Slide 1: 2Q23 Earnings Conference Call
2Q23 EARNINGS CONFERENCE CALL JULY 27, 2023 © 2023 Tradeweb Markets LLC. All rights reserved.
Slide 2: Disclaimers
Disclaimers The information in this presentation is current only as of its date and may have changed. We undertake no obligation to update this information in light of new information, future events or otherwise. Basis of Presentation Tradeweb Markets Inc. (unless the context otherwise requires, tog
Slide 3: 2Q23 Earnings Call Participants
2Q23 Earnings Call Participants STRATEGIC REVIEW GROWTH INITIATIVES Billy Hult Thomas Pluta CHIEF EXECUTIVE OFFICER PRESIDENT FINANCIAL REVIEW WELCOME/ Sara Furber INTRODUCTION CHIEF FINANCIAL OFFICER Ashley Serrao HEAD OF TREASURY, FP&A & IR 3 ©2023 Tradeweb Markets LLC. All rights reserved.
Slide 4: 2Q23 Summary
2Q23 Summary OPERATING PERFORMANCE HIGHLIGHTS REVENUE INTERNATIONAL ADJUSTED REVENUES NET INCOME2 $310.6M $109.7M $123.7M +4.5% y/y* +2.5% y/y +10.8% y/y +4.4% y/y (CC**)1 +2.1% y/y (CC)1 +11.1% y/y (CC)1 ADJUSTED ADJUSTED ADJUSTED EBITDA MARGIN2 EBIT MARGIN2 DILUTED EPS2 52.5% 47.9% $0.52 +12 bps y
Slide 5: 2Q23 Revenue Results
2Q23 Revenue Results ($ in millions) 2Q23 REVENUE GROWTH OF 4.5% (CC 4.4% Y/Y)1 $(0.3) $(0.5) 2Q23 y/y growth % 5.8% 0.1% (2.3)% 30.1% 8.3% (4.4)% 4.5% 2Q23 y/y constant currency growth % 1 5.6% 0.1% (2.9)% 30.0% 8.2% (4.4)% 4.4% YTD y/y growth % 6.1% 1.6% (1.7)% 29.3% 6.6% 5.7% 5.1% YTD y/y constan
Slide 6: Key Growth Initiatives
Key Growth Initiatives GLOBAL IRS (ADV AND SHARE1) 2Q23 Y/Y Growth U.S. TREASURIES (ADV AND SHARE2) 2Q23 Y/Y Growth ($ in billions) Total: +17% ($ in billions) Total: +2% Swaps/Swaptions≥ 1Y Swaps/Swaptions< 1Y Overall Share (%) $175 ADV Share (%) 27% 17.7% 16.3% $150 $144 24% $700 15.3% 18.0% $150
Slide 7: Credit Growth Initiatives
Credit Growth Initiatives EXPANDING SHARE1,2 (Share of TRACE GROWING FOUNDATIONAL U.S. RFQ PROTOCOL $ in billions, ADV) ($ in millions, ADV) Inst. $1,702 Client 618 705 740 806 896 Count $1,458 U.S. Investment Grade 24.6% 22.7% 21.3% $6.8 15.3% $6.1 $1,168 $4.8 $5.2 12.5% 9.7% $2.9 9.2% 9.9% 9.5% 7.
Slide 8: IRS Growth Initiatives
IRS Growth Initiatives RECOVERING GLOBAL INTEREST RATE SWAPS ADV1 TRADEWEB MARKET SHARE BY CURRENCY2 ($ in trillions) $3.0 21.9% 21.3% 20.7% $2.7 $2.6 $2.3 $2.3 $2.4 15.8% 16.2% $1.9 $2.0 13.8% 11.6%12.5% 8.1% 7.7% 8.9% 6.5% 2017 2018 2019 2020 2021 2022 6M22 6M23 Overall USD EUR GBP Other G11 EM 6M
Slide 9: Quarterly ADV
Quarterly ADV 2Q ADV of $1,297BN (+10.2% y/y, +10.8% ex Swaps <1 year) KEY RATES1 2Q23 Y/Y GROWTH CREDIT1 2Q23 Y/Y GROWTH ($ in billions) Total: +9% ($ in billions) Total: -29% Cash: +1% Cash: +4% Derivatives: +17% Derivatives: -49% $871 $900 $36 $33.2 $32.3 $749 $774 $800 $729 $709 $32 $29.3 $700 $
Slide 10: 2Q23 Financial Performance
2Q23 Financial Performance1 ($ in thousands, except share and per share amounts) REVENUE GROWTH OF 4.5% (4.4% CC)2 WITH 2Q23 EBITDA MARGIN OF 52.5% 6M23 EBITDA MARGIN EXPANSION OF +46 bps to 52.4% vs. FY 2022 OF 51.9% %∆ %∆ Constant Currency 2Q23 2Q22 2Q23 vs 2Q22 2Q23 vs 2Q222 Trading Revenues Fixe
Slide 11: Fees per Million Detail
Fees per Million1 Detail %∆ %∆ 2Q23 1Q23 2Q22 2Q23 vs 1Q23 2Q23 vs 2Q22 Rates $ 2.10 $ 2.09 $ 2.20 0.6 % (4.4) % Rates Cash $ 2.44 $ 2.54 $ 2.27 (3.9) % 7.7 % Rates Derivatives $ 1.83 $ 1.78 $ 2.14 3.1 % (14.5) % Rates Derivatives >= 1 Yr $ 2.75 $ 3.03 $ 3.42 (9.4) % (19.6) % Other Rates Derivatives
