Tradeweb Reports First Quarter 2023 Financial Results
Tradeweb Markets Inc. (Nasdaq: TW) reported robust financial results for the quarter ending March 31, 2023, achieving $329.2 million in revenues, a 5.7% increase year-over-year. The company recorded an impressive $1.4 trillion in average daily volume (ADV), marking a 16.2% rise from the previous year. Net income reached $102.2 million, up 4.9%, and adjusted net income rose by 12.2% to $129 million. The adjusted EBITDA margin improved to 52.3%, with adjusted EBITDA totaling $172.2 million. Tradeweb also declared a quarterly cash dividend of $0.09 per share and completed share repurchases worth $22.7 million. Future growth is anticipated following advanced discussions to acquire Yieldbroker for AUD 125 million.
- 5.7% revenue growth year-over-year to $329.2 million.
- Record ADV of $1.4 trillion, up 16.2% from prior year.
- Adjusted net income increased 12.2% to $129 million.
- Adjusted EBITDA margin rose to 52.3% with $172.2 million EBITDA.
- Quarterly cash dividend of $0.09 declared.
- Share repurchase of $22.7 million completed.
- In advanced discussions to acquire Yieldbroker for AUD 125 million.
- Equities revenue declined 1.3% to $26.2 million.
- Operating expenses increased 3.4% due to rising technology and administrative costs.
- Credit ADV decreased by 2.8% despite record High Grade activity.
"Tradeweb’s client focus and broad product offering contributed to a record ADV of
SELECT FINANCIAL RESULTS | ||||||||||||||
(dollars in thousands except per share amounts)(Unaudited) | 1Q23 |
|
|
1Q22 |
|
Change |
Constant Currency Change(1) |
|||||||
GAAP Financial Measures | ||||||||||||||
Total Revenue | $ |
329,249 |
|
$ |
311,486 |
|
5.7 |
% |
7.5 |
% |
||||
Rates | $ |
170,505 |
|
$ |
160,339 |
|
6.3 |
% |
8.3 |
% |
||||
Credit | $ |
89,017 |
|
$ |
86,318 |
|
3.1 |
% |
4.7 |
% |
||||
Equities | $ |
26,203 |
|
$ |
26,535 |
|
(1.3) |
% |
1.2 |
% |
||||
Money Markets | $ |
14,807 |
|
$ |
11,524 |
|
28.5 |
% |
30.3 |
% |
||||
Marked Data | $ |
22,434 |
|
$ |
21,366 |
|
5.0 |
% |
6.5 |
% |
||||
Other | $ |
6,283 |
|
$ |
5,404 |
|
16.3 |
% |
16.3 |
% |
||||
Net income | $ |
102,193 |
|
$ |
97,445 |
|
4.9 |
% |
|
|
||||
Net income attributable to |
$ |
87,856 |
|
$ |
82,965 |
|
5.9 |
% |
|
|
||||
Diluted EPS | $ |
0.42 |
|
$ |
0.40 |
|
5.0 |
% |
|
|
||||
Net income margin | 31.0 |
% |
31.3 |
% |
-25 |
bps |
|
|
||||||
Non-GAAP Financial Measures |
||||||||||||||
Adjusted EBITDA (1) |
$ |
172,203 |
|
$ |
160,635 |
|
7.2 |
% |
8.9 |
% |
||||
Adjusted EBITDA margin (1) |
|
52.3 |
% |
|
51.6 |
% |
+73 |
bps |
+64 |
bps |
||||
Adjusted EBIT (1) |
$ |
158,416 |
|
$ |
147,954 |
|
7.1 |
% |
8.8 |
% |
||||
Adjusted EBIT margin (1) |
|
48.1 |
% |
|
47.5 |
% |
+61 |
bps |
+56 |
bps |
||||
Adjusted Net Income (1) |
$ |
129,035 |
|
$ |
115,055 |
|
12.2 |
% |
14.1 |
% |
||||
Adjusted Diluted EPS (1) |
$ |
0.54 |
|
$ |
0.48 |
|
12.5 |
% |
14.9 |
% |
(1) |
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS and constant currency change are non-GAAP financial measures. See "Non-GAAP Financial Measures" below and the attached schedules for additional information and reconciliations of such non-GAAP financial measures. | |
(2) |
Represents net income less net income attributable to non-controlling interests. |
ADV (US $bn)
(Unaudited) |
|||||||||||
Asset Class |
Product |
|
1Q23 |
|
1Q22 |
YoY |
|||||
Rates |
Cash |
$ |
363 |
$ |
388 |
(6.4 |
)% |
||||
|
Derivatives |
|
509 |
|
361 |
40.9 |
% |
||||
|
Total |
|
871 |
|
749 |
16.4 |
% |
||||
Credit |
Cash |
|
11 |
|
11 |
6.4 |
% |
||||
|
Derivatives |
|
21 |
|
22 |
(7.2 |
)% |
||||
|
Total |
|
32 |
|
33 |
(2.8 |
)% |
||||
Equities |
Cash |
|
10 |
|
13 |
(17.8 |
)% |
||||
|
Derivatives |
|
9 |
|
9 |
4.1 |
% |
||||
|
Total |
|
20 |
|
21 |
(8.9 |
)% |
||||
Money Markets |
Cash |
|
442 |
|
372 |
18.9 |
% |
||||
|
Total |
|
442 |
|
372 |
18.9 |
% |
||||
|
Total |
$ |
1,365 |
$ |
1,175 |
16.2 |
% |
DISCUSSION OF RESULTS
Rates – Revenues of
Credit – Revenues of
