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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-21 · 126 added, 87 removed, 684 unchanged (24% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis covers the years ended December 31, 2024 and 2023 should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2024, which are included in Part II, Item 8 of this Annual Report on Form 10-K.

The following management’s discussion and analysis covers the years ended December 31, 2025 and 2024 should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025, which are included in Item 8 of this Annual Report on Form 10-K.

This management’s discussion and analysis contains forward-looking statements that involve risks and uncertainties.

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• risks inherent to the electronic market making business and trading generally;

• SEC proposals under the prior administration focused on equity markets which may, if adopted, materially change U.S.

equity market structure, including by reducing overall trading volumes, reducing off-exchange trading and market making opportunities, requiring additional tools, platforms and services to register as an ATS or exchange, and generally increasing the implicit and explicit cost as well as the complexity of the U.S.

equities eco-system for all participants;

• additionally, enhanced regulatory, congressional, and media scrutiny, including attention to electronic trading, wholesale market making and off-exchange trading, payment for order flow, and other market structure topics may result in additional potential changes in regulation or law which could have an adverse effect on our business as well as adversely impact the public’s perception of us or of companies in our industry;

• enhanced regulatory and media scrutiny, including attention to electronic trading, wholesale market making and off-exchange trading, payment for order flow, and other market structure topics and both the impact of additional potential changes in regulation or law as well as the potential impact upon public perception of us or of companies in our industry could also have an adverse effect on our business;

• increased competition in market making activities and execution services;

• dependence on continued access to sources of liquidity;

• risks associated with self-clearing and other operational elements of our business, including but limited to risks related to funding and liquidity;

• risks associated with self-clearing and other operational elements of our business, including but not limited to risks related to funding and liquidity;

• obligations to comply with applicable regulatory capital requirements;

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• failure to protect our systems from internal or external cyber threats that could result in damage to our computer systems, business interruption, loss of data, monetary payment demands or other consequences;

• risks associated with investments in our growth strategy which increase our capital expenditures and operating expenses and which may not ultimately yield returns that justify these increases;

• risks associated with international operations and expansion, including failed acquisitions or dispositions;

• the effects of and changes in economic conditions (such as volatility in the financial markets, increased inflation, monetary conditions and foreign currency and continued or exacerbated exchange rate fluctuations, foreign currency controls and/or government mandated pricing controls, as well as in trade, tariff, monetary, fiscal and tax policies in international markets), political conditions (such as military actions and terrorist activities), and other global events such as fires, geopolitical conflicts, natural disasters, pandemics or extreme weather;

• risks associated with potential growth and associated corporate actions;

• risks associated with new and emerging asset classes and eco-systems in which we may participate, including digital assets, including risks related to volatility in the underlying assets, regulatory uncertainty, evolving industry practices and standards around custody, clearing and settlement, and other risks inherent in a new and evolving asset class;

• inability to access, or delay in accessing, the capital markets to sell shares or raise additional capital;

• loss of key executives and failure to recruit and retain qualified personnel;

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As a market maker and liquidity provider, we stand ready, at any time, to buy or sell a broad range of securities and other financial instruments, and we generate profits by buying and selling large volumes of securities and other financial instruments and earning small bid/ask spreads.

Our market structure expertise, broad diversification, and scalable execution technology enable us to provide competitive bids and offers in over 25,000 securities and other financial instruments, on over 250 venues, in 40 countries worldwide.

Our market structure expertise, broad diversification, and scalable execution technology enable us to provide competitive bids and offers in over 50,000 securities and other financial instruments, on over 150 venues worldwide.

We use the latest technology to create and deliver liquidity to the global markets and automate our market making, risk controls, and post-trade processes.

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The Original Credit Agreement provides (i) a senior secured first lien term loan in an aggregate principal amount of $1,800.0 million, drawn in its entirety on the Credit Agreement Closing Date, the proceeds of which were used by VFH to repay all amounts outstanding under the previous credit agreement entered into in relation to the ITG Acquisition, to pay fees and expenses in connection therewith, to fund share repurchases under the Company’s repurchase program and for general corporate purposes, and (ii) a $250.0 million senior secured first lien revolving facility to VFH, with a $20.0 million letter of credit subfacility and a $20.0 million swingline subfacility.

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

1 to the Original Credit Agreement (as amended, the “Credit Agreement”) and completed the issuance of the Notes (as defined below).

Pursuant to the Credit Agreement, $1,245.0 million in aggregate principal amount of Senior Secured First Lien Term B-1 Loans due 2031 (the “New Term Loans”) were issued, the proceeds of which were used, along with the proceeds of the Notes, to repay in full all term loans previously outstanding under the Original Credit Agreement.

Additionally, the Credit Agreement provides an increase in its senior secured first lien revolving credit facility from $250.0 million to $300.0 million and an extension of the maturity thereof to three years after the Amendment Effective Date.

The New Term Loans will bear interest, at the Company’s election, at either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) term SOFR for a borrowing with an interest period of one month plus 1.00% and (d) 1.00%, plus, in each case, 1.75%, or (ii) the greater of (x) term SOFR for the interest period in effect and (y) 0%, plus, in each case, 2.75%.

