Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019 | |
Document and Entity Information | |
Entity Registrant Name | Tradeweb Markets Inc. |
Entity Central Index Key | 0001758730 |
Document Type | S-1 |
Document Period End Date | Jun. 30, 2019 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Amendment Flag | false |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition | Dec. 31, 2018USD ($) |
Assets | |
Cash and cash equivalents | $ 410,104,000 |
Total assets | 4,997,139,000 |
Stockholders' Equity/Members' Capital | |
Total stockholders' equity attributable to Tradeweb Markets Inc./members' equity | 4,572,334,000 |
Total equity | 4,572,334,000 |
Total liabilities and stockholders' equity/members' capital | 4,997,139,000 |
Tradeweb Markets Inc. only | |
Assets | |
Cash and cash equivalents | 100 |
Total assets | 100 |
Stockholders' Equity/Members' Capital | |
Common stock | 1 |
Additional paid-in capital | 99 |
Total liabilities and stockholders' equity/members' capital | $ 100 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - Tradeweb Markets Inc. only - $ / shares | Dec. 31, 2018 | Nov. 07, 2018 |
Common Stock, par value per share | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 100 | |
Common stock, shares outstanding | 100 |
Organization
Organization | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Organization | 1. Organization Tradeweb Markets Inc. (the “Corporation”) was incorporated as a Delaware corporation on November 7, 2018 for the purpose of completing certain reorganization transactions in order to carry on the business of Tradeweb Markets LLC (“TWM LLC”) and conducting an initial public offering (“IPO”) as described below under “—Initial Public Offering” and “—Reorganization Transactions.” The Corporation is a consolidating subsidiary of BCP York Holdings, (“BCP”) a company owned by certain investment funds affiliated with The Blackstone Group L.P. (“Blackstone”), through BCP’s majority ownership interest in Refinitiv Holdings Limited (“Refinitiv” or the “Parent”). As of June 30, 2019, Refinitiv owns a majority ownership interest in the Company (as defined below). The Corporation is a holding company whose principal asset is LLC Interests (as defined below) of TWM LLC. As the sole manager of TWM LLC, the Corporation operates and controls all of the business and affairs of TWM LLC and, through TWM LLC and its subsidiaries, conducts the Corporation’s business. As a result of this control, and because the Corporation has a substantial financial interest in TWM LLC, the Corporation consolidates the financial results of TWM LLC and reports a non-controlling interest in the Corporation’s consolidated financial statements. As of June 30, 2019, Tradeweb Markets Inc. owns 64.3% of TWM LLC and the Continuing LLC Owners (defined below) own the remaining 35.7% of TWM LLC. Unless the context otherwise requires, references to the “Company” refer to Tradeweb Markets Inc. and its consolidated subsidiaries, including TWM LLC, following the completion of the Reorganization Transactions (as defined below), and TWM LLC and its consolidated subsidiaries prior to the completion of the Reorganization Transactions. The Company is a leader in building and operating electronic marketplaces for a global network of clients across the institutional, wholesale and retail client sectors. The Company’s principal subsidiaries include: · Tradeweb LLC (“TWL”), a registered broker-dealer under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority (“FINRA”), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”). Tradeweb Europe Limited (“TEL”), a Multilateral Trading Facility regulated by the Financial Conduct Authority (the “FCA”) in the UK, which maintains branches in Asia which are regulated by certain Asian securities regulators. TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC. DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC. Tradeweb Japan K.K. (“TWJ”), a security house regulated by the Japanese Financial Services Agency (“JFSA”) and the Japan Securities Dealers Association (“JSDA”). Tradeweb EU B.V. (“TWEU”), a Trading Venue and Approved Publication Arrangement regulated by the Netherlands Authority for the Financial Markets (“AFM”). The Company, through its subsidiary Tradeweb IDB Markets Inc. (“TWIDB”) (formerly known as Hydrogen Holdings Corporation), owns Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.). DW is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. DW is also registered as an introducing broker with the CFTC and NFA. Initial Public Offering On April 8, 2019, the Corporation completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which includes 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1,161,270,000 in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase membership interests of TWM LLC from certain existing equityholders of TWM LLC (and cancelled the corresponding shares of common stock as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. Reorganization Transactions Prior to the closing of the IPO, a series of reorganization transactions (the “Reorganization Transactions”) was completed among the Corporation, TWM LLC and the following parties: The Owners of TWM LLC prior to the Reorganization Transactions, including an indirect subsidiary (the “Refinitiv LLC Owner”) of Refinitiv, certain investment and commercial banks (collectively, the “Bank Stockholders”) and members of management, that continued to own LLC Interests (as defined below) immediately prior to the closing of the IPO and who received shares of the Corporation’s Class C common stock, shares of the Corporation’s Class D common stock or a combination of both, as the case may be (collectively, the “Continuing LLC Owners”); and An indirect subsidiary (the “Refinitiv Direct Owner” and, together with the Refinitiv LLC Owner, the “Refinitiv Owners”) of Refinitiv that owned interests in an entity that held membership interests of TWM LLC prior to the Reorganization Transactions and contributed such entity to the Corporation (the “Refinitiv Contribution”). The following Reorganization Transactions occurred: TWM LLC’s limited liability company agreement (the “TWM LLC Agreement”) was amended and restated to, among other things, (i) provide for a new single class of common membership interests in TWM LLC (“LLC Interests”), (ii) exchange all of the existing membership interests of TWM LLC’s existing equityholders for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. See Note 9 – Stockholders’ Equity. The Corporation’s certificate of incorporation was amended and restated to, among other things, provide for Class A common stock, Class B common stock, Class C common stock and Class D common stock. See Note 9 – Stockholders’ Equity. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Continuing LLC Owners, on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (and the Corporation canceled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). · As a result of the Refinitiv Contribution (described above), the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. See Note 9 – Stockholders’ Equity. The Corporation’s board of directors adopted a new omnibus equity incentive plan, under which equity awards may be made in respect of shares of the Corporation’s Class A common stock. It also assumed sponsorship of an option plan and PRSU plan formerly sponsored by TWM LLC. See Note 11 – Stock-Based Compensation Plans. The Corporation entered into a tax receivable agreement (the “Tax Receivable Agreement”) with TWM LLC and the Continuing LLC Owners. See Note 8 – Tax Receivable Agreement. Acquisition of Parent Company and Presentation of Financial Statements A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from Thomson Reuters Corporation (“TR”). The accompanying consolidated financial statements are presented for two periods: predecessor and successor, which relate to the periods preceding and succeeding the Refinitiv Transaction, respectively. The Refinitiv Transaction results in a new basis of accounting beginning on October 1, 2018 and the financial reporting periods are presented as follows: · The successor period of the Company, reflecting the Refinitiv Transaction, as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019. · The predecessor period of the Company for the three and six months ended June 30, 2018. See Note 3 – Pushdown Accounting. | |
Tradeweb Markets Inc. only | ||
Organization | Tradeweb Markets Inc. Notes to Statement of Financial Condition December 31, 2018 1. ORGANIZATION Tradeweb Markets Inc. (the “Corporation”) was formed as a Delaware corporation on November 7, 2018. The Corporation was formed for the purpose of completing certain reorganization transactions in order to carry on the business of Tradeweb Markets LLC and conducting a public offering. It is expected that following the completion of such reorganization transactions the Corporation will be the sole managing member of Tradeweb Markets LLC and will operate and control all of the businesses and affairs of Tradeweb Markets LLC and, through Tradeweb Markets LLC and its subsidiaries, continue to conduct the business now conducted by these subsidiaries. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Significant Accounting Policies | 2. Significant Accounting Policies The following is a summary of significant accounting policies: Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented, are normal and recurring in nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the Continuing LLC Owners. Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360. Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. Deferred IPO Costs In 2018 the Company began incurring costs in connection with the filing of a Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25 in the consolidated statements of financial condition. IPO costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. As of June 30, 2019, $15.9 million of deferred costs were reclassified from other assets to additional paid-in capital on the consolidated statements of financial condition. See Note 9 – Stockholders’ Equity. Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation, on a pro rata basis. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis. This income is recognized by the Company when the transactions settle. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Company’s Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. In October 2018, following the closing of the Refinitiv Transaction, the Company made a special award of options to management and other employees (the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for the options issued under the Option Plan, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to these options will be recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019, with a charge of $20.4 million, and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Corporation’s Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Recent Accounting Pronouncements – Not Yet Adopted In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses. The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This ASU is applicable for the Company in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this ASU on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company's consolidated financial statements. | |
Tradeweb Markets Inc. only | ||
Entity Information [Line Items] | ||
Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The statement of financial condition is presented in accordance with accounting principles generally accepted in the United States of America. Separate statements of operations, comprehensive income, changes in stockholder’s equity and cash flows have not been presented in the financial statement because there have been no activities in this entity other than the initial capitalization. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Stockholders' Equity | 9. Stockholders’ Equity Initial Public Offering As described in Note 1 – Organization, in April 2019 Tradeweb Markets Inc. completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which includes 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1,161,270,000 in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase LLC Interests from certain of the Bank Stockholders (and cancelled the corresponding shares of common stock as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. Reorganization Transactions In connection with the IPO, the Reorganization Transactions described below were completed. Amendment and Restatement of Certificate of Incorporation On April 3, 2019, the certificate of incorporation of Tradeweb Markets Inc. was amended and restated to, among other things, provide for the authorization of (i) 250,000,000 shares of preferred stock with a par value of $0.00001 per share (ii) 1,000,000,000 shares of Class A common stock with a par value of $0.00001 per share; (iii) 450,000,000 shares of Class B common stock with a par value of $0.00001 per share; (iv) 350,000,000 shares of Class C common stock with a par value of $0.00001 per share; and (v) 300,000,000 shares of Class D common stock with a par value of $0.00001 per share. Each share of Class A common stock and Class C common stock entitles its holder to one vote on all matters presented to the Corporation’s stockholders generally. Each share of Class B common stock and Class D common stock entitles its holder to ten votes on all matters presented to the Corporation’s stockholders generally. The holders of Class C common stock and Class D common stock have no economic interests in the Corporation (where “economic interests” means the right to receive any dividends or distributions, whether cash or stock, in connection with common stock). These attributes are summarized in the following table: Class of Par Votes Economic Class A common stock $ 0.00001 1 Yes Class B common stock $ 0.00001 10 Yes Class C common stock $ 0.00001 1 No Class D common stock $ 0.00001 10 No Holders of outstanding shares of Class A common stock, Class B common stock, Class C common stock and Class D common stock will vote together as a single class on all matters presented to the Corporation’s stockholders for their vote or approval, except as otherwise required by applicable law. Holders of Class B common stock may from time to time exchange all or a portion of their shares of Class B common stock for newly issued shares of Class A common stock on a one-for-one basis (in which case their shares of Class B common stock will be cancelled on a one-for-one basis upon any such issuance). Holders of Class D common stock may also from time to time exchange all or a portion of their shares of Class D common stock for newly issued shares of Class C common stock on a one-for-one basis (in which case their shares of Class D common stock will be cancelled on a one-for-one basis upon such issuance). In addition, with respect to each Bank Stockholder that holds shares of Class D common stock, immediately prior to the occurrence of any event that would cause the combined voting power held by such Bank Stockholder to exceed 4.9%, the minimum number of shares of Class D common stock of such Bank Stockholder that would need to convert into shares of Class C common stock such that the combined voting power held by such Bank Stockholder would not exceed 4.9% will automatically convert into shares of Class C common stock. Each share of Class B common stock will automatically convert into one share of Class A common stock and each share of Class D common stock will automatically convert into one share of Class C common stock (i) immediately prior to any sale or other transfer of such share by a holder or its permitted transferees to a non-permitted transferee or (ii) once the Refinitiv Owners and their affiliates together no longer beneficially own a number of shares of common stock and LLC Interests that together entitle them to at least 10% of TWM LLC’s economic interest. Holders of LLC Interests that receive shares of Class C common stock upon any such conversion may continue to elect to have their LLC Interests redeemed for newly issued shares of Class A common stock as described below (in which case their shares of Class C common stock will be cancelled on a one-for-one basis upon such issuance). Recapitalization of Tradeweb Markets LLC On April 4, 2019, the TWM LLC Agreement was amended and restated to, among other things, (i) provide for the LLC Interests, (ii) exchange all of the existing membership interests of TWM LLC’s existing equityholders for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. All of the shares of TWM LLC outstanding prior to the Reorganization Transactions were exchanged for 222,222,197 LLC Interests. TWM LLC’s outstanding shares prior to the Reorganization Transactions consisted of the following classes of shares: Class A Shares 146,333 Class C Shares 447 Class P(A) Shares 6,887 Class P(C) Shares 2 Class P-1(A) Shares 6,094 Class P-1(C) Shares 232 The TWM LLC Agreement requires that TWM LLC at all times maintain (i) a one-to-one ratio between the number of shares of Class A common stock and Class B common stock issued by the Corporation and the number of LLC Interests owned by the Corporation and (ii) a one-to-one ratio between the number of shares of Class C common stock and Class D common stock issued by the Corporation and the number of LLC Interests owned by the holders of such Class C common stock and Class D common stock. LLC Interests held by the Continuing LLC Owners are redeemable, at the election of such holders, for newly issued shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis (and such holders’ shares of Class C common stock or Class D common stock, as the case may be, will be cancelled on a one-for-one basis upon any such issuance). In the event of such election by a Continuing LLC Owner, the Corporation may, at its option, effect a direct exchange of Class A common stock or Class B common stock for such LLC Interests of the redeeming holders in lieu of such redemption. In addition, the Corporation’s board of directors may, at its option, instead of the foregoing redemptions or exchanges of LLC Interests, cause the Corporation to make a cash payment equal to the volume weighted average market price of one share of Class A common stock for each LLC Interest redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the TWM LLC Agreement. Issuance and Cancellation of Common Stock · As a result of the Refinitiv Contribution, the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Continuing LLC Owners, on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (the Corporation canceled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). Following the completion of the Reorganization Transactions, including the IPO and the application of the proceeds therefrom as described above, (i) the investors in the IPO collectively owned 46,000,000 shares of Class A common, representing 2.7% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 20.7% of the economic interest in TWM LLC; (ii) the Refinitiv Direct Owner owned 96,933,192 shares of Class B common stock, representing 56.4% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 43.6% of the economic interest in TWM LLC; (iii) the Refinitiv LLC Owner owned 22,988,329 shares of Class D common stock, representing 13.4% of the combined voting power of all of the Corporation’s common stock, and 22,988,329 LLC Interests, representing 10.3% of the economic interest in TWM LLC, (iv) the Continuing LLC Owners that continue to own LLC Interests (other than the Refinitiv LLC Owner) collectively owned 10,006,269 shares of Class C common stock and 46,294,407 shares of Class D common stock, representing 27.5% of the combined voting power of all of the Corporation’s common stock, and 56,300,676 LLC Interests, representing 25.3% of the economic interest in TWM LLC; and (v) the Corporation owned 142,933,192 LLC Interests, representing 64.3% of the economic interest in TWM LLC. | |