Equities – Revenues of
Money Markets – Revenues of
Market Data – Revenues of
Other – Revenues of
Operating Expenses of
Adjusted Expenses of
RECENT HIGHLIGHTS
First Quarter 2023
-
Announced launch of a market data service to calculate real-time iNAVs for ETFs. BlackRock became the first ETF issuer to use Tradeweb iNAVs for its iShares ETF suite in
Europe -
Completed final technology milestone of integrating the Nasdaq
U.S. Fixed Income platform (formerly eSpeed) into Tradeweb's Dealerweb CLOB -
Appointed
Troy Dixon to the Tradeweb Board of Directors as an independent director, effective as ofMarch 1, 2023 -
Recognized in numerous awards celebrating our company, as well as our outstanding and diverse talent, including: Women in Technology and Data Awards, Vendor Professional of the Year -
Keri Neo (WatersTechnology), Risk Awards, OTC Trading Platform of the Year (Risk.net), NOVA Awards, Top Innovator in Financial Markets (TabbFORUM)
-
On
April 26, 2023 , Tradeweb announced it is in advanced discussions to acquire Yieldbroker, a leading Australian government bond and interest rate derivatives trading platform covering the institutional, wholesale, and primary markets. Tradeweb anticipates that the acquisition would be an all-cash transaction with a purchase price of AUD 125 million. This acquisition would provide Yieldbroker’s domestic client network with access to Tradeweb’s global multi-asset platform, deep liquidity and advanced technology, while Tradeweb customers worldwide would benefit from increased liquidity, pre-trade transparency, and coverage of the Australian andNew Zealand debt capital markets. Tradeweb can offer no assurance that a definitive agreement will be entered into, or if entered into that a transaction will be consummated. The potential deal remains subject to Yieldbroker stockholder approval, final definitive documentation, and would be subject to customary closing conditions and regulatory reviews. -
Tradeweb,
Euroclear and Informa Global Markets (IGM) jointly announced a collaboration to automate the security identification and setup process for soon-to-be issued syndicated Eurobonds in the primary market - TW SEF filed with the CFTC a proposed new MAT ("made available to trade") list for swaps aimed at promoting continuity as swaps migrate from LIBOR to other risk-free rates
CAPITAL MANAGEMENT
-
in cash and cash equivalents and an undrawn$1.2 billion credit facility at$500 million March 31, 2023 -
Cash capital expenditures and capitalization of software development in the first quarter 2023:
$16.7 million -
Free cash flow for the trailing twelve months ended
March 31, 2023 of , up$599.6 million 17.4% compared to prior year period. See “Non-GAAP Financial Measures” for additional information -
During the first quarter of 2023, as part of its share repurchase program, Tradeweb purchased 313,311 shares of Class A common stock, at an average price of
, for purchases totaling$72.47 . As of$22.7 million March 31, 2023 , a total of remained available for repurchase pursuant to the share repurchase program$252.3 million -
in shares of Class A common stock were withheld in the first quarter of 2023 to satisfy tax obligations related to the exercise of stock options and vesting of restricted stock units and performance-based restricted stock units held by employees$39.9 million -
The Board of Directors of
Tradeweb Markets Inc. declared a quarterly cash dividend of per share of Class A common stock and Class B common stock. The dividend will be payable on$0.09 June 15, 2023 to stockholders of record as ofJune 1, 2023
OTHER MATTERS
Unchanged Full-Year 2023 Guidance*
-
Adjusted Expenses:
- 714 million$669 -
Acquisition and Refinitiv Transaction related depreciation and amortization expense:
$127 million -
Assumed non-GAAP tax rate: ~
24% -25% -
Cash costs of capital expenditures and capitalized software development:
- 62 million$56
*GAAP operating expenses and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement of foreign currency rates.