Slide 12: Adjusted Expenses Detail
Adjusted Expenses1 Detail ($ in thousands) 2Q23 ADJUSTED EXPENSES INCREASED 4.7% (4.3% CC y/y)2 %∆ %∆ Constant Currency 2Q23 2Q22 2Q23 vs 2Q22 2Q23 vs 2Q22 2 Adjusted Expenses Employee compensation and benefits a $ 103,339 $ 102,595 0.7 % 0.9 % Depreciation and amortization b 14,258 13,009 9.6 % 9.7
Slide 13: Capital Management & FY Guidance
Capital Management & FY Guidance Capital Management Key Highlights ▪ $1.4 billion in cash and cash equivalents (June 30th, 2023). We expect to use our cash balances to fund the pending AUD125 million acquisition of Yieldbroker5 ▪ Undrawn $500 million credit facility ▪ TTM FCF: $634.8 million1 (+17.9
Slide 14: Share Count Sensitivity
Share Count Sensitivity PRO FORMA ADJUSTED FULLY DILUTED WEIGHTED AVERAGE SHARES Assumed Average Share Price Q3 2023 $60.00 236,390,782 $70.00 236,603,241 $80.00 236,803,753 $90.00 236,967,625 The pro forma adjusted fully diluted weighted average shares outstanding and assumed share prices provided
Slide 15: Appendix
APPENDIX 15 ©2023 Tradeweb Markets LLC. All rights reserved.
Slide 16: FPM Commentary
FPM Commentary RATES Avg FPM: -4% CREDIT Avg FPM: +38% Cash Rates: +8% Cash Credit: -2% • Higher FPM due to a positive mix shift towards higher fee per million • Lower FPM due to a mix shift away from munis partially offset by U.S. Treasuries. U.S. Treasuries fee per million was also aided by strong
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ($ in thousands) Net Income to Adjusted EBITDA, Adjusted EBIT and Adjusted EBT 2Q23 2Q22 6M23 FY22 Net income $ 101,939 $ 81,600 $ 204,132 $ 359,613 Merger and acquisition transaction and integration costs 1 1,212 15 1,797 1,069 Net interest (income) exp
Slide 18: Reconciliation of Non-GAAP Financial Measures cont.
Reconciliation of Non-GAAP Financial Measures cont. ($ in thousands, except share and per share amounts) Operating Expenses to Adjusted Expenses 2Q23 2Q22 Operating Expenses $ 194,278 $ 190,531 Merger and acquisition transaction and integration costs 1 (1,212) (15) D&A related to acquisitions and th
Slide 19: Reconciliation of Non-GAAP Financial Measures cont.
Reconciliation of Non-GAAP Financial Measures cont. ($ in thousands, except share and per share amounts) Reconciliation of Net Income attributable to Tradeweb Markets Successor Successor Successor Successor Successor Successor Successor Predecessor Predecessor Predecessor Inc. to Adjusted Net Income
Slide 20: Quarterly Volumes
Quarterly Volumes Q2 2023 Q1 2023 Q2 2022 QoQ YoY Asset Class Product ADV (USD mm) Volume (USD mm) ADV (USD mm) Volume (USD mm) ADV (USD mm) Volume (USD mm) ADV ADV Rates Cash 344,674 21,627,622 362,602 22,567,692 341,367 21,126,389 -4.94% 0.97% U.S. Government Bonds 135,128 8,513,069 144,083 8,933,
Slide 21: U.S. Corporate Bonds
U.S. Corporate Bonds USING MARKET REPORTING STANDARDS TRADEWEB MARKETS Q2 2023 Q1 2023 Q2 2022 QoQ YoY Volume (USD mm) Trades Volume (USD mm) Trades Volume (USD mm) Trades Volume (USD mm) Volume (USD mm) % of % of % of % of % of % of % of % of Product Type ADV Total TRACE ADT Total TRACE ADV Total T
Slide 22: Contacts
Contacts Ashley Serrao, CMA, CFA Tradeweb Markets Inc. Head of Treasury, FP&A & Investor Relations 1177 Avenue of the Americas Tel: 646-430-6027 New York, NY 10036 Email: ashley.serrao@tradeweb.com For more information on Tradeweb: www.tradeweb.com Sameer Murukutla, CFA Director, Investor Relations