Tradeweb Markets Inc. only | ||
Stockholders' Equity | 3. STOCKHOLDER’S EQUITY The Corporation is authorized to issue 1,000 shares of Common Stock, par value $0.01 per share. The Chief Executive Officer of Tradeweb Markets LLC is the sole shareholder of the Corporation and contributed $100 to the Corporation on November 7, 2018 to purchase 100 shares of common stock. Holders of common stock are entitled to one vote for each share of common stock held on all matters submitted to shareholders for vote, consent or approval. |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
SUBSEQUENT EVENTS | 19. Subsequent Events On August 1, 2019, London Stock Exchange Group plc announced that it has agreed definitive terms with a consortium including certain investment funds affiliated with Blackstone as well as Thomson Reuters to acquire Refinitiv in an all share transaction for a total enterprise value of approximately $27 billion. The transaction is subject to customary regulatory and shareholder approvals, and is expected to close during the second half of 2020. Refinitiv currently holds a 54% economic interest in the Company. On August 7, 2019, the board of directors of Tradeweb Markets Inc. declared a cash dividend of $0.08 per share of Class A common stock and Class B common stock for the third quarter of 2019. This dividend will be payable on September 16, 2019 to stockholders of record as of September 3, 2019. On August 6, 2019, Tradeweb Markets Inc., as the sole manager, approved a distribution by TWM LLC to its equityholders, including Tradeweb Markets Inc., in an aggregate amount of $33.0 million payable on September 13, 2019. | |
Tradeweb Markets Inc. only | ||
SUBSEQUENT EVENTS | 4. SUBSEQUENT EVENTS The Corporation has evaluated subsequent events through March 5, 2019, the date the statement of financial condition was issued. The Corporation did not note any subsequent events requiring disclosure or adjustments to the statement of financial condition. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Basis of Accounting | Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented, are normal and recurring in nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. | |
Tradeweb Markets Inc. only | ||
Entity Information [Line Items] | ||
Basis of Accounting | Basis of Accounting The statement of financial condition is presented in accordance with accounting principles generally accepted in the United States of America. Separate statements of operations, comprehensive income, changes in stockholder’s equity and cash flows have not been presented in the financial statement because there have been no activities in this entity other than the initial capitalization |
Stockholder's Equity - Authoriz
Stockholder's Equity - Authorized shares (Details) | Nov. 07, 2018USD ($)Vote$ / sharesshares | Jun. 30, 2019USD ($)Vote | Dec. 31, 2018$ / sharesshares |
Class of Stock [Line Items] | |||
Number of votes per common stock | Vote | 1 | ||
Proceeds from issuance of common stock in the IPO, net of underwriting discounts | $ | $ 1,161,270,000 | ||
Tradeweb Markets Inc. only | |||
Class of Stock [Line Items] | |||
Common Stock, shares authorized | shares | 1,000 | 1,000 | |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |
Number of votes per common stock | Vote | 1 | ||
Proceeds from issuance of common stock in the IPO, net of underwriting discounts | $ | $ 100 | ||
Issuance of common stock, net of offering costs and cancellations (in shares) | shares | 100 |
Consolidated Statements of Fi_3
Consolidated Statements of Financial Condition - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 410,104,000 | |
Restricted cash | 1,200,000 | |
Receivable from brokers and dealers and clearing organizations including receivables from related parties of $3,332 at December 31, 2018 | 174,591,000 | |
Deposits with clearing organizations including deposits from related parties of $500 at December 31, 2018 and December 31, 2017 | 11,427,000 | |
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 38,128,000 | |
Software development costs, net of accumulated amortization | 170,582,000 | |
Intangible assets, net of accumulated amortization | 1,380,848,000 | |
Goodwill | 2,694,797,000 | |
Receivable from affiliates | 3,243,000 | |
Other assets including other assets from related parties of $9 and $27 at December 31, 2018 and December 31, 2017, respectively | 25,027,000 | |
Total assets | 4,997,139,000 | |
Liabilities | ||
Payable to brokers and dealers and clearing organizations including payables to related parties of $2,404 at December 31, 2018 | 171,214,000 | |
Accrued compensation | 120,158,000 | |
Deferred revenue including deferred revenue from related parties of $9,151 and $5,106 at December 31, 2018 and December 31, 2017, respectively | 27,883,000 | |
Accounts payable, accrued expenses and other liabilities including payables to related parties of $2,555 at December 31, 2017 | 42,548,000 | |
Employee equity compensation payable | 24,187,000 | |
Payable to affiliates | 5,009,000 | |
Deferred tax liability | 19,627,000 | |
Total liabilities | 410,626,000 | |
Commitments and contingencies (Note 17) | ||
Mezzanine Capital | ||
Class C Shares and Class P(C) Shares | 14,179,000 | |
Members' capital | ||
Members' capital | 4,573,200,000 | |
Accumulated other comprehensive loss | (866,000) | |
Total liabilities and stockholders' equity/members' capital | 4,997,139,000 | |
Predecessor | ||
Assets | ||
Cash and cash equivalents | 410,104,000 | |
Restricted cash | 1,200,000 | |
Members' capital | ||
Total members' capital | $ 986,468,000 | |
Tradeweb Markets LLC | Successor | ||
Assets | ||
Cash and cash equivalents | 410,104,000 | |
Restricted cash | 1,200,000 | |
Receivable from brokers and dealers and clearing organizations including receivables from related parties of $3,332 at December 31, 2018 | 174,591,000 | |
Deposits with clearing organizations including deposits from related parties of $500 at December 31, 2018 and December 31, 2017 | 11,427,000 | |
Accounts receivable, net of allowance including receivables from related parties of $40,730 and $27,163 at December 31, 2018 and December 31, 2017, respectively | 87,192,000 | |
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 38,128,000 | |
Software development costs, net of accumulated amortization | 170,582,000 | |
Intangible assets, net of accumulated amortization | 1,380,848,000 | |
Goodwill | 2,694,797,000 | |
Receivable from affiliates | 3,243,000 | |
Other assets including other assets from related parties of $9 and $27 at December 31, 2018 and December 31, 2017, respectively | 25,027,000 | |
Total assets | 4,997,139,000 | |
Liabilities | ||
Payable to brokers and dealers and clearing organizations including payables to related parties of $2,404 at December 31, 2018 | 171,214,000 | |
Accrued compensation | 120,158,000 | |
Deferred revenue including deferred revenue from related parties of $9,151 and $5,106 at December 31, 2018 and December 31, 2017, respectively | 27,883,000 | |
Accounts payable, accrued expenses and other liabilities including payables to related parties of $2,555 at December 31, 2017 | 42,548,000 | |
Employee equity compensation payable | 24,187,000 | |
Payable to affiliates | 5,009,000 | |
Deferred tax liability | 19,627,000 | |
Total liabilities | 410,626,000 | |
Commitments and contingencies (Note 17) | ||
Mezzanine Capital | ||
Class C Shares and Class P(C) Shares | 14,179,000 | |
Members' capital | ||
Members' capital | 4,573,200,000 | |
Accumulated other comprehensive loss | (866,000) | |
Total members' capital | 4,572,334,000 | |
Total liabilities and stockholders' equity/members' capital | $ 4,997,139,000 | |
Tradeweb Markets LLC | Predecessor | ||
Assets | ||
Cash and cash equivalents | 352,598,000 | |
Restricted cash | 1,200,000 | |
Receivable from brokers and dealers and clearing organizations including receivables from related parties of $3,332 at December 31, 2018 | 4,324,000 | |
Deposits with clearing organizations including deposits from related parties of $500 at December 31, 2018 and December 31, 2017 | 9,926,000 | |
Accounts receivable, net of allowance including receivables from related parties of $40,730 and $27,163 at December 31, 2018 and December 31, 2017, respectively | 69,662,000 | |
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 27,031,000 | |
Software development costs, net of accumulated amortization | 41,181,000 | |
Intangible assets, net of accumulated amortization | 222,219,000 | |
Goodwill | 563,421,000 | |
Receivable from affiliates | 375,000 | |
Other assets including other assets from related parties of $9 and $27 at December 31, 2018 and December 31, 2017, respectively | 18,130,000 | |
Deferred tax assets | 6,820,000 | |
Total assets | 1,316,887,000 | |
Liabilities | ||
Payable to brokers and dealers and clearing organizations including payables to related parties of $2,404 at December 31, 2018 | 4,322,000 | |
Accrued compensation | 89,769,000 | |
Deferred revenue including deferred revenue from related parties of $9,151 and $5,106 at December 31, 2018 and December 31, 2017, respectively | 29,673,000 | |
Contingent consideration payable to related parties | 129,393,000 | |
Accounts payable, accrued expenses and other liabilities including payables to related parties of $2,555 at December 31, 2017 | 27,364,000 | |
Employee equity compensation payable | 31,019,000 | |
Payable to affiliates | 5,578,000 | |
Total liabilities | 317,118,000 | |
Commitments and contingencies (Note 17) | ||
Mezzanine Capital | ||
Class C Shares and Class P(C) Shares | 13,301,000 | |
Members' capital | ||
Members' capital | 999,735,000 | |
Accumulated other comprehensive loss | (13,267,000) | |
Total members' capital | 986,468,000 | |
Total liabilities and stockholders' equity/members' capital | $ 1,316,887,000 |
Consolidated Statements of Fi_4
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash deposited with related parties | $ 283,790 | ||
Receivables from related parties | 3,332 | ||
Deposits from related parties | 500 | ||
Accounts receivable, net of allowance from related parties | 40,730 | ||
Other assets from related parties | 9 | ||
Payables to related parties, brokers, dealers and clearing organizations | 2,404 | ||
Deferred revenues from related parties | $ 4,772 | 9,151 | |
Tradeweb Markets LLC | Successor | |||
Cash deposited with related parties | 283,790 | ||
Receivables from related parties | 3,332 | ||
Deposits from related parties | 500 | ||
Accounts receivable, net of allowance from related parties | 40,730 | ||
Other assets from related parties | 9 | ||
Payables to related parties, brokers, dealers and clearing organizations | 2,404 | ||
Deferred revenues from related parties | $ 9,151 | ||
Tradeweb Markets LLC | Predecessor | |||
Cash deposited with related parties | $ 234,107 | ||
Deposits from related parties | 500 | ||
Accounts receivable, net of allowance from related parties | 27,163 | ||
Other assets from related parties | 27 | ||
Deferred revenues from related parties | 5,106 | ||
Payables to related parties | $ 2,555 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Tradeweb Markets LLC | Predecessor | ||
Revenues | ||
Gross revenue | $ 562,968,000 | $ 518,404,000 |
Contingent consideration to related parties | (58,520,000) | (26,224,000) |
Net revenue | 504,448,000 | 492,180,000 |
Expenses | ||
Employee compensation and benefits | 248,963,000 | 228,584,000 |
Depreciation and amortization | 68,615,000 | 80,859,000 |
General and administrative including from related parties of $180, $539, $719 and $740 in the period ended December 31, 2018, September 30, 2018, December 31, 2017 and December 31, 2016, respectively | 33,973,000 | 27,392,000 |
Technology and communications including from related parties of $740, $2,220, $2,960 and $2,960 in the period ended December 31, 2018, September 30, 2018, December 31, 2017 and December 31, 2016, respectively | 30,013,000 | 28,239,000 |
Professional fees | 19,351,000 | 18,158,000 |
Occupancy including from related parties of $155, $466, $621 and $600 in the period ended December 31, 2018, September 30, 2018, December 31, 2017 and December 31, 2016, respectively | 14,441,000 | 15,817,000 |
Total expenses | 415,356,000 | 399,049,000 |
Operating income | 89,092,000 | 93,131,000 |
Interest income including from related parties of $17, $34, $40 and $80 in the period ended December 31, 2018, September 30, 2018, December 31, 2017 and December 31, 2016, respectively | 1,140,000 | 644,000 |
Interest expense from related parties | (455,000) | (1,339,000) |
Income before taxes | 89,777,000 | 92,436,000 |
Provision for income taxes | (6,129,000) | 725,000 |
Net income attributable to Tradeweb Markets Inc. | $ 83,648,000 | $ 93,161,000 |
Net income per share (Note 18) | ||
Basic | $ 0.39 | $ 0.44 |
Diluted | $ 0.39 | $ 0.44 |
Weighted average number of shares outstanding | ||
Basic | 212,568,635 | 210,979,704 |
Diluted | 212,568,635 | 210,979,704 |
Tradeweb Markets LLC | Predecessor | Transaction Fee Revenue | ||
Revenues | ||
Gross revenue | $ 267,020,000 | $ 230,171,000 |
Tradeweb Markets LLC | Predecessor | Subscription Fee Revenue | ||
Revenues | ||
Gross revenue | 144,409,000 | 141,419,000 |
Tradeweb Markets LLC | Predecessor | Commissions Revenue | ||
Revenues | ||
Gross revenue | 96,745,000 | 91,663,000 |
Tradeweb Markets LLC | Predecessor | Refinitiv Market Data Fees | ||
Revenues | ||
Gross revenue | 50,125,000 | 50,564,000 |
Tradeweb Markets LLC | Predecessor | Other | ||
Revenues | ||
Gross revenue | $ 4,669,000 | $ 4,587,000 |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - Tradeweb Markets LLC - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Successor | ||||
Revenues | ||||
General and administrative from related parties | $ 180 | |||
Technology and communications from related parties | 740 | |||
Occupancy from related parties | 155 | |||
Interest income from related parties | 17 | |||
Successor | Transaction Fee Revenue | ||||
Revenues | ||||
Revenue from related parties | 59,259 | |||
Successor | Subscription Fee Revenue | ||||
Revenues | ||||
Revenue from related parties | 5,718 | |||
Successor | Commissions Revenue | ||||
Revenues | ||||
Revenue from related parties | $ 12,401 | |||
Predecessor | ||||
Revenues | ||||
General and administrative from related parties | $ 539 | $ 719 | $ 740 | |
Technology and communications from related parties | 2,220 | 2,960 | 2,960 | |
Occupancy from related parties | 466 | 621 | 600 | |
Interest income from related parties | 34 | 40 | 80 | |
Predecessor | Transaction Fee Revenue | ||||
Revenues | ||||
Revenue from related parties | 159,663 | 151,695 | 134,231 | |
Predecessor | Subscription Fee Revenue | ||||
Revenues | ||||
Revenue from related parties | 16,627 | 37,426 | 35,169 | |
Predecessor | Commissions Revenue | ||||
Revenues | ||||
Revenue from related parties | $ 34,944 | $ 43,315 | $ 42,343 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Capital and Accumulated Other Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Members' Capital | ||||
Comprehensive income: | ||||
Members' capital end of period | $ 4,573,200 | |||
Predecessor | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | $ 986,468 | |||
Comprehensive income: | ||||
Members' capital end of period | $ 986,468 | |||
Predecessor | Members' Capital | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | 999,735 | |||
Comprehensive income: | ||||
Members' capital end of period | 999,735 | |||
Predecessor | Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | (13,267) | |||
Comprehensive income: | ||||
Members' capital end of period | (13,267) | |||
Tradeweb Markets LLC | Predecessor | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | 1,125,165 | 986,468 | 1,024,759 | $ 1,067,944 |
Comprehensive income: | ||||
Post-IPO net income attributable to Tradeweb Markets Inc. | 130,160 | 83,648 | 93,161 | |
Foreign currency translation adjustments | (3,064) | 2,885 | (4,679) | |
Comprehensive income attributable to non-controlling interests | 127,096 | 86,533 | 88,482 | |