The New Term Loans will mature on the seventh anniversary of the Amendment Effective Date and amortize in annual installments equal to 1.0% of the original aggregate principal amount of the New Term Loans.

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

On June 21, 2024 (the “Amendment No.

1 Effective Date”), the Company entered into Amendment No.

1 to the Original Credit Agreement (as amended, the “First Amended Credit Agreement”) and completed the issuance of the Notes (as defined below).

Pursuant to the First Amended Credit Agreement, $1,245.0 million in aggregate principal amount of Senior Secured First Lien Term B-1 Loans due 2031 (the “Term B-1 Loans”) were issued, the proceeds of which were used, along with the proceeds of the Notes, to repay in full all term loans previously outstanding under the Original Credit Agreement.

Additionally, the First Amended Credit Agreement provides an increase in its senior secured first lien revolving credit facility from $250.0 million to $300.0 million and an extension of the maturity thereof to three years after the Amendment No.

1 Effective Date.

The Term B-1 Loans bear interest, at the Company’s election, at either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) term SOFR for a borrowing with an interest period of one month plus 1.00% and (d) 1.00%, plus, in each case, 1.75%, or (ii) the greater of (x) term SOFR for the interest period in effect and (y) 0%, plus, in each case, 2.75%.

The Term B-1 Loans will mature on the seventh anniversary of the Amendment No.

1 Effective Date and amortize in annual installments equal to 1.0% of the original aggregate principal amount of the Term B-1 Loans.

The Term B-1 Loans are also subject to contingent principal payments based on excess cash flow and certain other triggering events.

On February 19, 2025 (the “Amendment No.

2 Effective Date”), the Company entered into Amendment No.

2 to the First Amended Credit Agreement (“Amendment No.

Amendment No.

2 amended the First Amended Credit Agreement (as amended, the “Credit Agreement”) to, among other things, effect a repricing of the $1,245.0 million in aggregate principal amount of Term B-1 Loans by establishing a new refinancing tranche of $1,245.0 million in aggregate principal amount of Senior Secured First Lien Term B-2 Loans (the “Original Term B-2 Loans”), the proceeds of which were used to repay in full the Term B-1 Loans on the Amendment No.

2 Effective Date.

On September 23, 2025 (the “Amendment No.

3 Effective Date”), the Company entered into Amendment No.

3 to the First Amended Credit Agreement (“Amendment No.

Amendment No.

3 amended the Credit Agreement to effect the issuance of incremental Senior Secured First Lien Term B-2 Loans in the amount of $300.0 million, the proceeds of which were used for general corporate purposes, for a total Term B-2 Loan balance of $1,545.0 million (collectively, the “Term B-2 Loans”).

The Term B-2 Loans bear interest, at the Company’s election, at either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) term SOFR for a borrowing with an interest period of one month plus 1.0% and (d) 1.0%, plus, in each case, 1.50%, or (ii) the greater of (x) term SOFR for the interest period in effect and (y) 0%, plus, in each case, 2.50%.

The Term B-2 Loans will mature on June 21, 2031 and amortize in annual installments equal to 1.0% of the original aggregate principal amount of the Term B-2 Loans due on each anniversary of the Amendment No.

2 Effective Date.

The Term B-2 Loans are also subject to contingent principal payments based on excess cash flow and certain other triggering events.

The interest rate swap effectively fixed interest payment obligations on $1,075.0 million of principal of the Term B-2 Loans at a rate of 6.92% through November 2025, based on the interest rates set forth in the Credit Agreement.

On June 21, 2024, VFH and Valor Co-Issuer, Inc., a subsidiary of Virtu Financial, (the “Co-Issuer”) completed the offering of $500.0 million aggregate principal amount of 7.50% senior secured first lien notes due 2031 (the “Notes”).

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We refer to VFH and the Co-Issuer together as, the “Issuers.”

Amended and Restated 2015 Management Incentive Plan

The Company’s Board of Directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the Company’s IPO and was subsequently amended and restated following receipt of approval from the Company’s stockholders on June 30, 2017 (the “Amended and Restated 2015 Management Incentive Plan”).

The Amended and Restated 2015 Management Incentive Plan provides for the grant of stock options, restricted stock units, and other awards based on an aggregate of 16,000,000 shares of Class A Common Stock, par value $0.00001 per share (the “Class A Common Stock”), subject to additional sublimits, including limits on the total option grant to any one participant in a single year and the total performance award to any one participant in a single year.

On April 23, 2020, the Company’s Board of Directors adopted an amendment to the Company’s Amended and Restated 2015 Management Incentive Plan in order to increase the number of shares of the Company’s Class A Common Stock reserved for issuance, and in respect of which awards may be granted under the Amended and Restated 2015 Plan from 16,000,000 to an aggregate of 21,000,000 shares of Class A Common Stock.

On April 22, 2022, the Company’s Board of Directors adopted another amendment to the Company’s Amended and Restated 2015 Management Incentive Plan to increase the number of shares to an aggregate of 26,000,000 shares of Class A Common Stock and the amendment was approved by the Company’s shareholders at the Company’s annual meeting of shareholders on June 2, 2022.

