Q4 2024 Virtu Financial Inc Earnings Call

Please note that this conference call is being recorded and that is a recording will be available on the company's website for replay shortly I would now like to turn the call over to Fred.

Speaker Change: Len Papuans.

Speaker Change: Merit medical systems founder.

Speaker Change: Chairman and Chief Executive Officer. Please go ahead Sir.

Speaker Change: Thank you operator and welcome everyone.

Speaker Change: I'm joined on the call today with multiple members of the merit team, including John.

Speaker Change: John Hall, our executive Vice President of research and development.

Speaker Change: Sheila Konwinski, our vice president of sales and marketing for the renal therapies group Raul Parra, our Chief Financial Officer, and Treasurer, and Brian Lloyd, Our Chief legal officer and corporate Secretary.

[music].

Speaker Change: I'm also pleased to welcome Dr. Danny per tell the medical director for Interventional neurology at the Volusia Flagler Vascular center in Daytona Beach, Florida, and a paid consultant to merit.

Speaker Change: Dr. Patel has graciously agreed to participate today and share his valuable insights and experiences.

Speaker Change: <unk> stent graft use in dialysis access.

Speaker Change: This has been an area of clinical entries for him during his more than 15 year career as a practicing interventional nephrologist.

Speaker Change: Also I am suffering from a head cold so if I sound less than enthusiastic.

Speaker Change: <unk>.

Speaker Change: I'm very enthusiastic about all but we're going to talk today.

Speaker Change: Now before we begin Brian would you mind, taking us through the Safe Harbor statements. Please.

Brian: Thank you Fred.

Speaker Change: I would like to remind everyone that this presentation contains forward looking statements that receive safe Harbor protection under federal Securities laws.

Speaker Change: Although we believe these forward looking statements are based upon reasonable assumptions they are subject to risks and uncertainties.

Speaker Change: The realization of any of these risks or uncertainties as well as extraordinary events or transactions impacting our company could cause actual results to differ materially from the expectations and projections expressed or implied by our forward looking statements.

Speaker Change: In addition, any forward looking statements represent our views only as of today January 28 2025.

Speaker Change: And should not be relied upon as representing our views as of any other date.

Speaker Change: We specifically disclaim any obligation to update such statements, except as required by applicable law.

Speaker Change: Please refer to discussions entitled cautionary statement regarding forward looking statements and our filings with the SEC for important information regarding such statements.

Speaker Change: For a discussion of factors that could cause actual results to differ from these forward looking statements. Please also refer to our most recent filings with the SEC, which are available on our website.

Fred: I will now turn the call back to Fred.

Fred: Thank you, Brian let me start with a brief agenda of what we will cover during our prepared remarks.

Fred: Before diving in on the Rhapsody sell in Permian Anvil prosthesis, our Cie I wanted to start with a brief history of what started as a big idea in 2010 to help investors appreciate that Rhapsody Cie is really just the beginning.

Speaker Change: After my opening remarks, John Hall will discuss the key design and development features of the reps Cie.

Speaker Change: And then we will hear and conditions perspective with respect to the device from Dr. Patel.

Speaker Change: <unk> will provide an overview of the estimated addressable market for the rapid Cie and our U S. Commercial strategy Raul will then talk about key financial and nonfinancial.

Speaker Change: Milestones for our U S <unk> III Cie program for 2025.

Yeah.

Speaker Change: Then we will open the call for your questions.

Speaker Change: Please standby your conference will start momentarily. Please standby your conference will start momentarily.

Speaker Change: As we announced via press release on December 20th the Rhapsody sell in Permian <unk> prostate <unk> received pre market approval from the FDA.

Speaker Change: We received orders shortly thereafter, and we're pleased to hear conditions began using a device to treat patients in the United States in early January.

Speaker Change: By securing pre market approval and initiating the U S. Commercial launch of this novel therapeutic technology.

Speaker Change: We are pleased to have achieved two important milestones for merit. These accomplishments are a result of many years of hard work and dedication to our strategic initiative.

Speaker Change: <unk> got it is the big idea back in 2010.

Speaker Change: Importantly, we believe the achievement of these rapidly Cie milestone should not be viewed as the culmination.

Speaker Change: But rather than more likely represent the first of what we believe will be a series of outcomes of multiyear strategic initiative.

Speaker Change: We look forward to leveraging the impression of foundation for future therapeutic product innovation that we have built as part of this strategic initiative in the years to come.

Speaker Change: Looking back to early 2010, the Genesis of this strategic initiative was an evaluation that we undertook of marriage business and competitive position in the med tech industry at that time, we had grown our business to approximately $260 million.

Annual revenue.

Speaker Change: Merit was viewed as a trusted manufactured products, serving key markets and as a company that had a strong customer relationships, primarily with hospital administrators and Cath lab supervisors.

Speaker Change: We realized that in order to fuel the company's next stage of growth we needed to transition the business towards developing higher value more therapeutic medical devices, which we believe will strengthen our relationship with physician customers.

Speaker Change: With its big idea in mind I set out to build a team to lead this effort John Hall. It was my first hire for this strategic initiative he.

Speaker Change: He has significant experience leading the product development at medical device companies, John built a team of experts with skills that were largely unique to merit.

Speaker Change: Together, they identified multiple areas with attractive market potential unmet clinical needs and the opportunity for merit to compete with.

Speaker Change: We ultimately chose dialysis outflows circuits as the initial market on which to focus our development efforts.

Speaker Change: John will share more color on what led to this choice and the Genesis of the Rhapsody CIA product specifically in a few moments.

Speaker Change: But I want to share a brief history of this important strategic initiative to help the investment community to appreciate that we have been planning the seeds of potential future therapeutic product development for many years now we've allocated capital to organic investments not just in the product development, but also in the manufacturing and supply.

Speaker Change: Hi chain, we believed it was imperative that we continue to invest in a vertically integrated infrastructure to facilitate the long term foundation for future growth.

Speaker Change: To that end as part of this strategic initiative. We also directed investments to establish or enhance our capabilities in additional areas, including clinical affairs marketing reimbursement regulatory and intellectual property protection.

Speaker Change: Clearly these important organic investments were intended to support our growth of our global medical device business over the last 10 to 15 years, but they were also a direct result of our strategic initiative to transition the business to developing higher value devices that are more therapeutic <unk>.

Speaker Change: <unk> and more effectively meet the needs of physicians.

Speaker Change: We have also allocated capital to inorganic opportunities as part of this strategic initiative.

In 2012, we acquired assets for many group, adding peritoneal dialysis catheters to our existing offering of chronic dialysis catheters guide wires and access devices in 2016, we acquired the hero graft hemodialysis access system further enhanced.

Speaker Change: Our dialysis portfolio and our presence with both vascular surgeons and interventional radiologists.

Speaker Change: Finally in 2023, we acquired a portfolio of dialysis catheter products for <unk> dynamics in the surface or inside out access catheter system from bluegrass vascular technologies.

Speaker Change: These inorganic investments were made with three clear goals in mind.

Speaker Change: Rod in our therapeutic platform.

Speaker Change: Strengthen our commercial position in the dialysis market and expand our specialty dialysis device offering.

As a result of these investments.

Speaker Change: Our renal therapies group is now armed with a broad portfolio of interventional solutions.

Speaker Change: Strong physician relationships and a focused commercial infrastructure.

Speaker Change: We believe we are well positioned to increase our share of the global dialysis market in years to come.

Speaker Change: I'm proud of the team's strong execution and commitment to this strategic initiative and we are excited to see initial fruits of this labor.

Speaker Change: As we introduce the <unk> to the U S market this year.

Speaker Change: The U S commercial launch of the reps HCI E represents an important inflection point in our company's history.

Speaker Change: I hope the investment community now has a better appreciation for our strong belief that the <unk> should not be viewed as the culmination, but rather as I have said before more likely represents the first.

Yeah.

[music].

Speaker Change: Of what we believe will be a series of outcomes of this multi year strategic initiatives.

Speaker Change: I would like now to turn the call over to John Hall, who will discuss the reps HCI E in more detail.

Speaker Change: John.

John Hall: Thank you Fred.

John Hall: <unk> project was inspired in part by feedback from a physician who approached merit about an unmet clinical need for dialysis patients with stenosis and the outflow circuit.

John Hall: The physician was frustrated with the significant challenges associated with existing covered stent grafts on the market.

Okay.

John Hall: As an engineer I embraced the opportunity to evaluate actual patient cases.

Good day and thank you for standing by welcome to the Virtu financial 2020 for fourth quarter results Conference call. At this time, all participants are in a listen only mode.

John Hall: There then existing covered stent devices were not effective looking at human tissue explants and histological analysis of sales covered stent grafts.

After the presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone you will then hear an automated message advisement. Your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the call over to Andrew. Please go ahead.

John Hall: Unified numerous examples or stent grafts can't and included.

John Hall: Fractured.

John Hall: Develop tissue on the lumen.

John Hall: Our experienced edge stenosis and restenosis.

John Hall: Alright evaluation of failed covered stent grafts rebuild that not only where the existing products not preventing restenosis and the vessel is intended alright.

Okay.

John Hall: Alright evaluation also revealed something we found really really interesting.

Specifically the histological analysis highlighted that there was tissue growing through the <unk> draft covering.

Please standby your conference will resume momentarily.

John Hall: That was a key determinant in identifying the first of four initiatives innovative features upon which our technology would be based.

John Hall: Let me take a moment to discuss these four features.

John Hall: All of which we believe represent significant advances versus the existing alternatives in the market and most importantly, we believe will result in improving patient outcomes.

For two.

You may begin.

Right.

Thank you our fourth quarter results were released this morning and are available on our website with us today on this morning's call. We have Mr. Douglas seafood, our Chief Executive Officer, Ms. Cindy Lee, our Chief Financial Officer, and Mr. Joseph <unk>, Our co President and co Chief operating officer will begin with prepared remarks, and then take your questions first if you.

John Hall: The first innovative feature for the stent graft design that could actually prevent tissue from growing through the graft.

John Hall: <unk> has a complete internal cell impermeable layer to prevent luminal tissue proliferation.

John Hall: Europe's CCA is not just another covered stent. It is truly a sell them permeable endo processes designed to stop transdermal cell growth.

Reminders today's call May include forward looking statements, which represent Virtus current belief regarding future events and are therefore subject to risks assumptions and uncertainties, which may be outside the company's control. Please note that our actual results and financial conditions may differ materially from what is indicated in these forward looking statements is important to note that any forward looking statements made on this call are based on information.

John Hall: The second innovative feature was focused on addressing another key driver of failed stent grafts thrombosis.

John Hall: We pursued a concept of modifying biocompatible PTFE to reduce fiber and in thrombus formation without the use of heffernan drugs like the existing alternatives on the market.

<unk> presently available to the company and we do not undertake to update or revise any forward looking statements as new information becomes available.

John Hall: We took the same polymer that was commonly used in stent grafts <unk> and.

We refer you to to disclaimers in our press release and encourage you to review the description of risk factors contained in our annual report on Form 10-K, and other public filings.

John Hall: And created a new micro structure using a proprietary spinning process that resulted in more random microstructure mimicking the architecture of blood vessels. It ended up resembling the random nature of a bowl of Linguini.

During today's call. In addition to GAAP measures, we may refer to certain non-GAAP measures, including adjusted net trading income adjusted net income adjusted EBITDA and adjusted EBITDA margin. These non-GAAP measures should be considered as supplemental to and not as superior to financial measures as reported in accordance with GAAP we.

John Hall: Our differentiated technology was initially validated clinically in our animal studies, which demonstrated that this novel microstructure reduced fiber and deposition and thrombus formation.

We direct listeners to consult.

John Hall: The third innovative feature was designed to manage the challenges related to mechanical forces in radio forces present in the anatomy of dialysis patients.

The investor portion of our website, where you will find additional supplemental information referred to on this call as well as a reconciliation of non-GAAP measures to the equivalent terms in the earnings materials with an explanation of why we deem this information to be meaningful.

John Hall: CCA has optimized compression resistance and outward radial force.

John Hall: Along with softer end rose to help manage the transition back into the healthy vessel where naturally.

As well as how management uses these measures and with that I'd like to turn the call over to Doug.