Adjustment to Class C Shares and Class P(C) Shares in mezzanine capital | 456 | (2,109) | (1,667) | |
Vesting of contingent consideration | 150,495 | |||
Capital contributions | 29,285 | |||
Capital distributions | (139,350) | (152,000) | (130,000) | |
Members' capital end of period | 1,125,165 | 986,468 | 1,024,759 | |
Tradeweb Markets LLC | Predecessor | Members' Capital | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | 1,141,496 | 999,735 | 1,040,911 | 1,079,417 |
Comprehensive income: | ||||
Post-IPO net income attributable to Tradeweb Markets Inc. | 130,160 | 83,648 | 93,161 | |
Comprehensive income attributable to non-controlling interests | 130,160 | 83,648 | 93,161 | |
Adjustment to Class C Shares and Class P(C) Shares in mezzanine capital | 456 | (2,109) | (1,667) | |
Vesting of contingent consideration | 150,495 | |||
Capital contributions | 29,285 | |||
Capital distributions | (139,350) | (152,000) | (130,000) | |
Members' capital end of period | 1,141,496 | 999,735 | 1,040,911 | |
Tradeweb Markets LLC | Predecessor | Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | (16,331) | (13,267) | (16,152) | (11,473) |
Comprehensive income: | ||||
Foreign currency translation adjustments | (3,064) | 2,885 | (4,679) | |
Comprehensive income attributable to non-controlling interests | (3,064) | 2,885 | (4,679) | |
Members' capital end of period | (16,331) | $ (13,267) | $ (16,152) | |
Tradeweb Markets LLC | Successor | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | 4,562,154 | |||
Comprehensive income: | ||||
Post-IPO net income attributable to Tradeweb Markets Inc. | 29,307 | |||
Foreign currency translation adjustments | (866) | |||
Comprehensive income attributable to non-controlling interests | 28,441 | |||
Adjustment to Class C Shares and Class P(C) Shares in mezzanine capital | (1,333) | |||
Conversion of certain cash-settled PRSUs to equity settled PRSUs | 19,072 | |||
Capital distributions | (36,000) | |||
Members' capital end of period | 4,572,334 | 4,562,154 | ||
Tradeweb Markets LLC | Successor | Members' Capital | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | 4,562,154 | |||
Comprehensive income: | ||||
Post-IPO net income attributable to Tradeweb Markets Inc. | 29,307 | |||
Comprehensive income attributable to non-controlling interests | 29,307 | |||
Adjustment to Class C Shares and Class P(C) Shares in mezzanine capital | (1,333) | |||
Conversion of certain cash-settled PRSUs to equity settled PRSUs | 19,072 | |||
Capital distributions | (36,000) | |||
Members' capital end of period | 4,573,200 | 4,562,154 | ||
Tradeweb Markets LLC | Successor | Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Members' capital beginning of period | 0 | |||
Comprehensive income: | ||||
Foreign currency translation adjustments | (866) | |||
Comprehensive income attributable to non-controlling interests | (866) | |||
Members' capital end of period | $ (866) | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash and cash equivalents and restricted cash | ||||
End of period | $ 411,304 | |||
Predecessor | ||||
Cash and cash equivalents and restricted cash | ||||
Beginning of period | $ 353,798 | |||
End of period | 411,304 | $ 353,798 | ||
Tradeweb Markets LLC | Successor | ||||
Cash flows from operating activities | ||||
Net income | 29,307 | |||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization | 33,020 | |||
Deferred taxes | 968 | |||
(Increase) decrease in operating assets: | ||||
Receivable from brokers and dealers and clearing organizations | (169,949) | |||
Deposits with clearing organizations | (2,248) | |||
Accounts receivable | 8,085 | |||
Receivable from affiliates | 107 | |||
Other assets | (4,695) | |||
Increase (decrease) in operating liabilities: | ||||
Payable to brokers and dealers and clearing organizations | 171,214 | |||
Accrued compensation | 38,368 | |||
Deferred revenue | (396) | |||
Accounts payable, accrued expenses and other liabilities | 639 | |||
Employee equity compensation payable | 9,345 | |||
Payable to affiliates | (1,209) | |||
Net cash provided by operating activities | 112,556 | |||
Cash flows from investing activities | ||||
Purchase of furniture, equipment, software and leasehold improvements | (9,090) | |||
Capitalized software development costs | (7,156) | |||
Net cash (used in) investing activities | (16,246) | |||
Cash flows from financing activities | ||||
Capital distributions | (36,000) | |||
Net cash (used in) financing activities | (36,000) | |||
Effect of exchange rate changes on cash and cash equivalents | (389) | |||
Net decrease in cash and cash equivalents | 59,921 | |||
Cash and cash equivalents and restricted cash | ||||
Beginning of period | 351,383 | |||
End of period | 411,304 | 351,383 | ||
Supplemental disclosure of cash flow information | ||||
Income taxes paid | 2,659 | |||
Supplemental disclosure of non-cash investing and financing information | ||||
Conversion of certain cash-settled PRSUs to equity settled PRSUs | 19,072 | |||
Tradeweb Markets LLC | Predecessor | ||||
Cash flows from operating activities | ||||
Net income | 130,160 | 83,648 | $ 93,161 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization | 48,808 | 68,615 | 80,859 | |
Contingent consideration | 26,830 | 58,520 | 26,224 | |
Vesting of P-1(C) Shares | (5,728) | |||
Deferred taxes | 2,602 | (950) | (6,323) | |
(Increase) decrease in operating assets: | ||||
Receivable from brokers and dealers and clearing organizations | (318) | (4,324) | 380 | |
Deposits with clearing organizations | 726 | 606 | (2,311) | |
Accounts receivable | (28,434) | 11,196 | (18,683) | |
Receivable from affiliates | (2,534) | 314 | 957 | |
Other assets | (6,371) | 4,719 | (5,369) | |
Increase (decrease) in operating liabilities: | ||||
Payable to brokers and dealers and clearing organizations | (4,322) | 4,322 | (380) | |
Accrued compensation | (7,568) | 12,364 | 7,851 | |
Deferred revenue | (1,396) | (12,555) | (6,167) | |
Accounts payable, accrued expenses and other liabilities | 8,793 | (3,826) | 2,364 | |
Employee equity compensation payable | 2,896 | 2,380 | 519 | |
Payable to affiliates | 684 | (449) | (1,237) | |
Net cash provided by operating activities | 164,828 | 224,580 | 171,845 | |
Cash flows from investing activities | ||||
Purchase of furniture, equipment, software and leasehold improvements | (6,327) | (13,461) | (9,998) | |
Capitalized software development costs | (19,523) | (27,157) | (25,351) | |
Business acquisitions | 66 | (15,216) | ||
Purchase of investments | (5,000) | |||
Net cash (used in) investing activities | (25,850) | (45,552) | (50,565) | |
Cash flows from financing activities | ||||
Capital distributions | (139,350) | (152,000) | (130,000) | |
Mezzanine capital contributions | 82 | |||
Mezzanine capital distributions | (1,543) | (521) | ||
Net cash (used in) financing activities | (139,350) | (153,461) | (130,521) | |
Effect of exchange rate changes on cash and cash equivalents | (2,043) | 3,157 | (6,200) | |
Net decrease in cash and cash equivalents | (2,415) | 28,724 | (15,441) | |
Cash and cash equivalents and restricted cash | ||||
Beginning of period | $ 351,383 | 353,798 | 325,074 | 340,515 |
End of period | 351,383 | 353,798 | 325,074 | |
Supplemental disclosure of cash flow information | ||||
Interest paid | 455 | 1,339 | ||
Income taxes paid | 5,500 | 6,312 | $ 6,735 | |
Supplemental disclosure of non-cash investing and financing information | ||||
Vesting of contingent consideration to Class P-1(A) Shares | $ 150,495 | |||
Conversion of convertible term note payable to Thomson Reuters to Class A Shares | $ 29,285 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash | $ 410,104,000 | ||||
Restricted cash | 1,200,000 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 411,304,000 | ||||
Predecessor | |||||
Cash | 410,104,000 | ||||
Restricted cash | 1,200,000 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 411,304,000 | $ 353,798,000 | |||
Tradeweb Markets LLC | Successor | |||||
Cash | 410,104,000 | ||||
Restricted cash | 1,200,000 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 411,304,000 | $ 351,383,000 | |||
Tradeweb Markets LLC | Predecessor | |||||
Cash | 350,183,000 | 352,598,000 | $ 324,074,000 | ||
Restricted cash | 1,200,000 | 1,200,000 | 1,000,000 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 351,383,000 | $ 353,798,000 | $ 325,074,000 | $ 340,515,000 |
Organization_2
Organization | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Organization | 1. Organization Tradeweb Markets Inc. (the “Corporation”) was incorporated as a Delaware corporation on November 7, 2018 for the purpose of completing certain reorganization transactions in order to carry on the business of Tradeweb Markets LLC (“TWM LLC”) and conducting an initial public offering (“IPO”) as described below under “—Initial Public Offering” and “—Reorganization Transactions.” The Corporation is a consolidating subsidiary of BCP York Holdings, (“BCP”) a company owned by certain investment funds affiliated with The Blackstone Group L.P. (“Blackstone”), through BCP’s majority ownership interest in Refinitiv Holdings Limited (“Refinitiv” or the “Parent”). As of June 30, 2019, Refinitiv owns a majority ownership interest in the Company (as defined below). The Corporation is a holding company whose principal asset is LLC Interests (as defined below) of TWM LLC. As the sole manager of TWM LLC, the Corporation operates and controls all of the business and affairs of TWM LLC and, through TWM LLC and its subsidiaries, conducts the Corporation’s business. As a result of this control, and because the Corporation has a substantial financial interest in TWM LLC, the Corporation consolidates the financial results of TWM LLC and reports a non-controlling interest in the Corporation’s consolidated financial statements. As of June 30, 2019, Tradeweb Markets Inc. owns 64.3% of TWM LLC and the Continuing LLC Owners (defined below) own the remaining 35.7% of TWM LLC. Unless the context otherwise requires, references to the “Company” refer to Tradeweb Markets Inc. and its consolidated subsidiaries, including TWM LLC, following the completion of the Reorganization Transactions (as defined below), and TWM LLC and its consolidated subsidiaries prior to the completion of the Reorganization Transactions. The Company is a leader in building and operating electronic marketplaces for a global network of clients across the institutional, wholesale and retail client sectors. The Company’s principal subsidiaries include: · Tradeweb LLC (“TWL”), a registered broker-dealer under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority (“FINRA”), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”). Tradeweb Europe Limited (“TEL”), a Multilateral Trading Facility regulated by the Financial Conduct Authority (the “FCA”) in the UK, which maintains branches in Asia which are regulated by certain Asian securities regulators. TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC. DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC. Tradeweb Japan K.K. (“TWJ”), a security house regulated by the Japanese Financial Services Agency (“JFSA”) and the Japan Securities Dealers Association (“JSDA”). Tradeweb EU B.V. (“TWEU”), a Trading Venue and Approved Publication Arrangement regulated by the Netherlands Authority for the Financial Markets (“AFM”). The Company, through its subsidiary Tradeweb IDB Markets Inc. (“TWIDB”) (formerly known as Hydrogen Holdings Corporation), owns Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.). DW is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. DW is also registered as an introducing broker with the CFTC and NFA. Initial Public Offering On April 8, 2019, the Corporation completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which includes 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1,161,270,000 in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase membership interests of TWM LLC from certain existing equityholders of TWM LLC (and cancelled the corresponding shares of common stock as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. Reorganization Transactions Prior to the closing of the IPO, a series of reorganization transactions (the “Reorganization Transactions”) was completed among the Corporation, TWM LLC and the following parties: The Owners of TWM LLC prior to the Reorganization Transactions, including an indirect subsidiary (the “Refinitiv LLC Owner”) of Refinitiv, certain investment and commercial banks (collectively, the “Bank Stockholders”) and members of management, that continued to own LLC Interests (as defined below) immediately prior to the closing of the IPO and who received shares of the Corporation’s Class C common stock, shares of the Corporation’s Class D common stock or a combination of both, as the case may be (collectively, the “Continuing LLC Owners”); and An indirect subsidiary (the “Refinitiv Direct Owner” and, together with the Refinitiv LLC Owner, the “Refinitiv Owners”) of Refinitiv that owned interests in an entity that held membership interests of TWM LLC prior to the Reorganization Transactions and contributed such entity to the Corporation (the “Refinitiv Contribution”). The following Reorganization Transactions occurred: TWM LLC’s limited liability company agreement (the “TWM LLC Agreement”) was amended and restated to, among other things, (i) provide for a new single class of common membership interests in TWM LLC (“LLC Interests”), (ii) exchange all of the existing membership interests of TWM LLC’s existing equityholders for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. See Note 9 – Stockholders’ Equity. The Corporation’s certificate of incorporation was amended and restated to, among other things, provide for Class A common stock, Class B common stock, Class C common stock and Class D common stock. See Note 9 – Stockholders’ Equity. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Continuing LLC Owners, on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (and the Corporation canceled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). · As a result of the Refinitiv Contribution (described above), the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. See Note 9 – Stockholders’ Equity. The Corporation’s board of directors adopted a new omnibus equity incentive plan, under which equity awards may be made in respect of shares of the Corporation’s Class A common stock. It also assumed sponsorship of an option plan and PRSU plan formerly sponsored by TWM LLC. See Note 11 – Stock-Based Compensation Plans. The Corporation entered into a tax receivable agreement (the “Tax Receivable Agreement”) with TWM LLC and the Continuing LLC Owners. See Note 8 – Tax Receivable Agreement. Acquisition of Parent Company and Presentation of Financial Statements A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from Thomson Reuters Corporation (“TR”). The accompanying consolidated financial statements are presented for two periods: predecessor and successor, which relate to the periods preceding and succeeding the Refinitiv Transaction, respectively. The Refinitiv Transaction results in a new basis of accounting beginning on October 1, 2018 and the financial reporting periods are presented as follows: · The successor period of the Company, reflecting the Refinitiv Transaction, as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019. · The predecessor period of the Company for the three and six months ended June 30, 2018. See Note 3 – Pushdown Accounting. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Organization | 1. Organization Tradeweb Markets LLC (the “Company”) is a leader in building and operating electronic marketplaces for a global network of clients across the institutional, wholesale and retail client sectors. The Company, a Delaware limited liability company, is a consolidating subsidiary of BCP York Holdings (“BCP”), a company owned by certain investment funds affiliated with The Blackstone Group L.P., through BCP’s majority ownership interest in King (Cayman) Holdings Ltd. (“Refinitiv” or the “Parent”). Refinitiv owns a majority ownership in the Company. A minority interest of the Company is owned by a group of investment and commercial banks (the “Banks”). A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from Thomson Reuters (“TR”). The accompanying consolidated financial statements are presented for two periods: predecessor and successor, which relate to the periods preceding and succeeding the Refinitiv Transaction, respectively. The Refinitiv Transaction results in a new basis of accounting beginning on October 1, 2018 and the financial reporting periods are presented as follows: · The successor period, reflecting the Refinitiv Transaction, from October 1, 2018 to December 31, 2018. · The predecessor period of the Company from January 1, 2018 to September 30, 2018. · The predecessor period of the Company for the year ended December 31, 2017. · The predecessor period of the Company for the year ended December 31, 2016. The Company, through its subsidiary Tradeweb Global LLC (“TWG”), owns: · Tradeweb LLC (“TWL”), a registered broker-dealer under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority ("FINRA"), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”). · Tradeweb Europe Limited (“TEL”), a Multilateral Trading Facility regulated by the Financial Conduct Authority (the “FCA”) in the UK, which maintains branches in Asia which are regulated by certain Asian securities regulators. · TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC. · DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC. · Tradeweb Japan K.K. (“TWJ”), a security house regulated by the Japanese Financial Services Agency (“JFSA”) and the Japan Securities Dealers Association (“JSDA”). · In January 2019, the Company received authorization from the Dutch Authority for Financial Markets ("AFM") to operate Tradeweb EU B.V. (“TWEU”), a Trading Venue and Approved Publication Arrangement regulated by the AFM. The Company, through its subsidiary Tradeweb IDB Markets Inc. (“TWIDB”) (formerly known as Hydrogen Holdings Corporation), owns Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.). DW is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. DW is also registered as an introducing broker with the CFTC and NFA. On October 7, 2011, the Company acquired the assets of the RaffCap business. The acquisition was accounted for as a business combination and therefore the cost of the assets acquired and liabilities assumed by the Company, which consisted of intangible assets and goodwill, were accounted for at fair value. On November 1, 2013, the Company acquired BondDesk Group LLC and subsidiaries (“BondDesk”). BondDesk’s subsidiary Tradeweb Direct LLC (“TWD”) (formerly known as BondDesk Trading LLC) is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. |
