Tradeweb Markets Inc. · NASDAQ:TW
Tradeweb Markets — Q3 2024 Earnings Presentation
22 slides from Tradeweb Markets's earnings presentation, Oct 30, 2024
Slide 1: 3Q24 Earnings Conference Call
3Q24 EARNINGS CONFERENCE CALL OCTOBER 30, 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: 3Q24 Earnings Call Participants
3Q24 Earnings Call Participants STRATEGIC REVIEW & GROWTH INTIATIVES Billy Hult CHIEF EXECUTIVE OFFICER 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: 3Q24 Summary
3Q24 Summary OPERATING PERFORMANCE HIGHLIGHTS REVENUE INTERNATIONAL ADJUSTED REVENUES NET INCOME2 $448.9M $169.2M $179.3M +36.7% y/y* +40.4% y/y +37.1% y/y +36.5% y/y (CC**)1 +39.9% y/y (CC)1 +35.6% y/y (CC)1 ADJUSTED ADJUSTED ADJUSTED EBITDA MARGIN2 EBIT MARGIN2 DILUTED EPS2 53.4% 49.9% $0.75 +154
Slide 5: 3Q24 Revenue Results
3Q24 Revenue Results ($ in millions) 3Q24 REVENUE GROWTH OF 36.7% (CC 36.5% Y/Y)1 3Q24 y/y growth % 34.9% 31.4% 22.1% 129.2% 29.6% 4.0% 36.7% 3Q24 y/y constant currency growth % 1 34.7% 31.3% 22.0% 128.2% 29.2% 4.0% 36.5% YTD y/y growth % 32.0% 31.3% 8.9% 52.9% 29.1% 2.2% 30.4% YTD y/y constant curr
Slide 6: Key Growth Initiatives
Key Growth Initiatives GLOBAL IRS (ADV AND SHARE1) 3Q24 Y/Y Growth U.S. TREASURIES (ADV AND SHARE2) 3Q24 Y/Y Growth ($ in billions) Total: +62% ($ in billions) Total: +56% Swaps/Swaptions≥ 1Y Swaps/Swaptions< 1Y Overall Share (%) $250 ADV Share (%) 23.6% 23.0% 23.0% 27% 23.6% $225 22.1% 22.0% 22.4%
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 742 820 891 976 $2,341 714 Count U.S. Investment Grade 24.7% $9.3 25.4% 23.9% $1,599 21.0% $6.8 7.0% 17.7% $6.0 $3.9 $4.5 9.9% 8.8% 10.0% 8.3% 17.
Slide 8: IRS Growth Initiatives
IRS Growth Initiatives GLOBAL INTEREST RATE SWAPS ADV 1 TRADEWEB MARKET SHARE BY CURRENCY1,2 ($ in trillions) 32.4% $3.5 $3.5 $2.9 $2.9 22.7% 23.0% $3.0 $2.7 $2.4 22.1% $2.3 $2.3 20.6% $2.5 18.9% $1.9 $2.0 16.5% $2.0 13.2% 14.3% 13.0% $1.5 8.5% 8.8% $1.0 $0.5 $0.0 2017 2018 2019 2020 2021 2022 2023
Slide 9: 3Q24 Financial Performance
3Q24 Financial Performance1 ($ in thousands, except share and per share amounts) REVENUE GROWTH OF 36.7% (36.5% CC)2 WITH 3Q24 ADJ. EBITDA MARGIN OF 53.4% 9M24 ADJ. EBITDA MARGIN EXPANSION OF +111 bps to 53.5% vs. FY 2023 OF 52.4% %∆ %∆ Constant Currency 3Q24 3Q23 3Q24 vs 3Q23 3Q24 vs 3Q232 Trading
Slide 10: Fees per Million Detail
Fees per Million1 Detail %∆ %∆ 3Q24 2Q24 3Q23 3Q24 vs 2Q24 3Q24 vs 3Q23 Rates $ 2.07 $ 2.00 $ 2.10 3.5 % (1.4) % Rates Cash $ 2.45 $ 2.54 $ 2.42 (3.8) % 1.1 % Rates Derivatives $ 1.85 $ 1.69 $ 1.87 9.4 % (1.5) % Rates Derivatives >= 1 Yr $ 3.19 $ 2.71 $ 2.72 17.7 % 17.2 % Other Rates Derivatives 2 $
Slide 11: Adjusted Expenses Detail
Adjusted Expenses1 Detail ($ in thousands) 3Q24 ADJUSTED EXPENSES INCREASED 30.4% (31.5% CC y/y)2 %∆ %∆ Constant Currency 3Q24 3Q23 3Q24 vs 3Q23 3Q24 vs 3Q23 2 Adjusted Expenses Employee compensation and benefits a $ 154,674 $ 114,147 35.5 % 35.2 % Depreciation and amortization b 15,923 14,588 9.2 %
