Geographic Information and Business Segments

12 Months Ended

Dec. 31, 2019

Geographic Information and Business Segments

The Company operates its business in the U.S. and internationally, primarily in Europe and Asia. Significant transactions and balances between geographic regions occur primarily as a result of certain of the Company’s subsidiaries incurring operating expenses such as employee compensation, communications and data processing and other overhead costs, for the purpose of providing execution, clearing and other support services to affiliates. Charges for transactions between regions are designed to approximate full costs. Intra-region income and expenses and related balances have been eliminated in the geographic information presented below to accurately reflect the external business conducted in each geographical region. The revenues are attributed to countries based on the locations of the subsidiaries. The following table presents total revenues by geographic area for the years ended December 31, 2019, 2018 and 2017:



	Years Ended December 31,
(in thousands)	2019			2018		2017
Revenues:
United States (1)	$	1,146,104		$	1,644,641	$	791,044
Ireland	188,154			81,531		97,637
United Kingdom	(1,735		)	15,681		21,143
Singapore	109,761			136,161		113,891
Canada	49,666			—		—
Australia	34,933			—		—
Others	3,199			704		4,267
Total revenues	$	1,530,082		$	1,878,718	$	1,027,982

(1) Includes $337.6 million gain on sale of BondPoint for the year ended December 31, 2018 and $86.6 million gain on the reduction of the Company's tax receivable agreement obligation as a result of the decrease in the U.S. corporate income tax rate for the year ended December 31, 2017.

The Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate.

The Market Making segment principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker-dealers, banks and institutions. The Company engages in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, ECNs and ATSs. The Company is an active participant on all major global equity and futures exchanges and also trades on substantially all domestic electronic options exchanges. As a complement to electronic market making, the cash trading business handles specialized orders and also transacts on the OTC Link ATS operated by OTC Markets Group Inc. and the AIM.

The Execution Services segment comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker-dealers as well as technology services revenues. The Company earns commissions and commission equivalents as an agent on behalf of clients as well as between principals to transactions; in addition, the Company will commit capital on behalf of clients as needed. Agency-based, execution-only trading in the segment is done primarily through a variety of access points including: (i) algorithmic trading and order routing in global equities and options; (ii) institutional sales traders who offer portfolio trading and single stock sales trading which provides execution expertise for program, block and riskless principal trades in global equities and ETFs; and (iii) matching of client conditional orders in POSIT Alert and in the Company's ATSs, including Virtu MatchIt, POSIT, and MATCHNow. The Execution Services segment also includes revenues derived from providing (a) proprietary risk management and trading infrastructure technology to select third parties for a service fee, (b) workflow technology, the Company’s integrated, broker-neutral trading tools delivered across the globe including trade order and execution management and order management software applications and network connectivity and (c) trading analytics, including (1) tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance, (2) portfolio construction and optimization decisions and (3) securities valuation.

The Corporate segment contains the Company's investments, principally in strategic trading-related opportunities and maintains corporate overhead expenses and all other income and expenses that are not attributable to the Company's other segments.

Management evaluates the performance of its segments on a pre-tax basis. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the years ended December 31, 2019, 2018 and 2017 are summarized in the following table:



(in thousands)	Market Making		Execution Services			Corporate			Consolidated Total
2019
Total revenue	$	1,032,072	$	493,908		$	4,102		$	1,530,082
Income before income taxes and noncontrolling interest	109,189		(126,930		)	(98,241		)	(115,982		)

2018
Total revenue	1,384,475		496,333			(2,090		)	1,878,718
Income (loss) before income taxes and noncontrolling interest	422,648		325,043			(51,328		)	696,363

2017
Total revenue	836,707		99,135			92,140			1,027,982
Income (loss) before income taxes and noncontrolling interest	74,633		(12,519		)	51,050			113,164