Thank you Andrew and good morning, everyone apologies for the delay we will check in with the service we're not sure what happened. Thank you for joining US. This morning in my remarks today will focus on <unk> fourth quarter, 2024 financial and business performance and strategic initiatives. Following my remarks, Cindy and Joe will provide additional details on our results.

John Hall: The fourth innovative features is that the <unk> technology is packaged into an elegant catheter delivery system.

John Hall: Redevelop the rats are ratcheted deployment handle for one handed accurate and controlled endo prosthesis placement.

John Hall: Ah handle that really allows the clinician to land the device with a high level of precision.

Looking at our full year and fourth quarter 2024 results, which are summarized on slide two of the supplemental materials, we generated $6 3 million and 7.2 dollars 7 million of adjusted net trading income per day for the full year 2024 in the fourth quarter, respectively. We reported normalized adjusted EPS.

John Hall: The delivery system also features a hydrophilic coating, which enables smooth endo prosthesis insertion and withdraw through the delivery sheet and exceptional track ability to tortuous vasculature.

John Hall: Our development efforts were initially validated invention animal testing, but we were really excited by the strong clinical results from a prospective observational first in human study Rhapsody <unk>.

A $1 14 for the fourth quarter and $3 55 for the full year 2024.

John Hall: <unk> delivered 84, 6% target lesion primary patency at 12 months.

In the fourth quarter, we delivered another strong performance in both our customer and non customer market, making businesses and our virtu execution services business against the mixed opportunity in the quarter. We ranked regroup remained.

John Hall: And 65, 9% access circuit primary patency at 12 months.

John Hall: We were even more excited by the six month clinical results from the randomized <unk> <unk> or <unk> official arm and Avi graft arm of our Rhapsody wave study pivotal trial announced in September 2024.

Committed to making further technology enhancements and investments in our capabilities to improve our performance in every environment and there are still significant improvements to make and will touch on these further in a moment slide three highlights that our market, making segment earned an average of $5 $5 million per day.

John Hall: Clinical results like those reported in these pivotal trials reflect changes in patient lives period.

John Hall: Less time in the chair less time and risk from interventions and overall improvement in quality of life for patients.

<unk> adjusted net trading income in the quarter, while execution services delivered $1 7 million per day increases up 23% and 12% per day, respectively over the quarter in.

John Hall: Patients are not the only ones who benefit from the improvements offered by Rhapsody Cie.

John Hall: Plus time treating existing patients means clinicians can treat additional patients suffering from this disease and fewer interventions offers the potential for significant cost savings for our health care system.

In 2024, we saw firsthand the unique benefits of our scaled operations that allow us to continually invest in our global multi asset platform to further increase our operating leverage and meet clients' needs with new and innovative offerings.

John Hall: The clinical validation supporting our <unk> impressive we.

John Hall: We have studied 423 patients in the U S and international markets, and our <unk> and our Obsity wave study clinical trials, demonstrating safety and significantly stronger efficacy versus the standard of care.

On the execution services side. This past quarter is $1 $7 million of anti per day represents ves best quarter since the first quarter of 'twenty, two with our algo product achieving increased revenue for the fifth consecutive quarter. This words ves's best quarter since the first quarter of 2000 22022.

John Hall: We intend to enroll up to 500 patients in a post market study currently underway called rap <unk> Global registry and we'll be initiating a new post market study of up to 250 patients in the U S and.

We continue to see institutions adopt ves's broad product set leading to deep integration with our clients' trading workflows. This has resulted in the improved consist consistency of results you've seen despite a very competitive market segment. We have we have incremental growth plan for <unk> and Virtu technology solutions.

John Hall: In Canada called <unk>, North America registry in June of this year.

John Hall: We believe this impressive body of clinical evidence.

John Hall: Evaluating the safety and efficacy of <unk> across a global patient population of nearly 1200 patients.

Both within and outside the United States, which we discussed at length on our last earnings call. These efforts are beginning to materialize as our team that expand our footprint with existing clients and generate new long term business from new clients to this end in 2024 B S leveraged our investments.

John Hall: Represents not only an invaluable tool in our discussion with physicians hospital administrators and payers, but also a key differentiator versus the existing competitors.

John Hall: Intimately we believe this robust body of evidence will clearly demonstrate how they're opposite ECA can improve patient lives.

And enhancements to accomplish key growth milestones winning remits include adoption of our Triton Valor execution management system for fixed income by a world class asset manager in Europe successfully deployed our Triton Valor EMS trading analytics posit alert and global equity execution.

Thanks, John.

Speaker Change: I would now like to introduce Dr. Daniel Patel, who has agreed to spend a few minutes with us today to share our clinicians perspective insights and experiences related to stent graft use in dialysis access and feedback on the <unk>.

<unk> for one of the largest asset managers in Asia, Most importantly, overall productivity and profitability within our <unk> pigment business segment has grown significantly since we began the technological technology rebuild and modernization and streamlining of that business Needless to say, we remain very excited about the growth.

Speaker Change: Dr. Patel is an interventional nephrologist, who is board certified in internal medicine.

Speaker Change: With sub specialty space certification in nephrology.

Speaker Change: Clinical interest include stent graft use in dialysis access.

Speaker Change: Intravascular ultrasound and central venous stenosis.

<unk>, increasing operating leverage and compounding benefits of our <unk> expansion in 2020 spot now onto market, making both our customer and non customer market, making businesses performed well in the quarter relative to relative to the opportunity set but even in a strong quarter. Like this we know that there is room to.

John Hall: He founded the Volusia Flagler vascular center in Daytona Beach, Florida in 2010.

Speaker Change: And so currently practices there.

Speaker Change: Dr. <unk> has presented his work at more than 60 conferences and symposia, including the Charing Cross International Symposium in London.

Improve our market, making results were up almost 23% in the fourth quarter. An impressive result, considering realized volatility was down across the board.

Speaker Change: The vascular access intervention therapy meeting in Japan, and the annual meeting of the American Society of diagnostic and interventional neurology.

The opportunity was markedly lower in October but conditions improved in November and the opportunity. So far has been the same or better every month since further quoted spread and executed shares per our 605 reports for the fourth quarter show, an increase of 12% and 11% respectively versus the third quarter.

Speaker Change: In addition, he has published extensively in it.

Speaker Change: <unk> Board member of the journal of vascular access.

Speaker Change: And it is reviewed more than 30 manuscripts for publication.

Patel: Dr. Patel has received several awards for teaching research and ethics.

Patel: And active industry consultant. He serves on the medical Advisory Board and Theres, a trainer and lecture.

Our ability to outperform market metrics as a function of many factors, including the success and development of our growth initiatives as well as internalization enhancements and continuous strategy iteration. For example in 2024, we saw a meaningful contributions to our results from new.

Patel: International for several medical technology companies and as a fellow of the American Science Society.

Patel: Diagnostic and interventional neurology.

Patel: Dr Patel.

Patel: Okay.

Patel: Thank you Fred I appreciate the opportunity to join in today's discussion on our Rhapsody Cie Merit asking him to discuss a few topics in my background profile on my practice general patient pathway and treatment in the Dallas, Texas market today My views on key Differentiators of the Rhapsody and key factors that may impact adoption of this novel technology.

And redesign market, making models that did not exist in 2023, we are confident that our growth initiatives combined with our efforts to enhance spread capture spread capture rates through smarter internalization will yield increased benefits in any environment.

Speaker Change: Medical director at the militia Fibrovascular Center in Daytona Beach, I have been fully dedicated to dialysis access and settling the practice in 2010 and the interest of full disclosure I'm currently serving in the first year of contracted relationship with merit as a consultant focused on training new users.

<unk> on our organic growth initiatives, including our expansion into crypto ETF block options and fixed income market, making to expand and perform well and have made meaningful progress throughout the year, we generated $787000 per day from organic growth in 2024, the highest anti per day for any year. Since we began reporting this.

Speaker Change: Practice is 100% outpatient dialysis access we are transitioning from an office space lab to an ambulatory surgery center in 2025, but functionally into the sales side practice in the outpatient setting fully focused on dialysis access for hemodialysis patients procedure mix includes dialysis access angiography stent placement coiling of accessory branches tunneled catheter placements on exchanges.

Four to five years ago in the fourth quarter and the full and for the full year 2020 for anti from organic growth initiatives represented 12% our firm wide anti or crypto growth initiatives performed very well in the fourth quarter delivering strong results despite market volumes and spot crypto Etfs.

Speaker Change: As long as vascular and mapping and percutaneous special appreciation.

Speaker Change: We are considered a higher volume practice with a high percentage of patients receiving dialysis access stent grafts.

Being down almost 20% compared to the first quarter of 2024, when they were first launched.

Speaker Change: A patient pathway in patients or call it clinically and referred from the dialysis units angioplasty is usually the first line treatment for clinically significant access lesions. The typical pathway involves assessment of the success of angioplasty immediate recoiled, a rupture generally calls for stent graft placement short term recurrence may also cause for stent graft placement most avs studies.

Our strong results were driven by investments we made in the second and third quarters. This year. After the excitement of rack crypto Etfs tapered off in the market became more efficient we enhanced our crypto capabilities by expanding our market access and liquidity distribution and improving our operational efficiency our decision to invest in building our scale crypto.

Speaker Change: So six months angioplasty patency rate between 20% to 50%.

<unk> pay dividends by enabling us to generate sizable returns in a relatively muted second and third quarters and really set us up to capture a significant opportunity that was presented in the fourth quarter, we arent done expanding and our global crypto footprint to meet growing institutional demand. We are in the early days of building our 24.

Speaker Change: Clinicians do Gary in their mentioned in regards to announce some choose repeated angioplasty, while others may choose drug coated balloons, Harvard drug coated balloons are cost prohibited in the outpatient setting others may choose sensor stent grafts for treatment of recurrent stenosis, we generally choose to place a stent grafts, if theres clinical recurrence of issues within 90 days or last or the development of <unk>.

By seven crypto native offering and continue to build out our connectivity to reputable markets and capital efficient framework to enhance our market, making and risk management capabilities importantly, despite growing our crypto footprint, we remain committed to risk management and capital efficiency. We are excited for the growing opportunity.

Speaker Change: Cleat access thrombosis, how are the twin sustained competition is also contingent on the clinical significance of <unk> and a location on the lesion. Some anatomical lesions respond better just encapsulation thats primary treatment versus angioplasty alone and this is being supported more and more in literature.

And crypto and digital assets more broadly we believe that the new regulatory tailwind will kick off a wave of new products in 2025, which will further expand the addressable market of our market, making and execution services, which plays to our core strengths.

Speaker Change: With.

Speaker Change: Respect to buy my views on Rhapsody and I'll note for consideration that I was not an investigator in the clinical study and have only been using the device for several weeks disease represent only my initial thoughts and opinions as a new adoption of technology. The biggest differentiation of the Rhapsody over other devices, a cell and permeable membrane. The other leading stent grafts devices on the market lack just layer.

Speaker Change: In addition, we continue to grow our ETF block offering by on boarding more clients and broadening our liquidity distribution. This disciplined work deliberate sizeable results in the fourth quarter as we saw greater client activity across both new and existing clients.

Speaker Change: However, the clinical advantages in routine practice of this membrane are still unknown.

Speaker Change: <unk> is fairly easy to use and deployment is similar to other stent graft devices on the market, which does allow for a minimal learning curve for us the existing initial clinical data is strong and longer term studies could add further support to the efficacy of the device.

Speaker Change: Taking a step back I look at our full year 2024 results and despite the recent strong performance I believe there is so much more to come.

Speaker Change: Our strategic focus areas of growth align us for even greater long term success as we expand our addressable market by adding more asset classes and offerings to our suite of market, making capabilities and execution service solutions.

Speaker Change: I believe the biggest challenge of widespread adoption of the routes even with the pricing of the device compared to its competitors. Additionally, a large percentage of dialysis action expansion in the United States is in the outpatient setting where choice of devices extremely price sensitive pricing strategies of the Rhapsody and its competitors may strongly influence outpatient adoption another limit.

Speaker Change: Our focus on enhancing our core businesses and the continued success of our growth initiatives positions us well for any macro environment, whether it be reduce volatility or significant spikes in volatility and volumes that typically accompany increasing global tensions and the economic uncertainty changes in monetary policy or elections.

