Virtu Financial (NYSE:VIRT) reported what executives called one of the strongest quarters in the company’s history, citing favorable market conditions alongside continued investments in trading capital, technology, and hiring.
First-quarter results and segment performance
Chief Financial Officer Cindy Lee said Virtu generated Adjusted Net Trading Income (NT) of $12.9 million per day, totaling $787 million for the first quarter of 2026, which she described as the company’s “highest quarter total ever.”
Lee said Virtu generated $521 million in Adjusted EBITDA with a 66% margin and reported adjusted EPS of $2.24. Over the past 12 months, the company recorded $1.6 billion in Adjusted EBITDA, also at a 66% margin, and $6.66 in adjusted EPS. She said these figures represented highs since early 2021 and an all-time quarterly high for adjusted EPS.
Capital expansion, returns, and dividend
Chief Executive Officer Aaron Simons said Virtu is executing a growth plan centered on investing in infrastructure, acquiring top talent, and expanding its capital base. Simons said that over the last seven months, the company added more than $500 million in new trading capital while maintaining a return on total capital in excess of 100%.
Lee said invested capital stood at $2.6 billion as of March 31 and that the firm generated an average return of 107% on capital over the past year. She said Virtu plans to continue expanding its capital base and infrastructure and to deploy capital where it sees the best opportunities, while maintaining its quarterly dividend of $0.24 per share.
When asked how much the added trading capital contributed to results, Simons said the quarter should be viewed through the lens of increased capacity. He said, “You should think of this as what would’ve happened in the counterfactual world where we didn’t add $500 million of new trading capital,” adding that the firm’s profit and loss “would not have been what it was in the first quarter.” Looking ahead, Simons said the goal is to outperform prior results “in any environment” given the higher capital level.
Hiring, compensation, and investment priorities
On expenses, Lee said Virtu’s first-quarter cash compensation ratio was 22%, within the historical range, and she said compensation expense increased as the company focused on retaining and recruiting talent, particularly in trading and technology.
In response to a question about hiring, Simons said Virtu is actively recruiting across roles “in the continuum of trader to quant to researcher,” as well as engineers and software developers, while emphasizing the company’s “very high bar for quality.” He said the firm has made several key senior hires in the last six to seven months and expects headcount to approach 1,100 this year, though he noted it is not tied to a precise target. “For the foreseeable future, we’re gonna be pretty aggressively hiring,” Simons said.
Simons also addressed how costs could evolve. He said the first-quarter compensation accrual “reflects where we want to be,” noting the ratio can appear lower in strong revenue quarters. He added that the company has adjusted compensation upward slightly in recent quarters to attract and retain talent. On infrastructure, Simons said investment will continue, but he expects changes may not be immediately obvious in expense tables because the business already has a “very heavy capital expenditure profile.”
Co-President and Co-Chief Operating Officer Joseph Molluso said that if compensation ratios rise over time, it would be “deliberate and intentional” and, in management’s view, a sign the growth plan is being executed while paying “market comp or better than market comp.”
Market environment and business drivers
Molluso said the first-quarter operating environment was “very robust” and described Virtu’s growth focus as broad-based across asset classes and geographies, rather than tied to a small number of initiatives. He said while the company has previously discussed areas like crypto and options, the growth plan “isn’t limited…to a handful of narrower areas.”
Pressed on whether any specific areas drove outsized growth, Molluso emphasized that Virtu’s performance is “not solely based on retail investor participation,” though he said retail participation “remains strong” and the customer market-making business “has done very well.” He added that the firm saw “continued outstanding performance and growth” in what he called proprietary market making, and said headline volatility from exogenous events contributed to results, alongside “underlying growth” tied to long-term investments.
Goldman Sachs analyst Alex Blostein asked about a divergence between lower trading costs (including brokerage, clearing, exchange and payment-for-order-flow related line items) and higher trading results. Molluso said the drivers included attractive flow characteristics, strong performance in the retail-related business, and the firm’s diversified global and multi-asset market-making footprint. He said Virtu continues to seek lower execution costs and increased internalization where possible, but cautioned against reading the quarter’s divergence as necessarily “permanent or long-term,” describing some factors as environment-dependent.
On the second quarter, Molluso reiterated that Virtu does not comment month-to-month, but said that even if conditions are “more muted” than the record first quarter, that does not mean it “isn’t a very good environment.” He also highlighted execution services momentum, saying the unit has “truly grown through the cycle” across different environments and continues to benefit from client wins and cross-selling multiple products.
Execution services progress, AI, and other topics
Asked to elaborate on execution services, Molluso said the momentum reflects a multi-year integration effort since Virtu acquired ITG, including building a common technology platform and improving product penetration across a “blue-chip” global client list. He credited Stephen Cavoli and the execution services team for tying together offerings such as the Algo Suite, Analytics Platform, and EMS Triton. Molluso said the business has been rationalized and margins have improved, noting that when Virtu acquired ITG, it had a “mid-teens EBITDA margin,” and said the business is now “a multiple of that,” though Virtu does not break out EBITDA by business line.
On artificial intelligence, Simons said Virtu is exploring generative and agentic AI tools and believes they could enhance productivity for software developers, particularly by accelerating “boilerplate” work and assisting with explanations. However, he cautioned that Virtu’s technology stack and engineering standards make it unsuitable to introduce “technical debt” from what he described as “AI-generated slop.” Simons said it is “a little early” to quantify productivity impact, but he expects AI to have “a material impact” over the coming year or two. Asked about competitive implications, Simons said the term AI is “pretty overloaded” and noted that statistical modeling has been part of trading competition for decades, while he said he had “zero insight” into what competitors are doing with agentic AI.
Bank of America analyst Craig Siegenthaler asked whether strong results reflected changes in risk management. Molluso said there had been no change, adding that the elevated P&L was not the result of taking on more risk. “The risk profile of the firm has not changed materially,” he said.
Siegenthaler also asked why Virtu does not operate a hedge fund alongside its core business. Molluso said the firm is not currently contemplating launching a hedge fund and suggested peers with that model may have evolved differently. Simons added that Virtu’s strategies are “very high Sharpe, but capacity constrained,” and said acquiring large amounts of external assets could push the firm into “far lower Sharpe strategies,” potentially increasing earnings variability. Molluso added Virtu does not have the infrastructure to manage a hedge fund-style risk framework.
In closing remarks, Simons thanked participants and said the company would provide an update next quarter.
About Virtu Financial (NYSE:VIRT)
Virtu Financial, Inc is a technology-driven electronic trading firm and market maker that provides liquidity and price discovery across a wide range of financial instruments. Leveraging advanced analytics, high-performance computing and proprietary algorithms, Virtu operates in equities, fixed income, foreign exchange, commodities and derivative products. Its technology platform is designed to capture bid-ask spreads in real time, manage risk through automated controls and adapt to changing market conditions.
The company offers a suite of execution services and market-making solutions to institutional clients such as asset managers, banks, broker-dealers and hedge funds.
