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ITG Reports First Quarter 2004 Results

NEW YORK, NY, April 29, 2004 - Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based equity trading services, today announced that for the first quarter ended March 26, 2004, revenues were $77.6 million, net income was $8.3 million and diluted earnings per share were $0.19, an increase of 6%, 27% and 36% respectively versus the first quarter of 2003.

ITG recognized tax benefits from certain capital loss carryforwards, in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which yielded a $0.6 million improvement to net income in the first quarter.

For the company overall, revenues per trading day in the first quarter of 2004 for POSIT, the Electronic Trading Desk and Client-Site Trading Products grew 9%, 1% and 12%, respectively, versus the first quarter of 2003. Revenues per trading day for POSIT and the Electronic Trading Desk were down 5% and 7%, respectively, while Client-Site Trading Products experienced a growth of 20% versus the fourth quarter of 2003. Canadian direct access trading revenues (approximately $30,000 per day in the first quarter of 2004), previously included in the Electronic Trading Desk, are now being reported within Client-Site Trading.

"Our two new Client-Site Trading Products, Radical and Triton, are performing very well and satisfying our clients' increasing appetite for direct access trading," said Robert Russel, ITG's President and Chief Executive Officer. "In the ten months since we launched Radical, Client-Site revenues at our Hoenig division have grown to $3.0 million last quarter. We have a tremendous opportunity to continue growing our market share in electronic trading and our ongoing R&D investment ensures that Radical and Triton offer some of the best functionality, flexibility and connectivity in the industry."

ITG's international business posted strong revenues in the first quarter, aided in part by the weakness of the U.S. dollar. International revenues for the first quarter were $16.9 million, a $4.8 million (or 40%) increase over last year's fourth quarter, with $2.2 million of this growth due to currency fluctuations. Consistent with prior guidance, the international business posted a pre-tax loss of $0.1 million, an improvement of $2.6 million from the first quarter of 2003, but a decline from the nominal pre-tax profit achieved in the fourth quarter of 2003. Pre-tax results were not affected by currency fluctuations.

"While growth in our European operations slowed as expected this quarter, the international business as a whole continues to post strong results, including record pre-tax profits in Canada," said Mr. Russel.

In the U.S., ITG's trading volume for the first quarter of 2004 was 4.8 billion shares (averaging 80.7 million shares per trading day) compared to 4.6 billion shares in the first quarter of 2003 (averaging 76.6 million shares per trading day) and 5.3 billion in the fourth quarter of 2003 (averaging 80.4 million shares per trading day).

For ITG overall, pre-tax margins for the first quarter were 17.9%, up from 16.7% in the first quarter of 2003.

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss first quarter results. Those wishing to listen to the call should dial 1-800-589-4298 at least 10 minutes prior to the start of the call to ensure connection. A listen-only webcast will also be available ITG's website at http://www.itginc.com/investor. For those unable to listen to the live broadcast of the call, a week-long replay will be available by dialing 888-203-1112 and entering the pass code 463620, and a two week-long replay will be available on ITG's website starting approximately 3 hours after the completion of the call.

About ITG

ITG is headquartered in New York with offices in Boston, Los Angeles, Dublin, Hong Kong, London, Melbourne, Sydney, Tel Aviv and Toronto. As a leading provider of technology-based equity-trading services and transaction research to institutional investors and brokers, ITG services help clients to access liquidity, execute trades more efficiently, and make better trading decisions. ITG generates superior trading results for its clients through three lines of business. POSIT, the world's largest equity matching system, allows clients to trade confidentially. The Electronic Trading Desk is recognized as one of the leading program trading operations in the U.S. ITG's leading-edge Client-Site Trading Products allow users to implement their own trading strategies by providing direct electronic access to most sources of market liquidity. For additional information, visit http://www.itginc.com.

In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors; rapid changes in technology; financial market volatility; general economic conditions in the United States and elsewhere; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and other documents filed with the Securities and Exchange Commission and available on the company's web site.

Click Here for Financial Information

Contacts:
Howard C. Naphtali
Chief Financial Officer
(212) 444-6160

Elise Wilkinson
Investor Relations
(212) 444-6245

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