Speaker Change: <unk> is the larger diameter, she's necessary to use the rhapsody compared to its competitors. Some clinicians may not feel as comfortable using the larger ship sizes compared to market competitors I don't believe more experienced clinicians will have as much of an issue with the larger sheet size. However, the learning curve may be there for others.

Speaker Change: We continue to hire and make investments in our business. For example, it is worth noting that of our current employees only 34% of them were at Virtu. Prior to 2019. This means that we continue to make significant multiyear investments in new traders develop developers quants and other great employees.

Speaker Change: Obviously, it does have some potential to become a first line treatment at specific locations or range of pasty given strong outcomes. However, the competing stent grafts on the market have also been used as first line treatments.

Speaker Change: Range of policy as well further usage and adoption of the device will give clinicians more experience of central App usage and outcomes will influence uptake of the device.

Speaker Change: Noticeably, notably about 20% of our new hires since 2023 were to support our organic growth initiatives and as you've come to expect from Virtu, we remained disciplined as ever around cost throughout the year, which enabled us to realize that 50, 58% adjusted EBITDA margin in 2020, 'twenty 'twenty four.

Speaker Change: Another potential limitation is the absence of clinical use and treatment across the elbow joints. It's unknown how much this may adopt Disney impact adoption on the project over time.

Speaker Change: Thank you Dr. Patel, I would like to turn the call over to <unk>, Our vice President of sales marketing of the renal therapy group to provide a high level overview of both the addressable market opportunity for the reps.

Speaker Change: Now I will turn the call over to MS. Cindy Lee our CFO Cindy.

Cindy Lee: Thank you Dan Good morning, everyone on slide three of our supplemental material. We've provided a summary of our quarterly performance.

Speaker Change: And our U S commercial strategy.

Speaker Change: David.

David: Thank you Fred beginning with an overview of the dialysis access maintenance market from a patient incidents perspective data from the 2024 annual data report from the NIH U S. Renal data system reported for the year ended 2022 indicated that more than 660000 people in the U.

Cindy Lee: Third quarter of 2024, our adjusted net trading income or anti <unk>, which represents our trading gains net of direct trading expenses totalled $458 million or $7.3 million per day, Mark in making adjusted net trading income was $348 million or $5 $5 million.

David: We're living with end stage renal diseases, 84% of which were nearly 560000 were undergoing in center hemodialysis. This is an important number from our perspective, because these patients have undergone dialysis access creation procedure to enable the dialysis treatment and are candidates to receive a dialysis access.

Cindy Lee: Okay.

Cindy Lee: Application services adjusted net trading income was $110 million or $1 $7 million per day, our fourth quarter 2020 for a normalized adjusted EPS was $1 14.

Cindy Lee: Adjusted EBITDA was $284 million for the fourth quarter 2024, and our adjusted EBITDA margin was 61, 9%.

David: Maintenance procedure or procedures, given the complications related to access an outflow circuits that patients on dialysis space. Other nearly 560000 U S patients undergoing in center hemodialysis, approximately 331000 or 69% are using an <unk> fistula for access and approximately 91000.

Cindy Lee: On slide nine we provided a summary of our operating expense results for the fourth quarter 2024, we recorded $191 million of adjusted operating expenses. We continue to maintain an efficient cost structure and disciplined expense management, which has helped us to control our operating expenses during the inflationary environment.

David: Or 16% are using an AAV graph for access combined we believe there are more than 420000 U S patients undergoing in center hemodialysis with an <unk> fistula or graft. We believe this represents the total addressable patient population in the U S for the <unk> based on the.

Cindy Lee: Financing interest expense was $27 million for the fourth quarter of 2024 with the benefit of our recent refinancing and interest rate swap contracts that we entered in the prior year. Our blended interest rate was approximately seven 2% for our long term debt in aggregate.

David: <unk> for use in the RP MAA approval.

David: We believe <unk> provides good data on the current market for dialysis access maintenance in the U S. According to Claire base dialysis access treatment devices market insights U S report published in September of 2024, there were 665000 dialysis access maintenance procedures in 2023 six.

Cindy Lee: Q4, we used a portion of our free cash flow to repurchase one 7 million shares at an average price of $34 18 per share for a total of 57 $1 million today, we have repurchased almost 51 million shares at an average price of $25.

David: <unk> hundred 54000, or 98% of which were endovascular.

Cindy Lee: <unk> 56 per share for a total of $1 $3 billion.

David: 77% of these endovascular access maintenance procedures were plain old balloon angioplasty or cobalt procedures. The remaining 23% of these endovascular access maintenance procedures were comprised of stents thrombectomy or combinations of both importantly clear rebate reports there were 95000 units implant.

Cindy Lee: Quarter end share Count was 159 2 million shares outstanding Gray, our buybacks on target and within the ranges. We have set forth publicly since we initiated our share repurchase program, we have repurchased over 19, 4% of the fully diluted shares of Burkett net after new.

David: <unk> for dialysis access maintenance in 2023 rare views. This as the initial addressable market opportunity in the U S for the reps to pcie.

Cindy Lee: Issuance.

Cindy Lee: Our share repurchase program yesterday is within the guidelines, we have published leaving.

Cindy Lee: We remain committed to our 24 cents per quarter dividend and combined with our share repurchase program demonstrates our continued commitment to return capital to our shareholders.

David: With respect to our U S commercial strategy as Fred mentioned earlier, we began taking orders shortly after our PMA approval in late December and we were pleased to see that customers began treating patients patients earlier this month.

Cindy Lee: Now I would like to turn the call over to the operator for the Q&A.

Cindy Lee: Certainly as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

David: As discussed on our October 32024 earnings call. The plan for the U S commercialization of the <unk> E Post PMA approval was part of a broader comprehensive commercial strategy for our renal therapies group.

Cindy Lee: One moment for our first question.

Cindy Lee: Yes.

Speaker Change: And our first question will come from Patrick <unk> of Piper Sandler Your line is open Patrick.

David: <unk> is an experienced dedicated team of sales and clinical partners offering a strong portfolio of dialysis products that address the entire end stage renal disease continuum of care, including our hero graft are surface or insider access catheter system, and our portfolio of acute chronic and peritoneal dialysis catheters.

Yes. Good morning, how are you guys doing.

Speaker Change: Good how are you.

Speaker Change: So congrats on the quarter.

Speaker Change: My question is on just the regulatory environment.

Speaker Change: Obviously, Doug I don't know if you heard but we have a new head of the SEC coming in.

David: As we move through 2024, our renal therapies group was understandably excited to add the Rab CCI E to our dialysis product offering following PMA approval and we are increasingly focused on ensuring would be ready to enter the U S market. Following PMA approval. The team completed intensive Rhapsody Cie training covering a range of.

Speaker Change: Can you just maybe talk about like what that means for your business and.

Speaker Change: What that means or the areas that you are in the opportunities that are presented there and then what it could mean for just the overall total addressable market of those opportunities.

Speaker Change: One of my New year's resolutions was not to mentioned Gary Gensler as name again. So thank you Patrick for having me violate that right away and.

David: Of important areas, including the technical story anatomy physiology, and deployment technique clinical data trainings and live hands on Tradings. We're also conducted.

Speaker Change: That may be the last time, I will say anything about him.

Speaker Change: Look I mean, obviously, we're thrilled with the changing changing of the guard in Washington, I mean, it really was a I'll be polite and say it was a burden that the entire industry had to bear for the last four years, you had a a politically motivated chair and head of trading and markets that was effectively a puppet.

David: Sales team readiness activities were bolstered by the rollout of comprehensive marketing plan to support the U S launch. The early successes, we're seeing to date are due in part to this thoughtful multichannel marketing approach focused on raising awareness through social media postings partnership channels and advertising of both digital and print as well as strong physician relationships and.

Speaker Change: And so they were.

David: Clinical partnerships that have been cultivated over the last 12 months to 18 months supporting the current rtg's product offerings. The sales team as a targeted plan to engage with new and existing customers and is working through the vac approval processors across the country. We're working with the largest group purchasing organizations in the U S to get this product loaded into those.

Speaker Change: Promulgating proposals that were not intended to make the markets better and so.

Speaker Change: For better or worse, we took a leading role in.

Speaker Change: And beating a lot of that back I think very successfully and I give a lot of credit to a lot of people within the industry that rallied behind this and recognize the harm they were going to do the good news is that Paul Atkins is an unbelievably experience thoughtful person. Obviously I think he has views that are contrary to gensler and his bank.

David: Systems, including <unk>, and Ascension, among others as well as some of the largest idms across the country, including atrium and USC University of Texas in the VA. We believe these efforts will help drive the adoption of the Rhapsody Cie. These processes vary by facility and can take a different amount of time.

Speaker Change: A merry men around market structure and wholesaling in payment for order flow. So all of those items will be off the table I think the most exciting thing in terms of and I mentioned it in the script around tailwind is what's going to happen on digital assets I mean, it's difficult to predict exactly where it will come out and whether the CFT C will have more.

David: Strong support team with our strategic accounts marketing and product management that are supporting a different requests that come through the back process and we believe that we will be able to get the <unk> approved and key hospitals around the country in a timely fashion.

Speaker Change: Authority, then the SEC, but you know that there's going to be a bipartisan solution already the interim chair of the SEC overturned staff accounting staff accounting Bulletin $1 21, which was this absurdity that gensler had pushed through around banks cutting digital assets and has to purse is.

David: Regarding physician awareness and engagement specifically, we plan to host physician training events at centers of excellence. These Marriott branded events will be led by a group of physicians that will work as our clinical experts serving in a valuable peer to peer role.

David: RTG team will be running in service <unk> to physicians in their respective regions as well all in we project. Our efforts to result in more than 250 active physician advocates of the routes to pcie by the end of 2025, a number that we believe will grow over time as we continue to identify a physician partners who are passionate about the product and <unk>.

Speaker Change: <unk> been appointed the head of a crypto subcommittee of the SEC and she is obviously a very smart person, that's very favorable around having sensible regulations rather than regulation by enforcement. So we're very very excited about that and you know Atkins has a history of one.

Speaker Change: Wanting to look at Reg NMS.

Speaker Change: In particular, the order protection rule, so I think there'll be a hit in 2021. He suggested that there be like a real comprehensive review of equity market structure.

David: Getting their peers on the benefits of the Rhapsody Cie importantly, while Rtg's U S. Commercial strategy is focused on the loss of reps at ECA. The total strategy is comprehensive with the team our planting seeds and working the process for reps ECA conversion, we continue to open new doors and identify opportunities to drive adoption.

Speaker Change: And I think that'll be that will it will involve the industry and obviously, we've made sensible proposals around sub dollar stocks and things like that we don't think that makes a lot of sense in the marketplace and so we're just excited that we're going to have folks in Washington that are willing to engage the industry.

David: And utilization of the rest of our dialysis product portfolio we.

David: We're very pleased to see early evidence that this strategy is working the team is adding new hero and peritoneal dialysis accounts and we're seeing a notable uptick in new customer conversion for our dialysis catheter offering, including the <unk> catheter acute hemodialysis catheters and central Cmos hemodialysis catheter.

Speaker Change: That are sensible and that we'll look at data driven solution. That's all we ever asked for or data driven solutions and when presented with the data the prior regime.

Speaker Change: Frankly ignored it because of their political motivations. So it's a new day in Washington, We're very very excited about it I think we'll get clarity bipartisan clarity around crypto I know Congressman French Hill.

David: With respect to pricing, we believe the routes Pcie is a completely new treatment option for patients as evidenced by our breakthrough designation from the FDA.

Speaker Change: As a as a proponent of clarity around and he is the new chair of the House Financial Services Committee I think Senator Tim Scott as well instead of Loomis are all very excited about.

David: Therefore, as part of our go to market strategy, we intend to sell Rhapsody at a premium price relative to the competitive cover since offered in the U S. Today.

Speaker Change: A bipartisan solution around digital assets, so that the United States can again be the leader of innovation.

David: <unk> is a novel differentiated product that improves dialysis maintenance procedure outcomes as demonstrated in a compelling body of clinical evidence.

Speaker Change: Very very important and growing asset class.

David: <unk> safety and efficacy to date and we offer a unique size offerings from our 2014 and 16 millimeter devices that represent potential treatment options for clinicians previously not available in the marketplace.

Speaker Change: Great.

Speaker Change: Great color and then just a follow up.

