 % in another JV that also builds and maintains communication networks and related assets and followed a similar fee arrangement.

As of September 1, 2024, the Company had disposed of its interest in this JV.

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, 2024, the Company held approximately a 9.8 % noncontrolling interest in this JV.

As of September 30, 2024, 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, 2024, the Company held approximately a 13.5 % noncontrolling interest in this JV.

As of September 30, 2024, the Company held approximately a 13.5 % noncontrolling interest in this JV.

The Company has an interest 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, 2024, the Company held approximately a 6.9 % noncontrolling interest in this JV.

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

The Company records its interest in the JVs under the equity method of accounting and records its investment in the JVs within Other assets and its amounts payable for communication services provided by the applicable JVs within Accounts payable, accrued expenses and other liabilities on the Statements of Financial Condition.

As of September 30, 2024, the Company held approximately a 6.9 % noncontrolling interest in this JV.

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

The Company records its interest in the JVs under the equity method of accounting and records its investment in the JVs within Other assets and its amounts payable for communication services provided by the telecommunication JVs within Accounts payable, accrued

expenses and other liabilities on the Statements of Financial Condition as applicable.

The Company records its pro-rata share of each JV's earnings or losses within Other, net and fees related to the use of communication services provided by the JVs within Communications and data processing on the Condensed Consolidated Statements of Comprehensive Income.

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, 2024:

The following table presents the Company’s nonconsolidated VIEs at September 30, 2024:

Carrying Amount Maximum Exposure to Loss VIEs' assets

6 unchanged sentences

The Company formed a JV to support the growth and expansion of a multi-asset request-for-quote communication platform in 2022.

As of June 30, 2024, the Company held a 51 % controlling interest in this entity.

As of September 30, 2024, 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.

6 unchanged sentences

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, 2024 and 2023:

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

(in thousands) Market Making Execution Services Corporate Total

10 unchanged sentences

Total revenues $ 576,660 $ 125,727 $ 4,453 $ 706,840

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in thousands) Market Making Execution Services Corporate Total

10 unchanged sentences

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in thousands) Market Making Execution Services Corporate Total

10 unchanged sentences

Total revenues $ 1,667,450 $ 370,575 $ 4,639 $ 2,042,664

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands) Market Making Execution Services Corporate Total

11 unchanged sentences

Remaining Performance Obligations and Revenue Recognized from Past Performance Obligations

As of June 30, 2024 and 2023, 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, 2024 and 2023, 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

2 unchanged sentences

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 $ 60.4 million and $ 56.4 million as of June 30, 2024 and December 31, 2023, respectively.

Receivables related to revenues from contracts with customers amounted to $ 61.9 million and $ 56.4 million as of September 30, 2024 and December 31, 2023, respectively.

The Company did not identify any contract assets.

There were no impairment losses on receivables as of June 30, 2024.

There were no impairment losses on receivables as of September 30, 2024.

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 $ 10.7 million and $ 8.4 million as of June 30, 2024 and December 31, 2023, respectively.

The Company recognized the full amount of revenue during the six months ended June 30, 2024 and 2023, that had been recorded as deferred revenue in the respective prior year.

Deferred revenue related to contracts with customers was $ 9.4 million and $ 8.4 million as of September 30, 2024 and December 31, 2023, respectively.

The Company recognized the full amount of revenue during the nine months ended September 30, 2024 and 2023, 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.

3 unchanged sentences

taxation as partnerships.

Accordingly, for the three and six months ended June 30, 2024 and 2023, 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, 2024 and 2023, 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.

1 unchanged sentence

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 $ 27.3 million, and 17.6 %, and $ 5.9 million, and 16.7 % for the three months ended June 30, 2024 and 2023, respectively, and $ 55.8 million, and 18.9 %, and $ 30.6 million, and 18.0 % for the six months ended June 30, 2024 and 2023, respectively.

The Company’s provisions for income taxes and effective tax rates were $ 28.1 million, and 19.1 %, and $ 20.5 million, and 14.9 % for the three months ended September 30, 2024 and 2023, respectively, and $ 83.9 million, and 19.0 %, and $ 51.1 million, and 16.6 % for the nine months ended September 30, 2024 and 2023, 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, 2024 and December 31, 2023 are current income tax receivables of $ 51.1 million and $ 44.3 million, respectively.

