Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator
of electronic marketplaces for rates, credit, equities and money
markets, today reported financial results for the quarter ended
June 30, 2022.
$297.1 million quarterly revenues
increased 13.9% (17.8% on a constant currency basis)
compared to prior year period
$1.2 trillion average daily volume
(“ADV”) for the quarter, an increase of 20.4% compared to
prior year period, with record ADV in swaps/swaptions ≥ 1-year;
fully electronic U.S. High Grade; municipal bonds and repurchase
agreements
$81.6 million net income and
$111.7 million adjusted net income for the quarter,
increases of 23.2% and 19.3% respectively from prior
year period
52.4% adjusted EBITDA margin and
$155.6 million adjusted EBITDA for the quarter, compared to
50.6% and $131.9 million respectively for prior year period
$0.33 diluted earnings per share
(“Diluted EPS”) for the quarter and $0.47 adjusted diluted
earnings per share
$0.08 per share quarterly cash
dividend declared; $9.0 million of shares repurchased
Lee Olesky, Chairman and CEO, Tradeweb
Markets:
"Tradeweb delivered another quarter of
robust year-over-year revenue growth thanks to strong contributions
from multiple asset classes, showcasing our differentiated and
diversified business model. While complex macroeconomic conditions
and continued rates volatility made for challenging global markets,
we saw increased adoption and engagement with a range of trading
protocols. Institutional and wholesale clients continued to be
active this quarter, and a surge in retail trading volumes was led
by municipal bonds and U.S. Treasuries.
In June we launched the Spotlight Dealer
Diversity Program, developed with input from the dealer and
buy-side communities to promote diverse dealers on the Tradeweb
platform. More recently, we were delighted to announce that Thomas
Pluta will succeed Billy Hult as President of Tradeweb when Billy
succeeds me as CEO on January 1, 2023. We remain sharply focused on
collaborating with clients through challenging markets and
positioning Tradeweb for continued growth.”
SELECT FINANCIAL
RESULTS
2Q22
2Q21
Change
Constant
Currency
Growth (1)
ADV (US $bn)
(Unaudited)
(dollars in thousands except per share
amounts)(Unaudited)
Asset Class
Product
2Q22
2Q21
YoY
GAAP Financial Measures
Rates
Cash
$
341
$
319
7.0 %
Total revenue
$
297,138
$
260,840
13.9
%
17.8
%
Derivatives
368
257
43.2 %
Rates
$
151,586
$
134,003
13.1
%
17.6
%
Total
709
576
23.2 %
Credit
$
83,991
$
72,212
16.3
%
19.4
%
Credit
Cash
10
10
6.9 %
Equities
$
22,659
$
17,397
30.2
%
37.6
%
Derivatives
16
9
92.3 %
Money Markets
$
12,166
$
11,340
7.3
%
10.5
%
Total
27
18
47.4 %
Market Data
$
21,030
$
20,007
5.1
%
7.0
%
Equities
Cash
10
8
20.7 %
Other
$
5,706
$
5,881
(3.0)
%
(2.9)
%
Derivatives
7
8
(13.5) %
Net income
$
81,600
$
66,233
23.2
%
Total
17
16
4.1 %
Net income attributable to Tradeweb
Markets Inc. (2)
$
68,344
$
55,316
23.6
%
Money Markets
Cash
424
367
15.5 %
Total
424
367
15.5 %
Diluted EPS
$
0.33
$
0.27
22.2
%
Total
$
1,176
$
977
20.4 %
Non-GAAP Financial Measures
Adjusted EBITDA (1)
$
155,621
$
131,898
18.0
%
22.9
%
(1) Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income,
Adjusted Diluted EPS and constant currency growth 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.