Significant Accounting Polici_3
Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Significant Accounting Policies | 2. Significant Accounting Policies The following is a summary of significant accounting policies: Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented, are normal and recurring in nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the Continuing LLC Owners. Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360. Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. Deferred IPO Costs In 2018 the Company began incurring costs in connection with the filing of a Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25 in the consolidated statements of financial condition. IPO costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. As of June 30, 2019, $15.9 million of deferred costs were reclassified from other assets to additional paid-in capital on the consolidated statements of financial condition. See Note 9 – Stockholders’ Equity. Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation, on a pro rata basis. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis. This income is recognized by the Company when the transactions settle. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Company’s Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. In October 2018, following the closing of the Refinitiv Transaction, the Company made a special award of options to management and other employees (the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for the options issued under the Option Plan, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to these options will be recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019, with a charge of $20.4 million, and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Corporation’s Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Recent Accounting Pronouncements – Not Yet Adopted In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses. The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This ASU is applicable for the Company in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this ASU on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company's consolidated financial statements. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Significant Accounting Policies | 2. Significant Accounting Policies The following is a summary of significant accounting policies: Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Recapitalization On April 4, 2019, the Company’s limited liability company agreement (“LLC Agreement”) was amended and restated to, among other things, (i) provide for a single class of common membership interests in the Company (“LLC Interests”) and (ii) exchange all of the existing membership interests of the Company’s existing equityholders for LLC Interests. For purposes of calculating net income per share on the consolidated statements of income, the number of outstanding shares has been adjusted retroactively for all periods to reflect the above-mentioned amendment and resulting recapitalization (the “Recapitalization”). Other share amounts and related disclosures in the notes to the consolidated financial statements reflect the share classes and amounts prior to the Recapitalization unless otherwise indicated. Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting, is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset's carrying value may not be fully recoverable in accordance with Accounting Standards Codification ("ASC") 360. Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. Intangible Assets Intangible assets with a finite life are amortized over the estimated lives in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding fair value. Intangible assets are amortized over their estimated useful lives of seven to sixteen years. Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting and is the cost of acquired companies in excess of the fair value of identifiable net assets at acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually on July 1st and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. Deferred IPO Costs In 2018, the Company began incurring costs in connection with the filing of its Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25, Equity - Recognition in the consolidated statements of financial condition. Initial public offering (“IPO”) costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. If the IPO becomes effective, these deferred costs will be offset against proceeds received from the offering and reclassified to equity on the consolidated statements of financial condition. Should the Company terminate or more than temporarily delay its planned offering, these costs will be expensed in the consolidated statements of income. Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. Income Tax The Company is a multiple member limited liability company which is taxed as a partnership. No income tax provision is required on the earnings of the Company as it is a partnership, and therefore the remaining tax effects of its activities accrue directly to its partners. As a partnership, the Company and certain subsidiaries are subject to unincorporated business taxes on income earned, or losses incurred, by conducting business in certain state and local jurisdictions and income taxes in foreign jurisdictions on certain of their operations. TWIDB and its subsidiary DW are C Corporations and therefore incur federal, state and local income tax expense. Income taxes are accounted for in accordance with ASC 740. The Company recorded deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act ("TCJA") effective for tax years ending after December 31, 2017. This legislation replaces the prior corporate tax rate structure with a flat 21% rate, effective in 2018. There were many other future impacts of the tax reform such as the repeal of the corporate alternative minimum tax rate, tax loss carryback and carryforward limitations. This legislation impacted the financial statements for the year ended December 31, 2017 by reducing the deferred tax asset by $1,982,000 as a result of the revaluation of the deferred tax asset based on the reduced federal corporate tax rate. During 2018 the Company finalized its calculations related to the impacts of the TCJA with no adjustment to the Company's previously recorded provisional tax expense. The TCJA also requires a U.S. shareholder of a controlled foreign corporation ("CFC") to include in income, as a deemed dividend, the global intangible low-taxed income ("GILTI") of the CFC. This provision is effective for taxable years of foreign corporations beginning after December 31, 2017, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the GILTI provision as a current period expense when incurred. Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s markets through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees on the consolidated statements of income are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly until annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis, as if the transactions have settled. This income is received by the Company when the transactions settle or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or timing of recognition of revenue in any prior reporting periods. However, in the current reporting period, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some commission and transaction fees earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees and variable components such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the year ended December 31, 2017 and 2016 is as follows: Successor Predecessor October 1, 2018 to January 1, 2018 to For the Year Ended For the Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 (in thousands) (in thousands) (in thousands) (in thousands) Revenues Variable Fixed Variable Fixed Variable Fixed Variable Fixed Transaction fees $ 73,800 $ 23,330 $ 208,049 $ 65,702 $ 210,198 $ 56,822 $ 176,060 $ 54,111 Subscription fees including Refinitiv market data fees 425 46,094 1,305 142,676 1,575 192,959 1,496 190,487 Commissions 22,608 10,232 49,367 30,463 57,118 39,627 54,194 37,469 Other — 2,148 40 8,169 36 4,633 30 4,557 Gross revenues $ 96,833 $ 81,804 $ 258,761 $ 247,010 $ 268,927 $ 294,041 $ 231,780 $ 286,624 Share-Based Compensation The Company accounts for share-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for share-based payments. Under ASC 718, the shared-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to members' capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. Under ASC 718, the grant-date fair value of share based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of share-based employee awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of share-based employee awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. Determining the appropriate fair value model and calculating the fair value of the share-based payment awards requires the input of highly subjective assumptions, including the expected life of the share-based payment awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its share-based awards. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the Company's consolidated statements of income. The Company has elected to account for forfeitures when they occur. If in a reporting period a forfeiture occurs, any expenses already recognized relating to the forfeited awards in prior reporting periods are reversed in the current reporting period. Net Income Per Share Basic net income per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted net income per share, the weighted-average number of the Company's shares reflects the dilutive effect that could occur if convertible securities were converted into or exercised for the Company's shares using the treasury stock method. Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions), are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Recent Accounting Pronouncements In February 2016, the FASB issued ASU2016-02, Leases. This standard requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases. The asset will reflect the present value of unpaid lease payments coupled with initial direct costs, prepaid lease payments, and lease incentives. The amount of the lease liability will be calculated as the present value of unpaid lease payments. ASU2016-02 will be effective for the Company in the fiscal year beginning January 1, 2019. The new standard must be adopted using a modified retrospective transition. The Company will adopt the transition method provided by ASU 2018 - 11, Leases - Targeted Improvements, in which the Company will initially apply the new lease standard on the adoption date of January 1, 2019, recognizing the cumulative-effect adjustment to members' capital. The Company is evaluating its current lease contracts and currently intends to use the package of practical expedients allowing entities to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. The Company has not quantified the impact on its consolidated financial statements, but it anticipates an increase in the recognition of right-of-use assets and lease liabilities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. This standard provided new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This guidance will be effective in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this standard on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This update provides specific guidance on the eight cash flow classification and presentation issues on the statements of cash flow. ASU 2016-15 was adopted by the Company beginning on January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows — Restricted Cash. This update requires that a statement of cash flows explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The standard must be adopted using a retrospective transition method to each period presented. ASU 2016-18 was adopted by the Company beginning on January 1, 2018. The adoption resulted in the Company presenting a reconciliation of cash and cash equivalents and restricted cash that sum to the amounts shown in the consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company’s financial statements. |
Pushdown Accounting
Pushdown Accounting | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Pushdown Accounting | 3. Pushdown Accounting The Refinitiv Transaction was accounted for by Refinitiv in accordance with the acquisition method of accounting pursuant to ASC 805, and pushdown accounting was applied to Refinitiv to record the fair value of the assets and liabilities of Refinitiv on the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, also accounted for the Refinitiv Transaction using pushdown accounting. Under pushdown accounting, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company was recorded as goodwill. At June 30, 2019 and December 31, 2018, goodwill amounted to $2,695,000. The Company has one year from the date of the Refinitiv Transaction to finalize these amounts. The adjusted valuations resulted in an increase in depreciation and amortization expense, due to the increased carrying value of the Company’s assets and the related increase in depreciation of tangible assets and amortization of intangible assets, and a decrease in occupancy expense as a result of the recognition of a leasehold interest liability. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Pushdown Accounting | 3. Pushdown Accounting The Refinitiv Transaction was accounted for by Refinitiv in accordance with the acquisition method of accounting pursuant to ASC 805 “Business Combinations” to record the fair value of the assets and liabilities of Refinitiv on the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, accounted for the Refinitiv Transaction using pushdown accounting. Under pushdown accounting, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company is recorded as goodwill. The fair value of assets acquired and liabilities assumed was determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. The following assumptions, the majority of which include significant unobservable inputs (Level 3), and valuation methodologies were used to determine fair value: · Licenses — The income approach: with or without method was used. Under this method, fair value is estimated based on income streams, such as cash flows or earnings, discounting to a present value. These discounted cash flows are calculated both with the asset and without the asset. The difference in the cash flows is discounted to the present value to determine the value of the asset. · Content and Data — The income approach: discounted cash flow method was used. Under this method, fair value is estimated based on income streams, such as cash flows or earnings, discounting to a present value. · Tradename and software development costs — The income approach: relief from royalty method was used. Under this method, the value of the asset is a function of several components: · The projected revenue attributable to the asset. · The expected economic life of the asset. · The royalty rate, as a percentage of revenue that would hypothetically be charged by a licensor of the asset to an unrelated licensee. · A discount rate that reflects the level of risk associated with the future income attributable to the asset. · Customer relationships — The income approach: multi-period excess earnings method was used. Under this method, the economic benefit of the asset is measured indirectly by calculating the income attributable to an asset after contributory asset charges. · Leasehold improvements, furniture and purchased software — The cost approach was used. Under this method the assets are valued based on the cost to a market participant to acquire a substitute asset of comparable utility, adjusted for obsolescence. · Computer hardware and office equipment — The market approach was used. Under this method, the fair value of an asset reflects the price at which comparable assets are purchased under similar circumstances based on recent sales prices of similar assets in an arm’s-length transaction. · Leasehold interests — The income approach was used. Under this method, fair value is estimated based on cash flows, discounting to a present value. The amount and timing of future cash flows used in these approaches were based on the Company’s most recent financial forecasts as of the date of the Refinitiv Transaction. In preparing the purchase price allocations, the Company considered a report of a third-party valuation expert. The Company’s management is responsible for these internal and third-party valuations and appraisals and they are continuing to review the amounts and allocations to finalize these amounts. The Company has one year from the date of the Refinitiv Transaction to finalize these amounts. The allocation applying pushdown accounting is summarized in the table below (in thousands): Fair value of the Company $ 4,575,000 Less: fair value of the net assets and liabilities of the Company (1,880,203) Goodwill $ 2,694,797 Net assets and liabilities of the Company at October 1, 2018: Cash and cash equivalents $ 350,183 Restricted cash 1,200 Receivable from brokers and dealers and clearing organizations 4,642 Deposits with clearing organizations 9,200 Accounts receivable 95,959 Furniture, equipment, purchased software and leasehold improvements: Computer hardware 15,787 Leasehold improvements 11,460 Purchased software 2,866 Furniture 1,616 Office equipment 572 Software development costs 168,500 Intangible assets: Tradename 154,300 Content and Data 154,400 Licenses 168,800 Customer relationships 928,200 Receivables from affiliates 3,350 Other assets 20,404 Total assets 2,091,439 Accrued compensation 82,201 Deferred revenue 28,280 Accounts payable, accrued expenses and other liabilities 39,291 Leasehold interests 3,020 Employee equity compensation payable 33,914 Payable to affiliates 5,856 Deferred tax liability 18,674 Total liabilities 211,236 Fair value of net assets and liabilities of the Company $ 1,880,203 |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Restricted Cash | 4. Restricted Cash Cash has been segregated in a special reserve bank account for the benefit of brokers and dealers under SEC Rule 15c3-3. The Company computes the proprietary accounts of other broker-dealers (“PAB”) reserve, which requires the Company to maintain minimum segregated cash in the amount of total credits per the reserve computation. As of December 31, 2018 and December 31, 2017, cash in the amount of $1,200,000 has been segregated in the PAB reserve account exceeding the requirements pursuant to SEC Rule 15c3-3. |
