Q1 2025 Virtu Financial Inc Earnings Call

Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to Virtu Financial 2025 First Quarter Results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session, you would need to press store of 1-1 on your telephone. You would then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Andrew Smith, head of investor relations. Please go ahead.

Andrew Smith: Thank you, Michelle, and good morning, everyone. Thank you for joining us.

Speaker Change: Our first quarter 2025 results were released this morning and are available on our website.

Speaker Change: With us today on this morning's call, we have Mr. Douglas Cifu, our chief executive officer, Mr. Joseph Molluso, our co-president and co-chief operating officer, and Mr. Cindy Lee, our chief financial officer.

We'll begin with prepare your marks and then take your questions . . .

Speaker Change: First up your reminders. Today's call may include forward-looking statements which represent Virtu's current beliefs regarding future events and are therefore subject to risks of assumptions and uncertainties, which may be outside the company's control.

Speaker Change: Please note that our actual results in financial conditions may differ materially from what is indicated in these more important statements.

Speaker Change: It is important to note that any forward-looking statements made on this call are based on information presently available to the company and would you not undertake to update or provide any forward-looking statements as new information becomes available.

Speaker Change: We refer you to disclaimers in our press release and encourage you to review the description of risk factors contained in our annual report, form 10K and other public violence.

Speaker Change: During today's call, in addition to Gatmeters, we may refer to certain non-Gatmeters, including Adjusted Metrating Income, Adjusted Med Income, Adjusted Ebidot, and Adjusted Ebidot Martins

Speaker Change: These non-get measures should be considered as supplemental to and not as superior to financial measures as

Speaker Change: We direct listeners to consult the investor portion of our website, where you'll find additional supplemental information referred to on this call, as well as reconciliation of non-GAAP mentors to the equivalent gap term in the earning materials, with an explanation of why we gain this information, meaningful, as well as how management users speak mentors.

Doug: And with that, I'd like to turn this all over the dust

Doug: Thank you, Andrew, and good morning everyone. Thank you for joining us this morning. In my remarks today, I will focus on Virtu's first quarter, 2025 financial and business performance and strategic initiatives. Following my remarks, Joe and Cindy will provide additional details on our results.

Doug: This morning we reported $1.30 of normal IDPS on total adjusted net training income per day of $8.3 million. Hordley, Yvodav was $320 million and our Yvodav margin was at healthy 64 percent.

Doug: This represents our highest net trading income for decades in 2021 and reflects the continued long-term improvement of our core business as well as our expansion into new markets.

Doug: Market-making had its best quarter since the first quarter of 2021 2021.

Doug: Thanks to our continued enhancements, our receivables felt this was strong.

Doug: and our global non-customer market-making businesses continue to outperform our opportunity metrics.

In particular, are non-customer global equities?

Stinginal asset and ETS lock, market-making franchises delivered outsized performances.

Doug: This courted demonstrates the benefits of our global diversified market banking operations and highlights its ability to outperform separate and apart from the US retail wholesale business.

Thank you very much.

Doug: In addition to our non-customer marking making businesses in the U.S. Europe and Asian Pacific

Doug: We make markets and energy products like crude oil and natural gas, currency, digital assets, fixed income instruments, and a range of other commodities, including precious and non-precious metals, all of which perform well during the quarter.

Doug: We've continued to extend our listed options business at Asia, Indian and Japan, have expanded our coverage of tokens and venues and digital assets, and we are making strides in expanding our ETF block business in Europe .

Doug: In addition, we had an outstanding quarter in metals given the tumult around terrace, which has now been implemented

Doug: I point this out unwind the fact that while our business does benefit from increased retail activity in the United States, we are also broadly diversified and levered to increase volumes and volatility across asset classes and geometries.

Doug: In addition to the strong performance of our marketing-based businesses, the diverse strength of the firm was further evidenced by virtue of execution services, seventh straight quarter of the increasing net trading income, a trend which has persisted through a range of both favorable and less favorable operating conditions.