Adjusted EBITDA margin (1)
52.4 %
50.6 %
+181
bps
+220
bps
Adjusted EBIT (1)
$
142,612
$
120,271
18.6
%
23.9
%
Adjusted EBIT margin (1)
48.0 %
46.1 %
+189
bps
+238
bps
Adjusted Net Income (1)
$
111,659
$
93,558
19.3
%
24.7
%
Adjusted Diluted EPS (1)
$
0.47
$
0.39
20.5
%
25.6
%
DISCUSSION OF RESULTS
Rates – Revenues of $151.6 million in the second quarter
of 2022 increased 13.1% compared to prior year period (17.6% on a
constant currency basis). Rates ADV was up 23.2% with record ADV in
swaps/swaptions ≥ 1-year driven by robust client interest in the
request-for-market (RFM) protocol, increased engagement from
international clients and strong trading activity in emerging
markets swaps.
Credit – Revenues of $84.0 million in the second quarter
of 2022 increased 16.3% compared to prior year period (19.4% on a
constant currency basis). Credit ADV was up 47.4% with record ADV
in fully electronic U.S. High Grade credit and municipal bonds.
Tradeweb's share of fully electronic TRACE volume for U.S. High
Grade and U.S. High Yield for the quarter increased by +70 bps and
+140 bps, respectively, compared to prior year period. Client
adoption was strong across Tradeweb protocols, including
request-for-quote (RFQ), Tradeweb AllTrade and portfolio
trading.
Equities – Revenues of $22.7 million in the second
quarter of 2022 increased 30.2% compared to prior year period
(37.6% on a constant currency basis). Equities ADV was up 4.1%,
with double-digit ADV increases in U.S. and European ETFs offset by
double-digit ADV decreases in equity derivatives as market
volatility remained elevated.
Money Markets – Revenues of $12.2 million in the second
quarter of 2022 increased 7.3% compared to prior year period (10.5%
on a constant currency basis). Money Markets ADV was up 15.5% led
by record ADV in Repurchase Agreements.
Market Data – Revenues of $21.0 million in the second
quarter of 2022 increased 5.1% compared to prior year period (7.0%
on a constant currency basis). The increase was derived from
increased third party market data fees and Refinitiv market data
fees.
Other – Revenues of $5.7 million in the second quarter of
2022 decreased 3.0% compared to prior year period (2.9% decrease on
a constant currency basis).
Operating Expenses of $190.5 million in the second
quarter of 2022 increased 7.6% compared to $177.0 million in the
prior year period due to: higher employee compensation and benefits
associated with higher headcount to support growth and higher
performance-related compensation, including $5.7 million in CEO
Retirement Accelerated Stock-Based Compensation Expense recognized
during the second quarter of 2022; higher depreciation and
amortization expense; and higher technology and communications
expenses primarily due to increased clearing and data fees driven
by higher trading volumes; partially offset by lower general and
administrative expense, as foreign exchange gains increased more
than travel and entertainment expense increased following the
easing of restrictions relating to the pandemic.
Adjusted Expenses of $154.5 million increased 9.9% (12.6%
on a constant currency basis) compared to the prior year period due
to: higher employee compensation and benefits associated with
higher headcount to support growth and higher performance-related
compensation; higher general and administrative expenses; higher
technology and communications expenses; and higher depreciation and
amortization expenses. Please see "Non-GAAP Financial Measures"
below for additional information.
RECENT HIGHLIGHTS
Second Quarter 2022
- Launched Spotlight Dealer Diversity Program designed to promote
diverse dealers on the Tradeweb platform
- Introduced enhanced functionality of electronic portfolio
trading tool to increase flexibility and efficiency for
institutional clients
- Completed the first-ever fully electronic SOFR swaption
trade
- Recognized in numerous awards including: Trading & Tech
Awards — Best Fixed Income Trading Platform (Financial News);
Trading & Tech Awards, Trading Initiative of the Year — AiEX
(Financial News); 40 Top Innovators in Financial Markets — Lee
Olesky (TabbForum); Person of the Decade — Lee Olesky (Markets
Media); Women in Finance Asia Awards, Excellence in Trading — YiLin
Lee (Markets Media)
July 2022
- Announced Thomas Pluta will join Tradeweb in October as
President-elect
- Appointed Jacques Aigrain and Rana Yared as Independent
Directors to Tradeweb’s board
- Celebrated the opening of Tradeweb’s new Paris office
CAPITAL MANAGEMENT
- $959.7 million in cash and cash equivalents and an undrawn $500
million credit facility at June 30, 2022
- Non-acquisition related capital expenditures and capitalization
of software development in second quarter 2022: $15.0 million
- Free cash flow for the trailing twelve months ended June 30,
2022 of $538.4 million, up 24.1% compared to the prior year period.
