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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2025, 2024, and 2023:
| Years Ended December 31,
| 2025 |  | 2024 |  | 2023
(in thousands) |  |  |  |  |
U.S. operations | $ | 792,839 |  |  | $ | 456,613 |  |  | $ | 248,987 |
Non-U.S. operations | 301,490 |  |  | 188,357 |  |  | 76,144 |
| $ | 1,094,329 |  |  | $ | 644,970 |  |  | $ | 325,131 |
The provision for income taxes consists of the following for the years ended December 31, 2025, 2024, and 2023:
| Years Ended December 31,
(in thousands) | 2025 |  | 2024 |  | 2023
Current provision (benefit) |  |  |  |  |
Federal | $ | 71,858 |  |  | $ | 52,009 |  |  | $ | 14,959 |
State and Local | 19,512 |  |  | 18,634 |  |  | 12,972 |
Foreign | 52,043 |  |  | 33,652 |  |  | 18,016 |
Deferred provision (benefit) |  |  |  |  |
Federal | 34,024 |  |  | 5,194 |  |  | 9,125 |
State and Local | 4,674 |  |  | 875 |  |  | 1,832 |
Foreign | (46) |  |  | 71 |  |  | 4,306 |
Provision for income taxes | $ | 182,065 |  |  | $ | 110,435 |  |  | $ | 61,210 |
A reconciliation of the provision of income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:
| Year Ended December 31,
| 2025 |  |  |  |
| (in thousands) |  | Percent |  |  |  |
U.S. federal statutory tax rate | $ | 229,809 |  |  | 21.0 | % |  |  |  |
Less: provision attributable to noncontrolling interest | (98,361) |  |  | (9.0) |  |  |  |  |
State and local income tax, net of federal income tax effects (1) | 24,754 |  |  | 2.3 |  |  |  |  |
Foreign tax effects |  |  |  |  |  |  |
Ireland | 17,428 |  |  | 1.6 |  |  |  |  |
United Kingdom | 16,246 |  |  | 1.5 |  |  |  |  |
Singapore | 11,589 |  |  | 1.1 |  |  |  |  |
All other jurisdictions | 6,734 |  |  | 0.6 |  |  |  |  |
Effect of cross-border tax laws | (50) |  |  | 0.0 |  |  |  |  |
Tax credits |  |  |  |  |  |  |
Foreign tax credit | (29,307) |  |  | (2.7) |  |  |  |  |
All other credits | (3,491) |  |  | (0.3) |  |  |  |  |
Nontaxable or nondeductible items | 285 |  |  | 0.0 |  |  |  |  |
Changes in unrecognized tax benefits | 10,014 |  |  | 0.9 |  |  |  |  |
Other, net | (3,585) |  |  | (0.4) |  |  |  |  |
Effective tax rate | $ | 182,065 |  |  | 16.6 | % |  |  |  |
(1) State and local taxes in New York and New York City contributed to the majority of the tax effect in this category. |  |  |  |
The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes for the years ended December 31, 2024 and 2023 is as follows:
|  |  | Years Ended December 31,
|  |  | 2024 |  | 2023
(in thousands, except percentages) |  |  |  |  |
Tax provision at the U.S. federal statutory rate |  |  | 21.0 | % |  | 21.0 | %
Less: rate attributable to noncontrolling interest |  |  | (9.0) | % |  | (8.7) | %
State and local taxes, net of federal benefit |  |  | 2.4 | % |  | 3.5 | %
Non-deductible expenses, net |  |  | 0.3 | % |  | 0.5 | %
Excess tax benefit (deficiency) from share based compensation |  |  | 0.1 | % |  | 0.3 | %
Foreign taxes |  |  | 5.2 | % |  | 6.9 | %
Foreign tax credits |  |  | (2.3) | % |  | (3.8) | %
Other, net |  |  | (0.6) | % |  | (0.9) | %
Effective tax rate |  |  | 17.1 | % |  | 18.8 | %
The components of the deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows:
| December 31,
(in thousands) | 2025 |  | 2024
Deferred income tax assets |  |  |
Tax Receivable Agreement | $ | 91,355 |  |  | $ | 114,402 |
Share-based compensation | 16,072 |  |  | 15,053 |
Fixed assets and other | 4,153 |  |  | 32,980 |
Tax credits and net operating loss carryforwards | 7,880 |  |  | 10,334 |
Less: Valuation allowance on net operating loss carryforwards and tax credits | (7,880) |  |  | (10,334) |
Total deferred income tax assets | $ | 111,580 |  |  | $ | 162,435 |
Deferred income tax liabilities |  |  |
Intangibles | $ | 19,158 |  |  | $ | 27,389 |
Fixed assets | 685 |  |  | 431 |
Total deferred income tax liabilities | $ | 19,843 |  |  | $ | 27,820 |
The Company is subject to U.S. federal, state and local income tax at the rate applicable to corporations for the share of income that is not attributable to the noncontrolling interest in Virtu Financial. These noncontrolling interests are subject to U.S. taxation at the partner level. Accordingly, for the years ended December 31, 2025, 2024, and 2023, the income attributable to these noncontrolling interests is reported in the Consolidated Statements of Comprehensive Income, but the related U.S. income tax expense attributable to these noncontrolling interests is not reported by the Company as it is the obligation of the individual partners. Income tax expense includes foreign, state and local income tax where certain of the Company’s subsidiaries are subject to corporate taxation. Included in Other assets on the Consolidated Statements of Financial Condition at December 31, 2025 and December 31, 2024 are current income tax receivables of $36.8 million and $13.2 million, respectively. These balances primarily comprise prepayments of income tax and income tax benefits due to the Company from federal, state and local, and foreign tax jurisdictions based on income before taxes. Included in Accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition at December 31, 2025 and December 31, 2024 are current tax liabilities of $37.8 million and $22.5 million, respectively. These balances primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes. Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the IPO (see Note 5 “Tax Receivable Agreements”), differences in the valuation of financial assets and liabilities, and other temporary differences arising from the deductibility of compensation, depreciation, and other expenses in different time periods for book and income tax return purposes. There are no expiration dates on the deferred tax assets. The provisions of ASC 740 require that carrying amounts of deferred tax assets be reduced by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically with appropriate consideration given to all positive and negative evidence related to the realization of the deferred tax assets. At December 31, 2025, the Company did not have any U.S. federal, state or local net operating loss carryforwards and therefore the Company did not record a deferred tax asset related to any federal net operating loss carryforwards. The Company has non-U.S. net operating losses at December 31, 2025 and 2024 of $46.8 million and $58.2 million, respectively, and has recorded related deferred tax assets of $7.9 million and $10.3 million, respectively. A full valuation allowance was recorded against these deferred tax assets at December 31, 2025 and 2024 as it is more likely than not that these deferred tax assets will not be realized. No valuation allowance against the remaining deferred taxes was recorded as of December 31, 2025 and 2024 because it is more likely than not that these deferred tax assets will be fully realized. The Company is subject to taxation in U.S. federal, state, local and foreign jurisdictions. As of December 31, 2025, the Company’s tax years for 2015 through 2024 and 2017 through 2024 are subject to examination by U.S. and non-U.S. tax authorities, respectively. In addition, the Company is subject to state and local income tax examinations in various jurisdictions for the tax years 2013 through 2024. The outcome of these examinations is not yet determinable. However, the Company anticipates that adjustments to the unrecognized tax benefits, if any, will not result in a material change to the financial condition, results of operations and cash flows. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income or loss before income taxes and noncontrolling interest. Penalties, if any, are recorded in Operations and administrative expense and interest received or paid is recorded in Other, net or Operations and administrative expense in the Consolidated Statements of Comprehensive Income, respectively. The Company had $19.2 million of unrecognized tax benefits as of December 31, 2025, all of which would affect the Company’s effective tax rate if recognized. The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of December 31, 2025. The table below presents the changes in the liability for unrecognized tax benefits. This liability is included in Accounts payable and accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.
(in thousands) |
Balance at December 31, 2023 | $ | 6,802 |
Decreases based on tax positions related to prior period | — |
Increase based on tax positions related to current period | 1,464 |
Balance at December 31, 2024 | 8,266 |
Decreases based on tax positions related to prior period | (5,533) |
Increase based on tax positions related to current period | 16,444 |
Balance at December 31, 2025 | $ | 19,177 |
The amounts of cash income taxes paid by the Company were as follows:
| Year Ended December 31,
(in thousands) | 2025 |  |  |  |
Federal | $ | 55,886 |  |  |  |  |
State and local |  |  |  |  |
New York City | 11,287 |  |  |  |  |
All other states | 7,783 |  |  |  |  |
Foreign |  |  |  |  |
United Kingdom | 22,007 |  |  |  |  |
Ireland | 13,981 |  |  |  |  |
All other foreign | 11,004 |  |  |  |  |
Income taxes, net of amounts refunded | $ | 121,948 |  |  |  |  |
Public Law No. 119-21, commonly referred to as the One Big Beautiful Bill Act (“OBBB”), was signed into law on July 4, 2025. The OBBB, amongst other things, extends permanently, with modifications, certain tax provisions enacted as part of Public Law No. 115-97, commonly referred to as The Tax Cuts and Jobs Act (“TCJA”). Certain domestic provisions have retroactive effects beginning in 2025, while the international provisions are generally effective for years beginning after December 31, 2025. The Company determined that the OBBB did not have a material impact on its Consolidated Financial Statements and related disclosures for the year ended December 31, 2025. The Company will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

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