CONFERENCE CALL
After the conference call, an archived recording will be available at http://investors.tradeweb.com.
ABOUT
INCOME STATEMENT Dollars in Thousands, Except Per Share Data |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
(unaudited) |
|
(unaudited) |
||||
Transaction fees and commissions |
|
$ |
266,598 |
|
|
$ |
251,805 |
|
Subscription fees |
|
|
44,374 |
|
|
|
41,455 |
|
Refinitiv market data fees |
|
|
15,594 |
|
|
|
15,558 |
|
Other |
|
|
2,683 |
|
|
|
2,668 |
|
Total revenue |
|
|
329,249 |
|
|
|
311,486 |
|
|
|
|
|
|
||||
Expenses |
|
|
|
|
||||
Employee compensation and benefits |
|
|
114,493 |
|
|
|
117,991 |
|
Depreciation and amortization |
|
|
45,404 |
|
|
|
44,450 |
|
Technology and communications |
|
|
17,567 |
|
|
|
15,776 |
|
General and administrative |
|
|
13,920 |
|
|
|
10,313 |
|
Professional fees |
|
|
11,176 |
|
|
|
7,857 |
|
Occupancy |
|
|
4,123 |
|
|
|
3,497 |
|
Total expenses |
|
|
206,683 |
|
|
|
199,884 |
|
Operating income |
|
|
122,566 |
|
|
|
111,602 |
|
Net interest income (expense) |
|
|
12,491 |
|
|
|
(447 |
) |
Other income (loss), net |
|
|
341 |
|
|
|
— |
|
Income before taxes |
|
|
135,398 |
|
|
|
111,155 |
|
Provision for income taxes |
|
|
(33,205 |
) |
|
|
(13,710 |
) |
Net income |
|
|
102,193 |
|
|
|
97,445 |
|
Less: Net income attributable to non-controlling interests |
|
|
14,337 |
|
|
|
14,480 |
|
Net income attributable to |
|
$ |
87,856 |
|
|
$ |
82,965 |
|
|
|
|
|
|
||||
Earnings per share attributable to |
|
|
|
|
||||
Basic |
|
$ |
0.42 |
|
|
$ |
0.41 |
|
Diluted |
|
$ |
0.42 |
|
|
$ |
0.40 |
|
Weighted average shares outstanding: |
|
|
|
|
||||
Basic |
|
|
208,105,437 |
|
|
|
204,061,347 |
|
Diluted |
|
|
210,143,734 |
|
|
|
207,497,102 |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Dollars in Thousands, Except per Share Data |
||||||||
|
|
Three Months Ended |
||||||
Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin |
|
|
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
(dollars in thousands) |
||||||
Net income |
|
$ |
102,193 |
|
|
$ |
97,445 |
|
Merger and acquisition transaction and integration costs (1) |
|
|
585 |
|
|
|
(18 |
) |
Net interest (income) expense |
|
|
(12,491 |
) |
|
|
447 |
|
Depreciation and amortization |
|
|
45,404 |
|
|
|
44,450 |
|
Stock-based compensation expense (2) |
|
|
850 |
|
|
|
3,869 |
|
Provision for income taxes |
|
|
33,205 |
|
|
|
13,710 |
|
Foreign exchange (gains) / losses (3) |
|
|
2,798 |
|
|
|
732 |
|
Tax receivable agreement liability adjustment (4) |
|
|
— |
|
|
|
— |
|
Other (income) loss, net |
|
|
(341 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
172,203 |
|
|
$ |
160,635 |
|
Less: Depreciation and amortization |
|
|
(45,404 |
) |
|
|
(44,450 |
) |
Add: D&A related to acquisitions and the Refinitiv Transaction (5) |
|
|
31,617 |
|
|
|
31,769 |
|
Adjusted EBIT |
|
$ |
158,416 |
|
|
$ |
147,954 |
|
Net income margin (6) |
|
|
31.0 |
% |
|
|
31.3 |
% |
Adjusted EBITDA margin (6) |
|
|
52.3 |
% |
|
|
51.6 |
% |
Adjusted EBIT margin (6) |
|
|
48.1 |
% |
|
|
47.5 |
% |
(1) | Represents incremental direct costs associated with the acquisition and integration of completed and potential mergers and acquisitions. These costs generally include legal, consulting, advisory, due diligence, severance and other third party costs incurred that directly relate to the acquisition transaction or its integration. |
|
(2) |
Represents non-cash stock-based compensation expense associated with the Special Option Award and post-IPO options awarded in 2019 and payroll taxes associated with the exercise of such options. During the three months ended |
|
(3) |
Represents unrealized gain or loss recognized on foreign currency forward contracts and foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency. |
|
(4) |