See “Non-GAAP Financial Measures” for additional information
- During the second quarter of 2022, as part of its Share
Repurchase Program, Tradeweb purchased 103,458 shares of Class A
common stock, at an average price of $86.99, for purchases totaling
$9.0 million. As of June 30, 2022, a total of $18.0 million
remained available for repurchase pursuant to the Share Repurchase
Program
- $2.2 million in shares were withheld in the second quarter of
2022 to satisfy tax obligations related to the exercise of stock
options and vesting of restricted stock units and performance-based
restricted stock units
- The Board of Directors of Tradeweb Markets Inc. declared a
quarterly cash dividend of $0.08 per share of Class A common stock
and Class B common stock. The dividend will be payable on September
15, 2022 to stockholders of record as of September 1, 2022
OTHER MATTERS
Full-Year 2022 Guidance*
Full-Year 2022 guidance is unchanged from previous confirmation
on July 13, 2022.
- Adjusted Expenses: $620 - $655 million
- Acquisition and Refinitiv Transaction related depreciation and
amortization expense: $127 million
- Assumed non-GAAP tax rate: ~22.0%
- Capital expenditures and capitalization of software
development: $62 - $68 million
*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
Tradeweb Markets will hold a conference call to discuss second
quarter 2022 results starting at 9:30 AM EDT today, August 3, 2022.
A live, audio webcast of the conference call along with related
materials will be available at http://investors.tradeweb.com.
Alternatively, interested parties can register to participate in
the call by clicking here. After the conference call, an archived
recording will be available at http://investors.tradeweb.com.
ABOUT TRADEWEB MARKETS
Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator
of electronic marketplaces for rates, credit, equities and money
markets. Founded in 1996, Tradeweb provides access to markets, data
and analytics, electronic trading, straight-through-processing and
reporting for more than 40 products to clients in the
institutional, wholesale and retail markets. Advanced technologies
developed by Tradeweb enhance price discovery, order execution and
trade workflows while allowing for greater scale and helping to
reduce risks in client trading operations. Tradeweb serves
approximately 2,500 clients in more than 65 countries. On average,
Tradeweb facilitated more than $1 trillion in notional value traded
per day over the past four fiscal quarters. For more information,
please go to www.tradeweb.com.
TRADEWEB MARKETS INC. INCOME STATEMENT Dollars
in Thousands, Except Per Share Data
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Revenues
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Transaction fees and commissions
$
237,669
$
205,381
$
489,474
$
423,197
Subscription fees
41,540
37,883
82,995
75,751
Refinitiv market data fees
15,426
14,926
30,984
30,043
Other
2,503
2,650
5,171
5,248
Total revenue
297,138
260,840
608,624
534,239
Expenses
Employee compensation and benefits
109,890
98,449
227,881
202,071
Depreciation and amortization
44,770
41,867
89,220
82,833
Technology and communications
16,034
13,957
31,810
27,501
General and administrative
7,601
8,789
17,914
12,248
Professional fees
8,575
10,368
16,432
20,096
Occupancy
3,661
3,618
7,158
7,371
Total expenses
190,531
177,048
390,415
352,120
Operating income
106,607
83,792
218,209
182,119
Net interest income (expense)
541
(325
)
94
(818
)
Income before taxes
107,148
83,467
218,303
181,301
Provision for income taxes
(25,548
)
(17,234
)
(39,258
)
(33,503
)
Net income
81,600
66,233
179,045
147,798
Less: Net income attributable to
non-controlling interests
13,256
10,917
27,736
24,623
Net income attributable to Tradeweb
Markets Inc.