Doug: The VES suite of scale highly performing products has begun to resonate with our growing and impressive global buyside and sells on flight lists as they continue to make significant inroads through product penetration and cross selling.

Doug: We believe our VES business has significant room to run. Our product line is best in class and our position is rising on broker wheels.

Doug: with successfully rolled out Virtu Technology Services, or VTS, with more in the queue. We've deployed an agency-fixed income bar of Q-platform to a handful of clients, building a deal with that work of almost 20 brokers on top of our client connectivity.

Doug: In 2024, we delivered on our plan to significantly increase our sales prowess with a number of key virus. Further excelementing our growth in this space and the results have been noticeable.

Doug: In addition, Virtu Capital Markets, which has been a pioneer in implementing the market offerance for corporate issuers to raise capital is off to a great start in 2025.

Doug: What we call VES today is the combination of the Knight Execution Service business we required when we bought Knight and ITG's Global Execution Workflow Outlooks and Connectivity

Doug: Since acquiring those businesses, we've completely overwhelmed their respective technology platforms and upgraded the entire suite of products from our elbows, the positive alert, and our extremely valuable and download the app for class, workflow, and analytics products.

Doug: The market registration, the adoption levels that BDS has realized in today on the culmination of this hard work and our continued investments.

Doug: RVS products allow us to achieve deep integration to client workflows, resulting in growth of recurrent and reoccurrent revenue streets.

Doug: In addition to the technological and product enhancements, we have also streamlined their operations.

Doug: Would you not bring that bottom-line result to our segment reporting? I won't [inaudible]

Doug: Suffice to say our EBITDA margin on these businesses are substantially high, and depending on the importance as much as two types of more than when we acquire them.

Doug: Given the outline of improvements in this business and the outlook and recent performance, we do not see any reason why in the median term we can

Doug: Now let me comment on recent market activities. As you know, after the tariff announcements on April 2nd, global markets became extremely volatile. I want to make a handful of comments about the state of the market in our experience in the last few weeks.

Doug: First and very importantly, despite some stresses, the market infrastructure performed exceedingly well.

Doug: We saw no interruptions in our flow, no significant out of his or liquidity concerns among any of our counterparties, which include the most important clearing houses, prime brokers, retail brokers, banks, and training venues around the world.

Doug: This performance at the culmination of years of shoring out the financial market infrastructure and sensible and prudent regulation for which we have always been an advocate.

Doug: This reflects the lessons learned from prior market events and tireless have competition, makes markets better by driving brokers, ATSs, and exchanges to innovate and invest in their

Doug: A operational performance was outstanding. The past several weeks included the highest volume and volatility data in Virtu's history. On practice said that we had no counterpouring issues from a risk standpoint or operational issues that prevented us from servicing clients.

Doug: While nationally we had increased marginal requirements as we anticipated, our liquidity was more than sufficient to meet all associated obligations. Looking at retail participation.

Doug: As measured by retail shares and quoted spread, the first due week to the second quarter were well ahead of 2024 and the first quarter of 2025.

Doug: Indeed, a lot of times we saw retail participation at these levels with a pandemic day of 2020.

Doug: We remain as a best we have since 2020, very focused on long-term retail engagement.

Doug: Of course, broader market buy people come down, but the most recent elevated level says one would naturally anticipate. However...

Doug: If you look at the long-term trend of retail participation, we believe that the data showed the secular uptrend in retail engagement. In fact,

Doug: If you look at the 605 share volume and quoted spread over the last six years, you will notice that even after the heightened activity in 2020 and in 2021, the market settled well above its pre-pandemic hype.

Doug: We also know several market trends, including the strong new account opening figures from retail brokers that are indicative of the retail dissipation continuing a pace at the new baseline levels.

Farley, I can not!