Represents income recognized during the applicable period due to changes in the tax receivable agreement liability recorded in the consolidated statement of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions which impacted our tax savings. |
|
(5) |
Represents intangible asset and acquired software amortization resulting from the NFI Acquisition and intangible asset amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the application of pushdown accounting to the Refinitiv Transaction (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction). |
|
(6) |
Net income margin, Adjusted EBITDA margin and Adjusted EBIT margin are defined as net income, Adjusted EBITDA and Adjusted EBIT, respectively, divided by revenue for the applicable period. |
|
|
Three Months Ended |
||||||
Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS |
|
|
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
(in thousands, except per share amounts) |
||||||
Earnings per diluted share |
|
$ |
0.42 |
|
|
$ |
0.40 |
|
Net income attributable to |
|
$ |
87,856 |
|
|
$ |
82,965 |
|
Net income attributable to non-controlling interests (1) |
|
|
14,337 |
|
|
|
14,480 |
|
Net income |
|
|
102,193 |
|
|
|
97,445 |
|
Provision for income taxes |
|
|
33,205 |
|
|
|
13,710 |
|
Merger and acquisition transaction and integration costs (2) |
|
|
585 |
|
|
|
(18 |
) |
D&A related to acquisitions and the Refinitiv Transaction (3) |
|
|
31,617 |
|
|
|
31,769 |
|
Stock-based compensation expense (4) |
|
|
850 |
|
|
|
3,869 |
|
Foreign exchange (gains) / losses (5) |
|
|
2,798 |
|
|
|
732 |
|
Tax receivable agreement liability adjustment (6) |
|
|
— |
|
|
|
— |
|
Other (income) loss, net |
|
|
(341 |
) |
|
|
— |
|
Adjusted Net Income before income taxes |
|
|
170,907 |
|
|
|
147,507 |
|
Adjusted income taxes (7) |
|
|
(41,872 |
) |
|
|
(32,452 |
) |
Adjusted Net Income |
|
$ |
129,035 |
|
|
$ |
115,055 |
|
Adjusted Diluted EPS (8) |
|
$ |
0.54 |
|
|
$ |
0.48 |
|
(1) |
Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of all outstanding LLC Interests held by non-controlling interests for shares of Class A or Class B common stock. |
|
(2) |
Represents incremental direct costs associated with the acquisition and integration of completed and potential mergers and acquisitions. These costs generally include legal, consulting, advisory, due diligence, severance and other third party costs incurred that directly relate to the acquisition transaction or its integration. |
|
(3) |
Represents intangible asset and acquired software amortization resulting from the NFI Acquisition and intangible asset amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the application of pushdown accounting to the Refinitiv Transaction (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction). |
|
(4) |
Represents non-cash stock-based compensation expense associated with the Special Option Award and post-IPO options awarded in 2019 and payroll taxes associated with the exercise of such options. During the three months ended |
|
(5) |
Represents unrealized gain or loss recognized on foreign currency forward contracts and foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency. |
|
(6) |
Represents income recognized during the applicable period due to changes in the tax receivable agreement liability recorded in the consolidated statement of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions which impacted our tax savings. |
|
(7) |
Represents corporate income taxes at an assumed effective tax rate of |
|
(8) |
For a summary of the calculation of Adjusted Diluted EPS, see “Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding and Adjusted Diluted EPS” below. |
The following table summarizes the calculation of Adjusted Diluted EPS for the periods presented:
Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding and Adjusted Diluted EPS |