Second Amended and Restated 2015 Management Incentive Plan

The Company’s Board of Directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the Company’s IPO and was subsequently amended and restated following receipt of approval from the Company’s stockholders on June 30, 2017 and June 2, 2025 (as amended and restated, the “Second Amended and Restated 2015 Management Incentive Plan”).

On April 23, 2025, the Company’s Board of Directors adopted the Second Amended and Restated 2015 Management Incentive Plan to increase the number of shares, to extend the expiration date to June 2, 2035 and to remove certain provisions related to Section 162(m) of the Code that are no longer applicable.

The Second Amended and Restated 2015 Management Incentive Plan provides for the grant of stock options, restricted stock units, and other awards based on an aggregate of 33,500,000 shares of Class A Common Stock, par value $0.00001 per share (the “Class A Common Stock”), subject to additional sublimits, including limits on the total option grant to any one participant in a single year and the total performance award to any one participant in a single year.

The Second Amended and Restated 2015 Management Incentive Plan was approved by the Company’s shareholders at the Company’s annual meeting of shareholders on June 2, 2025.

In connection with the IPO, non-qualified stock options to purchase 9,228,000 shares were granted at the IPO per share price, each of which vested in equal annual installments over a period of four years from the grant date and expire not later than 10 years from the grant date.

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Interest is also earned on securities borrowed from other market participants pursuant to collateralized financing arrangements and on cash held by brokers.

Dividends income arises from holding market making positions over dates on which dividends are paid to shareholders of record.

Dividends income arises from holding market making positions over dates on which dividends and capital gain distributions are paid to shareholders of record.

Commissions, net and technology services.

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Revenues or losses are recognized due to the changes in fair value of the investment or fluctuations in Japanese Yen conversion rates within Other, net.

Other, net can also include gains on sales of strategic investments and businesses, settlement fund recoveries, as well as revenues from service agreements related to the sale of businesses.

Other, net can also include gains on sales of strategic investments and businesses, settlement fund recoveries, remeasurement gains or losses on certain digital assets held, as well as revenues from service agreements related to the sale of businesses.

Operating Expenses

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Employee compensation and payroll taxes include employee salaries, cash and non-cash incentive compensation, employee benefits, payroll taxes, severance and other employee related costs.

Employee compensation and payroll taxes also includes non-cash compensation expenses with respect to restricted stock units and restricted stock awards pursuant to the Amended and Restated 2015 Management Incentive Plan.

Employee compensation and payroll taxes also includes non-cash compensation expenses with respect to restricted stock units and restricted stock awards pursuant to the Second Amended and Restated 2015 Management Incentive Plan.

Interest and dividends expense.

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Termination of office leases (5,982) 16,224 455

Gain on sale of RFQ-hub (66,988) — —

Other (2,902) (69,795) (65,536)

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Termination of office leases (5,982) 16,224 455

Gain on sale of RFQ-hub (66,988) — —

Other (2,902) (69,795) (65,536)

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(2) Assumes that (1) holders of all vested and unvested non-vesting Virtu Financial Units (together with corresponding shares of the Company’s Class C common stock, par value $0.00001 per share (the “Class C Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of Class A Common Stock on a one-for-one basis, (2) holders of all Virtu Financial Units (together with corresponding shares of the Company’s Class D common stock, par value $0.00001 per share (the “Class D Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of the Company’s Class B common stock, par value $0.00001 per share (the “Class B Common Stock”) on a one-for-one basis, and subsequently exercised their right to convert the shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis.

Includes additional shares from the dilutive impact of options, restricted stock units and restricted stock awards outstanding under the Amended and Restated 2015 Management Incentive Plan and the Amended and Restated ITG 2007 Equity Plan during the years ended December 31, 2024, 2023, and 2022.

Includes additional shares from the dilutive impact of options, restricted stock units and restricted stock awards outstanding under the Second Amended and Restated 2015 Management Incentive Plan and the Amended and Restated ITG 2007 Equity Plan during the years ended December 31, 2025, 2024, and 2023.

The following tables reconcile Trading income, net to Adjusted Net Trading Income by segment for the years ended December 31, 2025, 2024, and 2023:

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Total Average Daily (1)

% Total Average Daily % Total Average Daily %

% Total Average Daily (1)

% Total Average Daily %

Market Making $ 1,666,304 $ 6,705 77.7 % $ 1,195,107 $ 4,771 74.8 % $ 846,607 $ 3,386 69.9 %

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Commissions, net and technology services 50,949 42,376 20.2%

Other, net 81,449 78,413 3.9%

Other, net (8,817) 81,449 NM

Total revenues from Market Making $ 2,949,221 $ 2,374,096 24.2%

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Commissions, net and technology services 566,076 474,407 19.3%

Other, net (1,413) (7,856) (82.0)%

Other, net 63,681 (1,413) NM

Total revenues from Execution Services $ 668,192 $ 507,230 31.7%

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Interest and dividends income was primarily earned by our Market Making segment.