Conclude with that time ending on our outlook, both near-term and low-term [inaudible]

Doug: without re-entering what I just said a few minutes ago. Virtu was built.

Doug: They highly diversified market-making business and further diversified its business with the growth of the execution services businesses.

Doug: The current environment is favorable for both our customer and non-customer market-making businesses and our execution services business as well.

Doug: This has also been an excellent environment for our grown-up options business, digital asset business, as well as our ETF block business, which in recent days has handled a record number of

Doug: and Broadstrokes are brought to Japan by three key forces. First, short-run on edge and better transfer opportunities within our existing businesses.

Doug: Second, extending our exchange to new products and markets, which themselves are expanding.

Doug: such as the Electronification of the 60th time and the growing adoption of digital assets and ETFs abroad. And third, we benefit from the broader tailwinds that Mark and Barnes and Balophilis ride thanks to our diverse global multi-acti-class market-making execution services platform.

Doug: which enables us to participate in both short and long-term trends wherever and whenever they emerge importantly the first two drivers are within our control

Doug: Howard Barrett, Execution Innovation and Strategic Investment, regardless of how favorable we're challenging the external environment it may be. I think especially in times like these for our business, it's important to put these things into perspective and know how expansive Virtu's business has become over the years.

Andrew Smith: With more on this point, I'd like to turn conversation over to John Molluso from more commentary. Joseph?

Joseph Molluso: Thank you. We thought it was an appropriate time to revisit briefly some analysis we had included in our supplement materials and on our investor website in the past that are meant to provide some long term perspective on virtue and how we have grown business.

Joseph Molluso: in a deliberate way over the years. So first, on slide data, the supplement of materials.

Joseph Molluso: We went back to our IPO 10 years ago and arrayed this data from 2015 until the first quarter. And despite the inherent volatility in our business, there is a clear up until the right skew to our results.

Joseph Molluso: The next slide on page 9 is revisiting some perspective on how to analyze a bottle business, such as Virtu. The top of the page shows a sensitivity analysis based on adjusting the trading income and the resulting EPS.

Joseph Molluso: We introduced the sensitivity analysis about five years ago and have been able to realize results that are consistent with this analysis due to the rigor we have around cost and capital

Joseph Molluso: Things we can control are supposed to be operating environment, which we obviously can't control.

Joseph Molluso: Our average daily performance and net trading income going back to 2019, which was the first year after the ITG acquisition has been 6.3 million per day.

Joseph Molluso: So, through this cycle, throw the ups and downs of a different market cycle that are a median performance trend in place into $6.3 million per day which extrapolate from the chart is $3.40 of adjusted EPS.

Joseph Molluso: So we have real broken operating model as demonstrated over the long term which we are accelerating through our organic initiatives as seen in the middle of the slide

Joseph Molluso: Now we're going back to what Doug said in this prepared remarks while our business is volatile, we believe that pieces are in place to continue growing as we further enhance our capabilities and as we extend our abilities to new products and markets.

Joseph Molluso: As he mentioned, we believe the ES could be a two million dollar per day business through the Cyprys.

Joseph Molluso: And to that, the variable yet continuing contribution of our non-retail wholesaling business, and this means you should be able to raise the bar around cyclical troughs over time [inaudible]

Joseph Molluso: The final component of this plan is our continued share by that. The top line growth we have realized is significant and in the answer is at our bottom line, given our operating left.

Joseph Molluso: I will share by back programs and I will continue to compound this earnings growth.

Joseph Molluso: If you have a desire to look at two to three years...

Joseph Molluso: And even if you conclude that our business will continue to evolve and produce a drop a year in a given cycle, the cumulative impact of the share buy-backs is profound, baking in meaningful growth on top of any organic growth assumption you contemplate.

Speaker Change: And with that I'm going to turn the call over to our CIFO, Cindy Lee.