Speaker Change: If we look back over the last several years 'twenty 'twenty four your earnings were surprisingly stable could you just talk.

The data suggests that Rhapsody Cie requires fewer re intervention to maintain patency at the lesion site and more importantly, the access circuit remains functional which is key for any dialysis patient our pricing strategy for the Rhapsody CAE is aligned with our long term reimbursement strategy for securing add on reimbursement payment.

Speaker Change: Maybe you addressed this in your comments, we had some overlapping calls but could you talk about.

Speaker Change: What drove that stability and whether you think you can maintain that level of stability as we head into 2025 understanding that a lot of it's going to be driven by volumes and volatility, but what are those things that can maybe help it remained stable as it's been.

Speaker Change: Yes, that's a great question I think look we.

David: In the hospital and office based sites of care.

Speaker Change: We've we've prided ourselves in being a very scaled diverse.

David: We believe the Rhapsody CAE offers a compelling opportunity to not only improve patient outcomes, but also to reduce the cost of treating this patient population. These factors together with demonstrated clinical outcomes and the fact that wraps. The Cie is the only device that has been designed specifically for dialysis access maintenance supports our belief.

Speaker Change: Organization, we've made significant investments in people and I can't say the word internalization enough I mean, we really act as a single cohesive firms so internalizing.

Speaker Change: Both obviously retail order flow, but also within the firm are non customer market, making and customer market, making businesses and indeed, our execution services business that's in it.

David: That the <unk> should be a premium product in the market.

David: We know that the economics within a hospital outpatient ASC and OBL are very different and with that we have created pricing strategies that align with our <unk> and GPT reimbursement strategies, but also are not a financial burden to the facilities that are treating these patients.

Speaker Change: An added value that we can provide to our clients. So I think that really helps with.

Speaker Change: We've added obviously the growth initiatives have brought more to use your word stability and more consistency around what we're doing.

Speaker Change: And options in ETF block and as I mentioned crypto had a really nice fourth quarter. So again, it's the virtu value proposition, which was b scale be agnostic to market to try to be in as many asset classes and geographies as you, possibly can try to be the best bid and the best offer in the market, making and on the execution services.

David: Under the current reimbursement for covered stent in the dialysis circuit, we believe that our pricing strategy aligns with our long term goals, but also short term is not a financial burden for these facilities and we've created a pricing program to best work with our customers and the individualized financial situations.

Kayla: Thank you Kayla.

Raul Parra: I'd like to turn the time over now to Raul Parra level.

Speaker Change: Syed.

Speaker Change: <unk> really scaled efficient multi asset.

Raul Parra: Thank you Fred.

Speaker Change: Products and multiple products to great clients that understand the value proposition and so we're going to have our ads, we're going to have our flows hopefully we have more.

Speaker Change: Wanted to provide updates on our progress in our Q.

Speaker Change: A few key areas of our Rhapsody Cie program, specifically reimbursement.

Speaker Change: Clinical validation and raising awareness of the compelling safety and efficacy profile of Rhapsody Cie, among clinicians and 2025 revenue expectations for Rhapsody Cie in the U S.

Speaker Change: Slowing than ebbing and.

Speaker Change: Obviously with the change of administration in Washington, and regulatory tailwind, we're more confident and obviously part of that was.

Speaker Change: This buyback program, which we started four years ago, when we bought back about 19, 4%.

Speaker Change: Beginning with reimbursement.

Speaker Change: The team has continued to execute on our reimbursement strategy for the Rhapsody Cie since our last update to the investment community.

Speaker Change: Our company and obviously that that helps grow EPS, Joe you wanted to add on it no I'm just going to say and I think you touched on it but the execution services.

Speaker Change: By way of a reminder, on October 7th we submitted our application requested a new technology APC assignment for medicare's acute inpatient.

Speaker Change: Having a consistent year and half.

Speaker Change: An outstanding fourth quarter I think the bar is has been raised there I hesitated to say permanently but I think the original thesis of us getting into execution services was that while volatile it was going to be slightly less volatile than the market making.

Speaker Change: <unk> payment system, the new technology add on payment or <unk> designation enables new medical service or technology meeting certain eligibility criteria to receive additional reimbursement payment for a period up to three years.

Speaker Change: We believe that the Rep city Cie meets the eligibility criteria particular as it relates to the requirement that the technology represents an advance that substantially improves relative to technologies previously available the treatment of Medicare beneficiaries.

Speaker Change: And I think that's yes.

Speaker Change: Here, we are you know several years later.

Speaker Change: I think that's proving to be the case and hopefully will prove to be the case, even more going forward.

Speaker Change: Awesome. Thanks, guys.

Speaker Change: One moment for our next question.

Speaker Change: We notified CMS that we receive PMA approval in December and our applications for and tap remains under review.

Speaker Change: Our next question will be coming from Chris Allen of Citi. Your line is open Chris.

Speaker Change: We continue to expect to hear Cms's decision in June 2025 pursuant to their stated timeline for the <unk> program.

Chris Allen: Hey, good morning, everyone nice quarter.

Chris Allen: Wanted to just dig it a little bit on the fourth quarter and maybe if you could help us think about.

Speaker Change: We are also pursuing add on reimbursement for the Rhapsody Cie and the office space site of care or OBL. The OBL add on reimbursement process is different than and tap in a few ways. Most notably it has a 90 day application assessment period and companies can only submit applications once pms.

Chris Allen: The strong performance in the Mark you're baking segment.

Chris Allen: What was driven by an internalization versus the environment. I think you noted earlier on the call are mixed opportunity set but there was an improving environment over the course of the quarter. So trying to delineate between the two and then as we start 2025.

Chris Allen: All the signals in terms of realized volatility retail trading activity all seem to be pointing in the positive direction would you agree with that assessment.

Speaker Change: Approval is secured.

Speaker Change: As a reminder for office space to add on reimbursement, we are applying for transitional pass through payment or TPP under.

Speaker Change: Under the Medicare hospital, outpatient prospective payment system or <unk>.

Chris Allen: Yeah, I think it's look it's a great question I think.

Chris Allen: When you when you think of her two we've always said this like market volumes and then like what what's the bid offer spread those are.

Speaker Change: The GPT program is intended to facilitate access for Medicare beneficiaries to the advantages of new and innovative devices by allowing for adequate payment for these new devices.

Chris Allen: Always the best measurement of opportunity for the market maker.

Speaker Change: Some of that you can look in and I mentioned it in the script, Chris in the 605 reports around quoted spread and certainly we've seen a positive trend. There. So we had a very nice quarter in our retail business.

Speaker Change: All the requisite cost data is collected we.

Speaker Change: We believe the Rhapsody Cie meets the substantially clinical and the substantial clinical improvement threshold for new category eligibility for pass through payments. We are targeting submission of our application by the March one 2025 deadline and anticipate receiving a decision with respect to the award of pass through status in June.

Chris Allen: We highlighted crypto.

Chris Allen: Where we had a a.

Chris Allen: Really.

Chris Allen: Just a terrific quarter and crypto are blocky TFS business.

Speaker Change: 25.

Speaker Change: If we are awarded pass through status the Rhapsody Cie would be eligible for add on reimbursement as early as Q3 of 2025, which we believe will continue for at least two years thereafter.

Chris Allen: Did quite well and that's an area that really benefits from internalization.

Chris Allen: Think about.

Chris Allen: Your standard desk, that's taking down large positions, whether it's through the RFG.

Speaker Change: We intend to update the investment community community with any material progress in our efforts to secure and tap and TVT add on reimbursement.

Chris Allen: Regime, or it's a transition from a big.

Chris Allen: Our pension plan right the ability to provide.

Speaker Change: With respect to clinical validation in our efforts to raise awareness of the compelling safety and efficacy profile of the Rhapsody CAE among clinicians.

Chris Allen: Attractive pricing and a competitor in a highly competitive marketplace really hinges on being able to hedge your exposure or effectively without broadcasting that to the greater world and that's what internalization really is so I'm very proud of a lot of people.

Speaker Change: Simply stated we project a steady stream of progress in the areas through throughout 2025.

Speaker Change: We believe the Rhapsody Cie will be featured in presentations at multiple medical meetings and industry events. In 2025 that said there are for meetings that I would like to call special attention to <unk>.

Chris Allen: People around the firm that have worked very very hard in that area too.

Chris Allen: To.

Chris Allen: Enable us frankly to offer a much better product set and a wider product set both in the United States and Europe, we're really functionally able to provide liquidity.

Speaker Change: First the society of Interventional Radiology March 28 to April 2nd in Nashville, Tennessee, Dr. Raj on is scheduled to present at 12 month ABF data from our Rhapsody wave trial on Sunday March 30th at $3 27 PM as a late breaking session.

Chris Allen: <unk>.

Chris Allen: Equities commodities and now fixed income and then the last thing I'll highlight is.

Speaker Change: Don't sleep on our execution services business really proud of what Steve Kibali and the crew have done there.

Speaker Change: Second the American society of diagnostic and interventional nephrology or ask them meeting in February seven to nine in Grapevine, Texas. Dr. <unk> is scheduled to present six month re intervention rates data from our Rhapsody wave trial.

Chris Allen: We bought.

Chris Allen: Couple of Buick's, let's put it that way and we change the tires as they were driving down the highway and.

Chris Allen: Whatever your car of choices, you know BMW Rolls Royce Mercedes we have one of those now we have got a great scale global business. That's a heck of a lot more efficient and the proof is in the pudding as I tell people. The only competitive advantage. We have because we don't have research we've done a prime we don't have IPO calendar is <unk>.

Speaker Change: Third the sharing cross meeting April 23rd through the 25th in the U K Dr. Rob Jones is scheduled to present, the 12 month AVG data from our Rhapsody wave trial on Wednesday April 23rd during the Axis revision session.

Chris Allen: Performance and it's very clear that our products perform at or better than industry standard and that's why we've been able to grow market share, particularly in our algo suite, but also Triton and analytics. So if you add up all of those things, Chris and that's kind of been the business plan. It led to a nice quarter in 2020.

Speaker Change: And fourth the society of vascular Surgeons vascular annual meeting June 4th to June seven in New Orleans, Louisiana. Dr. Dexter is scheduled to present 12 month re intervention rates data from our Rhapsody waves trial.

Speaker Change: In addition to the <unk> featured at medical meetings, we believe there will be multiple publications featuring the devices safety and efficacy we intend to update the street will be publications become available this year.

Speaker Change: Four and I try very hard not to talk about the current quarter. Because every time I do it has come back to bite me.

Speaker Change: But it's hard to argue with your thesis right that a lot of those trends are continuing in the 15 or so trading days, we've seen in 2025.

Speaker Change: Turning to a discussion of our 2025 revenue expectations for the Rhapsody Cie in the U S. Here.

Speaker Change: Historically merit has not provided revenue disclosure for specific products on a reported basis. Our forward looking expectations that said given the unique nature of the Rhapsody Cie.

Speaker Change: Cool and just just a follow up on crypto.

Speaker Change: As noted that you've made some investments in the middle of the year 'twenty four but you are still in early days of building out your 24, seven crypto framework. So maybe if you can give us some color.

Speaker Change: Specifically being the company's first PMA approved product and the related multi pronged reimbursement strategy. We have elected to provide forward looking revenue forecast for U S. Rhapsody Cie revenue in 2025.

Speaker Change: Maybe it's worth recalling the investments you've made and what you need to do to kind of build out the framework to be fully prepared for what could be a good environment crypto moving forward.

Speaker Change: Although we are providing this forecast and this unique situation we expressed.

Speaker Change: Yes, I mean, it's great question I mean in some ways. It's a traditional virtu style business right. You got spot you got ETF and you've got futures right and that's kind of right now wheelhouse think of FX think of commodities, but in many ways. Its different you have non traditional venues I'll be nice and say that some of them.

Speaker Change: We disclaim any obligation to update or disclose revisions to this forecast are to provide similar forecast in the future.

Speaker Change: To that end for the full year 2025 period, we forecast U S revenue from the sales of Rhapsody Cie in the range of 7 million to $9 million.

Speaker Change: Our regulatory really questionable so you've got to avoid those the capital efficiencies are not there you don't have centralized clearing it off traditional prime brokerage.

Speaker Change: In addition to this forecasted revenue guidance range for the sales of <unk> in the U S. We would like to offer the following information for consideration when evaluating forecasted guidance.