|
Three Months Ended |
||||||
|
|
|||||||
|
|
2023 |
|
|
|
2022 |
|
|
Diluted weighted average shares of Class A and Class B common stock outstanding |
|
|
210,143,734 |
|
|
207,497,102 |
||
Weighted average of other participating securities (1) |
|
|
291,772 |
|
|
|
53,756 |
|
Assumed exchange of LLC Interests for shares of Class A or Class B common stock (2) |
|
|
26,340,754 |
|
|
|
30,296,879 |
|
Adjusted diluted weighted average shares outstanding |
|
|
236,776,260 |
|
|
|
237,847,737 |
|
Adjusted Net Income (in thousands) |
|
$ |
129,035 |
|
|
$ |
115,055 |
|
Adjusted Diluted EPS |
|
$ |
0.54 |
|
|
$ |
0.48 |
|
(1) |
Represents weighted average unvested restricted stock units and unsettled vested performance-based restricted stock units issued to certain retired or terminated employees that are entitled to non-forfeitable dividend equivalent rights and are considered participating securities prior to being issued and outstanding shares of common stock in accordance with the two-class method used for purposes of calculating earnings per share. |
|
(2) |
Assumes the full exchange of the weighted average of all outstanding LLC Interests held by non-controlling interests for shares of Class A or Class B common stock, resulting in the elimination of the non-controlling interests and recognition of the net income attributable to non-controlling interests. |
|
|
Three Months Ended |
||||||
Reconciliation of Operating Expenses to Adjusted Expenses |
|
|
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
(in thousands) |
||||||
Operating expenses |
|
$ |
206,683 |
|
|
$ |
199,884 |
|
Merger and acquisition transaction and integration costs (1) |
|
|
(585 |
) |
|
|
18 |
|
D&A related to acquisitions and the Refinitiv Transaction (2) |
|
|
(31,617 |
) |
|
|
(31,769 |
) |
Stock-based compensation expense (3) |
|
|
(850 |
) |
|
|
(3,869 |
) |
Foreign exchange gains / (losses) (4) |
|
|
(2,798 |
) |
|
|
(732 |
) |
Adjusted Expenses |
|
$ |
170,833 |
|
|
$ |
163,532 |
|
(1) |
Represents incremental direct costs associated with the acquisition and integration of completed and potential mergers and acquisitions. These costs generally include legal, consulting, advisory, due diligence, severance and other third party costs incurred that directly relate to the acquisition transaction or its integration. |
|
(2) |
Represents intangible asset and acquired software amortization resulting from the NFI Acquisition and intangible asset amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the application of pushdown accounting to the Refinitiv Transaction (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction). |
|
(3) |
Represents non-cash stock-based compensation expense associated with the Special Option Award and post-IPO options awarded in 2019 and payroll taxes associated with the exercise of such options. During the three months ended |
|
(4) |
Represents unrealized gain or loss recognized on foreign currency forward contracts and foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency. |
|
|
Trailing Twelve Months Ended |
||||||
Reconciliation of Cash Flow from Operating Activities to Free Cash Flow |
|
|
2023 |
|
|
|
2022 |
|
|
|
(in thousands) |
||||||
Cash flow from operating activities |
|
$ |
658,419 |
|
|
$ |
567,692 |
|
Less: Capitalization of software development costs |
|
|
(37,738 |
) |
|
|
(35,183 |
) |
Less: Purchases of furniture, equipment and leasehold improvements |
|
|
(21,032 |
) |
|
|
(21,580 |
) |
Free Cash Flow |
|
$ |
599,649 |
|
|
$ |
510,929 |
|
BASIC AND DILUTED EPS CALCULATIONS (UNAUDITED) Dollars in Thousands, Except per Share Data |
||||||||
The following table summarizes the basic and diluted earnings per share calculations for |
||||||||
|
|
Three Months Ended |
||||||