Cindy Lee: Thank you, Jones, for letting everyone on slide three of our supplemental materials, we provided a summary of our quarterly performance

Cindy Lee: For the first quarter of 2025 are adjusted by trading income or ANT, which represents our trading expenses. None of the retreating expenses totaled $490 million.

Cindy Lee: or $8.39 per day. Mark in making a jump in that trade income was $382 million, or $6.4 million per day.

Cindy Lee: Execution Services, Adjustment Mentoring Income, was $115 million, or $1.9 million per day. Our first quarter of 2025 normalize adjusted ETS with $1.30 ETS.

Cindy Lee: Adjustee Vidal was $320 million for the first quarter of 2025, and our Adjusted Edit out margin was 64%.

Cindy Lee: On slide 12, we provided a summary of our operating expense results for the first quarter of 2025. We reported $193 million of adjusted operating expenses. We continue to maintain a sufficient cost structure and discipline expense benefits.

Cindy Lee: which has helped us to control our operating expenses during an inflationary environment.

Cindy Lee: Finding Singh's interest expense was $30 million was first quarter of 2025. With the benefit of our race and refinance and the interest rates of all contracts that we've entered in the prior year, our blended interest rate was approximately 7.1% for our long-term debt in aggregate.

Cindy Lee: In Q1, we use the portion of our free cash flow to repurchase 1.3 million shares, an average price of $36.44 for shares, or a total of $48.0.

Cindy Lee: To date, we have been purchased over $52 million shares and an average price of $25.85 for a total of $1.4 billion dollars.

Cindy Lee: Polaroid Share Account was 160.2 million shares outlanding. Since we initiated our Share Repurchase Program, we haven't purchased over 18.9% of fully diluted shares of Virtu, and that's after new assurances.

Cindy Lee: We remain committed to our 24-cent report of dividend and combined with our share repurchase program. The industries are continuing commitment to return capital to our shareholders.

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

Speaker Change: Thank you. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.

Cindy Lee: To withdraw your question, please press star 1-1 again. We do ask that you please limit to 1-1 question and 1-1 follow up.

Speaker Change: And our first question is going to come from Chris Allen with City. Your line is open.

Good morning, everyone. Thanks for taking my questions.

Speaker Change: maybe just to start out on the marquee making an NTI, helpful comments just around the retail sustainability. But maybe when we think about it from a year of year perspective, looking at the growth there, 40% year of year.

Speaker Change: Can you help us think about what the balance between the wholesale business and the on exchange business?

Speaker Change: Was there about opportunity with their skill and also the contribution from the New Organic Growth Initiative, just to help people think about the sustainability of the overall complex moving forward.

Speaker Change: Yeah, and thank you. It's a great question, Chris. And obviously we've tried to be...

More front-footed about our views of sustainability and the...

and the cyclicality, if you will, of the retail business.

Speaker Change: Yeah, we obviously, you know, don't break out customer versus non-custom marketing, and part of that is obviously it's a little bit.

Speaker Change: competitive, but it's also the businesses are not as separate and distinct as you would think.

Speaker Change: We've done a lot of great work over the last seven years and certainly within the last two to three years in terms of actually

Speaker Change: Making the business work quite well together, we've done an assessment amount there, I guess success is a wrong word, an incredible amount of internalization between the various trade groups that involves the customer business and creating an internal central risk book of businesses

Speaker Change: So the increase from Q4 to Q1 was pretty diverse and pretty evenly allocated, if you will, between the customer and non-customer businesses. So wasn't as if we had some burst of activity.

Speaker Change: in January , February and March in order to cut the mark of making segments.

Speaker Change: as opposed to the non-customer warrant for making business advice. I noted it in the comments.

Speaker Change: We had some really good days in our precious and non-precious metals business because of the fear of tariffs which came to be, particularly a copper, a silver, flatland blade, our options business that stayed exceptionally well in the block UCF business.