The balances at June 30, 2024 and December 31, 2023 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, 2024 and December 31, 2023 are current tax liabilities of $ 9.5 million and $ 6.8 million, respectively.

The balances at June 30, 2024 and December 31, 2023 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, 2024 and December 31, 2023 are current income tax receivables of $ 34.1 million and $ 44.3 million, respectively.

The balances at September 30, 2024 and December 31, 2023 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, 2024 and December 31, 2023 are current tax liabilities of $ 16.3 million and $ 6.8 million, respectively.

The balances at September 30, 2024 and December 31, 2023 primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes.

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

2 unchanged sentences

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

At June 30, 2024 and December 31, 2023, the Company did not have any U.S.

At September 30, 2024 and December 31, 2023, the Company did not have any U.S.

federal, state or local net operating loss carryforwards and therefore the Company did not record a deferred tax asset related to any federal net operating loss carryforwards.

As a result of the acquisitions of ITG and KCG, the Company has non-U.S.

net operating losses at June 30, 2024 and December 31, 2023, of $ 302.4 million and $ 304.5 million, respectively, and has recorded related deferred tax assets of $ 56.6 million and $ 57.1 million, respectively.

A full valuation allowance was recorded against these deferred tax assets at June 30, 2024 and December 31, 2023 as it is more likely than not that these deferred tax assets will not be realized.

No valuation allowance against the remaining deferred taxes was recorded as of June 30, 2024 and December 31, 2023 because it is more likely than not that these deferred tax assets will be fully realized.

net operating losses at September 30, 2024 and December 31, 2023, of $ 301.6 million and $ 304.5 million, respectively, and has recorded related deferred tax assets of $ 56.4 million and $ 57.1 million, respectively.

A full valuation allowance was recorded against these deferred tax assets at September 30, 2024 and December 31, 2023 as it is more likely than not that these deferred tax assets will not be realized.

No valuation allowance against the remaining deferred taxes was recorded as of September 30, 2024 and December 31, 2023 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, 2024, the Company’s tax years for 2015 through 2022 and 2016 through 2023 were subject to examination by U.S.

As of September 30, 2024, the Company’s tax years for 2015 through 2023 and 2016 through 2023 were subject to examination by U.S.

tax authorities, respectively.

5 unchanged sentences

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

The Company had $ 7.9 million of unrecognized tax benefits as of June 30, 2024, 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, 2024.

The Company had $ 8.2 million of unrecognized tax benefits as of September 30, 2024, 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, 2024.

Commitments, Contingencies and Guarantees

51 unchanged sentences

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

On October 7, 2024, the Company and its 50 % owned subsidiary, NLN Holdings, LLC, along with several other defendants, were named in a lawsuit brought by Skywave Networks, LLC in the United States District Court for the Northern District of Illinois, Skywave Networks, LLC v.

DiSomma, et al., 1:24-cv-09650 (N.D.Ill.).

The complaint alleges that defendants engaged in violations of federal law, 18 U.S.C.

1962, in connection with the application for and utilization of various licenses issued by the Federal Communications Commission, purportedly harming plaintiffs’ attempts to offer certain network communications capacity on a commercial basis.

The complaint does not specify any amount of alleged damages.

The Company believes that the claims are without merit and intends to defend itself vigorously.

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.

14 unchanged sentences

equities market structure, the retail trading environment in the U.S., wholesale market making and the relationships between retail broker-dealers and market making firms including, but not limited to, payment for order flow arrangements, other remuneration arrangements such as profit-sharing relationships and exchange fee and rebate structures, alternative trading systems and off-exchange trading more generally, high frequency trading, short selling, market fragmentation, colocation, and access to market data feeds.

Specifically, in 2022 the SEC proposed several rule changes focused on equity market structure reform.

These proposals include, but are not limited to, (i) Proposed Rule 615 of Regulation NMS, which proposes to dramatically change U.S.

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 of 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, which was adopted in March 2024 and has a compliance date on or about December 15, 2025, 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 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.