EPS: Net income attributable to |
|
|
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
(in thousands, except share and per share amounts) |
||||||
Numerator: |
|
|
|
|
||||
Net income attributable to |
|
$ |
87,856 |
|
|
$ |
82,965 |
|
Less: Distributed and undistributed earnings allocated to unvested RSUs and unsettled vested PRSUs (1) |
|
|
(123 |
) |
|
|
(22 |
) |
Net income attributable to outstanding shares of Class A and Class B common stock - Basic and Diluted |
|
$ |
87,733 |
|
|
$ |
82,943 |
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
||||
Weighted average shares of Class A and Class B common stock outstanding - Basic |
|
|
208,105,437 |
|
|
|
204,061,347 |
|
Dilutive effect of PRSUs |
|
|
286,563 |
|
|
|
770,765 |
|
Dilutive effect of options |
|
|
1,469,219 |
|
|
|
2,322,027 |
|
Dilutive effect of RSUs |
|
|
282,515 |
|
|
|
342,963 |
|
Dilutive effect of PSUs |
|
|
— |
|
|
|
— |
|
Weighted average shares of Class A and Class B common stock outstanding - Diluted |
|
|
210,143,734 |
|
|
|
207,497,102 |
|
|
|
|
|
|
||||
Earnings per share - Basic |
|
$ |
0.42 |
|
|
$ |
0.41 |
|
Earnings per share - Diluted |
|
$ |
0.42 |
|
|
$ |
0.40 |
|
(1) |
During the three months ended |
REVENUES BY ASSET CLASS (UNAUDITED) |
||||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
||||||||||||||||||
Revenues |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
||||||||||
|
|
(dollars in thousands) |
||||||||||||||||||||||||
Rates |
|
$ |
114,168 |
|
$ |
56,337 |
|
$ |
103,389 |
|
$ |
56,950 |
|
$ |
10,779 |
|
|
$ |
(613 |
) |
|
10.4 |
% |
|
(1.1 |
)% |
Credit |
|
|
82,364 |
|
|
6,653 |
|
|
79,648 |
|
|
6,670 |
|
|
2,716 |
|
|
|
(17 |
) |
|
3.4 |
% |
|
(0.3 |
)% |
Equities |
|
|
23,897 |
|
|
2,306 |
|
|
24,151 |
|
|
2,384 |
|
|
(254 |
) |
|
|
(78 |
) |
|
(1.1 |
)% |
|
(3.3 |
)% |
Money Markets |
|
|
10,414 |
|
|
4,393 |
|
|
7,274 |
|
|
4,250 |
|
|
3,140 |
|
|
|
143 |
|
|
43.2 |
% |
|
3.4 |
% |
Market Data |
|
|
— |
|
|
22,434 |
|
|
— |
|
|
21,366 |
|
|
— |
|
|
|
1,068 |
|
|
— |
|
|
5.0 |
% |
Other |
|
|
— |
|
|
6,283 |
|
|
— |
|
|
5,404 |
|
|
— |
|
|
|
879 |
|
|
— |
|
|
16.3 |
% |
Total revenue |
|
$ |
230,843 |
|
$ |
98,406 |
|
$ |
214,462 |
|
$ |
97,024 |
|
$ |
16,381 |
|
|
$ |
1,382 |
|
|
7.6 |
% |
|
1.4 |
% |
AVERAGE VARIABLE FEES PER MILLION DOLLARS OF VOLUME (UNAUDITED) |
|||||||||
|
|
Three Months Ended |
|
|
|||||
|
|
|
|
YoY |
|||||
|
|
|
2023 |
|
|
2022 |
|
% Change |
|
Rates |
|
$ |
2.09 |
|
$ |
2.22 |
|
(5.7 |
)% |
Rates Cash |
|
$ |
2.54 |
|
$ |
2.05 |
|
24.0 |
% |
Rates Derivatives |
|
$ |
1.78 |
|
$ |
2.40 |
|
(26.0 |
)% |
Rates Derivatives (greater than 1 year) |
|
$ |
3.03 |
|
$ |
3.96 |
|
(23.5 |
)% |
Other Rates Derivatives (1) |
|
$ |
0.17 |
|
$ |
0.21 |
|
(21.0 |
)% |
|
|
|
|
|
|
|
|||
Credit |
|
$ |
40.75 |
|
$ |
38.51 |
|
5.8 |
% |
Cash Credit (2) |
|
$ |
146.32 |
|
$ |
147.49 |
|
(0.8 |
)% |
Credit Derivatives and |
|
$ |
6.32 |
|
$ |
6.91 |
|
(8.4 |
)% |
|
|
|
|
|
|
|
|||
Equities |
|
$ |
19.64 |
|
$ |
18.10 |
|
8.5 |
% |
Equities Cash |
|
$ |
30.33 |
|
$ |
26.18 |
|
15.9 |
% |
Equities Derivatives |
|
$ |
7.21 |
|
$ |
6.18 |
|
16.6 |
% |
|
|
|
|
|
|
|
|||
Money Markets |
|
$ |
0.38 |
|
$ |
0.31 |
|
20.2 |
% |
|
|
|
|
|
|
|
|||
Total |
|
$ |
2.71 |
|
$ |
2.93 |
|
(7.8 |
)% |
Total excluding Other Rates Derivatives (3) |
|
$ |
3.20 |
|
$ |
3.33 |
|
(3.9 |
)% |
(1) |
Includes Swaps/Swaptions of tenor less than 1 year and Rates Futures. |
|
(2) |
The “Cash Credit” category represents the “Credit” asset class excluding (1) Credit Derivatives and (2) |
|
(3) |
Included to contextualize the impact of short-tenored Swaps/Swaptions and Rates Futures on totals for all periods presented. |
AVERAGE DAILY VOLUME (UNAUDITED) |
||||||||||||||||||||
|
|
|
2023 Q1 |
|
2022 Q1 |
|
YoY |
|||||||||||||
Asset Class |
Product |
|