Speaker Change: which both is responding to anonymous or accused, but also handling worker-waters from customers did exceptionally well. So I would say overall that the businesses were quite balanced and we're trying to emphasize.

the Global Diversification and Asset

Speaker Change: to scale this business. I mean, obviously, we don't run away from our selflessness. It's a great business. We inherited it from Nate and we have improved it dramatically. We've integrated it with all of the other great things of

that Virtu had.

Speaker Change: and it continues to grow and integrate with all the product areas that we are.

Introduction

Speaker Change: You know, having the ability to market make that a non-customer side just makes our edge a lot more impressive. Joe's one-ass account. Yeah, I just wanted to frame to just underline what did you say Chris in the question.

Speaker Change: when you sent into the wholesaling retail business and then on exchange, right?

Speaker Change: So we don't think about it as off-exchange, on-exchange. We think about it as the retail wholesaling business and then the non-customer business is done set. So it's really, it is...

There is the equity component to it. [inaudible]

Speaker Change: But there's a U.S. and non-US equity component, pretty much all the growth initiatives, options, E.T.L. Block.

You know, crypto [inaudible]

Speaker Change: He's calling for customer versus non-customer. And obviously you know this, but he multiplies a lot of questions.

Thank you. Thank you.

Speaker Change: appreciate that. And just on my one follow up, just a kind of noted continued improvement against the opportunity set. So where are we kind of that continuous improvement? I realize that you have a lot of different areas you can...

kind of tighten it, tighten the dials on. Do you still see room in, like how does how does it, um

Speaker Change: How does it stand out and kind of the current environment when things, when obviously spreads wide and out more just as the environment or just you see, you actually realize increased efficiencies would the environment as well.

Speaker Change: Yeah, I mean, it's a really good question and we measure it, you know, in markets that are more benign in markets that are obviously heightened and you're right, like during times of volatility, particularly last couple weeks you see people with high urgency, so there's obviously a lot more spread crossing flow again.

Speaker Change: in a new bonnet for Martin Baker, but just in terms of absolute…

Speaker Change: and I sort of make this point in my prepared remarks and that's sure we're very focused on new areas like option GTS block, crypto, fixed income, but there's a continual and a lot of work being done to more of our, I guess I'll pull them more legacy businesses.

where we've become...

Speaker Change: Just better and more performant. We've added strategies and predictors within our customer marketing segment. We've made our non-pustomer global equities.

Speaker Change: Mark Amazing Business is more efficient. I can't overemphasize. That business is a single unit service forever. It really goes back to the DNA of Virtu Financial. We're a single firm. We don't kind of train pods. We don't give out, you know, train guarantees. We don't aim people based on books.

Speaker Change: So, this is an enormous amount of collaboration within the firm and that allows for internalization, which does a couple things that obviously makes you...

Speaker Change: So by definition you're going to be more profitable, but it also enables you to execute without having to expose your intentions to the marketplace so you can be more aggressive, taking larger blocks [inaudible]

Speaker Change: and provide better two-sided pricing to your clients. So that's a key key element to our success, and it was a big contributor in the first quarter.

Speaker Change: Thanks guys, appreciate the car and good luck and playoff stuff.

Thank you very much.

Speaker Change: And the next question comes from Dan Fannon with Jeffries. Your line is open.

Dan Fannin: Thanks. Good morning. I wanted to come back to the 2 million per day in the VES business. You know, kind of what gives you that confidence to say this now? You talked about a lot of diversity of products and hiring some [inaudible]

Speaker Change: I guess where the momentum is, if you could be a little more specific in terms of that business, and as you think about it, it's just more cross-selling, more of the same, or there are more things on the conum that you expect to roll out.

Speaker Change: Thank you, Daniel. We don't typically give forecasts or talk about numbers like that, so we have a high degree of confidence based on a lot of the work that's deep

Speaker Change: You know, five, six years since we had fire at ITG and integrated, and this was really the road map that we tried to lay out in 2019 when we made the decision strategically to become bigger in an execution service.

Speaker Change: segment, and it's really a number of components and that adds up so it's just a bunch of signals so it's our Virtu Technology Services platform. Roll it out to...

Speaker Change: Small to mid-size broker dealers that need a technology solution, and even asset management need the technology solution. We've seen a huge adoption of that.

Speaker Change: You're right, there's a great deal of cross-selling, if someone's going to take our front-to-earth global elbow product, they very often will take an analytics product and then we try to sell them, trade their execution management system.

Speaker Change: We've made a huge amount of enhancements and improvements to our workflow solutions and analytics solutions since the acquisition of ITG, essentially re-platform those and change the gut system so they're a lot more performant.

Speaker Change: in regular times and in bursts. We had, you know, I did hear a single complaint about Triton during this recent April .

Speaker Change: I'm sure there were some, but we handled them, but there was no systemic global issues, and that's a huge improvement and we've made those products multi-astid class.

Speaker Change: We are a big believer in distribution partnerships, so we're kind of agnostic. We're happy to have partner of self-styled firms, what label are products.

Speaker Change: and the technology provider. And in addition, we've made a number of product enhancements. For example, we've got this great switcher Algo product, which is effectively like an Algo product that uses real high level machine learning and some artificial intelligence to

Speaker Change: We have an agency RFQ product now in 16th home, which was something that the Marshall Place was asking for. And as I mentioned earlier, we have multi-acid-class track analytics products. So you can go to a large asset management and say, hey, we can be a one-stop solution.

Speaker Change: for your credit traders, your equity traders, your fixed income here, excuse me, your tax traders, and so all of those...

Speaker Change: Give us a conference, if you want, and a result.

Speaker Change: or in the proof is in the pudding. And on top of that, you know, once we made a number of cultural changes shall I say within that business segment, we've really done a terrific job. Again, I get speed-provolly and the guy for a lot of credit.

by having a number of strategic cars. This is ultimately...

Please stand by one moment.

Speaker Change: We are having a technical difficulty, so please stand by for one moment.

Sean Galvin, Douglas Cifu, Joseph Molluso, Sean Galvin, Andrew Smith

Thank you for joining us.

and others.

Speaker Change: Please stand by for one moment. We are experiencing a technical difficulty, so please stand by.

[inaudible]

Andrew Smith: Andrew. Are you ready to continue, sir? Yeah, where did we drop?

Thank you.

Dan Fannin: It looks like that you were answering a question for Dan Fannon.

Yeah, okay, thank you. Are we back live?

Dan Fannin: Yes, we are. Okay. Dan, I think I was pretty much done going through the four, five, six...

Speaker Change: Elements, I hope I answered your question, I don't know if you had a follow-up [inaudible]

Dan Fannin: Yeah, no, we got most of that, so I appreciate it. Just as a follow-up, there obviously is a bunch of debate around the sustainability of retail and you talked about what's been happening more recently. Just want to make sure that there's nothing you're seeing.

Dan Fannin: You know, from the flow or other parts of the market that would, you know, basically support this idea that retail is slowing or has the potential to slow in the short term. [inaudible]

Dan Fannin: No, it's a good question, obviously. We tried to be front-footed and address it not only in the script, but we provided it in the supplemental materials.

You know, data and the data that some lie.

Dan Fannin: You know, sure, you'll have, as you will in non-customer segments, you'll have surges of interest, but you know, we've seen retail hasn't pulled back, we've seen a very healthy and sustainable level of retail engagement.

Dan Fannin: You know, if you look at slide seven, you can see that, you know, the, you know, the baseline has elevated and indeed, you know, the key retail brokers have indicated that their account openings have continued to grow with pace.

Dan Fannin: You know 10 billion shares of retail come into the market in other days where there's two billion but at the end of the day the long-term positive trend here has continued I think the data is very very clear I mean that we provided in the supplemental materials so I think

Speaker Change: That narrative is frankly just incorrect and is not supported by the data.

Thank you.

Thank you.

Speaker Change: And the next question will come from Ken Worthington with JP Morgan. Your line is open.

Hi, good morning. Thanks for taking the question.

Speaker Change: I wanted to maybe start on, I guess, what I'll call the core non-customer market-making business and was hoping to get more color in terms of...

Speaker Change: You know, to what extent that that business is sort of building and growing?

Speaker Change: So, if possible, you know, are you adding new symbols, new exchanges? Is it more headcount? Is it additional capital? Are there other things that are getting the baseline in that business to grow?

Speaker Change: or should we really just kind of go back to the other businesses that you talked about and focus on the growth in VES and the customer business, etc.

Speaker Change: Yeah, yeah, it's a great question. Obviously we struggle to provide as much information as we possibly can to you all to validate that.

Douglas Cifu, Joseph Molluso, Sean Galvin, Andrew Smith

Speaker Change: a future or an equity in digital assets and whatnot.

Speaker Change: and so we score ourselves every day and I was very clear on remarks that we outperformed in just about every non-customer market-making segment that I can think of and that is really the culmination of a couple of things. One obviously is...

Speaker Change: Not only in latency in terms of execution, but through a part of market data and connectivity that we are there.

Speaker Change: In equities, you know, there's not only now 15 asks in the United States, there's 15 national securities exchanges, there's

Speaker Change: 40 odd ATSs that were connected to that we do quite well on and we run a very significant single-dealer platform and so...

Speaker Change: You know, streaming directly to customers and making sure that you manage toxicity of the company.

Speaker Change: and provide good execution quality to those customers. That's something that we strive for and continue to improve on. And then lastly, I've mentioned it now, three or four times. It's enhancing internalization within the firm.

So it's hard to underestimate that.

How important it is and how vibrant [inaudible]

Speaker Change: I'll call our legacy businesses are. And over the last four or five years we have seen a continual shift to the right of those businesses in the aggregate. Sure, some will have better days, weeks, months, quarters, and years than others.

Speaker Change: But the notion that somehow those businesses are diminishing or not growing is not correct, so we're very...

Speaker Change: very focused on continuing to diversify our revenue streams. Then add on to that obviously some of the new issues around options and

Joseph Molluso: and ETF Block, which has grown pretty dramatically in digital assets. Joe, I don't know if you wanted to answer that. No, that's not, I mean, your question can, you know, what do we, you know, with new products, new markets, I mean,

Speaker Change: Pretty much everything that we describe or have described in the past as an organic growth initiative is in this cap-non-retail category.

ETS Block, Digital Assets Option

Thank you.

Great, thank you very much [inaudible]

Thanks again.

Speaker Change: And the next question comes from Craig Siegenthaler with Bank of America. Your line is open.

Speaker Change: Good morning. Thanks for taking the question. This is Eli on for Craig. Can you update us on the product road map for your crypto business? Specifically, what exchanges are you providing liquidity on today, for what coins, and then how is that going to build out and expand over time?

Speaker Change: Yeah, sure. I'm going to try to be as specific as I can. I'm not the youngest guy in the world, so I can't keep track of all these [inaudible]

Speaker Change: have a better handle on them. I mean, a lot of it really has been driven by our partners. So...

Speaker Change: As you know, we're an investor in EDX. EDX has asked us to expand our coverage both in terms of coins and in terms of ours, so we are now a 24 by 7 firm. You know, we're doing a lot more than the big.

3, so it's more than Bitcoin and Ethereum and Solana. We're doing about a dozen or so coins moving to close to two dozen. We won't go far out on the queue and do some of these.

Speaker Change: I'll call him fococked, you know, one-off meme coins because those don't seem appropriate, but anything that EDX and other partner firms like Coinbase...

Speaker Change: Bullish, trying to think the other venues were connected to Binand. I'm sorry? Yeah, so, okay, X, Andrew's updating me here, what other venues are we connected to? Okay, X, buy the crack-in. Right, there you go, in addition, we have now...

