Tradeweb Markets Inc. · NASDAQ:TW
Tradeweb Markets — Q1 2024 Earnings Presentation
22 slides from Tradeweb Markets's earnings presentation, Apr 25, 2024
Slide 1: 1Q24 Earnings Conference Call
1Q24 EARNINGS CONFERENCE CALL APRIL 25, 2024 © 2024 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: 1Q24 Earnings Call Participants
1Q24 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 ©2024 Tradeweb Markets LLC. All rights reserved.
Slide 4: 1Q24 Summary
1Q24 Summary OPERATING PERFORMANCE HIGHLIGHTS REVENUE INTERNATIONAL ADJUSTED REVENUES NET INCOME2 $408.7M $154.6M $167.9M +24.1% y/y* +28.3% y/y +30.1% y/y +23.8% y/y (CC**)1 +27.3% y/y (CC)1 +30.8% y/y (CC)1 ADJUSTED ADJUSTED ADJUSTED EBITDA MARGIN2 EBIT MARGIN2 DILUTED EPS2 53.7% 50.0% $0.71 +141
Slide 5: 1Q24 Revenue Results
1Q24 Revenue Results ($ in millions) 1Q24 REVENUE GROWTH OF 24% (CC 23.8% Y/Y)1 $0.8 $(0.3) 1Q24 y/y growth % 25.6% 30.1% 3.2% 13.4% 29.4% (5.4)% 24.1% 1Q24 y/y constant currency growth % 1 25.3% 29.8% 2.8% 13.1% 28.8% (5.4)% 23.8% 1. Changes presented on a “constant currency” basis reflect changes
Slide 6: Key Growth Initiatives
Key Growth Initiatives GLOBAL IRS (ADV AND SHARE1) 1Q24 Y/Y Growth U.S. TREASURIES (ADV AND SHARE2) 1Q24 Y/Y Growth ($ in billions) Total: +56% ($ in billions) Total: +36% Swaps/Swaptions≥ 1Y Swaps/Swaptions< 1Y Overall Share (%) $225 ADV Share (%) 27% 23.6% $200 22.1% 22.0% 25.0% 20.5% 24% $1,000 1
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. Client 690 722 783 877 935 Count $2,217 U.S. Investment Grade 26.2% $10.4 23.0% $1,719 19.5% 22.5% $7.5 $6.1 8.6% 15.0% $5.7 $4.0 $1,451 9.3% 10.5% 9.7%
Slide 8: IRS Growth Initiatives
IRS Growth Initiatives GLOBAL INTEREST RATE SWAPS ADV1 TRADEWEB MARKET SHARE BY CURRENCY2 ($ in trillions) $3.6 31.6% $3.5 $3.3 $2.9 $3.0 $2.7 22.0% $2.3 $2.3 $2.4 20.4% 21.3% 20.1% $2.5 18.2% $1.9 $2.0 $2.0 15.3% 12.3% 12.7% $1.5 11.2% 7.2% 8.2% $1.0 $0.5 $0.0 2017 2018 2019 2020 2021 2022 2023 3M2
Slide 9: 1Q24 Financial Performance
1Q24 Financial Performance1 ($ in thousands, except share and per share amounts) REVENUE GROWTH OF 24.1% (23.8% CC)2 WITH 1Q24 EBITDA MARGIN OF 53.7% 1Q24 EBITDA MARGIN EXPANSION OF +128 bps to 53.7% vs. FY 2023 OF 52.4% %∆ %∆ Constant Currency 1Q24 1Q23 1Q24 vs 1Q23 1Q24 vs 1Q232 Trading Revenues F
Slide 10: Fees per Million Detail
Fees per Million1 Detail %∆ %∆ 1Q24 4Q23 1Q23 1Q24 vs 4Q23 1Q24 vs 1Q23 Rates $ 1.98 $ 1.95 $ 2.09 1.3 % (5.5) % Rates Cash $ 2.56 $ 2.47 $ 2.54 3.7 % 0.6 % Rates Derivatives $ 1.65 $ 1.66 $ 1.78 (0.6) % (7.2) % Rates Derivatives >= 1 Yr $ 2.49 $ 2.36 $ 3.03 5.5 % (17.7) % Other Rates Derivatives 2
Slide 11: Adjusted Expenses Detail
Adjusted Expenses1 Detail ($ in thousands) 1Q24 ADJUSTED EXPENSES INCREASED 19.5% (18.3% CC y/y)2 %∆ %∆ Constant Currency 1Q24 1Q23 1Q24 vs 1Q23 1Q24 vs 1Q23 2 Adjusted Expenses Employee compensation and benefits a $ 141,669 $ 113,643 24.7 % 23.9 % Depreciation and amortization b 14,970 13,787 8.6 %