$
68,344
$
55,316
$
151,309
$
123,175
Earnings per share attributable to
Tradeweb Markets Inc. Class A and B common stockholders:
Basic
$
0.33
$
0.27
$
0.74
$
0.61
Diluted
$
0.33
$
0.27
$
0.73
$
0.60
Weighted average shares outstanding:
Basic
204,501,035
201,749,985
204,282,406
200,414,714
Diluted
207,272,675
207,463,960
207,371,372
206,253,756
TRADEWEB MARKETS INC. RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (UNAUDITED) Dollars in Thousands, Except
per Share Data
Three Months Ended
Six Months Ended
Reconciliation of Net Income to
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBIT and Adjusted
EBIT Margin
June 30,
June 30,
2022
2021
2022
2021
(dollars in thousands)
Net income
$
81,600
$
66,233
$
179,045
$
147,798
Acquisition transaction costs (1)
15
2,966
(3
)
4,727
Net interest (income) expense
(541
)
325
(94
)
818
Depreciation and amortization
44,770
41,867
89,220
82,833
Stock-based compensation expense (2)
7,295
2,803
11,164
9,186
Provision for income taxes
25,548
17,234
39,258
33,503
Foreign exchange (gains) / losses (3)
(3,066
)
470
(2,334
)
(4,883
)
Tax receivable agreement liability
adjustment (4)
—
—
—
—
Adjusted EBITDA
$
155,621
$
131,898
$
316,256
$
273,982
Less: Depreciation and amortization
(44,770
)
(41,867
)
(89,220
)
(82,833
)
Add: D&A related to acquisitions and
the Refinitiv Transaction (5)
31,761
30,240
63,530
59,843
Adjusted EBIT
$
142,612
$
120,271
$
290,566
$
250,992
Adjusted EBITDA margin (6)
52.4
%
50.6
%
52.0
%
51.3
%
Adjusted EBIT margin (6)
48.0
%
46.1
%
47.7
%
47.0
%
- Represents transaction and other costs related to the NFI
Acquisition, which closed in June 2021. Acquisition-related costs
primarily include legal, consulting and advisory fees and severance
costs incurred that relate to the acquisition transaction.
- 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
totaling $1.6 million and $2.8 million during the three months
ended June 30, 2022 and 2021, respectively, and $3.8 million and
$9.2 million during the six months ended June 30, 2022 and 2021,
respectively. During the three and six months ended June 30, 2022,
this adjustment also includes $5.7 million and $7.4 million,
respectively, of non-cash accelerated stock-based compensation
expense and related payroll taxes associated with our former CFO
and our retiring CEO.
- 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.
- 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.
- 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).
- Adjusted EBITDA margin and Adjusted EBIT margin are defined as
Adjusted EBITDA and Adjusted EBIT, respectively, divided by revenue
for the applicable period.
Three Months Ended
Six Months Ended
Reconciliation of Net Income to
Adjusted Net Income and Adjusted Diluted EPS
June 30,
June 30,
2022
2021
2022
2021
(in thousands, except per
share amounts)
Earnings per diluted share
$
0.33
$
0.27
$
0.73
$
0.60
—
Net income attributable to Tradeweb
Markets Inc.
$
68,344
$
55,316
$
151,309
$
123,175
Net income attributable to non-controlling
interests (1)
13,256
10,917
27,736
24,623
Net income
81,600
66,233
179,045
147,798
Provision for income taxes
25,548
17,234
39,258
33,503
Acquisition transaction costs (2)
15
2,966
(3
)
4,727
D&A related to acquisitions and the
Refinitiv Transaction (3)
31,761
30,240
63,530
59,843
Stock-based compensation expense (4)
7,295
2,803
11,164
9,186
Foreign exchange (gains) / losses (5)
(3,066
)
470
(2,334
)
(4,883
)
Tax receivable agreement liability
adjustment (6)
—
—
—
—
Adjusted Net Income before income
taxes
143,153
119,946
290,660
250,174
Adjusted income taxes (7)
(31,494
)
(26,388
)
(63,946
)
(55,038
)
Adjusted Net Income
$
111,659
$
93,558
$
226,714
$
195,136
Adjusted Diluted EPS (8)
$
0.47
$
0.39
$
0.95
$
0.82
- 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.