ADV (USD mm) |
Volume (USD mm) |
|
ADV (USD mm) |
Volume (USD mm) |
|
ADV |
|||||||||||
Rates |
Cash |
|
$ |
362,618 |
$ |
22,568,694 |
|
$ |
387,505 |
$ |
24,060,508 |
|
(6.42 |
)% |
||||||
|
|
|
|
144,070 |
|
8,932,353 |
|
|
149,564 |
|
9,272,997 |
|
(3.67 |
)% |
||||||
|
European Government Bonds |
|
|
42,636 |
|
2,728,696 |
|
|
38,945 |
|
2,453,565 |
|
9.48 |
% |
||||||
|
Mortgages |
|
|
170,203 |
|
10,552,565 |
|
|
193,844 |
|
12,018,341 |
|
(12.20 |
)% |
||||||
|
Other Government Bonds |
|
|
5,710 |
|
355,079 |
|
|
5,151 |
|
315,605 |
|
10.84 |
% |
||||||
|
Derivatives |
|
|
508,675 |
|
31,989,758 |
|
|
361,041 |
|
22,531,755 |
|
40.89 |
% |
||||||
|
Swaps/Swaptions ≥ 1Y |
|
|
285,896 |
|
17,965,246 |
|
|
210,550 |
|
13,143,966 |
|
35.78 |
% |
||||||
|
Swaps/Swaptions < 1Y |
|
|
221,202 |
|
13,926,695 |
|
|
148,430 |
|
9,260,040 |
|
49.03 |
% |
||||||
|
Futures |
|
|
1,577 |
|
97,816 |
|
|
2,060 |
|
127,749 |
|
(23.45 |
)% |
||||||
|
Total |
|
|
871,293 |
|
54,558,452 |
|
|
748,546 |
|
46,592,263 |
|
16.40 |
% |
||||||
Credit |
Cash |
|
|
11,497 |
|
714,878 |
|
|
10,807 |
|
667,197 |
|
6.38 |
% |
||||||
|
|
|
|
4,129 |
|
256,013 |
|
|
3,083 |
|
191,135 |
|
33.94 |
% |
||||||
|
|
|
|
3,137 |
|
194,472 |
|
|
2,838 |
|
175,975 |
|
10.51 |
% |
||||||
|
|
|
|
674 |
|
41,764 |
|
|
773 |
|
47,948 |
|
(12.90 |
)% |
||||||
|
|
|
|
372 |
|
23,093 |
|
|
410 |
|
25,393 |
|
(9.05 |
)% |
||||||
|
European Credit |
|
|
2,046 |
|
130,939 |
|
|
2,109 |
|
132,856 |
|
(2.98 |
)% |
||||||
|
Municipal Bonds |
|
|
312 |
|
19,316 |
|
|
249 |
|
15,449 |
|
25.03 |
% |
||||||
|
Chinese Bonds |
|
|
714 |
|
42,133 |
|
|
1,252 |
|
72,641 |
|
(42.98 |
)% |
||||||
|
Other Credit Bonds |
|
|
113 |
|
7,148 |
|
|
93 |
|
5,800 |
|
22.40 |
% |
||||||
|
Derivatives |
|
|
20,806 |
|
1,306,491 |
|
|
22,420 |
|
1,401,929 |
|
(7.20 |
)% |
||||||
|
Swaps |
|
|
20,806 |
|
1,306,491 |
|
|
22,420 |
|
1,401,929 |
|
(7.20 |
)% |
||||||
|
Total |
|
|
32,303 |
|
2,021,369 |
|
|
33,227 |
|
2,069,127 |
|
(2.78 |
)% |
||||||
Equities |
Cash |
|
|
10,491 |
|
656,069 |
|
|
12,766 |
|
795,184 |
|
(17.82 |
)% |
||||||
|
|
|
|
7,663 |
|
475,075 |
|
|
9,050 |
|
561,091 |
|
(15.33 |
)% |
||||||
|
European ETFs |
|
|
2,828 |
|
180,994 |
|
|
3,716 |
|
234,094 |
|
(23.89 |
)% |
||||||
|
Derivatives |
|
|
9,043 |
|
562,478 |
|
|
8,683 |
|
539,189 |
|
4.14 |
% |
||||||
|
Convertibles/Swaps/Options |
|
|
6,056 |
|
376,950 |
|
|
3,370 |
|
209,391 |
|
79.72 |
% |
||||||
|
Futures |
|
|
2,987 |
|
185,528 |
|
|
5,314 |
|
329,798 |
|
(43.78 |
)% |
||||||
|
Total |
|
|
19,533 |
|
1,218,547 |
|
|
21,449 |
|
1,334,373 |
|
(8.93 |
)% |
||||||
Money Markets |
Cash |
|
|
441,607 |
|
27,534,565 |
|
|
371,578 |
|
23,107,647 |
|
18.85 |
% |
||||||
|
Repurchase Agreements (Repo) |
|
|
425,350 |
|
26,525,708 |
|
|
353,820 |
|
22,006,261 |
|
20.22 |
% |
||||||
|
Other Money Markets |
|
|
16,257 |
|
1,008,857 |
|
|
17,758 |
|
1,101,386 |
|
(8.46 |
)% |
||||||
|
Total |
|
|
441,607 |
|
27,534,565 |
|
|
371,578 |
|
23,107,647 |
|
18.85 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
ADV (USD mm) |
Volume (USD mm) |
ADV (USD mm) |
Volume (USD mm) |
YoY |
|||||||||||||
|
Total |
|
$ |
1,364,737 |
$ |
85,332,933 |
|
$ |
1,174,801 |
$ |
73,103,409 |
|
16.20 |
% |
To access historical traded volumes, go to https://www.tradeweb.com/newsroom/monthly-activity-reports/
BASIS OF PRESENTATION
Numerical figures included in this release have been subject to rounding adjustments and as a result totals may not be the arithmetic aggregation of the amounts that precede them and figures expressed as percentages may not total
Please refer to the Company's previously filed Quarterly Reports on Form 10-Q and Annual Report on Form 10-K for capitalized terms not otherwise defined herein.
UNAUDITED INTERIM RESULTS