Additionally, rules to amend the definitions of “dealer” and “government securities dealer” within the Exchange Act were recently adopted, and are expected to broaden the scope of these registrant categories.

In 2022 and 2023, the SEC proposed several rule changes focused on equity market structure reform, certain of which have adopted while others remain pending.

The SEC has recently (i) adopted rule amendments to minimum pricing increments under Rule 612 of 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”) which have a compliance date commencing in November 2025, (ii) adopted amendments to Rule 605 of Regulation NMS, which has a compliance date on or about December 15, 2025, (iii).approved a funding model submitted by several exchanges in relation to the Consolidated Audit Trail (CAT) which provides for fee collection commencing in November but is currently subject to legal challenge, and (iv) adopted rules to amend the definitions of “dealer” and “government securities dealer” within the Exchange Act, which is expected to broaden the scope of these registrant categories.

The remaining pending proposals include, but are not limited to, (i) Proposed Rule 615 of Regulation NMS, which proposes to dramatically change U.S.

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) 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, (iv) proposed amendments to expand and update Regulation Systems Compliance and Integrity (SCI), and (v) a proposal to restrict volume based tiered pricing by equity exchanges in certain cases, and the SEC has indicated that additional rule proposals may be forthcoming.

Further, on April 23, 2024, the Federal Trade Commission (FTC) announced a final rule banning most non-compete clauses in employer-employee contracts.

The final rule is scheduled to become effective on September 4, 2024, but its implementation and enforceability is subject to ongoing legal challenges which have not been definitively resolved.

The final rule was scheduled to become effective on September 4, 2024, but it was enjoined by a federal district court in September 2024 on the grounds that the rule exceeds the FTC's authority.

The FTC is appealing the ruling and therefore its implementation has not yet been definitively resolved.

These pending or potential rule changes, to the extent adopted, along with those that have recently been adopted, could adversely affect the Company’s business or the Company’s industry.

9 unchanged sentences

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

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

disclosed in its operating agreement.

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

2 unchanged sentences

Lease assets and liabilities are summarized as follows:

(in thousands) Financial Statement Location June 30, 2024 December 31, 2023

(in thousands) Financial Statement Location September 30, 2024 December 31, 2023

Operating leases

6 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Weighted average remaining lease term

5 unchanged sentences

The components of lease expense are as follows:

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

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

(in thousands) 2024 2023 2024 2023

8 unchanged sentences

Total Finance lease cost $ 3,116 $ 2,559 $ 9,067 $ 7,631

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of June 30, 2024, are as follows:

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of September 30, 2024, are as follows:

(in thousands) Operating Leases Finance Leases

10 unchanged sentences

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, 2024 December 31, 2023

(in thousands) September 30, 2024 December 31, 2023

Cash and cash equivalents $ 701,405 $ 820,436

7 unchanged sentences

The Founder Member controls approximately 86.8 % 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 57.4 % interest in Virtu Financial at June 30, 2024.

The Company holds approximately a 57.2 % interest in Virtu Financial at September 30, 2024.

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, 2024 and December 31, 2023, there were 4,040,772 Virtu Financial Units outstanding held by Employee Holdco (as defined below), and 173,535 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 there were no units exchanged, forfeited or repurchased during the six months ended June 30, 2024.

In connection with these reorganization transactions, all Class A-2 profits interests and Class B interests were reclassified into Virtu Financial Units.

As of September 30, 2024 and December 31, 2023, there were 4,007,826 and 4,040,772 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 32,946 and 422,068 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, 2024 and 2023, respectively.

Amended and Restated 2015 Management Incentive Plan

15 unchanged sentences

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

From the inception of the program through June 30, 2024, the Company repurchased approximately 47.0 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 1,176.3 million.

As of June 30, 2024, the Company has approximately $ 543.7 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, 2024, the Company repurchased approximately 48.7 million shares of Class A Common Stock and Virtu Financial Units for approximately $ 1,224.7 million.

As of September 30, 2024, the Company has approximately $ 495.3 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.

Employee Exchanges

During the six months ended June 30, 2023, 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 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.

There were no employee exchanges during the six months ended June 30, 2024.

During the nine months ended September 30, 2024 and 2023, 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 31,097 and 186,394 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.

Accumulated Other Comprehensive Income

The following table presents the changes in Other Comprehensive Income for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, 2024

The following table presents the changes in Other Comprehensive Income for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024

(in thousands) AOCI Beginning Balance Amounts recorded

4 unchanged sentences

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

As of June 30, 2024, the Company expects approximately $ 19.1 million to be reclassified from AOCI into earnings over the next 12 months.

As of September 30, 2024, the Company expects approximately $ 11.1 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, 2023

Three Months Ended September 30, 2023

(in thousands) AOCI Beginning Balance Amounts recorded

4 unchanged sentences

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in thousands) AOCI Beginning Balance Amounts recorded

4 unchanged sentences

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

As of June 30, 2024, the Company expects approximately $ 19.1 million to be reclassified from AOCI into earnings over the next 12 months.

As of September 30, 2024, the Company expects approximately $ 11.1 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.

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in thousands) AOCI Beginning Balance Amounts recorded

6 unchanged sentences

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

The following table summarizes activity related to stock options for the six months ended June 30, 2024 and 2023:

The following table summarizes activity related to stock options for the nine months ended September 30, 2024 and 2023:

Options Outstanding Options Exercisable

4 unchanged sentences

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

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

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

At December 31, 2023 1,511,776 $ 19.00 1.24 1,511,776 $ 19.00

2 unchanged sentences

Forfeited or expired ( 2,750 ) — — ( 2,750 ) —

At June 30, 2024 1,482,401 $ 19.00 0.74 1,482,401 $ 19.00

At September 30, 2024 1,025,981 $ 19.00 0.49 1,025,981 $ 19.00

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

8 unchanged sentences

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

For the six months ended June 30, 2024 and 2023, respectively, there were 878,091 and 868,315 shares of immediately vested Class A Common Stock granted as part of year-end compensation.

In addition, the Company accrued compensation expense of $ 7.8 million and $ 6.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 12.7 million and $ 12.0 million for the six months ended June 30, 2024 and 2023, 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, 2024 and 2023:

For the nine months ended September 30, 2024 and 2023, respectively, there were 878,091 and 868,315 shares of immediately vested Class A Common Stock granted as part of year-end compensation.

In addition, the Company accrued compensation expense of $ 6.9 million and $ 5.9 million for the three months ended September 30, 2024 and 2023, respectively, and $ 19.6 million and $ 17.9 million for the nine months ended September 30, 2024 and 2023, 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 and RSAs for the nine months ended September 30, 2024 and 2023:

Number of RSUs and RSAs Weighted

4 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

At December 31, 2023 4,903,174 $ 23.90

2 unchanged sentences

Vested ( 2,820,419 ) 21.65

At June 30, 2024 5,291,553 $ 22.01

(1) Excluded in the number of RSUs and RSAs are 37,500 participating RSAs for June 30, 2023, where the grant date has not been achieved because the performance conditions have not been met.

The Company recognized $ 10.1 million and $ 10.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 20.3 million and $ 20.2 million for the six months ended June 30, 2024 and 2023, respectively, of compensation expense in relation to RSUs.

As of June 30, 2024 and December 31, 2023, total unrecognized share-based compensation expense related to unvested RSUs was $ 64.4 million and $ 55.2 million, respectively, and this amount is to be recognized over a weighted average period of 1.2 years and 0.9 years, respectively.

At September 30, 2024 5,510,000 $ 21.38

(1) Excluded in the number of RSUs and RSAs are 37,500 participating RSAs for nine months ended September 30, 2023, where the grant date has not been achieved because the performance conditions have not been met.

The Company recognized $ 11.1 million and $ 9.7 million for the three months ended September 30, 2024 and 2023, respectively, and $ 31.3 million and $ 29.8 million for the nine months ended September 30, 2024 and 2023, respectively, of compensation expense in relation to RSUs.

As of September 30, 2024 and December 31, 2023, total unrecognized share-based compensation expense related to unvested RSUs was $ 61.7 million and $ 55.2 million, respectively, and this amount is to be recognized over a weighted average period of 1.1 years 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, 2024.