Interest and dividends income remained around the same level year-over-year, slightly decreasing by $0.5 million, or 0.1%, to $462.1 million for the year ended December 31, 2024, compared to $462.6 million for the year ended December 31, 2023.

Fluctuations were primarily attributable to changes in interest income earned on cash collateral posted as part of securities borrowed transactions and securities purchased under the agreements to resell, driven by the movements of interest rates as well as the level of our activities in securities borrowing and reverse repurchase agreements.

The slight decrease was due to overall lower interest rates for the period compared to the same period during the prior year.

Interest and dividends income increased $46.7 million, or 10.1%, to $508.8 million for the year ended December 31, 2025, compared to $462.1 million for the year ended December 31, 2024.

The increase for the year ended December 31, 2025 was primarily driven by higher interest income from increased securities borrowing transactions and higher dividends earned on market making trading assets held over periods when dividends are paid, compared to the prior year.

As indicated above, rather than analyzing interest and dividends income in isolation, we evaluate it in the broader context of our Adjusted Net Trading Income.

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As indicated above, rather than analyzing commission income in isolation, we evaluate it in the broader context of our Adjusted Net Trading Income.

Other, net increased $1.8 million, or 2.4%, to $75.7 million for the year ended December 31, 2024, compared to $73.9 million for the year ended December 31, 2023.

The income for the years ended December 31, 2024 and 2023 were primarily related to gains on settlement fund recoveries in which we are eligible to participate based on our transactions in the applicable products.

Other, net decreased $6.1 million, or 8.1%, to $69.6 million for the year ended December 31, 2025, compared to $75.7 million for the year ended December 31, 2024.

The income for the year ended December 31, 2025 included gains on the sale and deconsolidation of RFQ-hub, partially offset by remeasurement losses on certain digital assets held during the period.

The income for the year ended December 31, 2024 included gains on settlement fund recoveries in which we were eligible to participate based on our transactions in the applicable products.

Adjusted Net Trading Income

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Average daily Adjusted Net Trading Income increased $2.2 million, or 34.4%, to $8.6 million for the year ended December 31, 2025, compared to $6.4 million for the year ended December 31, 2024.

Taking shortened trading days into consideration for the year ended December 31, 2024, the number of trading days was 250.5 days, compared to 250 days for the year ended December 31, 2023 under the previous trading day convention.

Taking shortened trading days into consideration starting in the fourth quarter of 2024, for the year ended December 31, 2025, the number of trading days was 248.5 days, compared to 250.5 days for the year ended December 31, 2024.

For a full description of Adjusted Net Trading Income and a reconciliation of Adjusted Net Trading Income to trading income, net, see “Non-GAAP Financial Measures and Other Items” in this “Item 7.

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Our operating expenses increased $305.8 million, or 13.7%, to $2,537.8 million for the year ended December 31, 2025, compared to $2,232.0 million for the year ended December 31, 2024.

The increase was primarily driven by increases in Brokerage, exchange, clearance fees and payments for order flow, net, Interest and dividends expense, Employee compensation and payroll taxes, and Debt issue cost related to debt refinancing, prepayment and commitment fees.

The increase was primarily driven by increases in Brokerage, exchange, clearance fees and payments for order flow, net, Interest and dividends expense, and Employee compensation and payroll taxes, partially offset by a decrease in Debt issue cost related to debt refinancing, prepayment and commitment fees and Termination of office leases.

Brokerage, exchange, clearance fees and payments for order flow, net.

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Communication and data processing expense increased $12.8 million, or 5.4%, to $249.2 million for the year ended December 31, 2025, compared to $236.4 million for the year ended December 31, 2024.

This increase was primarily attributable to increased connectivity spending on market data, subscription, and communication networks maintained by our joint ventures.

This increase was primarily attributable to increased connectivity spending on market data, subscription, colocation connectivity, and communication networks maintained by our joint venture.

Employee compensation and payroll taxes.

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Interest and dividends expense increased $118.2 million, or 22.3%, to $647.4 million for the year ended December 31, 2025, compared to $529.2 million for the year ended December 31, 2024.

This increase was primarily attributable to higher interest expense incurred on cash collateral received driven by an increase in securities lending transactions, as well as higher dividends expense with respect to securities sold, not yet purchased for the period compared to the same period during the prior year.

the prior year.

As indicated above, rather than analyzing interest and dividends expense in isolation, we generally evaluate it in the broader context of our Adjusted Net Trading Income.

Operations and administrative.

Operations and administrative expense decreased $2.0 million, or 2.0%, to $97.0 million for the year ended December 31, 2024, compared to $99.0 million for the year ended December 31, 2023.

The decrease was primarily driven by a decrease in occupancy expenses.

Operations and administrative expense increased $0.9 million, or 0.9%, to $97.9 million for the year ended December 31, 2025, compared to $97.0 million for the year ended December 31, 2024.

The increase was primarily driven by an increase in professional expenses compared to the prior year.

Depreciation and amortization.

Depreciation and amortization increased $2.5 million, or 3.9%, to $65.8 million for the year ended December 31, 2024, compared to $63.3 million for the year ended December 31, 2023.