Slide 12: Capital Management & FY Guidance
Capital Management & FY Guidance Capital Management Key Highlights ▪ $1.17 billion in cash and cash equivalents (September 30th, 2024) and undrawn $500 million credit facility ▪ As purchase consideration for the August 1, 2024 acquisition of ICD, we paid $771.2 million in net cash and also issued 41
Slide 13: Share Count Sensitivity
Share Count Sensitivity PRO FORMA ADJUSTED FULLY DILUTED WEIGHTED AVERAGE SHARES Assumed Average Share Price Q4 2024 $110.00 238,283,775 $120.00 238,354,244 $130.00 238,415,334 $140.00 238,467,696 $150.00 238,513,077 The pro forma adjusted fully diluted weighted average shares outstanding and assume
Slide 14: Appendix
APPENDIX 14 ©2024 Tradeweb Markets LLC. All rights reserved.
Slide 15: Quarterly ADV
Quarterly ADV 3Q24 ADV of $2,212BN (+55.3% y/y, +47.5% ex Swaps <1 year) KEY RATES1 3Q24 Y/Y GROWTH CREDIT1 3Q24 Y/Y GROWTH ($ in billions) Total: +52% ($ in billions) Total: +42% Cash: +37% Cash: +17% Derivatives: +63% Derivatives: +61% $1,500 $1,261 $1,298 $42.6 $1,249 $45 $1,250 $1,087 $40 $34.9
Slide 16: Fee Per Million (FPM) Commentary
Fee Per Million (FPM) Commentary RATES Avg FPM: -1% CREDIT Avg FPM: -8% Cash Rates: +1% Cash Credit: -6% • Higher FPM primarily due to an increase in Australian government • Lower FPM due to a mix shift away from municipals, which carry a bond FPM. higher FPM. Swaps/Swaptions ≥ 1Yr: +17% Credit Deri
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ($ in thousands) Net Income to Adjusted EBITDA, Adjusted EBIT and Adjusted EBT 3Q24 3Q23 9M24 FY23 Net income $ 130,223 $ 111,630 $ 410,021 $ 419,503 Merger and acquisition transaction and integration costs 1 14,488 4,614 21,752 8,042 Interest income (16
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 3Q24 3Q23 Operating expenses $ 289,599 $ 203,619 Merger and acquisition transaction and integration costs 1 (14,488) (4,614) D&A related
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 Successor Successor Successor Successor Successor Successor Successor Successor Predecessor Predecessor Predecessor Markets Inc. to Adj. Net
Slide 20: Quarterly Volumes
Quarterly Volumes Q3 2024 Q2 2024 Q3 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 496,603 31,860,816 462,335 29,121,086 361,421 22,842,103 7.41% 37.40% U.S. Government Bonds 221,864 14,199,309 202,460 12,75
Slide 21: U.S. Corporate Bonds
U.S. Corporate Bonds USING MARKET REPORTING STANDARDS TRADEWEB MARKETS Q3 2024 Q2 2024 Q3 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 Tradeweb Markets Inc. 1177 Avenue of the Americas New York, NY 10036 www.tradeweb.com Ashley Serrao, CMA, CFA Sameer Murukutla, CFA Head of Treasury, FP&A & Investor Relations Managing Director, Investor Relations Tel: 646-430-6027 Tel: 646-767-4864 Email: ashley.serrao@tradeweb.com Email: