Virtu Financial’s fourth quarter results reflect a 37% quarter over quarter increase in adjusted net trading income to $486m, adjusted EPS of $1.19 and adjusted EBITDA of $328.4m, Doug Cifu, CEO, said on the earnings webcast on February 8.
“It’s another strong year for Virtu,” commented Cifu.
In 2021, the firm achieved $1.9bn in adjusted net trading income, posted $4.57 in adjusted EPS and $1.3bn of adjusted EBITDA.
“Virtu enters 2022 in a better position than ever to capitalize on the secular and macro tailwind occurring around the globe,” Cifu said.
While the overall market environment was better in the fourth quarter than the third quarter, Cifu said he’s incredibly proud of how their results significantly outperformed the benchmarks, thanks to “enhancements within core market making businesses, growing adoption of execution services products and the continued success of growth initiatives”.
Virtu’s market making business produced $5.8m per day in the fourth quarter, almost 50% more than in the third quarter, despite volumes and volatility being 10% and 26% higher in a quarter respectively.
“Our strong performance was driven by several factors including the continued progress we have made on our efforts to improve internalization, which optimizes how we manage risk across the firm,” Cifu said.
Virtu’s execution services segment also performed well in the fourth quarter, according to Cifu.
The firm’s Options Market Making business continued to demonstrate strong performance as Virtu increased symbol and venue coverage and invested in growing the team.
Growing options capabilities remains a top priority for Virtu, according to Cifu: “We are investing significant resources to become a wholesaler for retail partners.”
The contribution from the capital markets business also set a new record in 2021.
“Issuers took advantage of healthy markets and Virtu’s trading capability. We recently expanded the capital markets to help us cover more issuers across the United States and Canada, as some support the growth of this business,” commented Cifu.
Cifu added that he continues to]be most excited about Virtu’s efforts with regard to becoming a “leading global market maker in crypto products”.
“Our crypto market making continues to accelerate as we allocate more traders and technologists to expand our activities across major venues globally,” he said.
According to Cifu, the company trades approximately 30 products in the US, Canada, Europe and Asia, including ETFs.
Cifu said the the firm continues to support the launch of a US base bought Bitcoin ETF for crypto. “We believe that our crypto market making will be a significant growth area for the firm for the foreseeable future.”
Cifu said that the company’s overall debt levels are at a sustainable nominal amount. The firm recently took advantage of market conditions to refinance its long term debt at attractive levels and extend the maturity of its term loan until 2029.
“Additionally, we opportunistically upsize our term loan by an additional $200m which we intend to use for general corporate purposes and to find additional buybacks,” he said.
Cifu said he’s excited for 2022: “We remain focused on investing and executing on the many growth opportunities in front of us,” he added.
“While we believe our results will continue to be somewhat variable, our growth initiatives and enhancements to our core business are raising the bar of our baseline performance in any environment and will continue to grow in the long term,” Cifu stressed.