This increase was driven primarily by increased amortization of capitalized software compared to the prior period.

Depreciation and amortization decreased $1.4 million, or 2.1%, to $64.4 million for the year ended December 31, 2025, compared to $65.8 million for the year ended December 31, 2024.

This decrease was driven primarily by a decrease in depreciation of computer equipment and leased equipment compared to the prior year.

Amortization of purchased intangibles and acquired capitalized software.

Amortization of purchased intangibles and acquired capitalized software decreased $3.4 million, or 6.7%, to $47.1 million for the year ended December 31, 2025, compared to $50.5 million for the year ended December 31, 2024.

This decrease was primarily attributable to certain intangible assets being fully amortized in 2023 and during 2024.

This decrease was primarily attributable to certain intangible assets being fully amortized during 2024.

Termination of office leases.

Termination of office leases increased $15.7 million to $16.2 million for the year ended December 31, 2024, compared to $0.5 million for the year ended December 31, 2023.

The increase was related to the impairment of lease right-of-use assets and asset retirement obligations for certain abandoned or vacated office spaces in 2024.

Termination of office leases expenses, when incurred, are related to the impairment of lease right-of-use assets, leasehold improvements and fixed assets for certain abandoned or vacated office space.

The expenses for the year ended December 31, 2024 included the impairment of lease right-of-use assets and asset retirement obligations for certain abandoned or vacated office spaces.

The expenses for the year ended December 31, 2025 included a reduction of $6.5 million in cost related to asset retirement obligations that the Company previously recorded.

See Note 17 “Leases” for further details.

Debt issue cost related to debt refinancing, prepayment and commitment fees.

Expense from debt issue cost related to debt refinancing, prepayment and commitment fees increased $21.2 million, or 255.4%, to $29.5 million for the year ended December 31, 2024, compared to $8.3 million for the year ended December 31, 2023.

The increase was primarily driven by the acceleration of capitalized debt issue cost and discount on our previous term loan as a result of refinancing during the year ended December 31, 2024.

Expense from debt issue cost related to debt refinancing, prepayment and commitment fees decreased $23.0 million, or 78.0%, to $6.5 million for the year ended December 31, 2025, compared to $29.5 million for the year ended December 31, 2024.

The decrease was primarily driven by the acceleration of capitalized debt issue cost and discount on our previous term loan as a result of refinancing during the year ended December 31, 2024.

See Note 9 “Borrowings” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional details.

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Financing interest expense on long term borrowings.

Financing interest expense on long-term borrowings decreased $1.5 million, or 1.5%, to $97.8 million for the year ended December 31, 2024, compared to $99.3 million for the year ended December 31, 2023.

This decrease was attributable to the decrease in outstanding principal as a result of the voluntary prepayment in December 2023, the amortization of the amounts in AOCI related to the interest rate swaps terminated in December 2023, as well as a lower overall interest rate after our debt refinancing described in Note 9 “Borrowings”.

Financing interest expense on long-term borrowings increased $35.1 million, or 35.9%, to $132.9 million for the year ended December 31, 2025, compared to $97.8 million for the year ended December 31, 2024.

This increase was primarily attributable to the completion in February 2025 of the amortization of the amounts in AOCI related to the interest rate swaps that were terminated in December 2023, partially offset by the effect from lower overall interest rates as a result of rate cuts and our debt refinancing described in Note 9 “Borrowings”.

Provision for income taxes

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We have continually received the benefit of uncommitted margin financing from our prime brokers globally.

These margin facilities are

secured by securities in accounts held at the prime brokers.

These margin facilities are secured by securities in accounts held at the prime brokers.

For purposes of providing additional liquidity, we maintain a committed credit facility and an uncommitted credit facility for our wholly-owned U.S.

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Tax Receivable Agreements

Generally, we are required under the tax receivable agreements entered into in connection with our IPO to make payments to certain direct or indirect equity holders of Virtu Financial that are generally equal to 85% of the applicable cash tax savings, if any, that we realize as a result of favorable tax attributes that are available to us as a result of the IPO and certain reorganization transactions undertaken in connection therewith, for exchanges of membership interests for Class A Common Stock or Class B Common Stock and payments made under the tax receivable agreements.

Generally, we are required under the tax receivable agreements entered into in connection with our IPO to make payments to certain direct or indirect equity holders of Virtu Financial or their permitted assignees (collectively, “TRA Parties”) that are generally equal to 85% of the applicable cash tax savings, if any, that we realize as a result of favorable tax attributes that are available to us as a result of the IPO and certain reorganization transactions undertaken in connection therewith, for exchanges of membership interests for Class A Common Stock or Class B Common Stock and payments made under the tax receivable agreements.

We will retain the remaining 15% of any such cash tax savings.

We expect that future payments to certain direct or indirect equity holders of Virtu Financial described in Note 5 “Tax Receivable Agreements” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K are expected to range from approximately $0.1 million to $22.1 million per year over the next 15 years.

We expect that future payments to TRA Parties described in Note 5 “Tax Receivable Agreements” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K are expected to range from approximately $0.3 million to $22.5 million per year over the next 15 years.