The interim financial results presented herein for the three months ended
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, our guidance, including full-year 2023 guidance, future performance, the industry and markets in which we operate, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions and future events are forward-looking statements.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the heading “Risk Factors” in the documents of
NON-GAAP FINANCIAL MEASURES
This release contains “non-GAAP financial measures,” including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Net Income per diluted share ("Adjusted Diluted EPS"), Adjusted Expenses, Free Cash Flow and constant currency change, which are supplemental financial measures that are not calculated and presented in accordance with GAAP. We make use of non-GAAP financial measures in evaluating our past results and future prospects. We present these non-GAAP financial measures because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
Management and our board of directors use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT and Adjusted EBIT margin to assess our financial performance and believe they are helpful in highlighting trends in our core operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Further, our executive incentive compensation is based in part on components of Adjusted EBITDA.
We use Adjusted Net Income and Adjusted Diluted EPS as supplemental metrics to evaluate our business performance in a way that also considers our ability to generate profit without the impact of certain items. Each of the normal recurring adjustments and other adjustments included in Adjusted Net Income and Adjusted Diluted EPS help to provide management with a measure of our operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.
We use Adjusted Expenses as a supplemental metric to evaluate our underlying operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.
We use Free Cash Flow to assess our liquidity in a way that considers the amount of cash generated from our core operations after non-acquisition related expenditures for capitalized software development costs and furniture, equipment and leasehold improvements.
We present certain changes on a “constant currency” basis. Since our consolidated financial statements are presented in
See the attached schedules for reconciliations of the non-GAAP financial measures contained in this release to their most comparable GAAP financial measure. Non-GAAP financial measures have limitations as analytical tools, and you should not consider these non-GAAP financial measures in isolation or as alternatives to net income attributable to
Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, the non-GAAP financial measures contained in this release may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
MARKET AND INDUSTRY DATA
This release includes estimates regarding market and industry data that we prepared based on our management’s knowledge and experience in the markets in which we operate, together with information obtained from various sources, including publicly available information, industry reports and publications, surveys, our clients, trade and business organizations and other contacts in the markets in which we operate. In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and we take no responsibility for such information.
TRADEWEB SOCIAL MEDIA
Investors and others should note that Tradeweb announces material financial and operational information using its investor relations website, press releases,
View source version on businesswire.com: https://www.businesswire.com/news/home/20230427005052/en/
Investor Relations
Ashley.Serrao@Tradeweb.com
Media Relations
Daniel.Noonan@Tradeweb.com
Source:
FAQ
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