Slide 12: Capital Management & FY Guidance
Capital Management & FY Guidance Capital Management Key Highlights ▪ $1.54 billion in cash and cash equivalents (March 31st, 2024) and undrawn $500 million credit facility ▪ As consideration for the acquisition of r8fin, we paid $89.2 million in cash and issued 374,601 shares of Class A common stock
Slide 13: Share Count Sensitivity
Share Count Sensitivity PRO FORMA ADJUSTED FULLY DILUTED WEIGHTED AVERAGE SHARES Assumed Average Share Price Q2 2024 $90.00 237,908,041 $100.00 238,015,265 $110.00 238,117,484 $120.00 238,213,463 The pro forma adjusted fully diluted weighted average shares outstanding and assumed share prices provid
Slide 14: Appendix
APPENDIX 14 ©2024 Tradeweb Markets LLC. All rights reserved.
Slide 15: Quarterly ADV
Quarterly ADV 1Q ADV of $1,899BN (+39.1% y/y, +40.8% ex Swaps <1 year) KEY RATES1 1Q24 Y/Y GROWTH CREDIT1 1Q24 Y/Y GROWTH ($ in billions) Total: +45% ($ in billions) Total: +8% Cash: +27% Cash: +52% Derivatives: +57% Derivatives: -16% $1,400 $34.9 $1,261 $36 $33.2 $1,300 $32.3 $1,200 $1,088 $32 $29.
Slide 16: FPM Commentary
FPM Commentary RATES Avg FPM: -6% CREDIT Avg FPM: +24% Cash Rates: +1% Cash Credit: -4% • Higher FPM due to an increase in the European government bond • Lower FPM due to a mix shift away from high yield and municipals, fee per million. which carry a higher FPM. Swaps/Swaptions ≥ 1Yr: -18% Credit De
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ($ in thousands) Net Income to Adjusted EBITDA, Adjusted EBIT and Adjusted EBT 1Q24 1Q23 FY23 Net income $ 143,382 $ 102,193 $ 419,503 Merger and acquisition transaction and integration costs 1 3,614 585 8,042 Interest income (21,060) (12,940) (67,397) I
Slide 18: Reconciliation of Non-GAAP Financial Measures cont.
Reconciliation of Non-GAAP Financial Measures cont. ($ in thousands, except share and per share amounts) Reconciliation of Operating Expenses to Adjusted Expenses 1Q24 1Q23 Operating expenses $ 241,061 $ 206,683 Merger and acquisition transaction and integration costs 1 (3,614) (585) D&A related to
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 Successor Predecessor Predecessor Predecessor Inc. to Adjusted
Slide 20: Quarterly Volumes
Quarterly Volumes Q1 2024 Q4 2023 Q1 2023 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 461,826 28,270,241 397,946 24,713,727 362,707 22,574,171 16.05% 27.33% U.S. Government Bonds 196,469 11,984,583 162,335 10,0
Slide 21: U.S. Corporate Bonds
U.S. Corporate Bonds USING MARKET REPORTING STANDARDS TRADEWEB MARKETS Q1 2024 Q4 2023 Q1 2023 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: Sameer Murukutla, CFA www.tradeweb.com Managing Director, Investor R