Such payments will occur only after we have filed our U.S.

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We currently expect to fund these payments from realized cash tax savings from the favorable tax attributes.

Under the tax receivable agreements, as a result of certain types of transactions and other factors, including a transaction resulting in a change of control, we may also be required to make payments to certain direct or indirect equity holders of Virtu Financial in amounts equal to the present value of future payments we are obligated to make under the tax receivable agreements.

Under the tax receivable agreements, as a result of certain types of transactions and other factors, including a transaction resulting in a change of control, we may also be required to make payments to TRA Parties in amounts equal to the present value of future payments we are obligated to make under the tax receivable agreements.

We would expect any acceleration of these payments to be funded from the realized favorable tax attributes.

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In June 2023 our U.S.

subsidiary RFQ-hub Americas LLC (“RAL”, which is currently held for sale, as described in Note 3 “Business Held for Sale”) became a registered U.S.

subsidiary RFQ-hub Americas LLC (“RAL”) became a registered U.S.

broker-dealer and as such is subject to regulation and capital requirements from its primary regulators, the SEC and FINRA.

As described in Note 3 “Sale of RFQ-hub”, we disposed of a 49% interest in RAL’s parent company RFQ-hub Holdings LLC (together with its subsidiaries, “RFQ-hub”) in May 2025 and we ceased to control, and deconsolidated, RFQ-hub at such time.

The SEC and FINRA impose rules that require notification when regulatory capital falls below certain pre-defined criteria.

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Our Canadian subsidiaries, Virtu Canada Corp (f/k/a Virtu ITG Canada Corp.) and Virtu Financial Canada ULC, are subject to regulatory capital requirements and periodic requirements to report their regulatory capital and submit other regulatory reports set forth by the Canadian Investment Regulatory Organization.

Effective January 22, 2025, Virtu Financial Canada ULC has resigned from membership with the Canadian Investment Regulatory Organization and is no longer subject to its regulatory requirements.

Our Irish subsidiaries, Virtu Financial Ireland Limited (“VFIL”) and Virtu Europe Trading Limited (“VETL”) (f/k/a Virtu ITG Europe Limited) are regulated by the Central Bank of Ireland as Investment Firms and in accordance with European Union law are required to maintain a minimum amount of regulatory capital based upon their positions, financial conditions, and other factors.

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In addition, a commitment fee accrues at a rate of 0.50% per annum on the average daily unused amount of the revolving facility, with step-downs to 0.375% and 0.25% per annum based on VFH’s first lien leverage ratio, and is payable quarterly in arrears.

In October 2019, the Company entered into a five-year $525.0 million floating-to-fixed interest rate swap agreement.

In January 2020, the Company entered into a five-year $1,000.0 million floating-to-fixed interest rate swap agreement.

These two interest rate swaps met the criteria to be considered and were designated as qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and they effectively fixed interest payment obligations on $525.0 million and $1,000.0 million of principal under the previous first lien term loan facility in relation to the ITG Acquisition at rates of 4.3% and 4.4% through September 2024 and January 2025, respectively.

In April 2021, each of the swap agreements described above was novated to another counterparty and amended in connection with such novation.

The amendments included certain changes to collateral posting obligations and also had the effect of increasing the effective fixed interest payment obligations to rates of 4.5%, with respect to the earlier maturing swap arrangement, and 4.6% with respect to the later maturing swap arrangement.

In January 2022, in order to align the swap agreements with the Original Credit Agreement, the Company amended each of the swap agreements to align the floating rate term of such swap agreements to SOFR.

The effective fixed interest payment obligations remained at 4.5%, with respect to the earlier maturing swap arrangement, and 4.6% with respect to the later maturing swap arrangement.

In January 2022, in order to align the swap agreements with the Original Credit Agreement, the Company amended its existing five-year $525.0 million floating-to-fixed interest rate swap agreement and five-year $1,000.0 million floating-to-fixed interest rate swap agreement to align the floating rate term of such swap agreements to SOFR.

These two interest rate swaps met the criteria to be considered and were designated as qualifying cash flow hedges under ASC 815, and they effectively fixed interest payment obligations on $525.0 million and $1,000.0 million of principal under the first lien term loan facility in relation to the Original Credit Agreement at rates of 4.5% and 4.6% through September 2024 and January 2025, respectively.

In December 2023, the Company terminated the two interest rate swap arrangements and received $55.8 million in proceeds from the counterparty.

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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 Original Credit Agreement.

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

1 to the Original Credit Agreement (the “Credit Agreement”) and completed the issuance of the Notes (as defined below).

Pursuant to the Credit Agreement, $1,245.0 million in aggregate principal amount of senior secured first lien term B-1 loans due 2031 (the “New Term Loans”) were issued, the proceeds of which were used, along with the proceeds of the Notes, to repay in full all term loans previously outstanding under the Original Credit Agreement.

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

On June 21, 2024 (the “Amendment No.

1 Effective Date”), the Company entered into Amendment No.

1 to the Original Credit Agreement (the “First Amended Credit Agreement”) and completed the issuance of the Notes (as defined below).

