Tradeweb Markets Inc. · NASDAQ:TW
Tradeweb Markets — Q2 2024 Earnings Presentation
22 slides from Tradeweb Markets's earnings presentation, Jul 25, 2024
Slide 1: 2Q24 Earnings Conference Call
2Q24 EARNINGS CONFERENCE CALL JULY 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: 2Q24 Earnings Call Participants
2Q24 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: 2Q24 Summary
2Q24 Summary OPERATING PERFORMANCE HIGHLIGHTS REVENUE INTERNATIONAL ADJUSTED REVENUES NET INCOME2 $405.0M $152.8M $166.7M +30.4% y/y* +39.3% y/y +34.7% y/y +30.8% y/y (CC**)1 +40.6% y/y (CC)1 +34.5% y/y (CC)1 ADJUSTED ADJUSTED ADJUSTED EBITDA MARGIN2 EBIT MARGIN2 DILUTED EPS2 53.5% 49.7% $0.70 +98 b
Slide 5: 2Q24 Revenue Results
2Q24 Revenue Results ($ in millions) 2Q24 REVENUE GROWTH OF 30.4% (CC 30.8% Y/Y)1 $0.5 $0.7 2Q24 y/y growth % 35.7% 32.5% 3.3% 14.0% 28.3% 9.1% 30.4% 2Q24 y/y constant currency growth % 1 36.4% 32.6% 3.8% 14.2% 28.4% 9.2% 30.8% YTD y/y growth % 30.5% 31.3% 3.3% 13.7% 28.8% 1.4% 27.2% YTD y/y constan
Slide 6: Key Growth Initiatives
Key Growth Initiatives GLOBAL IRS (ADV AND SHARE1) 2Q24 Y/Y Growth U.S. TREASURIES (ADV AND SHARE2) 2Q24 Y/Y Growth ($ in billions) Total: +82% ($ in billions) Total: +50% Swaps/Swaptions≥ 1Y Swaps/Swaptions< 1Y Overall Share (%) $225 ADV Share (%) 23.0% 27% 23.6% 23.6% $200 22.1% 22.0% 25.0% 20.5%
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 705 740 806 896 953 Count $2,215 U.S. Investment Grade 27.0% $9.6 22.7% 24.7% $1,702 15.3% 21.3% $6.8 8.2% $6.1 $4.8 $5.2 $1,458 9.2% 9.9% 9.7% 9.
Slide 8: IRS Growth Initiatives
IRS Growth Initiatives GLOBAL INTEREST RATE SWAPS ADV 1 TRADEWEB MARKET SHARE BY CURRENCY1,2 ($ in trillions) $3.4 33.4% $3.5 $2.9 $3.0 $3.0 $2.7 $2.3 $2.4 22.8% $2.5 $2.3 21.9% $2.0 20.7% 21.2% $1.9 19.1% $2.0 15.8% 12.5% 13.4% 12.1% $1.5 7.6% 8.9% $1.0 $0.5 $0.0 2017 2018 2019 2020 2021 2022 2023
Slide 9: 2Q24 Financial Performance
2Q24 Financial Performance1 ($ in thousands, except share and per share amounts) REVENUE GROWTH OF 30.4% (30.8% CC)2 WITH 2Q24 ADJ. EBITDA MARGIN OF 53.5% 6M24 ADJ. EBITDA MARGIN EXPANSION OF +117 bps to 53.6% vs. FY 2023 OF 52.4% %∆ %∆ Constant Currency 2Q24 2Q23 2Q24 vs 2Q23 2Q24 vs 2Q232 Trading
Slide 10: Fees per Million Detail
Fees per Million1 Detail %∆ %∆ 2Q24 1Q24 2Q23 2Q24 vs 1Q24 2Q24 vs 2Q23 Rates $ 2.00 $ 1.98 $ 2.10 1.3 % (4.8) % Rates Cash $ 2.54 $ 2.56 $ 2.44 (0.5) % 4.1 % Rates Derivatives $ 1.69 $ 1.65 $ 1.83 2.4 % (7.9) % Rates Derivatives >= 1 Yr $ 2.71 $ 2.49 $ 2.75 8.5 % (1.5) % Other Rates Derivatives 2 $
Slide 11: Adjusted Expenses Detail
Adjusted Expenses1 Detail ($ in thousands) 2Q24 ADJUSTED EXPENSES INCREASED 25.8% (27.0% CC y/y)2 %∆ %∆ Constant Currency 2Q24 2Q23 2Q24 vs 2Q23 2Q24 vs 2Q23 2 Adjusted Expenses Employee compensation and benefits a $ 136,663 $ 103,339 32.2 % 32.2 % Depreciation and amortization b 15,221 14,258 6.8 %
Slide 12: Capital Management & FY Guidance
Capital Management & FY Guidance Capital Management Key Highlights ▪ $1.72 billion in cash and cash equivalents (June 30th, 2024) and undrawn $500 million credit facility ▪ $785 million acquisition of ICD is expected to close in the third quarter of 2024, subject to the satisfaction of customary clo
Slide 13: Share Count Sensitivity
Share Count Sensitivity PRO FORMA ADJUSTED FULLY DILUTED WEIGHTED AVERAGE SHARES Assumed Average Share Price Q3 2024 $90.00 238,057,949 $100.00 238,147,208 $110.00 238,233,356 $120.00 238,315,392 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 2Q24 ADV of $1,922BN (+48.3% y/y, +41.1% ex Swaps <1 year) KEY RATES1 2Q24 Y/Y GROWTH CREDIT1 2Q24 Y/Y GROWTH ($ in billions) Total: +61% ($ in billions) Total: +56% Cash: +34% Cash: +59% Derivatives: +83% Derivatives: +54% $1,400 $34.9 $1,261 $1,249 $36 $1,300 $32.3 $1,200 $1,088 $32
Slide 16: FPM Commentary
FPM Commentary RATES Avg FPM: -5% CREDIT Avg FPM: -15% Cash Rates: +4% Cash Credit: -12% • Higher FPM due to an increase in the European and Australian • Lower FPM due to a mix shift away from municipals and session government bond fees per million. trading, which carry a higher FPM. Swaps/Swaptions
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ($ in thousands) Net Income to Adjusted EBITDA, Adjusted EBIT and Adjusted EBT 2Q24 2Q23 6M24 FY23 Net income $ 136,416 $ 101,939 $ 279,798 $ 419,503 Merger and acquisition transaction and integration costs 1 3,650 1,212 7,264 8,042 Interest income (21,5
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 2Q24 2Q23 Operating expenses $ 242,457 $ 194,278 Merger and acquisition transaction and integration costs 1 (3,650) (1,212) D&A related t
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 Q2 2024 Q1 2024 Q2 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 462,335 29,121,086 461,780 28,267,435 344,674 21,627,623 0.12% 34.14% U.S. Government Bonds 202,460 12,754,982 196,421 11,98
Slide 21: U.S. Corporate Bonds
U.S. Corporate Bonds USING MARKET REPORTING STANDARDS TRADEWEB MARKETS Q2 2024 Q1 2024 Q2 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