Speaker Change: Largely because of reputation issues in staff accounting Bulletin 121 didn't help right. So and then also in the ETF World.

First as discussed earlier, we are pursuing a multi pronged strategies.

Speaker Change: Saar Gensler wouldn't allow for in-kind creation redemption, you had to do cash creation redemptions.

Speaker Change: Add on reimbursement payments for the Rhapsody Cie in the hospital and office based sites of care. We currently expect to receive decisions on the on both <unk> and TVT add ons payments on June <unk> and June 2025 note. Our full year 2025 revenue range reflects multiple potential.

Speaker Change: So that meant that operationally it was a lot more of a hassle to be an efficient market maker in the cash bitcoin ETF products. So we spent a lot of time and a lot of money investing in that and in addition.

Speaker Change: For the first time.

Speaker Change: <unk> and assumptions for adoption utilization and commercial strategies that are influenced by the outcome of each add on reimbursement process. We continue to believe that we meet the requirements to secure both and tap and TPG add on reimbursement payments.

Speaker Change: The marketplace demands 24 by seven pricing right. So typically.

Speaker Change: Salaries and Sundays up to whenever the CME would open at six PM Eastern.

Speaker Change: Our machines and our staff was off and that's changed right. So now we're at 24 by seven provider and that's what the industry demands.

Speaker Change: That said until we have secured those add on payments there is a level of related uncertainty for.

Speaker Change: Obviously, we're a big market maker on <unk>, the best solution out there because we own a piece of it we started with our friends at Citadel, and Schwab and fidelity and Sequoia and Pantera and it's a great.

Speaker Change: For avoidance of doubt, we have not deviated from our core philosophy on providing forward looking financial expectations over the past four years. The investment community should appreciate that we continue to provide forward looking financial expectations in a range, where the low end of the range reflects a realistic view of what we expect to deliver.

Speaker Change: Great.

Speaker Change: Venue for us right, but they demand 24 by seven execution and so to build all that took a lot of time what are we continue to work on its distribution, we firmly believe that these products.

Speaker Change: If we execute our plan while nothing is certain we believe we have a high level of confidence in our team's ability to deliver at least the low end of the range of guidance.

Speaker Change: They've migrated to the wealth divisions of of meaningful institutions and Theyre going to continue to go up the ladder, if you will and there'll be institutional adoption on a significant scale with these products. We believe so like our other distribution capabilities, whether it's block ETF for FX, we need to be able to provide.

Speaker Change: Second for modeling purposes, our full year 2025 U S. Rhapsody <unk> revenue range assumes a larger weighting of revenue in the second half of 2025 versus the first half and a larger weighting of revenue in the fourth quarter versus the third quarter. These assumptions are driven primarily by the mid year timing.

Speaker Change: <unk>.

Speaker Change: Attractive two sided pricing in size and a multitude of coins to institutions and so youll see a V. F. Crypto just like we have V F.

Speaker Change: <unk> for add on reimbursement payments in the hospital and office based sites of care. We are also sensitive to the potential impact on adoption and utilization as we navigate the vac approval process.

Speaker Change: Fixed income, we've got the FX et cetera, so it'll be an institutional offering offering where we stream prices directly to end users. So again classic virtu, but with a lot of operational complexities managed and run by legacy long term virtu institutional traders and operations people, but.

Speaker Change: Third and finally, we do not intend to provide incremental financial or material non financial details on our U S. <unk> commercial strategy, given the potential competitive impact in the marketplace.

Speaker Change: For avoidance of doubt, while we intend to provide updated expectations for U S. Rhapsody Cie revenue on each of our quarterly earnings calls. This year, we do not plan to disclose revenue results on a quarterly basis with that I will turn the call back to Fred for closing remarks Fred.

Speaker Change: A lot more of a of a lot more complexity a lot more hassle frankly, because of some of the regulatory uncertainties.

Speaker Change: Great color thanks, guys.

Speaker Change: Thank you.

Speaker Change: And our next question.

Fred: Thank you Kayla John Thank you very much ladies and gentlemen, I hope you are.

Speaker Change: Next question will be coming from Ken Worthington of JP Morgan Ken Your line is open.

Speaker Change: Hi, good morning, Thanks for taking the questions.

Speaker Change: Brief today on the things we promised we would deliver we look forward to.

Speaker Change: Hi.

Speaker Change: First what are the takeaways from the election was that betting via listed contracts contracts, sorry is a viable market.

Talking to you in February we wish you all the very best from Salt Lake City.

Speaker Change: Good evening, Thank you very much.

Speaker Change: Bedding is a bit different than the financial markets. The virtue is currently in today, but do you see potential for bird to participate and listed betting markets and how big or established with.

Speaker Change: Thank you.

Speaker Change: And now we're going to go into our Q&A session.

Speaker Change: I'd like to ask a question. Please press star one on your telephone.

Speaker Change: Automotive message advanced in your hand, it's raised.

Speaker Change: Would they need to be for <unk> to really be interested here.

Michael: We also ask that you. Please wait for your name and company to be announced before proceeding with your question at this time I will have some remarks for you. Please go ahead Michael.

Speaker Change: Yes, I have to be a little careful what I say because of our involvement with the NHL, obviously, but putting NHL. Aside can look when we look at every opportunity we know that some of our competitors.

Speaker Change: Good evening, everybody. Thank you for joining us I just wanted to give you guys. A brief update as you heard at the.

Speaker Change: Great competitors are already involved in it I think here's what I would say.

Michael: Our pre recorded.

Speaker Change: Obviously, we look for credible venues and to your point. There are then we look at like our their index products, where there's enough volume that it makes sense.

John Hall: Remarks, Fred was fighting a cold yesterday, that's turned into a flu and so he is not with us but in the room I have John with me Caleb and so we will be answering your.

Speaker Change: In terms of our involvement I mean, it's a little difficult to make a market and whether the ranges are going to.

Michael: <unk> Q&A questions here in.

Michael: And look forward to it.

Speaker Change: As you guys can imagine Fred is pretty upset that he can't be here with you guys. He was excited to be here and present.

Speaker Change: Win or lose against the Carolina Hurricanes. They lost last night for example, right like that's not something that a market maker get involved and if you had broader indices.

Speaker Change: Theres no other place he'd rather be than here on this call talking to you guys.

Speaker Change: <unk>.

Speaker Change: Definitely it's something we would look at we're always excited about new markets. If you had asked me four years ago about bitcoin I wouldn't have noted from our BLT right like it's just not what we do I don't know where our focus on the underlying products, but if it is a widget that people like to trade in a viable market.

Speaker Change: But you're going to fight that flu and he'll get better and.

Speaker Change: We'll go ahead and take it from here.

Speaker Change: Thank you gave us one moment, while we compile the Q&A roster.

Speaker Change: And our first question for today will be coming from the line of Jason Bednar of Piper Sandler.

Speaker Change: With significant volume, where somebody needs to side of pricing will be there and so we like what people are doing in terms of.

Speaker Change: Your line is open.

Jason Bednar: Alright. Good afternoon. Thanks, so much for taking the questions and hosting the call and Fred I know you are listening in.

Speaker Change: Coming up with like Dcms, and having futures products and things like that that's kind of right in our wheelhouse. So I think Ken the market will evolve in that manner because to your point its something that has meaningful in our retail to put it mildly.

Speaker Change: Here as well, but congrats on everything so far I hope youre doing better soon.

Speaker Change: Raul I wanted to start with the 25 sales guidance for Rhapsody, the $7 million to $9 million.

Speaker Change: Interest.

Speaker Change: Totally appreciate there's a lot of factors here influencing that maybe the timing of uptake with respect to reimbursement the vac approval process.

Speaker Change: I like very very much that piece.

Speaker Change: Entities I forgot some of the names, it's like and even how to pronounce it <unk> and <unk> and some of these other venues are trying to launch DCM products and that's certainly something that's attractive to us.

Speaker Change: Couple of questions here I guess do you anticipate the vac approval process to be largely addressed by the time, we get through to the end of the end of the year and then we can all do our own math around what the revenue exit rate might look like for <unk> city in the fourth quarter, but are you comfortable with the expectation today is something like a $15 million to $20 million run rate exiting this year.

Speaker Change: Perfect. Thank you and then.

Speaker Change: Clearly you had a great quarter.

Speaker Change: Historically, <unk> has generated sort of disproportional opportunity to profit around events.

Speaker Change: Okay.

Speaker Change: Can you help us gauge the magnitude of the election, and how big the impact the days around the election were.

Speaker Change: That's a great quest.

Speaker Change: Question, Jason as you can imagine, we're not going to get into 2026.

Speaker Change: Revenue forecasting or anything like that I think we've provided enough detail for you guys to be able to kind of do the math I think we continue to be excited we talked about the weighting and the Vac Committee and process in our opening remarks.

Speaker Change: On the results you had this quarter.

Speaker Change: Yes, it's a great question.

Speaker Change: I'll answer it this way I mean, obviously.

Speaker Change: Said it in the script.

Speaker Change: The October quoted spread was meaningfully smaller than quoted spread and a 605 reports in November and I think December is going to be released or has been released and so it wasn't like on whatever election day was November whatever we had this crazy outside like eight.

Speaker Change: So.

Speaker Change: As always we we have a range of outcomes from reimbursement of pricing strategic initiatives that we're dealing with and we'll make sure that as you look at the guidance that we provided.

Speaker Change: <unk> thousand nine figure day, but it's been a buildup since then right and it hasnt really dissipated so.

Speaker Change: I think we've given you the cadence that should help you kind of understand how we see us getting through the Vac committees and also understanding what the pricing dynamic is going to be as we.

Speaker Change: Question is how sustainable is that I think its pretty sustainable I think there is a keen interest again in market I think.

Speaker Change: Some of those reimbursement questions answered later in the year.

Speaker Change: Okay, Alright fair enough.

Speaker Change: I'm not going to quote the new President and say, it's the Golden age of this that and the other thing, but I do think that theres more exuberant and confidence in.

Speaker Change: I guess, maybe if I pivot over to the other part of the P&L here the rest of the P&L.

Speaker Change: I didn't hear any commentary around.

Speaker Change: In the market.

Speaker Change: Margin assumptions I think in the past.

Speaker Change: Thank you.

Speaker Change: Having to Republicans control both houses of Congress means that maybe things are going to get done and there's just a growing participation and enthusiasm in markets that we see here in the United States and in Asia and in frankly in Europe, I mean, Europe had a couple of.

Speaker Change: Characterize <unk> as being very much margin accretive.

Speaker Change: You don't have to hire a new sales force, but also.

Speaker Change: Also understanding your manufacturing might not yet be optimized you might have some necessary spending around initial marketing account onboarding and things like that.

Speaker Change: $40 billion notional days, again, which was something that I.

Should we think of Rab city as immediately accretive to margin and earnings this year.

Speaker Change: We haven't seen in a while and I do think that theres going to be more innovation a lot new products you can't swing a dead cat These days without hitting a new crypto product and no crypto ETF I frankly lost track of how many issuers are are putting out new products around coins and leveraged products and things like that so all of that a few that cornucopia.

Speaker Change: Are you willing to offer color on what the margin contribution from perhaps what it looks like when it does get to greater scale.

Speaker Change: Yes, we're not going to be providing specific op margin details related to the U S reps for the launch.

Speaker Change: As we were pretty clear at the beginning of our CGI initiatives.

Speaker Change: Obviously the revenue is not included in that CGI models that we have.

Speaker Change: Of interest in <unk> and new products.

Speaker Change: Is just a positive for our market making firm.

Speaker Change: And so.

Speaker Change: Some of the expense as you can imagine is already included given that we made some acquisitions and we built out our RTG group in order to be prepared for the launch of Rhapsody. So.

Speaker Change: Great. Thanks for your comments.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Okay.

Speaker Change: Our next question will be coming from Alex <unk> of Goldman Sachs. Your line is open Alex.

Speaker Change: Think we've given enough details there the.

The revenue is obviously.

Alex: Hey, good morning, Hey, Doug Hey, everybody.

Speaker Change: In addition to our CGI initiatives, we've always said that the gross margin is accretive to our corporate gross margin.

Alex: I was hoping to go back to the regulatory discussion for a second so pretty clear the benefits that your business and many others would see.

Speaker Change: And I think we've made the investments that we think we need to make at this initial phase of the launch we will reevaluate everything as we kind of gear up for the rest of the year.

Alex: From a different approach and a different framework when it comes to crypto and digital assets, but are there any other aspects of your business that you felt were particularly sort of suppressed by the regulatory regime over the last several years.

Speaker Change: But for now I think we feel pretty confident in our investments.

Speaker Change: And that has been baked into our model.

Alex: That could also see.

Alex: A bit more of a bounce back aside from crypto.

Speaker Change: Alright, thank you.

Speaker Change: Yes, it's a great question I think.

Speaker Change: Thank you one moment for the next questions.

Speaker Change: The new FCC is really good for us in two ways I think it will it's going to stop New road rules that we're disrupting competition and harming capital formation. So if you think of.

Speaker Change: And our next question will be coming from the line of Larry <unk> of Wells Fargo.

Speaker Change: Your line is open.

Speaker Change: Hi, guys. This is <unk> on for Larry. Thank you guys for taking the questions today and a very helpful presentation.

Speaker Change: Initial public offerings in this in this country again I don't have the statistics, but I know folks at all of the big investment banks and when I talk to a DNN and learn about like listings, they're all excited about.

Speaker Change: Maybe just a follow up on Jason's question around.

Speaker Change: The 2025 Rhapsody revenue assumption I appreciate.

Speaker Change: Companies coming public in 2025 less concern around.

Speaker Change: Kind of all of the color that you guys have laid out.

Speaker Change: Enhanced disclosures around things like ESG and expenses around that all of that kind of stuff. So I think that that clarity.

Speaker Change: I didn't hear a F. T. So is there an underlying ASP range that you can point us scale.

Speaker Change: We actually buy.

Speaker Change: I know you said that it is a premium to the competitor is but any finer point there.

Speaker Change: Not proposing new rules and making it easier to be a public company.

Speaker Change: Will mean that there'll be more listed companies I hope in the United States in 2025, and beyond Thats, all new product for us and obviously the.

Speaker Change: Yes look as we said in our prepared remarks, we will sell Rhapsody at a premium price realm.

Speaker Change: The bigger the better and the more the more the merrier I think secondly, and I said this before I think really just clarity I mean, what what what gensler and his crew did to the crypto industry in the last two or three years I'm going to say it was just patently un-american. It really was it was it was disgusting to watch how.

Speaker Change: Relative to the.

Speaker Change: Competitive covered stent that are offered in the U S. I think our technology.

Speaker Change: It calls for that and as part of our reimbursement strategy, So having said that our <unk> and TVT.

Speaker Change: The pricing that we've set up for that as a targeted ASP of $5800.

Speaker Change: They they were on this jihad of regulation by enforcement intimidating small companies going after large companies with no basis in fact or law. It was really an awful awful thing.

Speaker Change: That's what we're that's what we're chasing.

Speaker Change: Got it that's very helpful.

John Hall: And John maybe one level bullet point that I think is important.

John Hall: As you can imagine our pricing varies depending on the site of care and region of the country I just want to make that clear right. So again, we're targeting that ASP of 500, but as you can imagine there is a lot of variables in that.

Speaker Change: To be involved with and to see so having that clarity I think is a good thing and the last thing I'll say just to shed on the administrative state and yes, I used the word <expletive> is not having lean a con at the FTC is a godsend I mean in the in the realm of horrible administrative officials Chi.

Speaker Change: Got it that's very helpful and maybe just to parse out.

Speaker Change: The launch cadence throughout the year I know.

Speaker Change: The moving parts with the price pass through payment coming on online activity.

Speaker Change: Gensler tied for the gold medal, so I think there'll be a lot more clarity around M&A and not this again I'll use the word jihad I don't use that lightly around competition and combination in.

Speaker Change: No.

Speaker Change: I believe for office based labs in ASC.

Speaker Change: It's a much simpler process to get access to.

Speaker Change: Just people being more confident about investing in growth and that's really what this country needs not overbearing political.

Speaker Change: <unk> devices like these.

Speaker Change: I think it would be helpful.

Speaker Change: Just walk through how the launch could be different angle French sites of care.

Speaker Change: Enforcement.

Speaker Change: Loud and clear.

Speaker Change: Second question.

For you guys just around capital management priorities.

Speaker Change: And could we see potential upside from a faster launch.

Speaker Change: If the firm, which what it feels like is setting up to be in a more robust trading backdrop again, I don't want to extrapolate Q4, which obviously was very strong but it feels like given everything we just talked about you guys are in a stronger footing from a revenue perspective.

Speaker Change: Office based labs.

Speaker Change: Steve.

Speaker Change: Yes, we're not going to.

Speaker Change: Talked about the cadence that we expect as you can imagine it includes a lot of variables. There, we're not going to get into that level of detail I. Appreciate the question though.

Speaker Change: You have a framework on kind of how that translates into buybacks, that's pretty straightforward any room within that to reduce debt as well or should we be thinking about the buybacks still being the main priority when it comes to capital return.

Speaker Change: Got it thank you.

Speaker Change: Yes.

Speaker Change: Thank you one moment for the next question.

Speaker Change: Yeah, Alex It's Joe I think you should still think about the buybacks as being the main.

Speaker Change: And our next question will be coming from the line of Steve Lichtman of Oppenheimer. Your line is open.

Speaker Change: Our source of capital return.

Speaker Change: Yes.

Steve Lichtman: Thank you evening, guys and thanks for the call.

Speaker Change: I think our capital structure.

Speaker Change: Right now.

Speaker Change: <unk> you mentioned the initial market opportunity the 95000 or so.

Speaker Change: We took advantage of some opportunities.

Speaker Change: Theres always seems like there is always opportunities to get the desktop cheaper, which will continue to do.

Steve Lichtman: <unk> units going in.

Steve Lichtman: Today, what do you think youre going to be the key steps to getting at the larger Tam beyond that.

Speaker Change: But I think.

Speaker Change: We're excited about the future and we're really happy.

Steve Lichtman: Currently treated population.

Speaker Change: With how the buyback program is worked with tailor made for a company like us with in terms of the volatility of our.

Steve Lichtman: Yes, I mean for the sake of this conversation I think we are really focused on that 95000 units.

Speaker Change: Of our of our earnings and the volatility of our cash flows.

Steve Lichtman: Our initial addressable market.

Steve Lichtman: Obviously, that's kind of what we're focusing on obligate here and Thats kind of a obviously the indications that we have for you. So that's the 95000 addressable.

Speaker Change: Worked out extremely well we look at it all the time right. So we don't just set it and forget it we look at it.

Steve Lichtman: Addressable market out the gate that we're targeting.

Speaker Change: On a rolling basis.

Steve Lichtman: Okay got it.

Speaker Change: And then we also look at how much capital we need to to run the firm and invest in the areas we've been talking about today.

Relative to pricing how much.

Steve Lichtman: Should we think about that being variable based upon.

Speaker Change: So taking all those things into account I would say that the buyback is still.

Steve Lichtman: The success, you have with and tap et cetera in the middle of this year.

Speaker Change: The upfront priority in terms of capital management.

Steve Lichtman: Yes, I mean again, Steve I think we've given enough detail there right. We've talked about the targeted ASP that we have we have all sorts of assumptions baked into our guidance as you can imagine.

Speaker Change: Great Alright, Thank you guys.

Speaker Change: Thank you hen one moment our next question.

Speaker Change: Our.

Speaker Change: Next question will be coming from Dan Fannon of Jefferies. Your line is open Dan.

Steve Lichtman: But again I think.

Steve Lichtman: The thing that you should take away from this is that.

Dan Fannon: Great. Thanks, Good morning, I wanted to follow up on execution services. Another good quarter, good year, I guess and you've talked a bit about this but is there is it just time in terms of since the ITG stuff.

Steve Lichtman: As always we feel really comfortable with the low end of our guidance to $7 million and.

Steve Lichtman: And we feel comfortable with our range of $7 million to $9 million.

Steve Lichtman: Okay, great one.

Dan Fannon: The acquisition integration that this is now gaining momentum are there things that youre doing externally salesforce investment like kind of more front footed in terms of of that to think about the prospect of kind of continued solid growth in that business.

Steve Lichtman: Last quick one.

Steve Lichtman: Based upon the approval now.

Steve Lichtman: The increased visibility on Rhapsody.

Steve Lichtman: What impact do you think it could have on your outside of the U S Rhapsody business.

Steve Lichtman: We're going to focus on the U S market, but I think we've always said that.

Dan Fannon: Yes. Thank you. It's a great question I would say a couple of things one is our mantra from day one.

Steve Lichtman: The data that would come out of our of our PMA study would be critical to some of the pushing.

Dan Fannon: Acquiring ITG and then the part of KCG that was institutional services was was multi asset.

Steve Lichtman: Pushing the sales of O U S Rhapsody, Cie and we still feel that way.

Dan Fannon: Those firms particular, ITG talked it but in reality they didn't really have the offerings and so making our Triton EMS.

Steve Lichtman: So we've got the six month data that's out.

Steve Lichtman: Soon enough, we'll have the 12 month data and our sales force internationally will be able to leverage that.

Dan Fannon: EMS product truly multi asset, making our analytics offering truly multi asset having al goes and expertise.

Speaker Change: Hey, great. Thanks, Rob.

Speaker Change: Thank you one moment for the next question.

Dan Fannon: That is truly multi asset is a huge advantage because what we are seeing particularly in the global the large global asset managers and pension funds that they want a single holistic multi asset class solution that works really well.

Speaker Change: And our next question will be coming from the line of Jim Sidoti of Sidoti <unk> Company. Your line is open.

Jim Sidoti: Hi, Good afternoon can you hear me.

Dan Fannon: That execution services is tied to a firm that has a multi asset class market maker. So that they know these clients and users or know that theyre getting the same functionality and understanding of markets that the market maker hat. So it's a really attractive scaled offering is the first thing I'll say the second thing.

Speaker Change: Got you loud and clear Jim good to hear you.

Speaker Change: Great. So you started off the call talking about.

Speaker Change: Saying that this is the first of a variety of products what other products can you develop to use it with technology and well.

Speaker Change: Future products require a PMA or now that you have this approved we'd be able to use 510 case.

Dan Fannon: Is.

Dan Fannon: The products the equities products, we had our algo products, we made those truly global products for the first time and if you're.

Speaker Change: We're not going to get into that level of detail as you can imagine.

Dan Fannon: If you're running a trading firm and you've got a trading office in Hong Kong, one in London, and one in New York lets say, you know that the outlet product or using obviously with regulatory and marketplace differences is essentially the same the same product. So that's very interesting. We also for the first time integrated all those products together.

Speaker Change: We've got a lot of people listening in on this call and I think we'll keep that close to divest.

Speaker Change: But I will say that the technology that.

Speaker Change: We came up with Rhapsody.

Speaker Change: Conserve and multiple purposes, and we're excited about the roadmap of products that we have for that.

Speaker Change: But for now we're we're solely focused on on executing on Rhapsody Cie I'm, making sure that this gets off to a great start, which we feel like it has.

Dan Fannon: So analytics EMS really are truly integrated into a single holistic solution. So the mantra around here has been be multi asset class sell clients multiple products right because you get a better return on a better yield.

Speaker Change: We'll share more color on.

Speaker Change: Things, we can do at a later date, but we are excited about the technology that we built the infrastructure, we have the manufacturing capabilities and the supply chain that we've that we've built out so more to come there, but just not quite yet.

Dan Fannon: In both broker neutral and our broker products and then the last thing and you nailed it which is it really was a culture shift.

Speaker Change: Changing the firms that we acquire particularly ITG from a balkanized regional Mimi culture to a single unitary firm was not the easiest thing to do as we were upgrading the technology. So I give Steve <unk> a lot of credit we've added some very.

Speaker Change: Alright, and then can you give any detail on your sales outside the United States, how would this approval effects.

So sales in.

Speaker Change: The size of those markets.

Speaker Change: Yes, we're not going to talk about that outside of what I already said on the previous question other than to say that the PMA approval on the data that gets released with that will help our international sales, we feel really strongly about that.

Speaker Change: Talented senior hires.

Speaker Change: And the last year year, and a half that have really buttressed. The group there is a lot of great people.