Speaker Change: More of what I will call the institutional business, so streaming directly to buy side firms either through our own APR, you're using the auspices of one of the aforementioned exchanges.

Speaker Change: And then the last thing is, this business is a multi-acid class business if you will, a multi-product business because you know every day you turn around there's a new ETF that's about to be launched here in the United States thankfully.

Speaker Change: You'll have levered and inverse products and then you'll have options on those products [inaudible]

Speaker Change: We see the same thing in Europe , in Canada, a little bit of Brazil and in Asia as well and then there's perpetual futures as well that like EDX has launched for example on these products so think of this as

a multitude of coins.

Speaker Change: ETF products globally, futures products both listed and perpetual futures on other platforms, and then on top of that...

Speaker Change: We will offer a single-beal institutional streaming as well. So we are, I would say kind of in the second inning, if you will, of a 980 game of building that out. We're happy to be a wholesale crypto liquidity provider, and so, you know, this is going to be no different if you will from...

Speaker Change: or FX or other businesses that we've built out over the years. And the last thing is to the extent there's institutional support for this business, there's no reason we couldn't support digital asset products and we already have a roadmap for this.

Speaker Change: to the extent this, and investor demand on our Triton product, right? So,

Speaker Change: traders could access markets through our execution management system, and we're more than happy and prepared to have execution service algos to support them. So this is truly a product or an asset class, if you will, that spans the firm.

Speaker Change: Thank you. And for our follow-up, there has been some news flow about you guys getting new competition and Virtu technology services with Social Security and Jane Street both also looking to do more of that sort of outsourced trading business with Social Security firms.

Speaker Change: Can you talk a little bit about how you're offering stacks up against these competing solutions being rolled back?

out by your competitors.

Thank you. Thank you. Thank you.

Speaker Change: Yeah, yeah. It's a really good question. Look, I mean, Citadel and Jaina are both terrific firms run by great people and we're frenemies, I guess, because we collaborate on exchanges and regulatory matters, so I have nothing but respect for both of those firms and their leadership. I've said that many, many, many times. I think it's a very different product offer. Their offering is more of a white label, RFQ product. It's a very different product offer. It's a very different product offer. It's a very different product offer.

Speaker Change: that connects to like a bank partner and will provide them with liquidity that their partner then kind of repackage mark-up and share with their clients.

Speaker Change: That's a great business. It can be focused on like maybe one or two larger dealers.

Douglas Cifu, Joseph Molluso, Sean Galvin, Andrew Smith

Speaker Change: for smaller regional broker dealers and asset matters and it's got, you know, it's more commoditized and it scales exceptionally well. And the benefit of that, obviously, is you have a larger addressable marketplace. It's more of a commoditized product that's easier to get out there and it's easier to support.

and he provides us the benefit of being able to…

Speaker Change: If we choose, and obviously we generally choose, to be a liquidity provider with respect to that broker dealer. But again, we're going to be Switzerland. So we're going to allow them to access, if they want to access Citadel, Jane Street, Hudson River, and all these other great firms.

Speaker Change: You know, that's that's their prerogative will be a you know liquidity provider on a wheel, but it's really empowering

Speaker Change: firms that don't have the resources that we do in order to execute

Speaker Change: to provide that capability to their end users as opposed to like a single large partnership. So I think it's...

Speaker Change: It's a very, very different approach and a very different philosophy and that's how I would distinguish it

out of thank you.

Thank you.

Speaker Change: I am showing no further questions at this time. I would now like to turn the call back over to Doug for closing remarks.

Speaker Change: Thank you everybody for joining us today and we very much look forward to addressing the second quarter in July of this year. Thank you everybody.

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

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and many more. Thank you. Thank you.

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Douglas Cifu: Michael Cifu, Andrew Smith, Christopher Allen, Craig Siegenthaler

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