1 Effective Date.

The Term B-1 Loans will mature on the seventh anniversary of the Amendment No.

1 Effective Date and amortize in annual installments equal to 1.0% of the original aggregate principal amount of the Term B-1 Loans.

The Term B-1 Loans are also subject to contingent principal payments based on excess cash flow and certain other triggering events.

In connection with its entry into the First 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.

The cash flow hedge was proportionally dedesignated under ASC 815 as of June 21, 2024.

As a result of the partial dedesignation, we recognized a gain of $5.7 million in Other Income.

The remaining interest rate swap effectively fixed interest payment obligations on the $1,075.0 million of principal of the Term B-1 Loans at a rate of 7.17% through November 2025, based on the interest rates set forth in the First Amended Credit Agreement.

On February 19, 2025 (the “Amendment No.

2 Effective Date”), the Company entered into Amendment No.

2 to the First Amended Credit Agreement (“Amendment No.

Amendment No.

2 amended the First Amended Credit Agreement (as amended, “Credit Agreement”) to, among other things, effect a repricing of the $1,245.0 million in aggregate principal amount of Term B-1 Loans by establishing a new refinancing tranche of $1,245.0 million in aggregate principal amount of Senior Secured First Lien Term B-2 Loans (the “Original Term B-2 Loans”), the proceeds of which were used to repay in full the Term B-1 Loans on the Amendment No.

2 Effective Date.

On September 23, 2025 (the “Amendment No.

3 Effective Date”), the Company entered into Amendment No.

3 to the First Amended Credit Agreement (“Amendment No.

Amendment No.

2 Effective Date.

The Term B-2 Loans are also subject to contingent principal payments based on excess cash flow and certain other triggering events.

The cash flow hedge was discontinued upon the termination of the interest rate swap in November 2025.

The revolving facility under the Credit Agreement is subject to a springing net first lien leverage ratio which may spring into effect as of the last day of a fiscal quarter if usage of the aggregate revolving commitments exceeds a specified level as of such date.

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

If an event of default occurs and is continuing, the lenders under the Credit Agreement will be entitled to take various

actions, including the acceleration of amounts outstanding under the Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Credit Agreement.

As of December 31, 2024, $1,245.0 million was outstanding under the term loans.

If an event of default occurs and is continuing, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts outstanding under the Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Credit Agreement.

As of December 31, 2025, $1,545.0 million was outstanding under the current term loans.

We were in compliance with all applicable covenants under the Credit Agreement as of December 31, 2025.

In connection with its entry into the 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.

The cash flow hedge was proportionally dedesignated under ASC 815 as of June 21, 2024.

As a result of the partial dedesignation, we recognized a gain of $5.7 million in Other Income.

The current interest rate swap effectively fixed interest payment obligations on the $1,075.0 million of principal of the New Term Loans at a rate of 7.17% through November 2025, based on the interest rates set forth in the Credit Agreement.

Senior Secured First Lien Notes

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Net cash provided by operating activities was $518.4 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $599.0 million for the year ended December 31, 2024.

The change in net cash provided by operating activities was primarily attributable to higher net income as well as movements in noncash adjustments for the year ended December 31, 2024 compared to the prior period.

The change in net cash provided by operating activities was primarily attributable to movements in noncash adjustments, partially offset by higher Net income for the year ended December 31, 2025 compared to the prior year.

Investing Activities

Net cash used in investing activities, which includes cash used with respect to capitalized software and cash used in the acquisition of property and equipment, was $40.6 million for the year ended December 31, 2025, compared with net cash used in investing activities of $61.8 million for the year ended December 31, 2024.

The change in net cash used in investing activities was primarily attributable to decreases in acquisition of property and equipment and other investing activities for the year ended December 31, 2024.

The decrease in net cash used in investing activities was primarily attributable to proceeds received from sale of RFQ-hub, partially offset by increases in acquisition of property and equipment and other investing activities for the year ended December 31, 2025.

Financing Activities

Net cash used in financing activities was $281.0 million for the year ended December 31, 2025, compared to Net cash used in financing activities of $469.6 million for the year ended December 31, 2024.

The cash used in financing activities for the year ended December 31, 2024 was primarily attributable to $1,741.9 million of net proceeds from long-term borrowings and $38.5 million of net proceeds from short-term borrowings, offset by $1,727.0 million of repayment of our previous long-term borrowings, $299.4 million in dividends to stockholders and distributions made to noncontrolling interests, and $191.1 million in purchases of treasury stock.

The cash used in financing activities of $585.0 million during the same period of 2023 primarily reflects $306.1 million net dividends to stockholders and distributions to noncontrolling interests and $229.0 million purchase of treasury stock.

The cash used in financing activities for the year ended December 31, 2025 was primarily attributable to $1,245.0 million of repayment of our previous long-term borrowings, $349.3 million in dividends to stockholders and distributions made to noncontrolling interests, and $188.8 million in purchases of treasury stock, partially offset by $1,545.0 million of net proceeds from long-term borrowings.