Speaker Change: That hung in there from ITG that as we say, we're virtualized and really get it.

Speaker Change: So.

Speaker Change: We've learned a lot of things from our international sales markets and I think that's why our U S sales force. It's one of them. One reason on top of all the other reasons that <unk> talked about that our sales force will be ready to go here in the U S.

Speaker Change: And so I'm really excited about the team that we have we're going to continue to hire there more relationship managers more people that are technologically.

Speaker Change: Savi and can and can speak to clients about their needs.

Speaker Change: Very very effectively so I think it's just all of that Dan has really led to our ability to.

Speaker Change: Alright, thank you.

Speaker Change: Thank you one moment to the next questions.

Speaker Change: Generate revenue the last thing I should say is our <unk>.

Speaker Change: Virtu capital markets group the at the money offering folks are a terrific group they had a really nice quarter and continue to grow that's like the little engine that could that it delivers really good outsize results again as I said in response to an earlier question the only competitive advantage we have.

Speaker Change: And the next question will be coming from the line of Quinn.

Speaker Change: <unk> Bank of America. Your line is open.

Quinn: Great. Good afternoon, thanks for taking the questions and congrats on the approval. So I wanted to ask on the pricing program.

Speaker Change: <unk> execution quality and superior customer service, we don't have like your bank. We don't have prime we don't have research great guys. Like you. We don't have IPO calendar. We don't have any of that we have a bunch of really talented people. We can offer scale. We can offer efficiency, we can offer demonstrable performance.

Speaker Change: I appreciate the fact that you guys are going to have a different strategy for each of the different sites.

Speaker Change: In the prepared remarks, you Dr Patel mentioned that.

Speaker Change: Pricing was going to be.

Speaker Change: Or it could be a factor in in adoption. So.

Speaker Change: I guess specifically the question is is that pricing program or the pricing strategies that you have are you considering the profit profitability of <unk>.

Speaker Change: And we can give very very attentive customer service and that's where all of that.

Speaker Change: Great. Thanks, and just as a follow up Joe just as you look at 2025 2024 actually was another good year of expenses and margin expansion as.

Speaker Change: Rhapsody at a certain site versus a competitive product I guess is that how.

Speaker Change: Maybe a little bit of how you are trying how you came up with the pricing strategy I guess I'm just trying to get an understanding of the site profitability with Rhapsody versus some of the competitive products.

Speaker Change: As you think about areas of investment as we spend also expense growth.

Speaker Change: Much difference in terms of the growth rates, we've seen historically as we look to 'twenty five.

Speaker Change: Not I would say the operating expenses I think we've always guided.

Speaker Change: Yes, I mean as you can imagine our pricing strategy entails a lot of detail Craig and a lot of different outcomes on where reimbursement ends up.

Speaker Change: Low single digit low to mid single digit growth I think over time, that's proven that out as a daily battle.

Speaker Change: Do we get and tap do we not get TPP do we get <unk> do we not get in tap theres a lot of variables and.

Speaker Change: I think it means in the chart, we put in the supplement that looks at different levels of net trading income in different levels.

Speaker Change: A lot of.

Speaker Change: EPS and buyback I think we've incorporated some slightly higher comp.

Speaker Change: Different areas within the country that are also different so I would look.

Speaker Change: <unk> expenses nothing nothing.

Speaker Change: All I can say is that we gave a range for revenue of $7 million to $9 million.

Speaker Change: Too dramatic.

Speaker Change: But just take into account that.

Speaker Change: We are we are very comfortable with that low end of the range.

Speaker Change: We continue to hire and that will continue to hire very high quality individuals.

Speaker Change: Depending on the on the outcomes.

Speaker Change: <unk>.

Speaker Change: Sure.

Speaker Change: The different pricing strategies that could come our way and we're prepared to execute on what we just disclose which is the $7 million to $9 million.

Speaker Change: We modeled in slightly higher.

Speaker Change: Interest expense just given we had some old swaps roll off.

Speaker Change: But there is continued opportunity to always repriced, so we're being a little conservative there.

Speaker Change: Obviously, we've considered all of it.

Speaker Change: All the different economics of every site and where we're going to be selling. So I think you can you can you can you can bet that that's been baked into our guidance and in our assumptions as one of the scenarios that we've played out.

Speaker Change: But no nothing nothing dramatic I think on the capital side as I mentioned buybacks continue.

Speaker Change: And then the investments required there'll be some incremental capital investments needed in crypto.

Speaker Change: Okay.

Speaker Change: And then maybe just a little bit on the training strategy for docs. It sounds like it's going to be pretty easy to adopt for.

Speaker Change: Perhaps in Europe, as we build out our European ETF block business too.

Speaker Change: To compete over there. So I think we've got a couple of priorities, but it's all captured in that.

Speaker Change: Most stocks, but maybe if you could just expand upon how how we should be thinking about that ramping throughout 2012.

Speaker Change: And that slide the guidance.

Speaker Change: Got it thank you.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: One moment for our next question.

Speaker Change: As you know as we outlined in the prepared remarks are the group that we're targeting.

Speaker Change: And our next question will be coming from Craig Siegenthaler of Bank of America. Your line is open.

Speaker Change: The data these advocate for Rhapsody.

Speaker Change: We're not going to provide additional color on the composition of all the different users. Although we're really planning on leveraging new centers of excellence as the central hubs to lead these training throughout the year to really raise awareness and training around <unk>.

Craig Siegenthaler: Good morning, Doug Hope everyone's doing well.

Speaker Change: We wanted to circle back on your market share comments to Chris's earlier question, we can definitely keep the discussion more long term, but how is market share been trending in cash equities relative to your larger established competitors and also several newer entrants that look to be taking share.

Speaker Change: <unk> across the country.

Speaker Change: Yes, okay.

Speaker Change: As a reminder, Craig right that that 250 active physician advocates is an annual target rate just to make that clear.

Craig Siegenthaler: Yeah look it's a great question. These these.

Craig Siegenthaler: Obviously, the statistics are are public and some lag time I mean again I've said this for the last 10 years since we've been public we look at market share, but we try to optimize P&L against market share.

Speaker Change: Got it thanks for thanks, guys for taking the questions.

Speaker Change: Yep.

Speaker Change: Thank you one moment for the next question.

Craig Siegenthaler: We very easily could ratchet up a couple of hundred basis points market share, particularly.

Speaker Change: And our next question will be coming from the line of Jayson Bedford of Raymond James Your line is open.

Speaker Change: From some of the larger retail participants.

Craig Siegenthaler: That would cost us money.

Jayson Bedford: Hi, good afternoon, maybe just to pick up the loss.

Craig Siegenthaler: No.

Speaker Change: It doesn't seem to be a great reason to do that I mean look it's no secret that like Jane Street in Hudson River, two fantastic firms great competitors have joined the Fray of Wholesaling I think youll see from the chart, we've maintained our relative share there.

Speaker Change: <unk> lineup.

Speaker Change: Discussion the term physician advocate so still unclear is the inference here that the 250 physicians drive the $7 million to $9 million in revenue, meaning at $5800 Thats five to six procedures per physician.

Craig Siegenthaler: Share within within the group.

Jason Bednar: Yes, we're not going to get into that level of detail, Jason but you can take you can you can kind of consider those as kind of a train the trainer.

Craig Siegenthaler: And.

Craig Siegenthaler: Yeah.

Craig Siegenthaler: They've taken it from other competitors and citadel's given up a little bit so there's going to be ebbs and flows there again.

Speaker Change: As Caleb explained in his opening remarks.

Craig Siegenthaler: Again, we had a terrific quarter in retail so I'm very very confident with.

Speaker Change: But thats the best way to kind of think about it is those 250.

Speaker Change: Our being prep as trainers and advocates for the product.

Craig Siegenthaler: What we're doing the other thing I'll just.

Craig Siegenthaler: Note is that the volumes, particularly in the fourth quarter in U S. Equities have been all used to also use a strong word a little distorted by some of the gigantic volumes, you'll see in low price names and so the sub dollar stocks and I'm not suggesting that every company that trades under a dollar.

Speaker Change: Okay. So you expect to have more than 250 physicians performing.

Speaker Change: The procedure.

Speaker Change: And $25 is that right.

Speaker Change: I understand that okay. Okay.

Speaker Change: Okay, and then maybe for caliber of the group.

Speaker Change: The 95000 stent procedures.

Craig Siegenthaler: Sure.

Craig Siegenthaler: <unk> is a company that shouldnt be a public company, but indeed many of them are I mean, there's been some obvious fraud from Chinese companies companies that do 12357 reverse splits and we submitted a rulemaking request to effectively force New York and NASDAQ to list a lot of those companies in the meantime, and those are pretty unattractive.

Speaker Change: You mentioned what percent of those are inpatient outpatient slash ASC or OBL.

Speaker Change: Maybe I missed it sorry.

Speaker Change: Yes, four four.

Speaker Change: Referencing back to the <unk> report that we leverage and that's what we use roughly 79% of the procedures are done in the non hospital setting.

Craig Siegenthaler: <unk> companies for our spreads are a lot narrower because they trade sub dollar.

Speaker Change: Of that 95000.

Speaker Change: Okay perfect.

Craig Siegenthaler: It's a huge burden because the volume is significant we have to take the flow from our clients and so that will distort.

Speaker Change: And then <unk>.

Speaker Change: One of the potential limitations that Dr. Patel mentioned was just larger diameter sheets.

Craig Siegenthaler: Market share.

You just talked about the internal efforts to reduce or the ability to reduce the size of the ship.

Craig Siegenthaler: December guard, so frankly, if we could just ignore all of that direct and not have to take any of it and just allow it to go to an exchange we would but that's not the the deal that we have with our retail parties. So again I'm not suggesting in market share is completely unimportant I recognize that there is competition out there we continue to do.

Speaker Change: Yeah. Thank you for the question I think when we look at the sheer size and we took those four key features that we talked about.

Speaker Change: Really innovative features.

Speaker Change: One of our tradeoffs was French size, we do believe that through training that we are going to be able to overcome any hesitation you know as Fred said. This is the first of many things that we're looking at.

Craig Siegenthaler: Quite well.

Craig Siegenthaler: And continue to be the number two provider.

As we have been since we acquired Knight and <unk>.

Craig Siegenthaler: Marketable orders, which is kind of where we focus our time and energy.

Yes.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks, Doug just for my follow up I wanted to get a state of the union on the fixed income ramp I think it's roughly 12 months now since you broke into market access as leader board for the first time.

Speaker Change: Thank you one month to the next question.

Speaker Change: And our next question will be coming from the line of Michael <unk> of Barrington Research. Your line is open.

Speaker Change: Although you aren't a first mover in this business so where are you in the build out and also ability to move up into larger trades.

Michael <unk>: Hi, good evening.

Michael <unk>: This was sort of touched on but I guess I wanted to just drill down a little bit on on this.

Speaker Change: Yes, it's a great question.

Michael <unk>: Issues of Dr. Paul raised in terms of.

Speaker Change: I'm very happy with the progress we've made particularly.

Michael <unk>: The outpatient setting where he said choice of device uses extremely price sensitive I guess just relative to your your.

Speaker Change: In rates as much credit I mean rates is an exciting.

Speaker Change:

Speaker Change: Opportunity for us is fewer Q subs kind of feels more like a legacy virtu business a lot of it is.

Michael <unk>: Target targeted premium pricing, how did all of that sort of weigh in as you were thinking about.

Speaker Change: Electronic.

Speaker Change: It continues to be a significant opportunity for us we're now profitable in both of those businesses after fees and expenses, which is a huge thing I mean, it's not a cheap business to be in we ramped up hiring we've got significant distribution.

Speaker Change: Sort of the AFP and where you guys landed thanks, yes.

Michael <unk>: Yes look as you can imagine.

Mike: Mike We've obviously thought of all of the different.

Speaker Change: No pushback.

Speaker Change: That we could get specifically as our competitors go out there and try and create doubt on what is it just an excellent product.

Speaker Change: You do make the right point, though which is we have a.

Speaker Change: Opportunity to kind of move upstream and take more risk and take on bigger positions, which we're doing slowly I mean, we're an aggressive firm, but we're in incrementalism firm in the same way, it's kind of how we built the firm so I'm not going to go crazy.

Speaker Change: So.