- Represents transaction and other costs related to the NFI
Acquisition, which closed in June 2021. Acquisition-related costs
primarily include legal, consulting and advisory fees and severance
costs incurred that relate to the acquisition transaction.
- 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).
- 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
totaling $1.6 million and $2.8 million during the three months
ended June 30, 2022 and 2021, respectively, and $3.8 million and
$9.2 million during the six months ended June 30, 2022 and 2021,
respectively. During the three and six months ended June 30, 2022,
this adjustment also includes $5.7 million and $7.4 million,
respectively, of non-cash accelerated stock-based compensation
expense and related payroll taxes associated with our former CFO
and our retiring CEO.
- 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.
- 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.
- Represents corporate income taxes at an assumed effective tax
rate of 22% applied to Adjusted Net Income before income taxes for
each of the three and six months ended June 30, 2022 and 2021.
- 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
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Diluted weighted average shares of Class A
and Class B common stock outstanding
207,272,675
207,463,960
207,371,372
206,253,756
Weighted average of other participating
securities (1)
76,426
—
80,778
—
Assumed exchange of LLC Interests for
shares of Class A or Class B common stock (2)
29,971,658
30,531,933
30,133,370
30,871,285
Adjusted diluted weighted average shares
outstanding
237,320,759
237,995,893
237,585,520
237,125,041
Adjusted Net Income (in thousands)
$
111,659
$
93,558
$
226,714
$
195,136
Adjusted Diluted EPS
$
0.47
$
0.39
$
0.95
$
0.82
- Represents weighted average unvested restricted stock units and
unsettled vested performance-based restricted stock units issued to
certain retired executives 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.
- 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
Six Months Ended
June 30,
June 30,
Reconciliation of Operating Expenses to Adjusted Expenses
2022
2021
2022
2021
(in thousands)
Operating expenses
$
190,531
$
177,048
$
390,415
$
352,120
Acquisition transaction costs (1)
(15
)
(2,966
)
3
(4,727
)
D&A related to acquisitions and the
Refinitiv Transaction (2)
(31,761
)
(30,240
)
(63,530
)
(59,843
)
Stock-based compensation expense (3)
(7,295
)
(2,803
)
(11,164
)
(9,186
)
Foreign exchange gains / (losses) (4)
3,066
(470
)
2,334
4,883
Adjusted Expenses
$
154,526
$
140,569
$
318,058
$
283,247
- Represents transaction and other costs related to the NFI
Acquisition, which closed in June 2021. Acquisition-related costs
primarily include legal, consulting and advisory fees and severance
costs incurred that relate to the acquisition transaction.
- 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).
- 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
totaling $1.6 million and $2.8 million during the three months
ended June 30, 2022 and 2021, respectively, and $3.8 million and
$9.2 million during the six months ended June 30, 2022 and 2021,
respectively. During the three and six months ended June 30, 2022,
this adjustment also includes $5.7 million and $7.4 million,
respectively, of non-cash accelerated stock-based compensation
expense and related payroll taxes associated with our former CFO
and our retiring CEO.
- 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
June 30,
Reconciliation of Cash Flows from
Operating Activities to Free Cash Flow
2022
2021
(in thousands)
Cash flow from operating activities
$
597,330
$
482,687
Less: Capitalization of software
development costs
(35,767
)
(33,215
)
Less: Purchases of furniture, equipment
and leasehold improvements
(23,158
)
(15,651
)
Free Cash Flow
$
538,405
$
433,821
TRADEWEB MARKETS INC. 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 Tradeweb Markets Inc.:
Three Months Ended
Six Months Ended
EPS: Net income attributable to
Tradeweb Markets Inc.
June 30,
June 30,
2022
2021
2022
2021
(in thousands, except share
and per share amounts)
Numerator:
Net income attributable to Tradeweb
Markets Inc.
$
68,344
$
55,316
$
151,309
$
123,175
Less: Distributed and undistributed
earnings allocated to unvested RSUs and unsettled vested PRSUs
(1)
(26
)
—
(53
)
—
Net income attributable to outstanding
shares of Class A and Class B common stock - Basic and Diluted
$
68,318
$
55,316
$
151,256
$
123,175
Denominator:
Weighted average shares of Class A and
Class B common stock outstanding - Basic
204,501,035
201,749,985
204,282,406
200,414,714
Dilutive effect of PRSUs
782,955
2,021,234
765,497
1,926,771
Dilutive effect of options
1,839,177
3,461,230
2,080,602
3,656,412
Dilutive effect of RSUs
149,508
231,511
242,867
255,859
Weighted average shares of Class A and
Class B common stock outstanding - Diluted
207,272,675
207,463,960
207,371,372
206,253,756
Earnings per share - Basic
$
0.33
$
0.27
$
0.74
$
0.61
Earnings per share - Diluted
$
0.33
$
0.27
$
0.73
$
0.60
- During the three and six months ended June 30, 2022, there was
a total of 76,426 and 80,778, respectively, weighted average
unvested RSUs and unsettled vested PRSUs that were considered a
participating security for purposes of calculating earnings per
share in accordance with the two-class method. There were none
during the three and six months ended June 30, 2021.
TRADEWEB MARKETS INC. REVENUES BY ASSET CLASS
(UNAUDITED)
Three Months Ended
June 30,
2022
2021
$ Change
% Change
Revenues
Variable
Fixed
Variable
Fixed
Variable
Fixed
Variable
Fixed
(dollars in thousands)
Rates
$
96,334
$
55,252
$
79,766
$
54,237
$
16,568
$
1,015
20.8
%
1.9
%
Credit
77,497
6,494
65,712
6,500
11,785
(6
)
17.9
%
(0.1
)%
Equities
20,409
2,250
14,612
2,785
5,797
(535
)
39.7
%
(19.2
)%
Money Markets
7,658
4,508
7,242
4,098
416
410
5.7
%
10.0
%
Market Data
—
21,030
—
20,007
—
1,023
—
5.1
%
Other
—
5,706
—
5,881
—
(175
)
—
(3.0
)%
Total revenue
$
201,898
$
95,240
$
167,332
$
93,508
$
34,566
$
1,732
20.7
%
1.9
%
TRADEWEB MARKETS INC. AVERAGE VARIABLE FEES PER
MILLION DOLLARS OF VOLUME (UNAUDITED)
Three Months Ended
June 30,
YoY
2022
2021
% Change
Rates
$
2.20
$
2.18
0.9
%
Cash Rates
$
2.27
$
2.02
12.0
%
Rates Derivatives
$
2.14
$
2.38
(10.0
)%
Swaps / Swaptions Tenor (greater than 1
year)
$
3.42
$
3.54
(3.6
)%
Other Rates Derivatives (1)
$
0.22
$
0.28
(20.8
)%
Credit
$
47.31
$
57.62
(17.9
)%
Cash Credit (2)
$
155.56
$
138.52
12.3
%
Credit Derivatives and U.S. Cash “EP”
$
7.73
$
7.91
(2.3
)%
Equities
$
19.77
$
14.50
36.3
%
Cash Equities
$
29.20
$
23.21
25.8
%
Equity Derivatives
$
5.93
$
5.34
11.1
%
Money Markets (Cash)
$
0.29
$
0.31
(5.9
)%
Total Fees per Million
$
2.78
$
2.70
3.1
%
Total Fees per Million excluding Other
Rates Derivatives (3)
$
3.14
$
2.95
6.7
%
- Includes Swaps/Swaptions of tenor less than 1 year and Rates
Futures.
- The “Cash Credit” category represents the “Credit” asset class
excluding (1) Credit Derivatives and (2) U.S. High Grade and High
Yield electronically processed (“EP”) activity.
- Included to contextualize the impact of short-tenored
Swaps/Swaptions and Rates Futures on totals for all periods
presented.
TRADEWEB MARKETS INC. AVERAGE DAILY VOLUME
(UNAUDITED)
2022 Q2
2021 Q2
YoY
Asset Class
Product
ADV (USD mm)
Volume (USD mm)
ADV (USD mm)
Volume (USD mm)
ADV
Rates
Cash
$
341,351
$
21,125,468
$
318,996
$
20,346,393
7.01
%
U.S. Government Bonds
131,936
8,180,022
106,904
6,841,840
23.42
%
European Government Bonds
35,429
2,161,176
30,515
1,891,937
16.10
%
Mortgages
168,603
10,453,372
177,443
11,356,322
(4.98
)%
Other Government Bonds
5,384
330,898
4,135
256,293
30.20
%
Derivatives
367,604
22,616,945
256,648
16,209,757
43.23
%
Swaps/Swaptions ≥ 1Y
221,191
13,602,492
165,825
10,441,873
33.39
%
Swaps/Swaptions < 1Y
145,004
8,927,045
89,975
5,713,635
61.16
%
Futures
1,410
87,408
848
54,248
66.31
%
Total
708,956
43,742,413
575,644
36,556,150
23.16
%
Credit
Cash
10,173
624,892
9,519
599,766
6.87
%
U.S. High Grade - Fully
Electronic
3,256
201,877
2,857
182,873
13.95
%
U.S. High Grade - Electronically
Processed
2,652
164,397
2,231
142,770
18.86
%
U.S. High Yield - Fully
Electronic
653
40,488
477
30,506
37.00
%
U.S. High Yield - Electronically
Processed
353
21,910
359
22,975
(1.56
)%
European Credit
1,741
106,178
1,911
118,454
(8.89
)%
Municipal Bonds
394
24,444
193
12,367
104.04
%
Chinese Bonds
1,001
58,041
1,373
82,377
(27.11
)%
Other Credit Bonds
123
7,556
118
7,444
4.27
%
Derivatives
16,477
1,013,032
8,566
540,584
92.34
%
Swaps
16,477
1,013,032
8,566
540,584
92.34
%
Total
26,650
1,637,924
18,085
1,140,350
47.36
%
Equities
Cash
9,945
613,836
8,239
516,731
20.70
%
U.S. ETFs
7,201
446,492
5,885
370,742
22.37
%
European ETFs
2,743
167,344
2,355
145,988
16.51
%
Derivatives
6,761
418,547
7,815
490,800
(13.49
)%
Convertibles/Swaps/Options
3,273
202,579
3,850
241,047
(14.97
)%
Futures
3,488
215,968
3,965
249,752
(12.05
)%
Total
16,706
1,032,383
16,055
1,007,530
4.06
%
Money Markets
Cash
424,016
26,207,624
366,978
23,326,831
15.54
%
Repurchase Agreements (Repo)
405,685
25,071,439
353,361
22,456,390
14.81
%
Other Money Markets
18,332
1,136,185
13,617
870,441
34.62
%
Total
424,016
26,207,624
366,978
23,326,831
15.54
%
ADV (USD mm)
Volume (USD mm)
ADV (USD mm)
Volume (USD mm)
YoY
Total
$
1,176,328
$
72,620,344
$
976,762
$
62,030,861
20.43
%
To access historical traded volumes, go to
https://www.tradeweb.com/newsroom/monthly-activity-reports/.
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 2022
guidance, and 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 documents of Tradeweb Markets Inc. on file with or furnished to
the SEC, may cause our actual results, performance or achievements
to differ materially from those expressed or implied by these
forward-looking statements. Given these risks and uncertainties,
you are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements
contained in this release are not guarantees of future performance
and our actual results of operations, financial condition or
liquidity, and the development of the industry and markets in which
we operate, may differ materially from the forward-looking
statements contained in this release. In addition, even if our
results of operations, financial condition, or liquidity, and
events in the industry and markets in which we operate, are
consistent with the forward-looking statements contained in this
release, they may not be predictive of results or developments in
future periods. Any forward-looking statement that we make in this
release speaks only as of the date of such statement. Except as
required by law, we do not undertake any obligation to update or
revise, or to publicly announce any update or revision to, any of
the forward-looking statements, whether as a result of new
information, future events or otherwise, after the date of this
release.
BASIS OF PRESENTATION
Tradeweb Markets Inc. (unless the context otherwise requires,
together with its subsidiaries, referred to as “we,” “our,”
“Tradeweb,” “Tradeweb Markets” or the “Company”) closed its IPO on
April 8, 2019. As a result of certain reorganization transactions
(the “Reorganization Transactions”) completed in connection with
the IPO, on April 4, 2019, Tradeweb Markets Inc. became a holding
company whose only material assets consist of its equity interest
in Tradeweb Markets LLC (“TWM LLC”) and related deferred tax
assets. As the sole manager of TWM LLC, Tradeweb Markets Inc.
operates and controls all of the business and affairs of TWM LLC
and, through TWM LLC and its subsidiaries, conducts its business.
As a result of this control, and because Tradeweb Markets Inc. has
a substantial financial interest in TWM LLC, Tradeweb Markets Inc.
consolidates the financial results of TWM LLC and its
subsidiaries.
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 100%.
Please refer to the Company's previously filed Annual Report on
Form 10-K for capitalized terms not otherwise defined herein.
TRADEWEB SOCIAL MEDIA
Investors and others should note that Tradeweb Markets announces
material financial and operational information using its investor
relations website, press releases, SEC filings and public
conference calls and webcasts. Information about Tradeweb Markets,
its business and its results of operations may also be announced by
posts on the Company’s accounts on the following social media
channels: Instagram, LinkedIn and Twitter. The information that we
post through these social media channels may be deemed material. As
a result, we encourage investors, the media, and others interested
in Tradeweb Markets to monitor these social media channels in
addition to following our press releases, SEC filings and public
conference calls and webcasts. These social media channels may be
updated from time to time on our investor relations website.
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 Diluted EPS, Adjusted
Expenses and Free Cash Flow, which are supplemental financial
measures that are not calculated or 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.
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 Tradeweb Markets Inc., net income, earnings
per share, operating income, operating expenses or cash flow from
operating activities or any other financial measure derived in
accordance with GAAP. You are encouraged to evaluate each
adjustment included in the reconciliations. In addition, in
evaluating Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT,
Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS,
Adjusted Expenses and Free Cash Flow, you should be aware that in
the future, we may incur expenses similar to the adjustments in the
presentation of these non-GAAP financial measures.
We present certain growth information on a “constant currency”
basis. Since our consolidated financial statements are presented in
U.S. dollars, we must translate non-U.S. dollar revenues and
expenses into U.S. dollars. Constant currency growth, which is a
non-GAAP financial measure, is defined as growth excluding the
effects of foreign currency fluctuations. Constant currency
information is calculated by translating the current period and
prior period’s results using the annual average exchange rates for
the prior period. We use constant currency growth as a supplemental
metric to evaluate our underlying performance between periods by
removing the impact of foreign currency fluctuations. We present
certain constant currency growth information because we believe it
provides investors and analysts a useful comparison of our results
and trends between periods. This information should be considered
in addition to, not as a substitute for, results reported in
accordance with GAAP.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005023/en/
Investor Relations Ashley Serrao + 1 646 430 6027
Ashley.Serrao@Tradeweb.com Media Relations Daniel Noonan + 1
646 767 4677 Daniel.Noonan@Tradeweb.com
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