The cash used in financing activities of $469.6 million during the same period of 2024 primarily reflects $1,727.0 million of repayment of our previous long-term borrowings, $299.4 million net dividends to stockholders and distributions to noncontrolling interests, and $191.1 million purchase of treasury stock, partially offset by $1,741.9 million of net proceeds from long-term borrowings and $38.5 million of net proceeds from short-term borrowings.

Share Repurchase Program

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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.

Repurchases are also permitted to be made under Rule 10b5-1

Repurchases are also permitted to be made under Rule 10b5-1 plans.

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.

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Valuation of Financial Instruments

Due to the nature of our operations, substantially all of our financial instrument assets, comprised of financial instruments owned, securities purchased under agreements to resell, and receivables from brokers, dealers and clearing organizations are carried at fair value based on published market prices and are marked to market daily, or are assets which are short-term in nature and are reflected at amounts approximating fair value.

Due to the nature of our operations, substantially all of our financial instrument assets, comprised of financial instruments owned, securities purchased under agreements to resell, receivables from brokers, dealers and clearing organizations, and digital assets are carried at fair value based on published market prices and are marked to market daily, or are assets which are short-term in nature and are reflected at amounts approximating fair value.

Similarly, all of our financial instrument liabilities that arise from financial instruments sold but not yet purchased, securities sold under agreements to repurchase, securities loaned, and payables to brokers, dealers and clearing organizations are short-term in nature and are reported at quoted market prices or at amounts approximating fair value.

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Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable

The fair values for substantially all of our financial instruments owned and financial instruments sold but not yet purchased are based on observable prices and inputs and are classified in levels 1 and 2 of the fair value hierarchy.

The fair values for substantially all of our financial instruments owned, financial instruments sold but not yet purchased, and digital assets are based on observable prices and inputs and are classified in levels 1 and 2 of the fair value hierarchy.

Instruments categorized within level 3 of the fair value hierarchy are those which require one or more significant inputs that are not observable.

Estimating the fair value of level 3 financial instruments requires judgments to be made.

Due to the relative immateriality of our financial instruments classified as level 3, we do not believe that a significant change to the inputs underlying the fair value of our level 3 financial instruments would have a material impact on our Consolidated Financial Statements.

See Note 10 “Financial Assets and Liabilities” of Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for further information about fair value measurements.

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Trading income, net, consists of trading gains and losses that are recorded on a trade date basis and reported on a net basis.

Trading income, net, is comprised of changes in fair value of financial instruments owned and financial instruments sold, not yet purchased assets and liabilities (i.e., unrealized gains and losses) and realized gains and losses on equities, fixed income securities, currencies and commodities.

Trading income, net, is primarily comprised of changes in fair value of financial instruments owned and financial instruments sold, not yet purchased assets and liabilities (i.e., unrealized gains and losses) and realized gains and losses on equities, fixed income securities, currencies and commodities.

Interest and Dividends Income/Interest and Dividends Expense

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Share-based compensation transactions with employees are measured based on the fair value of equity instruments issued.

Share-based awards issued for compensation in connection with or subsequent to the Reorganization Transactions and the IPO pursuant to our Amended and Restated 2015 Management Incentive Plan were in the form of stock options, Class A Common Stock, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”).

Share-based awards issued for compensation in connection with or subsequent to the Reorganization Transactions and the IPO pursuant to our Second Amended and Restated 2015 Management Incentive Plan were in the form of stock options, Class A Common Stock, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”).

The fair value of the stock option grants is determined through the application of the Black-Scholes-Merton model.

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Tax Receivable Agreements

We are required under the tax receivable agreements entered into in connection with our IPO to make payments to certain direct or indirect equity holders of Virtu Financial that are generally equal to 85% of the applicable cash tax savings, if any, that we realize as a result of favorable tax attributes that are available to us as a result of the Reorganization Transactions, for exchanges of membership interests for Class A Common Stock or Class B Common Stock and payments made under the tax receivable agreements.

We are required under the tax receivable agreements entered into in connection with our IPO to make payments to TRA Parties that are generally equal to 85% of the applicable cash tax savings, if any, that we realize as a result of favorable tax attributes that are available to us as a result of the Reorganization Transactions, for exchanges of membership interests for Class A Common Stock or Class B Common Stock and payments made under the tax receivable agreements.

An exchange of membership interests by the Virtu Members for Class A Common Stock or Class B Common Stock (an “Exchange”) during the year will give rise to favorable tax attributes that may generate cash tax savings specific to the Exchange, to be realized over a specific period of time (generally 15 years).

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Our largest finite-lived intangible asset is customer relationships, which is being amortized over an estimated useful life of ten to twelve years.

Had we used a shorter estimated useful life of seven years, the Company would have recorded an additional $18.4 million, $21.7 million, and $21.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Had we used a shorter estimated useful life of seven years, the Company would have recorded an additional $14.4 million, $18.4 million, and $21.7 million of amortization expense for the years ended December 31, 2025, 2024, and 2023, respectively.

We test finite-lived intangible assets for impairment when impairment indicators are present, and if impaired, they are written down to fair value.

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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-K

Item 7. Management’s Discussion and Analysis