Speaker Change: We feel comfortable in our pricing strategy, we feel comfortable.

Speaker Change: About the product and the technology behind it.

Speaker Change: And we feel we are well positioned with great technology strong clinical performance, which at the end of the day will drive patient outcomes and adoption and that we are confident.

Speaker Change: And.

Speaker Change: Ramp up beyond our capabilities don't forget also that those businesses tie into our ETF capabilities and leverage ETF capabilities, which are significant so I would highlight a lot of the progress that we made in Europe.

Speaker Change: Okay, Great and just a quick question.

Speaker Change: The second question in terms of success you guys might have with <unk> I mean, you sort of called out.

Speaker Change: In fixed income a lot of that's driven by our ETF business over there, but I'm very very happy with the product with the progress. We have made it's been overshadowed in a very very great way by crypto and ETF block in terms of our growth initiatives, but I wouldn't sleep on it is something that we continue to be excited about and I see a lot.

Speaker Change: Some specific names and groups Youre targeting I mean, as you get sort of wins you get.

Speaker Change: The ball across the goal line.

Speaker Change: Some of these organizations.

Speaker Change: Organizationally.

Speaker Change: Would that be like.

Speaker Change: Sure.

Speaker Change: Something on a conference call, where you would actually call out Hey, we've got atrium across the finish line or two.

Speaker Change: <unk>.

Runway for it.

Speaker Change: It's been a lot of interest in private credit and the growth of this and you look at these gigantic asset managers that effectively you have turned into global.

Speaker Change: We plan to update on that at all.

Speaker Change: That's a great question, but no we're not going to be updating the minute by minute wins.

Speaker Change: I can tell you that.

Speaker Change: Credit houses.

Speaker Change: <unk> often.

Speaker Change: We're excited about partnering with those folks going forward.

Speaker Change: We are focused on making sure that the adoption that we feel.

Speaker Change: Thank you.

Speaker Change: <unk>.

Speaker Change: Yes. Thank you.

Speaker Change: As required.

Speaker Change: Our next question.

Speaker Change: Wanted by this product.

Speaker Change: That's our focus and we're not going to play kind of minute by minute kind of updates on where we stand I can tell you. Okay. So.

Speaker Change: Our next question will be coming from Michael Cyprus with Morgan Stanley. Your line is open.

Michael Cyprus: Hey, good morning, Thanks for taking the question I just wanted to ask about single name options, just hoping you could maybe update us on the build out there how many symbols. It guys are active in making markets today across single names and how do you think about that expanding as you look out over the next year or two.

Speaker Change: Even on conference calls even on quarterly conference calls you wouldn't update yes, yes, we're focused on the seven to nine.

Speaker Change: Okay annual target and just look I think just as we said in our opening remarks, we're off to a great start we're getting great feedback there is a lot of excitement out there our salesforce is excited.

Speaker Change: Yes, it's a great question I don't know exactly how many names are and I'm looking at Andrew I mean, it's in the dozens and again, it's some of it's opportunistic like when the video is going Crazy, obviously youre going to focus on that.

Speaker Change: But for now.

It's early and it's safe and.

Speaker Change: We're focused on that seven to nine.

Speaker Change: Okay, perfect Congrats exciting times thanks.

Michael Cyprus: It's a little bit of a.

Michael Cyprus: The challenge right. Because every time you add more single names you need more cores and more gear because theres a lot of throughput and a lot of names. So we continue to grow that again at the same way I will answer I answered.

Speaker Change: Thank you.

Speaker Change: Thank you and one for the next question.

Speaker Change: And our next question will be coming from the line of David <unk> of Baird. Your line is open.

Craig Siegenthaler: The last question that Craig made around.

Michael Cyprus: Credit and rates, which is.

David: Can you hear me.

Michael Cyprus: We're in the business, we've invested we need to make meaningful additional.

Speaker Change: Yes, we got you great.

Michael Cyprus: Additional investments and hires in terms of technology. We're in the process of doing that we make money from single names are we at the end state not even close.

David: For a second.

Speaker Change: For taking my question and congrats on the progress here.

David: A lot of the feedback that we've had.

David: Uncovered so far here on this space. It does seem to suggest that if you have the ease of use clinical outcomes reimbursement all in place you know, it's something that some of these docs likely.

Michael Cyprus: We've made a lot of progress in India.

Michael Cyprus: This year.

Michael Cyprus: I'm sorry in 2024, and we continue to do that in 2025 so.

Michael Cyprus: Happy where we are today could we have gone faster and done more I don't know and we're balancing all of these different and juggling all these different priorities we have.

David: Would love to switch to or shift too.

David: Primarily utilizing reps at the end the vast majority of their procedures or having a bulk of their procedures being with a single product again, whether it's you guys or another player. When you think about the initial seven to nine for the year are you kind of expecting a broader increase in utilization across the.

Michael Cyprus: So again, we're the little engine that could and we continue to perform well.

Michael Cyprus: Great and then just a follow up question on private credit.

Michael Cyprus: Just curious how youre thinking about the opportunity set across potentially market, making and that asset class over time as the end market continues to grow money managers looking to bring some liquidity into the private market space to help expand and broaden investor access to the asset class just curious how youre thinking about that what steps are you taking.

David: Yes.

David: Activate a physician based or is this something where you could have a skew some some higher volume users.

David: And the rest of them kind of moving up the curve.

David: Yes.

Michael Cyprus: May or may not take how are you sort of assessing some of the hurdles how might that be overcome just curious your thoughts there.

David: We're not going to give that level of detail.

David: I appreciate the question again, we're focused on the 95000 <unk>.

Yeah look I mean, it's obviously gotten a lot of a lot of press and a lot of people are interested and we're talking with the big issuers and the Blackrock State Street will talk to anybody about it I mean look at it as a growing exciting area.

David: That are placed.

David: Our implanted.

David: Every year.

David: We think we have a good strategy of where we're going to attack first and go to market as Taylor mentioned, our team is ready and willing and we've got a great product and now we've just got to go out and execute and that's the focus right now is just execution.

Michael Cyprus: Where you have non traditional lenders the KKR is the the.

Michael Cyprus: Apollo's the Blackstone in all of these firms.

David: Our competitors can do whatever they're going to do.

Michael Cyprus: That are that have massive private credit businesses Aires et cetera, all of these firms that we know reasonably well.

David: We're focused on moving the ball.

David: Okay. Thanks, and then.

David: It relates to the existing kind of renal division that you have out there on the street today can you remind us I guess.

Michael Cyprus: At some point that all of those assets need to be velocities are tradable.

David: What the head count is for that group, but when you think about delivering something.

Michael Cyprus: I saw that they're going to start getting CUSIP, obviously there is.

Michael Cyprus: Operational issues, when you have private credit and how that can be transferred and things like that so again youll, probably see more index Z kind of products first as opposed to kind of single names, which again is right in our wheelhouse. So I think that probably develops first.

David: So the upper end, if not above that 7% to nine for the year and then even as you look into that to ramping that into 2026.

David: Is a lot of the upside or growth beyond 709, more baked on just increasing utilization per account for territory, where do you think you need to maybe invest.

Michael Cyprus: No surprise, we're working with the big issuers, who are working with the aforementioned large private credit houses.

David: Behind the head count.

David: To grow this thereafter 25, thank you.

Speaker Change: Is it something that we're going to see in the first second and third quarter of this year, probably not but theres a lot of really smart people.

Speaker Change: Yeah look we think we've got a solid group of RTG group right now in the U S has a total of 22 people on the commercial team that.

Speaker Change: That are looking at that asset class I don't know how many trillions of dollars. It is but I know, it's meaningful and they are looking at ways to tariffs how can they velocities that and we're going to be in that discussion. So again growth area for us can't put a.

David: That includes reps clinical and RVP.

Speaker Change: We think.

Speaker Change: As we scale that in its current format.

Speaker Change: One of the most dedicated RTG groups.

A pin on exactly when that's going to happen.

Speaker Change: Out there we know there are.

Speaker Change: Some pretty large competitors that we're going up against.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: And I'm showing no further questions I would now like to turn the call back to management for closing remarks.

Speaker Change: And.

Speaker Change: We feel that we've got a great product portfolio.

Speaker Change: And best Technology, and the Rhapsody Ci and that's all we can do for now.

Speaker Change: Thank you everybody for joining today, we apologize for the delayed start and we look forward to speaking with you in April Thank you.

Speaker Change: I think you've heard us say this Dave.

Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: David is we're not going to go out and spend ahead of <unk>.

Speaker Change: <unk> success, where we're going to let of course.

Speaker Change: But at the end of the day, we have a high level of confidence in the team that we currently have theyre excited about the product they are building relationships out there with doctors.

Speaker Change: [music].

Speaker Change: We have best in class technology.

Speaker Change: Thank you and we'll move to the next question.

Speaker Change: Yes.

Speaker Change: And our next question will be coming from the line of William <unk>.

Speaker Change: Canaccord Your line is open.

Great. Thanks, Good evening and thanks for taking my questions.

Speaker Change: Just the first question.

Speaker Change: You gave us your average pricing for wrap cie across the different.

Speaker Change: Mhm.

Speaker Change:

Speaker Change: [music].

Speaker Change: So point, what's a covered stent average pricing today.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: When you pull up the clarity data again, which is the reference point.

Speaker Change: We utilize obviously site of care is a big denominator in that but when we look at the coverage stent market. The average selling prices are right around that.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: <unk> 2420 to 2400 $2500 range.

Speaker Change: Okay, great. Thanks for that and then.

Speaker Change: In the 250 basically.

Speaker Change: Wells that you're targeting the trainers.

Speaker Change: Of the 95000 stents that are done today.

Speaker Change: What percentage are covered by those 250 docs is this like an 80 20 rule, where theyre doing most of them or how should I think about that.

Speaker Change: Youre good asking those questions Bill, but I think we're not going to get to that level of detail I. Appreciate the question, but thank you.

Speaker Change: That's fine.

Speaker Change: Appreciate that and then.

Speaker Change: <unk>.

Speaker Change: I think the last thing is just it looks like it's doing simple math that youre expecting to get about a quarter one in a quarter to one 5% to the market at the average ASP and whatever the procedures.

Speaker Change: As we talk about.

Speaker Change: I actually switched back as we talk about the reimbursement.

Speaker Change: TPG and tap to make the decision in June did those turn on July 1st August 1st September 1st I'm, just trying to figure out the cadence of your work and your push and Youre trying to get in there.

Speaker Change: When that reimbursement comes on I would imagine thats a huge influx your point so what when it turns on when would those July 1st stage on both of those or how should we think about that and as June the decision actual decision point on both of those or is there something else in between kind of as we go through the.

Speaker Change: Assess of getting and tap and TPG on and thanks for taking my questions.

Speaker Change: Yes, it's a great question.

Speaker Change: We will follow.

Speaker Change: We'll wait to hear back following the <unk> tap and TPG program their timelines.

Speaker Change: And when we hear of Bill Obviously award and effective date. The plan is around that Q3, 2025 timeline, but again, depending on site of care that is a variable factor that plays into it as well.

Speaker Change: But typically given what you know do you expect that to be a July 1st or is that like.

Speaker Change: September one.

Speaker Change: Don't know given the process I would imagine your consultants are at least advised on what is most likely yes, we expect to hear.

Speaker Change: The award if we get it in the effective date sometime in June no comment as to what date specific.

Speaker Change: A specific date will get it we know it will be sometime in Q3 of 2025, and I think thats a reasonable assumption that you can make.

Speaker Change: Okay. Thanks for taking my questions. Thank.

Speaker Change: Thank you good to hear your voice.

Raul Parra: Thank you. This does conclude today's Q&A session I would like to go ahead and turn the call over to Raul for closing remarks. Please go ahead.

Raul Parra: Just wanted to thank everybody for dialing in and we know it's a busy night Stryker has got their earnings call. Today. So just thank you for dialing in as you can see we are super excited about <unk> Cie. We're excited about our <unk> sales group and what they can do and the products in their portfolio again, we think we have the best product on the market with the best poor.

Raul Parra: Folio and the best sales team. So now it's just about execution and that's what we plan on doing here over the next.

Raul Parra: A year or so so hang tight.

Raul Parra: Thank you everybody have a good day.

Speaker Change: This concludes today's conference call. Thank you all for joining you may now disconnect.