The required amount is determined under the exchange rules as the greater of (i) $ 1.0 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, 2024 was as follows:

subsidiaries as of September 30, 2024 was as follows:

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

1 unchanged sentence

RFQ-hub Americas LLC 664 6 658

As of June 30, 2024, VAL had $ 25.4 million of cash in special reserve bank accounts for the benefit of customers pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements, and $ 6.2 million of cash in reserve bank accounts for the benefit of proprietary accounts of brokers.

As of September 30, 2024, VAL had $ 30.2 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 $ 6.3 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.

7 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, 2024 were as follows:

The regulatory net capital balances and regulatory capital requirements applicable to the Company's foreign subsidiaries as of September 30, 2024 were as follows:

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

11 unchanged sentences

(1) Preliminary

As of June 30, 2024, Virtu Europe Trading Limited had $ 50 thousand of segregated funds on deposit for trade clearing and settlement activity, and Virtu ITG Hong Kong Ltd.

As of September 30, 2024, Virtu Europe Trading Limited had $ 62 thousand 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, 2024 and 2023 :

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, 2024 and 2023 :

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

(in thousands) 2024 2023 2024 2023

12 unchanged sentences

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.

The Company earns commissions and commission equivalents as an agent on behalf of clients as well as between principals to transactions;

The Company earns commissions as an agent on behalf of clients as well as between principals to transactions;

in addition, the Company will commit capital on behalf of clients as needed.

9 unchanged sentences

The Company’s total revenues and

income (loss) before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the three months ended June 30, 2024 and 2023 are summarized in the following table:

income (loss) before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the three months ended September 30, 2024 and 2023 are summarized in the following table:

(in thousands) Market

6 unchanged sentences

Income (loss) before income taxes and noncontrolling interest 130,252 7,814 39 138,105

The Company’s Pre-tax earnings by segment for the six months ended June 30, 2024 and 2023 are summarized in the following table:

The Company’s Pre-tax earnings by segment for the nine months ended September 30, 2024 and 2023 are summarized in the following table:

(in thousands) Market Making Execution Services Corporate Consolidated Total

7 unchanged sentences

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

As of June 30, 2024 and December 31, 2023 the Company had net payables to its affiliates of $ 1.7 million and $ 1.5 million, respectively.

As of September 30, 2024 and December 31, 2023 the Company had net payables to its affiliates of $ 1.1 million and $ 1.5 million, respectively.

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

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

The Company paid $ 2.8 million and $ 3.4 million for the three months ended June 30, 2024 and 2023, respectively, and $ 5.0 million and $ 5.9 million for the six months ended June 30, 2024 and 2023, respectively, to JNX for these trading activities.

The Company pays monthly use fees to two JVs in which it holds interests (see Note 12 “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 $ 7.4 million and $ 6.3 million for the three months ended June 30, 2024 and 2023, respectively, and $ 14.8 million and $ 12.6 million for the six months ended June 30, 2024 and 2023, respectively.

The Company paid $ 3.5 million and $ 2.4 million for the three months ended September 30, 2024 and 2023, respectively, and $ 8.5 million and $ 8.4 million for the nine months ended September 30, 2024 and 2023, respectively, to JNX for these trading activities.

The Company pays monthly use fees to a JV in which it holds an interest (see Note 12 “Variable Interest Entities”).

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

The Company previously held a similar arrangement with another telecommunication JV and paid a monthly use fee, and the Company disposed of its interests in this JV and ended the monthly fee arrangement as of September 1, 2024.

The Company made payments to these JVs of $ 13.5 million and $ 12.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 28.3 million and $ 25.2 million for the nine months ended September 30, 2024 and 2023, 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 $ 3.3 million and $ 0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 4.8 million and $ 0.2 million for the six months ended June 30, 2024 and 2023, respectively.

The Company made payments of $ 1.1 million and $ 2.2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 5.9 million and $ 2.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Subsequent Events

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

On July 18, 2024, 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, 2024 to holders of record as of September 1, 2024.

On October 24, 2024, 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, 2024 to holders of record as of December 1, 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