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ITG Reports Record Revenues For Second Quarter

NEW YORK, July 18, 2001 -- Investment Technology Group, Inc. (NYSE:ITG), a leading provider of technology-based equity trading services, today announced that for the second quarter ended June 30, 2001, revenues rose to a record $94.9 million, a 14% growth compared with the same period a year ago, net income increased 8% to $19.1 million and diluted earnings per share increased 5% to $0.59 compared to $0.56 in last year's second quarter. Excluding international operations and a non-operating gain in last year's second quarter of $0.04 per diluted share from the sale of shares that ITG held in Versus Technologies Inc., ITG's diluted earnings per share for its core U.S. business were 69 cents, a 19% increase over comparable year ago results.

Average daily revenues were $1.5 million, a 14% growth vs. the comparable quarter in 2000 and a 2% growth vs. the trailing quarter. Compared to the second quarter of 2000, average daily revenues increased 28% in Client Site Products, 36% for the Electronic Trading Desk and 6% for POSIT®, ITG's electronic crossing system.

ITG's U.S. trading volume for the second quarter was 5.7 billion shares, up 30% from the second quarter of 2000 and up 9% from the first quarter of 2001. On a consolidated basis including international operations, total second quarter trading volume was 7.0 billion shares.

"These strong results in a weak market are very encouraging and demonstrate the resilience of our business model and the growth of each of our business lines in the U.S. We now have a diverse set of products that serve a broad range of different trading needs." said Raymond L. Killian, Jr., ITG's Chairman, President and Chief Executive Officer. "The U.S. success gives us the resources and the confidence to continue to invest in developing ever more advanced investment technologies and to expand our model to the leading global capital markets."

International Operations

During the second quarter, ITG continued to invest in international expansion in Europe, Australia, Canada and Asia. In Canada, ITG signed an agreement with the Toronto Stock Exchange to give Canadian traders direct access to POSIT Canada through the exchange. An early 2002 launch is expected. In Asia, the company is developing plans for launching business operations in Hong Kong early in 2002.

For the six months ended June 30, 2001, ITG's revenues rose to $186.6 million, an 18% growth compared to the same period a year ago, net income increased 14% to $38.2 million and diluted earnings per share increased 10% to $1.18. Revenues per trading day for the first six months of 2001 averaged $1.49 million, compared with $1.26 million in the first six months of 2000, a 19% growth.

Excluding international operations and a non-operating gain in last year's second quarter of $0.04 per diluted share from the sale of shares that ITG held In Versus Technologies Inc., ITG's six-month diluted earnings per share for its core U.S. business were $1.34, a 22% increase over the comparable 2000 period.

Conference Call

ITG has scheduled a conference call today at 10:30 a.m. EDT to discuss second quarter results and the outlook for the balance of 2001. Those wishing to listen to the call should dial 800-811-0667 at least 10 minutes prior to the start of the call to ensure connection. 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 passcode 401222, and a two week-long replay will be available on ITG's website at http://www.itginc.com starting approximately 2 hours after the completion of the call.

About ITG

ITG is headquartered in New York with offices in Boston, Los Angeles, Dublin, London, Melbourne, Sydney, Tel Aviv and Toronto. As the leading provider of technology-based equity trading services and transaction research to institutional investors and brokers, ITG generates superior trading results for its clients. ITG's services help clients to access liquidity, execute trades more efficiently and make better trading decisions. ITG's cutting edge trading tools are easy to use and interface seamlessly with clients' workflow. As an electronic broker, ITG differentiates itself with institutional customers via front-end or desktop services that provide unique content and connectivity. In the electronic trading marketplace, through its POSIT system, ITG is the premier confidential stock-crossing system for the industry.

Further information can be accessed on ITG's Web site at 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; 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 filings with the Securities and Exchange Commission including those on forms 10-K and 10-Q.

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