Receivable from and Payable to
Receivable from and Payable to Brokers and Dealers and Clearing Organizations | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Receivable from and Payable to Brokers and Dealers and Clearing Organizations | 5. Receivable from and Payable to Brokers and Dealers and Clearing Organizations Receivable from and payable to brokers and dealers and clearing organizations consists of proceeds from transactions which failed to settle due to the inability of a transaction party to deliver or receive the transacted security. These securities transactions are generally collateralized by those securities. |
Deposits With Clearing Organiza
Deposits With Clearing Organizations | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Deposits with Clearing Organizations | 6. Deposits with Clearing Organizations Deposits with clearing organizations are comprised of cash deposits. Due to the short-term nature of these deposits, the recorded value has been determined to approximate fair value. |
Furniture, Equipment, Purchased
Furniture, Equipment, Purchased Software and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | 7. Furniture, Equipment, Purchased Software and Leasehold Improvements The components of furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization are as follows (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Computer hardware $ 22,818 $ 67,852 Leasehold improvements 12,339 27,139 Purchased software 3,039 12,991 Furniture and office equipment 2,968 6,350 Accumulated depreciation and amortization (3,036) (87,301) Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization $ 38,128 $ 27,031 For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, depreciation and amortization expense related to these assets was $3,094,000, $9,270,000, $11,959,000 and $12,910,000 respectively. |
Software Development Cost
Software Development Cost | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Software Development Cost | 8. Software Development Cost The components of Software development costs, net of accumulated amortization are as follows (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Software development costs $ 175,656 $ 218,382 Accumulated amortization (5,074) (177,201) Software development costs, net of accumulated amortization $ 170,582 $ 41,181 For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, software development costs totaling $7,156,000, $19,523,000, $27,157,000 and $25,351,000, respectively, were capitalized. In addition, on October 1, 2018, a fair value of $168,500,000 was assigned to software development costs of the Company as a result of the Refinitiv Transaction. Non-capitalized software costs and routine maintenance costs are expensed as incurred and are included in employee compensation and benefits and professional fees on the consolidated statements of income. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, amortization expense related to these assets was $5,074,000, $19,962,000, $25,420,000 and $26,824,000 respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill Intangible assets and goodwill relate to the allocation of purchase price associated with the Refinitiv Transaction (see Note 3 – Pushdown Accounting). The following is a summary of intangible assets which have an indefinite useful life at both June 30, 2019 and December 31, 2018 (in thousands): Licenses $ 168,800 Tradename 154,300 Total $ 323,100 Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Successor June 30, 2019 December 31, 2018 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships - Refinitiv Transaction 12 Years $ 928,200 $ (58,012) $ 870,188 $ 928,200 $ (19,338) $ 908,862 Content and data 7 Years 154,400 (16,543) 137,857 154,400 (5,514) 148,886 $ 1,082,600 $ (74,555) $ 1,008,045 $ 1,082,600 $ (24,852) $ 1,057,748 Amortization expense relating to intangible assets was $24,852,000 and $49,704,000, respectively, for the three and six months ended June 30, 2019, and $6,557,000 and $13,063,000, respectively, for the three and six months ended June 30, 2018. The estimated annual future amortization for existing intangibles assets through December 31, 2023 is as follows (in thousands): Remainder of 2019 $ 49,704 2020 99,408 2021 99,408 2022 99,408 2023 99,408 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Intangible Assets and Goodwill | 9. Intangible Assets and Goodwill Intangible assets and goodwill relate primarily to the allocation of purchase price associated with the Refinitiv Transaction, the acquisition by TR of Tradeweb Group LLC in 2004, the merger in 2010 of the Company with Tradeweb NewMarkets LLC (“NewMarkets”), which was a company owned by the Banks and TR (the “Merger”), the purchase of the RaffCap business in 2011 and the purchase of BondDesk in 2013. The following is a summary of goodwill (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Refinitiv Transaction $ 2,694,797 $ — TR Acquisition — 334,185 Merger — 66,484 RaffCap Business — 49,200 BondDesk — 103,158 Other — 10,394 Total $ 2,694,797 $ 563,421 The following is a summary of intangible assets which have an indefinite useful life (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Licences $ 168,800 $ 12,000 Tradename 154,300 — Total $ 323,100 $ 12,000 Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Predecessor December 31, 2018 December 31, 2017 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships - Refinitiv Transaction 12 Years $ 928,200 $ (19,338) $ 908,862 $ — $ — $ — Content and data 7 Years 154,400 (5,514) 148,886 — — — Customer relationships - Fixed Income Business 13 Years — — — 155,284 (155,270) 14 Customer relationships - DW 11 Years — — — 65,000 (42,348) 22,652 Customer relationships - RaffCap 12 Years — — — 17,600 (9,166) 8,434 Customer relationships - BondDesk 15 Years — — — 104,000 (28,806) 75,194 Customer relationships - Other 10 Years — — — 2,100 (385) 1,715 Tradenames 10 Years — — — 200 (125) 75 Liquidity contracts 16 Years — — — 185,000 (82,865) 102,135 $ 1,082,600 $ (24,852) $ 1,057,748 $ 529,184 $ (318,965) $ 210,219 For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, amortization expense relating to these assets was $24,852,000, $19,576,000, $31,236,000 and $41,125,000, respectively. The estimated annual future amortization for existing intangibles assets through December 31, 2023 is as follows (in thousands): Year Amount 2019 $ 99,408 2020 99,408 2021 99,408 2022 99,408 2023 99,408 |
Deferred Revenue
Deferred Revenue | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Deferred Revenue | 6. Deferred Revenue The Company records deferred revenue when cash payments are received or due in advance of services to be performed. The recognized revenue and remaining balance is shown below (in thousands): Deferred revenue balance -December 31, 2018 $ 27,883 New billings 54,735 Revenue recognized (57,348) Deferred revenue balance - June 30, 2019 $ 25,270 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Deferred Revenue | 10. Deferred Revenue The Company records deferred revenue when cash payments are received or due in advance of services to be performed. The recognized revenue and remaining balance is shown below (in thousands): Successor Predecessor Predecessor October 1, January 1, Year Ended 2018 to 2018 to December 31, December 31, 2018 September 30, 2018 2017 Deferred revenue balance – beginning of period $ 28,280 $ 29,673 $ 42,184 New billings 26,609 100,091 127,312 Revenue recognized (27,006) (101,484) (139,823) Deferred revenue balance – end of period $ 27,883 $ 28,280 $ 29,673 |
Income Taxes
Income Taxes | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Income Taxes | 7. Income Taxes The Company's effective tax rate was 20.3% and 4.5% for the three months ended June 30, 2019 and 2018, respectively, and 14.2% and 4.9% for the six months ended June 30, 2019 and 2018, respectively. The significant increase in the effective tax rate for the three months and six months ended June 30, 2019 was primarily due to the Reorganization Transactions. Prior to the Reorganization Transactions, incomes taxes consisted only of business taxes incurred by TWM LLC and certain subsidiaries for business conducted in certain state, local and foreign jurisdictions as well as federal, state and local taxes for certain subsidiaries that are taxed as corporations for U.S. tax purposes. As a result of the Reorganization Transactions, the Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. The Company’s actual effective tax rate will be impacted by the Corporation’s ownership share of TWM LLC, which may increase over time if the Continuing LLC Owners redeem or exchange their LLC Interests for shares of Class A common stock or Class B common stock, as applicable. The Company's consolidated effective tax rate will vary from period to period depending on redemptions or exchanges by the Continuing LLC Owners, changes in the geographic mix of its earnings and changes in tax legislation and tax rates. The Company expects to obtain an increase in its share of the tax basis of the assets of TWM LLC when LLC Interests are redeemed or exchanged by the Continuing LLC Owners and in connection with certain other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that the Corporation would otherwise pay in the future to various tax authorities. Pursuant to the Tax Receivable Agreement, the Corporation is required to make cash payments to the Continuing LLC Owners equal to 50% of the amount of U.S. federal, state and local income or franchise tax savings, if any, that the Corporation actually realizes (or in some circumstances are deemed to realize) as a result of certain future tax benefits to which we may become entitled. The Corporation expects to benefit from the remaining 50% of tax benefits, if any, that the Corporation may actually realize. See Note 8 – Tax Receivable Agreement. As a result of the IPO, the Company assumed a tax benefit of $93,194,000, due to an increase in amortizable tax basis that will be amortized primarily over 15 years pursuant to Section 197 of the Internal Revenue Code of 1986, as amended, offset by other factors. The tax benefit has been recognized in deferred tax asset on the June 30, 2019 consolidated statement of financial condition. As a result of the Refinitiv Contribution, the Company assumed the tax liabilities of the contributed entity. The contributed entity is under audit by the State of New Jersey for the tax years 2012-2015 and is appealing a tax assessment from an audit by the State of New Jersey for the tax years 2008-2011. The Company recognized a tax liability of $2,722,000 as a result of the Refinitiv Contribution which is included in accounts payable, accrued expenses and other liabilities on the June 30, 2019 consolidated statement of financial condition. The Company is indemnified by Refinitiv for tax liabilities that were assumed by the Company as a result of the Refinitiv Contribution. See Note 12 – Related Party Transactions. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Income Taxes | 11. Income Taxes The provision for income taxes consists of the following (in thousands): Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Current: Federal $ — $ — $ — $ — State and Local 1,235 5,739 4,331 2,772 Foreign 1,212 3,559 2,748 2,826 2,447 9,298 7,079 5,598 Deferred – Federal 680 1,085 (433) (5,783) Deferred – state and local 288 1,517 (517) (540) Total deferred 968 2,602 (950) (6,323) Total $ 3,415 $ 11,900 $ 6,129 $ (725) A reconciliation of the statutory tax rate to the effective rate is as follows: Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 U.S. federal tax at statutory rate 21.0 % 21.0 % 35.0 % 35.0 % State and local taxes – net of federal benefit 4.7 % 5.1 % 2.8 % 1.6 % Foreign taxes 3.7 % 2.5 % 3.1 % 3.1 % Tax Cuts and Jobs Act provisional tax charge % % 2.2 % % LLC flow-through structure (19.0) % (20.2) % (36.3) % (40.5) % Effective tax rate 10.4 % 8.4 % 6.8 % (0.8) % The components of the Company’s deferred tax assets (liabilities) are as follows (in thousands): Successor Predecessor December 31, 2018 December 31, 2017 Deferred tax assets (liabilities): Net operating losses $ 6,810 $ 8,966 Goodwill and intangible assets (28,799) (2,146) Other 2,362 — Total deferred tax assets (liabilities) $ (19,627) $ 6,820 As of December 31, 2018, the Company has federal, New York state and New York City net operating loss carryforwards for income tax purposes of $17,196,000, $24,449,000 and $22,654,000, respectively. If not utilized, the federal net operating loss carryforwards will begin to expire in 2032 and the state and local net operating loss carryforwards will begin to expire in 2035. The Company was audited by the City of New York (“NYC”) for the tax periods from 2011 – 2013 and TWG was audited for the tax periods 2009 – 2011. In 2018, NYC issued an assessment for the periods under audit. Furthermore, NYC has also requested an extension of the statute of limitations, for TWG for the years 2012 – 2014 and for the Company for 2014, as it will audit those periods as well. For October 1, 2018 to December 31, 2018 and January 1, 2018 to September 30, 2018, the Company recorded the additional tax, penalties and interest of $26,000 and $1,288,000, respectively, resulting from NYC UBT audit assessments. For the tax periods from 2012 – 2016, the Company has calculated and recorded a provision of $70,000 and $2,003,000 for October 1, 2018 to December 31, 2018 and January 1, 2018 to September 30, 2018, respectively, for the additional exposure based on the methodology from the UBT audit assessment. This provision is included in accounts payable, accrued expenses and other liabilities on the consolidated statement of financial condition and in provision for income taxes in the consolidated statement of income. This provision was made using the best estimate of the amount expected to be paid based on available information and assessment of all relevant factors. Due to the uncertainty associated with tax audits, it is possible that at some future date liabilities resulting from this audit could vary significantly from this provision. Nevertheless, based on currently enacted legislation and information currently known to us, the Company believes that the ultimate resolution of this audit will not have a material adverse impact on the Company’s financial condition taken as a whole. |
Shares
Shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Shares | 9. Stockholders’ Equity Initial Public Offering As described in Note 1 – Organization, in April 2019 Tradeweb Markets Inc. completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which includes 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1,161,270,000 in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase LLC Interests from certain of the Bank Stockholders (and cancelled the corresponding shares of common stock as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. Reorganization Transactions In connection with the IPO, the Reorganization Transactions described below were completed. Amendment and Restatement of Certificate of Incorporation On April 3, 2019, the certificate of incorporation of Tradeweb Markets Inc. was amended and restated to, among other things, provide for the authorization of (i) 250,000,000 shares of preferred stock with a par value of $0.00001 per share (ii) 1,000,000,000 shares of Class A common stock with a par value of $0.00001 per share; (iii) 450,000,000 shares of Class B common stock with a par value of $0.00001 per share; (iv) 350,000,000 shares of Class C common stock with a par value of $0.00001 per share; and (v) 300,000,000 shares of Class D common stock with a par value of $0.00001 per share. Each share of Class A common stock and Class C common stock entitles its holder to one vote on all matters presented to the Corporation’s stockholders generally. Each share of Class B common stock and Class D common stock entitles its holder to ten votes on all matters presented to the Corporation’s stockholders generally. The holders of Class C common stock and Class D common stock have no economic interests in the Corporation (where “economic interests” means the right to receive any dividends or distributions, whether cash or stock, in connection with common stock). These attributes are summarized in the following table: Class of Par Votes Economic Class A common stock $ 0.00001 1 Yes Class B common stock $ 0.00001 10 Yes Class C common stock $ 0.00001 1 No Class D common stock $ 0.00001 10 No Holders of outstanding shares of Class A common stock, Class B common stock, Class C common stock and Class D common stock will vote together as a single class on all matters presented to the Corporation’s stockholders for their vote or approval, except as otherwise required by applicable law. Holders of Class B common stock may from time to time exchange all or a portion of their shares of Class B common stock for newly issued shares of Class A common stock on a one-for-one basis (in which case their shares of Class B common stock will be cancelled on a one-for-one basis upon any such issuance). Holders of Class D common stock may also from time to time exchange all or a portion of their shares of Class D common stock for newly issued shares of Class C common stock on a one-for-one basis (in which case their shares of Class D common stock will be cancelled on a one-for-one basis upon such issuance). In addition, with respect to each Bank Stockholder that holds shares of Class D common stock, immediately prior to the occurrence of any event that would cause the combined voting power held by such Bank Stockholder to exceed 4.9%, the minimum number of shares of Class D common stock of such Bank Stockholder that would need to convert into shares of Class C common stock such that the combined voting power held by such Bank Stockholder would not exceed 4.9% will automatically convert into shares of Class C common stock. Each share of Class B common stock will automatically convert into one share of Class A common stock and each share of Class D common stock will automatically convert into one share of Class C common stock (i) immediately prior to any sale or other transfer of such share by a holder or its permitted transferees to a non-permitted transferee or (ii) once the Refinitiv Owners and their affiliates together no longer beneficially own a number of shares of common stock and LLC Interests that together entitle them to at least 10% of TWM LLC’s economic interest. Holders of LLC Interests that receive shares of Class C common stock upon any such conversion may continue to elect to have their LLC Interests redeemed for newly issued shares of Class A common stock as described below (in which case their shares of Class C common stock will be cancelled on a one-for-one basis upon such issuance). Recapitalization of Tradeweb Markets LLC On April 4, 2019, the TWM LLC Agreement was amended and restated to, among other things, (i) provide for the LLC Interests, (ii) exchange all of the existing membership interests of TWM LLC’s existing equityholders for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. All of the shares of TWM LLC outstanding prior to the Reorganization Transactions were exchanged for 222,222,197 LLC Interests. TWM LLC’s outstanding shares prior to the Reorganization Transactions consisted of the following classes of shares: Class A Shares 146,333 Class C Shares 447 Class P(A) Shares 6,887 Class P(C) Shares 2 Class P-1(A) Shares 6,094 Class P-1(C) Shares 232 The TWM LLC Agreement requires that TWM LLC at all times maintain (i) a one-to-one ratio between the number of shares of Class A common stock and Class B common stock issued by the Corporation and the number of LLC Interests owned by the Corporation and (ii) a one-to-one ratio between the number of shares of Class C common stock and Class D common stock issued by the Corporation and the number of LLC Interests owned by the holders of such Class C common stock and Class D common stock. LLC Interests held by the Continuing LLC Owners are redeemable, at the election of such holders, for newly issued shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis (and such holders’ shares of Class C common stock or Class D common stock, as the case may be, will be cancelled on a one-for-one basis upon any such issuance). In the event of such election by a Continuing LLC Owner, the Corporation may, at its option, effect a direct exchange of Class A common stock or Class B common stock for such LLC Interests of the redeeming holders in lieu of such redemption. In addition, the Corporation’s board of directors may, at its option, instead of the foregoing redemptions or exchanges of LLC Interests, cause the Corporation to make a cash payment equal to the volume weighted average market price of one share of Class A common stock for each LLC Interest redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the TWM LLC Agreement. Issuance and Cancellation of Common Stock · As a result of the Refinitiv Contribution, the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Continuing LLC Owners, on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (the Corporation canceled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). Following the completion of the Reorganization Transactions, including the IPO and the application of the proceeds therefrom as described above, (i) the investors in the IPO collectively owned 46,000,000 shares of Class A common, representing 2.7% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 20.7% of the economic interest in TWM LLC; (ii) the Refinitiv Direct Owner owned 96,933,192 shares of Class B common stock, representing 56.4% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 43.6% of the economic interest in TWM LLC; (iii) the Refinitiv LLC Owner owned 22,988,329 shares of Class D common stock, representing 13.4% of the combined voting power of all of the Corporation’s common stock, and 22,988,329 LLC Interests, representing 10.3% of the economic interest in TWM LLC, (iv) the Continuing LLC Owners that continue to own LLC Interests (other than the Refinitiv LLC Owner) collectively owned 10,006,269 shares of Class C common stock and 46,294,407 shares of Class D common stock, representing 27.5% of the combined voting power of all of the Corporation’s common stock, and 56,300,676 LLC Interests, representing 25.3% of the economic interest in TWM LLC; and (v) the Corporation owned 142,933,192 LLC Interests, representing 64.3% of the economic interest in TWM LLC. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Shares | 12. Shares The Company's issued and vested shares are as follows: Successor Predecessor December 31, 2018 December 31, 2017 Number of Vested Shares Issued Class A Shares 146,333 146,333 Class C Shares 447 447 Class P(A) Shares 6,887 6,887 Class P(C) Shares 2 2 Class P-1(A) Shares 6,094 — Class P-1(C) Shares 232 — Each outstanding Class A Share, Class P(A) Share, Class P-1(A) Share, Class C Share, Class P(C) Share and Class P-1(C) Share equally participates in the earnings of the Company. All of these shares cannot be transferred without approval by the Board of Managers of the Company, with the exception of transfers to certain related parties. Most of the Class A, Class P(A) and Class P-1(A) Shareholders have the right to appoint the members of the Board of Managers. The Class C, Class P(C) and Class P-1(C) Shareholders do not have the right to appoint members of the Board of Managers. As a result of the Recapitalization described in Note 2, all of the outstanding Class A Shares, Class P(A) Shares, Class P-1(A) Shares, Class C Shares, Class P(C) Shares and Class P-1(C) Shares of the Company were exchanged for 222,222,197 LLC Interests. The Company’s issued and vested shares adjusted retroactively for the Recapitalization, in their pre-exchange classes, are as follows at December 31, 2018 and 2017: Successor Predecessor December 31, 2018 December 31, 2017 Number of Vested Shares Issued Class A Shares 203,245,361 203,245,361 Class C Shares 612,431 621,431 Class P(A) Shares 9,565,659 9,565,659 Class P(C) Shares 2,520 2,520 Class P-1(A) Shares 8,464,589 — Class P-1(C) Shares 322,637 — |
Share-Based Compensation Plans
Share-Based Compensation Plans | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Share-Based Compensation Plans | 11. Stock-Based Compensation Plans The Company maintains a stock-based incentive plan (the “PRSU Plan”) which provides for the grant of performance-based restricted share units (“PRSUs”) to encourage employees of the Company to participate in the long-term success of the Company. PRSUs generally vest in the third plan year following the year of grant and are equity-settled in shares of Class A common stock (except as described below). The outstanding PRSUs vest on January 1, 2020, 2021 and 2022. The number of PRSUs initially awarded is subsequently adjusted (upward or downward) by a performance modifier, based on the financial performance of the Company in the year of the grant. If an employee’s employment with the Company is terminated, subject to certain exceptions, all unvested PRSUs are forfeited. The following table summarizes information for equity-settled PRSUs of the Company (in thousands, except weighted average grant date fair value per unit): Successor Successor Three Months Six Months Ended Ended June 30, June 30, Equity-Settled PRSUs 2019 2019 PRSU compensation expense $ 6,894 $ 11,671 Income tax benefit — — PRSU compensation expense, net of taxes $ 6,894 $ 11,671 Weighted-average grant date fair value per unit $ 22.19 $ 22.19 Total fair value of vested PRSUs $ — $ — The Company previously granted cash-settled PRSUs, some of which are still outstanding and are accounted for as liability awards. The Company measures the cost of employee services received in exchange for the award based on the fair value of the Company and the value of accumulated dividend rights associated with each award. The fair value of that award is remeasured subsequently at each reporting date through to settlement. Changes in the award's fair value during the requisite service period is recognized as compensation cost over that period. The following table summarizes information for cash-settled PRSUs of the Company (in thousands, except weighted average fair value per unit): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Cash-Settled PRSUs 2019 2019 2018 2018 PRSU compensation expense $ 419 $ 519 $ 5,209 $ 11,155 Income tax benefit — — — — PRSU compensation expense, net of taxes $ 419 $ 519 $ 5,209 $ 11,155 Weighted-average fair value per unit $ 63,497 $ 63,497 $ 33,672 $ 33,672 Total fair value of vested PRSUs $ — $ — $ — $ — The Corporation maintains an option plan (the “Option Plan”) which provides for the grant of stock options. In October 2018, the Company made a special award of options under the Option Plan. Each option vests one half based solely on the passage of time and one half only if the Company achieves certain performance targets. The time vesting portion of the options has a graded vesting schedule with vesting dates of January 1, 2019, 2020, 2021 and 2022, with accelerated vesting for time-based options with vesting dates of January 1, 2021 and 2022 upon the completion of an initial public offering. In accounting for the options issued under the Option Plan, the Company measures and recognizes compensation expense for all awards based on their estimated fair values measured as of the grant date. These options are exercisable only any time following the closing of an initial public offering or during a 15‑day period following a change in control of the Company (and certain other sales of equity by the Company’s shareholders). Costs related to these options are recognized as an expense in the consolidated statements of income over the requisite service period, when exercisability is considered probable, with an offsetting increase to additional paid-in capital. As a result, expense recognition commenced upon the completion of the IPO, with $18,883,000 recognized as compensation expense related to these options immediately upon the completion of the IPO. The following table summarizes information for options of the Company (in thousands, except weighted average fair value per unit): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Options 2019 2019 2018 2018 Option compensation expense $ 20,403 $ 20,403 $ — $ — Income tax benefit — — — — Option compensation expense, net of taxes $ 20,403 $ 20,403 $ — $ — Weighted-average fair value per unit $ 1.85 $ 1.85 $ — $ — Total fair value of vested options $ 16,309 $ 16,309 $ — $ — As of June 30, 2019, total unrecognized compensation expense related to non-vested stock-based compensation arrangements and the expected recognition period are as follows (in thousands): Cash-Settled Equity Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 558 $ 41,237 $ 12,923 Weighted-average recognition period 1.3 years 2.0 years 1.7 years | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Share-Based Compensation Plans | 13. Share-Based Compensation Plans The Company has a share-based incentive plan which provides for the grant of performance-based restricted share units (“PRSUs”), to encourage employees of the Company to participate in the long-term success of the Company. The Company's outstanding PRSUs as of December 31, 2018 vest on January 1, 2019, 2020 and 2021. The final value of the PRSUs upon vesting is determined by a performance modifier, which is adjusted as a result of the financial performance of the Company in the grant year. If an employee’s employment with the Company is terminated, with the exception of retirement, all unvested PRSUs are forfeited. On December 31, 2018, certain PRSUs, which previously were cash-settled, were converted to equity settled PRSUs. The conversion was at fair value, using a unit price consistent with the share price of the Company, and as a result of the impact of the performance modifier on PRSUs value, 1,033.2 cash-settled PRSUs were converted into the equivalent value of 1,442.2 equity settled PRSUs. Equity-settled PRSUs have vesting terms similar to the cash-settled PRSUs and are converted into shares of the Company on the February 1 following vesting. The shares received upon conversion are subject to certain selling restrictions including an underwriter's lockup period if an IPO of the Company is effective or a restriction that the shares can only be sold to the Company in January or June, if there is not an effective IPO of the Company. As a result of the modification, which impacted 54 employees, the Company reclassified $19,072,000 from employee equity compensation payable to members' capital. The following table reports the activity for equity-settled PRSUs issued by the Company: Weighted Average Number of Fair Value Successor PRSUs of PRSUs Outstanding at October 1, 2018 — $ — Converted to equity settled PRSUs 1,442.2 30,482 Outstanding at December 31, 2018 1,442.2 $ 30,482 The following table reports the activity for equity-settled PRSUs issued by the Company adjusted retroactively for the Recapitalization described in Note 2: Weighted Average Number of Fair Value Successor PRSUs of PRSUs Outstanding at October 1, 2018 — $ — Converted to equity settled PRSUs 2,003,100 21.95 Outstanding at December 31, 2018 2,003,100 $ 21.95 The remaining PRSUs that are cash-settled are accounted for as liability awards. The Company measures the cost of employee services received in exchange for the award based on its current fair value. The fair value of each award is based on the fair value of the Company and the value of accumulated dividend rights associated with each award. The fair value of that award is remeasured subsequently at each reporting date through to settlement. Changes in the award's fair value during the requisite service period is recognized as compensation cost over that period. The following table reports the activity for cash-settled PRSUs issued by the Company: Weighted Average Number of Fair Value Predecessor PRSUs of PRSUs Outstanding at December 31, 2015 574.7 $ 22,512 Granted 512.8 21,723 Forfeited (12.9) 23,170 Outstanding at December 31, 2016 1,074.6 13,159 Granted 511.7 24,911 Forfeited (8.7) 26,770 Outstanding at December 31, 2017 1,577.6 31,039 Granted 531.9 29,609 Exercised (560.4) 32,246 Forfeited (9.9) 31,130 Outstanding at September 30, 2018 1,539.2 $ 38,017 Successor Outstanding at October 1, 2018 1,539.2 $ 38,017 Granted 36.7 42,892 Forfeited (20.2) 34,891 Converted to equity settled PRSUs (1,033.2) 42,696 Outstanding at December 31, 2018 522.5 $ 34,221 The Company maintains an Option Plan which was established to recruit and retain key employees, directors and consultants by providing such participating individuals with a proprietary interest in the performance of the Company. There are currently 13,912.7 shares reserved for issuance under the Option Plan. In October 2018, the Company made a special award of options under the Option Plan. The options have a graded vesting schedule with vesting dates of January 1, 2019, 2020, 2021 and 2022. Half of the options only vest if the Company achieves certain performance targets. All options expire ten years from the grant date. In accounting for the options issued under this plan, the Company measures and recognizes compensation expense for all awards based on their estimated fair values measured as of the grant date. These options are only exercisable any time following the closing of an initial public offering or during a 15‑day period following a change in control of the Company. Costs related to these options will be recognized as an expense in the consolidated statements of income over the requisite service period, when exercisability is considered probable. Therefore expense will only be recognized upon the completion of an initial public offering or a change in control, over the vesting period, with an offsetting increase to members' capital. The fair value of the options is calculated at the date of grant using the Black-Scholes model. The significant assumptions used to estimate the fair value of the options as of grant date are as follows: Weighted Average Expected Life (years) 5.7 Weighted Average Risk Free Interest Rate 2.94 % Weighted Average Expected Volatility 20.0 % Weighted Average Expected Dividend Yield 4.02 % Share Price $ 25,657 Exercise Price $ 28,594 The following table reports the activity for options issued by the Company: Weighted Weighted Average Weighted Average Grant Date Intrinsic Average Remaining Number of Fair Value Value Exercise Contract Successor Options of Options (in thousands) Price Life (years) Outstanding at October 1, 2018 — $ — Granted 13,025.8 2,569 $ 28,594 Outstanding at December 31, 2018 13,025.8 $ 2,569 $ 4,741 $ 28,594 9.8 The following table reports the activity for options issued by the Company adjusted retroactively for the Recapitalization described in Note 2: Weighted Weighted Average Weighted Average Grant Date Intrinsic Average Remaining Number of Fair Value Value Exercise Contract Successor Options of Options (in thousands) Price Life (years) Outstanding at October 1, 2018 — $ — Granted 18,091,793 1.85 $ 20.59 Outstanding at December 31, 2018 18,091,793 $ 1.85 $ 4,741 $ 20.59 9.8 Prior to 2015, the Company granted employees Stock Appreciation Rights ("SARs"). The SARs had graded vesting schedules with expiration dates through December 31, 2016. If an employee was terminated without cause, all unvested SARs were forfeited. All vested SARs were only exercisable during a specific period of the year and must have been exercised by 2017. The fair value of the SARs is calculated at the date of grant and remeasurement date using an appropriate valuation model such as Black-Scholes. Consequently, the fair values of these awards are based on the estimated fair value at that date. At December 31, 2016, due to the expiration of the SARs, the fair value of each award equals the intrinsic value. The following table reports activity for the SARs issued by the Company: Weighted Average Number of Exercise Price Predecessor SARS of SARs Outstanding at December 31, 2015 6,315.5 $ 16,839 Forfeited (91.0) 17,280 Exercised (3,338.4) 16,389 Outstanding at December 31, 2016 2,886.1 $ 17,344 Exercised (2,886.1) 17,344 Outstanding at December 31, 2017 — $ — As of December 31 , 2018, total unrecognized compensation cost related to non-vested share-based compensation arrangements and the expected recognition period are as follows: Cash-Settled Equity Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 419,000 $ 24,853,000 $ 33,460,000 Weighted average recognition period 1.8 years 1.7 years 0.9 years Certain employees acquired or vested in Class C Shares, Class P(C) Shares and Class P‑1(C) Shares of the Company (collectively the “Employee Shares”). The following table records activity of the Employee Shares. Class C Class P(C) Class P-1(C) Predecessor Shares Shares Shares Outstanding at December 31, 2015 528 2 — Sold (24) — — Outstanding at December 31, 2016 504 2 — Purchased 5 — — Sold (62) — — Outstanding at December 31, 2017 447 2 — Sold — — 232 Outstanding at September 30, 2018 447 2 232 Successor Outstanding at October 1, 2018 447 2 232 Sold — — — Outstanding at December 31, 2018 447 2 232 The Employee Shares are classified as mezzanine capital, as opposed to members’ capital, due to the right of employees to sell the shares back to the Company at fair market value upon termination of employment. Employee Shares that have been outstanding for less than six months are included in employee equity compensation payable. At December 31, 2017 there were no Employee Shares included in employee compensation payable. At December 31, 2018, $6,727,000 of vested Class P-1(C) Shares are included in employee compensation payable with any changes in the value of the shares included in compensation cost on the consolidated statements of income. Changes in the Employee Shares' fair value included in mezzanine capital are not recognized as compensation cost. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, $9,413,000, $15,949,000, $26,100,000 and $19,032,000, respectively, has been expensed relating to PRSUs, options and shares granted to or acquired by employees and included in employee compensation and benefits in the consolidated statements of income. |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Related Party Transactions | 12. Related Party Transactions The Company enters into transactions with affiliates of Refinitiv which are considered to be related party transactions. The Company also enters into transactions with affiliates of the Bank Stockholders. Prior to the Reorganization Transactions, the Bank Stockholders were considered to be related parties of the Company. As a result of the Reorganization Transactions, they are no longer considered to be related parties. As a result, the related party transactions listed below include transactions with affiliates of Refinitiv for all periods presented and only includes transactions with affiliates of the Bank Stockholders for pre-IPO periods. At June 30, 2019 and December 31, 2018, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Successor June 30, 2019 December 31, 2018 Cash and cash equivalents $ — $ 283,790 Receivables from brokers and dealers and clearing organizations — 3,332 Deposits with clearing organizations — 500 Accounts receivable — 40,730 Receivable from affiliates 2,849 3,243 Other assets — 9 Payable to brokers and dealers and clearing organizations — 2,404 Deferred revenue 4,772 9,151 Payable to affiliates 6,004 5,009 The following balances with such affiliates were included in the consolidated statements of income in the following line items (in thousands): Successor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Revenue: Transaction fees (1) $ — $ 59,643 $ 53,949 $ 106,867 Subscription fees (1) — 5,670 5,961 11,181 Commissions (1) — 16,186 11,505 23,136 Refinitiv market data fees (2) 13,385 27,001 12,081 24,318 Operating Income: (3) Interest income — 858 7 28 Expenses Shared Services Fees (4) : Technology and communications 740 1,480 740 1,480 General and administrative 191 371 180 360 Occupancy 155 310 155 310 (1) For pre-IPO periods, represents fees and commissions from affiliates of the Bank Stockholders. (2) The Company maintains a market data license agreement with Refinitiv (TR in the predecessor period). Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees or royalties for these feeds. (3) For pre-IPO periods, represents interest income from money market funds invested with and savings accounts deposited with affiliates of the Bank Stockholders. (4) The Company maintains a shared services agreement with Refinitiv (TR in the predecessor period). Under the terms of the agreement, Refinitiv provides the Company with certain real estate, payroll, benefits administration, insurance, content, financial reporting and tax support. The Company reimburses affiliates of Refinitiv (TR in the predecessor period) for expenses paid on behalf of the Company for various services including salaries and bonuses, marketing, professional fees, communications, data costs and certain other administrative services. For the three and six months ended June 30, 2019, the Company reimbursed such affiliates approximately $3,211,000 and $4,238,000, respectively, for these expenses. For the three and six months ended June 30, 2018, the Company reimbursed such affiliates approximately $6,258,000 and $28,408,000, respectively, for these expenses. The Company is indemnified by Refinitiv for any tax liabilities that existed in the entity contributed by Refinitiv as a result of the Refinitiv Contribution. At June 30, 2019, $2,722,000 is included in other assets on the June 30, 2019 consolidated statement of financial condition related to this indemnification. During 2014, the Company issued Class A Shares and unvested Class P-1(A) Shares to some of the Bank Stockholders as a result of a $120,000,000 capital contribution. In connection with this investment, employees invested $5,266,000 in the Company and were issued Class C Shares and unvested Class P-1(C) Shares. Certain Class P-1(A) Shares and Class P-1(C) Shares vested on July 31, 2018, based on a formula determined by the Company’s new credit platforms’ revenues and any remaining unvested Class P-1(A) Shares and Class P-1(C) Shares were cancelled and as a result no contingent consideration has been recognized related to these shares subsequent to that date. The Company recognized contingent consideration for the three months and six months ended June 30, 2018 of $19,297,000 and $29,367,000, respectively, relating to these shares, which is included in net revenue on the consolidated statements of income. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Related Party Transactions | 14. Related Party Transactions The Company enters into transactions with affiliates of the Banks and Refinitiv. At December 31, 2018 and December 31, 2017, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Predecessor December 31, 2018 December 31, 2017 Cash and cash equivalents $ 283,790 $ 234,107 Receivables from brokers and dealers and clearing organizations 3,332 — Deposits with clearing organizations 500 500 Accounts receivable 40,730 27,163 Receivable from affiliates 3,243 375 Other assets 9 27 Payable to brokers and dealers and clearing organizations 2,404 — Deferred revenue 9,151 5,106 Contingent consideration payable — 129,393 Accounts payable, accrued expenses and other liabilities — 2,555 Payable to affiliates 5,009 5,578 The Company maintains a shared services agreement with Refinitiv (TR in the predecessor periods). Under the terms of the agreement, Refinitiv provides the Company with certain real estate, payroll, benefits administration, insurance, content, financial reporting and tax support. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, the Company incurred shared services fees of $1,075,000, $3,225,000, $4,300,000 and $4,300,000 relating to this agreement, respectively. These fees are included in occupancy, technology and communications and general and administrative expenses in the consolidated statements of income. The Company maintains a market data license agreement with Refinitiv (TR in the predecessor periods). Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees or royalties for these feeds. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, the Company earned $13,467,000, $36,851,000, $50,125,000 and $50,564,000, respectively, of revenue under this agreement. The Company reimburses affiliates of Refinitiv (TR in the predecessor periods) for expenses paid on behalf of the Company for various services including salaries and bonuses, marketing, professional fees, communications, data costs and certain other administrative services. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, the Company reimbursed such affiliates approximately $3,837,000, $28,736,000, $38,361,000 and $34,350,000, respectively, for these expenses. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, the Company earned approximately $90,845,000, $211,234,000, $232,436,000 and $211,743,000, respectively, of transaction, subscription and other fees from affiliates of the Banks. For October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, the Company earned $17,000, $34,000, $40,000 and $80,000, respectively, of interest income from money market funds invested with and savings accounts deposited with affiliates of the Banks. Interest rates earned on the money market and savings accounts are comparable to rates offered to third parties. The Company borrowed $29,285,000 from a subsidiary of TR under a convertible term note. Interest charged on the outstanding borrowings is the greater of LIBOR or 150 basis points, plus 300 basis points per annum, and is reset and payable quarterly. On May 5, 2017, TR converted all outstanding borrowings into 1,835 Class A Shares at the price of $15,958 per share. During the years ended December 31, 2017 and 2016, the interest rate charged was 4.50% per annum. The Company paid and expensed interest on this note of $455,000 and $1,339,000 in the years ended December 31, 2017 and 2016, respectively. During 2014, the Company issued Class A Shares and unvested Class P-1(A) Shares to some of the Banks as a result of a $120,000,000 capital contribution. In connection with this investment, employees invested $5,266,000 in the Company and were issued Class C Shares and unvested Class P-1(C) Shares. Certain Class P-1(A) Shares and Class P-1(C) Shares vested on July 31, 2018, based on a formula determined by the Company’s new credit platforms’ revenues and any remaining unvested Class P-1(A) Shares and Class P-1(C) Shares were cancelled. The value of the vested Class P-1(A) Shares which are included in members’ capital is $150,495,000 and the value of the vested P-1(C) Shares which are included in employee equity compensation payable is $6,727,000. The Company recognized contingent consideration for January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, of $26,830,000, $58,520,000 and $26,224,000, respectively, relating to these shares, which is included in net revenue on the consolidated statements of income. At December 31, 2017, $129,393,000 is included in contingent consideration payable on the consolidated statements of financial condition. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Fair Value of Financial Instruments | 13. Fair Value of Financial Instruments Certain financial instruments that are not carried at fair value on the consolidated statements of financial condition are carried at amounts that approximate fair value. These instruments include deposits with clearing organizations and accounts receivable. The Company's money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company has no instruments that are classified within level 2 or level 3 of the fair value hierarchy. The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Identical Observable Unobservable Assets Inputs Inputs Successor (Level 1) (Level 2) (Level 3) Total As of June 30, 2019 Assets Money market funds $ 113,180 $ — $ — $ 113,180 $ 113,180 $ — $ — $ 113,180 As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Fair Value of Financial Instruments | 15. Fair Value of Financial Instruments Certain financial instruments that are not carried at fair value on the consolidated statements of financial condition are carried at amounts that approximate fair value. These instruments include deposits with clearing organizations and accounts receivable. Following is a description of the fair value methodologies used for the Company's instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy: The Company's money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. Contingent consideration is classified within level 3 of the fair value hierarchy because the valuation requires assumptions that are both significant and unobservable. The contingent consideration valuation is determined using a monte carlo simulation, with key inputs being the standard deviation applied to the Company's new credit platforms' revenues, revenue multiple and discount rate. At December 31, 2017, the inputs in the valuation are as follows: Standard deviation $ 1,666,667 Revenue multiple 7.03x Discount rate 1.64 % The Company has no instruments that are classified within level 2 of the fair value hierarchy. The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Indentical Observable Unobservable Assets Inputs Inputs Predecessor (Level 1) (Level 2) (Level 3) Total As of December 31, 2017 Assets Money market funds $ 101,154 $ — $ — $ 101,154 $ 101,154 $ — $ — $ 101,154 Liabilities Contingent consideration payable $ — $ — $ 129,393 $ 129,393 $ — $ — $ 129,393 $ 129,393 Successor As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 |
Credit Risk
Credit Risk | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Credit Risk | 14. Credit Risk The Company may be exposed to credit risk regarding its receivables, which are primarily receivables from financial institutions, including investment managers and broker/dealers. At June 30, 2019 and December 31, 2018, the Company established an allowance for doubtful accounts of $1,273,000 and $1,169,000, respectively, with regard to these receivables. In the normal course of business the Company, as agent, executes transactions with, and on behalf of, other brokers and dealers. If the agency transactions do not settle because of failure to perform by either counterparty, the Company may be obligated to discharge the obligation of the non-performing party and, as a result, may incur a loss if the market value of the security is different from the contract amount of the transaction. A substantial number of the Company's transactions are collateralized and executed with, and on behalf of, a limited number of brokers and dealers. The Company's exposure to credit risk associated with the nonperformance of these clients in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair the clients' ability to satisfy their obligations to the Company. The Company does not expect nonperformance by counterparties in the above situations. However, the Company's policy is to monitor its market exposure and counterparty risk. In addition, the Company has a policy of reviewing, as considered necessary, the credit standing of each counterparty with which it conducts business. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Credit Risk | 16. Credit Risk The Company may be exposed to credit risk regarding its receivables, which are primarily receivable from financial institutions, including investment managers and broker/dealers. At December 31, 2018 and December 31, 2017 the Company established an allowance for doubtful accounts of $1,169,000 and $928,000, respectively, with regard to these accounts receivable. In the normal course of business the Company, as agent, executes transactions with, and on behalf of, other brokers and dealers. If the agency transactions do not settle because of failure to perform by either counterparty, the Company may be obligated to discharge the obligation of the non-performing party and, as a result, may incur a loss if the market value of the security is different from the contract amount of the transaction. A substantial number of the Company's transactions are collateralized and executed with, and on behalf of, a limited number of brokers and dealers. The Company's exposure to credit risk associated with the nonperformance of these clients in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair the clients' ability to satisfy their obligations to the Company. The Company does not expect nonperformance by counterparties in the above situations. However, the Company's policy is to monitor its market exposure and counterparty risk. In addition, the Company has a policy of reviewing, as considered necessary, the credit standing of each counterparty with which it conducts business. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Commitments and Contingencies | 15. Commitments and Contingencies In the normal course of business, the Company enters into user agreements with its dealers which provide the dealers with indemnification from third parties in the event that the electronic marketplaces of the Company infringe upon the intellectual property or other proprietary right of a third party. The Company's exposure under these user agreements is unknown as this would involve estimating future claims against the Company which have not yet occurred. However, based on its experience, the Company expects the risk of a material loss to be remote. The Company has been named as a defendant, along with other financial institutions, in antitrust class actions (consolidated into two actions) relating to trading practices in United States Treasury securities auctions. The Company has filed a motion to dismiss the actions, believes it has substantial defenses to the other plaintiff's claims and intends to defend itself vigorously. The Company was dismissed from a class action relating to an interest rate swaps matter in 2017, but that matter continues against the remaining defendant financial institutions. The Company is a co-defendant in a matter relating to the distribution of financial strength ratings over the Company's trading platform to one of its customers. The matter alleges that while certain business units of the client were licensed to receive the data via the Company's platform, the data was also distributed without authorization to certain end clients of the customer. The plaintiff claims to have suffered approximately $80,000,000 in damages and also seeks punitive damages, attorneys' fees and costs. The Company intends to continue to vigorously defend what the Company believes to be meritless and excessive claims. The Company records its best estimate of a loss, including estimated defense costs, when the loss is considered probable and the amount of such loss can be reasonably estimated. Based on its experience, the Company believes that the amount of damages claimed in a legal proceeding is not a meaningful indicator of the potential liability. At this time, the Company cannot reasonably predict the timing or outcomes of, or estimate the amount of loss, or range of loss, if any, related to its pending legal proceedings, including the matters described above, and therefore does not have any contingency reserves established for any of these matters. Revolving Credit Facility On April 8, 2019, the Company entered into a five year, $500 million senior secured revolving credit facility (“Credit Facility”) with a syndicate of banks. The Credit Facility provides additional borrowing capacity to be used to fund ongoing working capital needs, letters of credit and for general corporate purposes, including potential future acquisitions and expansions. Under the terms of the credit agreement that governs the Credit Facility, borrowings under the Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) a base rate equal to the greatest of (i) the administrative agent’s prime rate, (ii) the federal funds effective rate plus ½ of 1.0% and (iii) one month LIBOR plus 1.0%, in each case plus 0.75%, or (b) LIBOR plus 1.75%, subject to a 0.00% floor. The credit agreement also includes a commitment fee of 0.25% for available but unborrowed amounts and other administrative fees that are payable quarterly. The Credit Facility is available until April 2024, provided the Company is in compliance with all covenants. Financial covenant requirements include maintaining minimum ratios related to interest coverage and leverage. As of June 30, 2019, there were no amounts outstanding under the Credit Facility. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Commitments and Contingencies | 17. Commitments and Contingencies The Company is obligated under operating leases in the US and UK for office space through 2027. Minimum rent is expensed on a straight-line basis over the term of the lease. The terms of the leases require the following remaining future minimum rental payments at December 31, 2018 (in thousands): Year ending December 31, Amount 2019 $ 11,393 2020 7,580 2021 5,317 2022 4,051 2023 3,877 Thereafter 11,156 $ 43,374 The actual rent charged to occupancy amounted to $2,733,000, $9,011,000, $11,774,000 and $13,253,000 for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, respectively. One US lease is secured by a letter of credit in the amount of $1,200,000, which is guaranteed by Refinitiv. In the normal course of business, the Company enters into user agreements with its dealers which provide the dealers with indemnification from third parties in the event that the electronic marketplaces of the Company infringe upon the intellectual property or other proprietary right of a third party. The Company's exposure under these user agreements is unknown as this would involve estimating future claims against the Company which have not yet occurred. However, based on its experience, the Company expects the risk of a material loss to be remote. The Company was named as a defendant, along with dozens of financial institutions, in antitrust class actions (consolidated into two actions) relating to trading practices in United States Treasury securities auctions and, separately, interest rate swaps. The Company was dismissed from the interest rate swaps matter and believes it has substantial defenses to the other plaintiffs’ claims and intends to defend itself vigorously. The Company is a co-defendant in a matter relating to the distribution of financial strength ratings over the Company's trading platform to one of its customers. The matter alleges that while certain business units of the client were licensed to receive the data via the Company's platform, the data was also distributed without authorization to certain end clients of the customer. The plaintiff claims to have suffered approximately $80,000,000 in damages and also seeks punitive damages, attorneys’ fees and costs. The Company intends to continue to vigorously defend what the Company believes to be meritless and excessive claims. The Company records its best estimate of a loss, including estimated defense costs, when the loss is considered probable and the amount of such loss can be reasonably estimated. Based on its experience, the Company believes that the amount of damages claimed in a legal proceeding is not a meaningful indicator of the potential liability. At this time, the Company cannot reasonably predict the timing or outcomes of, or estimate the amount of loss, or range of loss, if any, related to its pending legal proceedings, including the matters described above, and therefore does not have any contingency reserves established for any of these matters. |
Net Income Per Share
Net Income Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Net Income Per Share | 16. Earnings Per Share In April 2019, the Company completed the Reorganization Transactions and the IPO, which, among other things, resulted in the Corporation becoming the successor of TWM LLC for financial reporting purposes. As a result, earnings per share information for the pre-IPO period is not comparable to earnings per share information for the post-IPO period. Thus, earnings per share information is being presented separately for the pre-IPO and post-IPO periods. The following tables summarize the basic and diluted earnings per share calculations for Tradeweb Markets LLC (pre-IPO period) and Tradeweb Markets Inc. (post-IPO period) : Successor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 EPS: Pre-IPO net income attributable to Tradeweb Markets LLC (1) (in thousands, except share and per share amounts) Numerator: Pre-IPO net income attributable to Tradeweb Markets LLC $ 42,352 38,897 84,205 Denominator: Weighted average LLC Interests outstanding - Basic 222,222,197 213,435,314 213,435,314 Dilutive effect of equity-settled PRSUs 1,098,260 — — Weighted average LLC Interests outstanding - Diluted 223,320,457 213,435,314 213,435,314 Earnings per share - Basic $ 0.19 $ 0.18 $ 0.39 Earnings per share - Diluted $ 0.19 $ 0.18 $ 0.39 EPS: Post-IPO net income attributable to Tradeweb Markets Inc. Numerator: Post-IPO net income attributable to Tradeweb Markets Inc. $ 12,828 $ 12,828 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 142,933,192 142,933,192 Dilutive effect of equity-settled PRSUs 2,214,480 2,214,480 Dilutive effect of options 5,699,511 5,699,511 Weighted average shares of Class A and Class B common stock outstanding - Diluted 150,847,183 150,847,183 Earnings per share - Basic $ 0.09 $ 0.09 Earnings per share - Diluted $ 0.09 $ 0.09 (1) Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the TWM LLC Agreement to, among other things, (i) provide for LLC Interests and (ii) exchange all of the original members’ existing membership interests for LLC interests. For the three and six months ended June 30, 2019, there were approximately 340 shares that were anti-dilutive and thus excluded from the computation of diluted earnings per share. For the three and six months ended June 30, 2018, there were approximately 8,045,000 and 6,789,000 shares, respectively, that were anti-dilutive and thus excluded from the computation of diluted earnings per share. LLC Interests held by the Continuing LLC Owners are redeemable, at the election of such holders, for shares of Class A or Class B common stock of Tradeweb Markets Inc. After evaluating the potential dilutive effect under the if-converted method, the 79,289,005 LLC Interests for the assumed exchange of non-controlling interests were determined to be anti-dilutive and thus were excluded from the computation of diluted earnings per share for the post-IPO periods. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Net Income Per Share | 18. Net Income Per Share On April 4, 2019, the LLC Agreement was amended and restated to, among other things, (i) provide for LLC Interests and (ii) exchange all of the existing membership interests of the Company’s existing equityholders for LLC Interests. For purposes of calculating net income per share on the consolidated statements of income, the number of outstanding shares has been adjusted retroactively for all periods presented to reflect the above-mentioned amendment and resulting Recapitalization. The following table sets forth the computation of basic and diluted net income per share: Successor Predecessor Predecessor Predecessor October 1, January 1, Year Year 2018 to 2018 to Ended Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Net Income (in thousands) $ 29,307 $ 130,160 $ 83,648 $ 93,161 Basic Weighted Average Shares Outstanding 222,221,628 215,365,920 212,568,635 210,979,704 Dilutive Effect of Conversion to Equity Settled PRSU 22,223 — — — Diluted Weighted Average Shares Outstanding 222,243,851 215,365,920 212,568,635 210,979,704 Basic Net Income Per Share $ 0.13 $ 0.60 $ 0.39 $ 0.44 Diluted Net Income Per Share $ 0.13 $ 0.60 $ 0.39 $ 0.44 Shares from the convertible term note payable totaling 894,464 and 2,548,668 for the years ended December 31, 2017 and 2016, respectively, and shares from the contingent consideration payable totaling 5,444,566 for January 1, 2018 to September 30, 2018 were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive. Net income per share are the same for all classes of the Company’s shares since each class of share equally participates in the earnings of the Company. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Regulatory Capital Requirements | 17. Regulatory Capital Requirements TWL, DW and TWD are subject to the Uniform Net Capital Rule 15c3‑1 under the Securities Exchange Act of 1934. TEL is subject to certain financial resource requirements with the FCA in the UK, TWJ is subject to certain financial resource requirements with the FCA in Japan and TWEU is subject to certain finance resource requirements with the AFM in the Netherlands. At June 30, 2019 and December 31, 2018, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL, TWJ and TWEU were as follows (in thousands): As of June 30, 2019 TWL DW TWD TEL TWJ TWEU Regulatory Capital $ 21,837 $ 42,786 $ 25,858 $ 47,555 $ 12,286 $ 6,472 Regulatory Capital Requirement 1,615 1,559 386 17,515 4,368 6,472 Excess Regulatory Capital $ 20,222 $ 41,227 $ 25,472 $ 30,040 $ 7,918 $ — As of December 31, 2018 TWL DW TWD TEL TWJ Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 As SEFs, TW SEF and DW SEF are required to maintain adequate financial resources and liquid financial assets in accordance with CFTC regulations. The required and maintained financial resources and liquid financial assets at June 30, 2019 and December 31, 2018 are as follows (in thousands): As of June 30, 2019 As of December 31, 2018 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 30,137 $ 15,032 $ 31,232 $ 17,837 Required Financial Resources 10,500 5,589 10,500 5,169 Excess Financial Resources $ 19,637 $ 9,443 $ 20,732 $ 12,668 Liquid Financial Assets $ 16,961 $ 8,719 $ 16,662 $ 11,888 Required Liquid Financial Assets 5,250 2,795 5,250 2,585 Excess Liquid Financial Assets $ 11,711 $ 5,924 $ 11,412 $ 9,303 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Regulatory Capital Requirements | 19. Regulatory Capital Requirements TWL, DW and TWD are subject to the Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934. TEL is subject to certain financial resource requirements with the FCA in the UK and TWJ are subject to certain financial resource requirements with the FCA in Japan. At December 31, 2018 and December 31, 2017, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL and TWJ were as follows (in thousands): Predecessor TWL DW TWD TEL TWJ As of December 31, 2017 Regulatory Capital $ 22,551 $ 35,546 $ 16,965 $ 31,509 $ 5,326 Regulatory Capital Requirement 1,589 1,612 378 18,034 961 Excess Regulatory Capital $ 20,962 $ 33,934 $ 16,587 $ 13,475 $ 4,365 Successor TWL DW TWD TEL TWJ As of December 31, 2018 Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 As SEFs, TW SEF and DW SEF are required to maintain adequate financial resources and liquid financial assets in accordance with CFTC regulations. The required and maintained financial resources and liquid financial assets at December 31, 2018 and December 31, 2017 are as follows (in thousands): Successor Predecessor As of December 31, 2018 As of December 31, 2017 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 31,232 $ 17,837 $ 23,349 $ 20,069 Required Financial Resources 10,500 5,169 10,500 5,875 Excess Financial Resources $ 20,732 $ 12,668 $ 12,849 $ 14,194 Liquid Financial Assets $ 16,662 $ 11,888 $ 14,084 $ 13,865 Required Liquid Financial Assets 5,250 2,585 5,250 2,893 Excess Liquid Financial Assets $ 11,412 $ 9,303 $ 8,834 $ 10,972 |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Employee Savings Plan | 20. Employees Savings Plan The Company sponsors a 401(k) savings plan for its US employees. Employees may voluntarily contribute up to 75% of their annual compensation, including bonus. The Company matches 100% of the employee's contribution, up to 4% of their annual compensation, which vests immediately. Company's expense for matching contributions under the plans was $738,000, $3,758,000, $4,137,000 and $4,179,000, for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, respectively. The Company has deferred compensation plans for its UK and Asia employees. Employer contributions to the plans were $423,000, $1,113,000, $1,242,000 and $1,181,000 for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016, respectively. |
Business Segment and Geographic
Business Segment and Geographic Information | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Business Segment and Geographic Information | 18. Business Segment and Geographic Information The Company operates electronic marketplaces for the trading of products across the rates, credit, equities and money markets asset classes and provides related pre-trade pricing and post-trade processing services. The Company’s operations constitute a single business segment because of the integrated nature of these marketplaces and services. Information regarding revenue by client sector is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net revenue: Institutional $ 111,057 $ 220,309 $ 102,095 $ 204,415 Wholesale 41,945 81,376 32,265 64,860 Retail 19,939 41,145 20,918 39,954 Market Data 17,544 34,447 15,737 31,289 Contingent consideration — — (19,297) (29,367) Net revenue 190,485 377,277 151,718 311,151 Operating expenses 159,530 300,045 111,556 223,634 Operating income $ 30,955 $ 77,232 $ 40,162 $ 87,517 The Company operates in the U.S. and internationally, primarily in Europe and Asia. Revenues are attributed to geographic area based on the jurisdiction where the underlying transactions take place. The results by geographic region are not meaningful in understanding the Company's business. Long-lived assets are attributed to the geographic area based on the location of the particular subsidiary. Information regarding revenue for the three and six months ended June 30, 2019 and 2018 and long-lived assets as of June 30, 2019 and December 31, 2018 is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net Revenue: U.S. $ 122,693 $ 242,090 $ 109,540 $ 217,322 International 67,792 135,187 61,475 123,196 Gross revenue 190,485 377,277 171,015 340,518 Contingent consideration — — (19,297) (29,367) Total $ 190,485 $ 377,277 $ 151,718 $ 311,151 June 30, 2019 December 31, 2018 Long-lived assets U.S. $ 4,251,030 $ 4,276,568 International 13,413 7,787 Total $ 4,264,443 $ 4,284,355 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Business Segment and Geographic Information | 21. Business Segment and Geographic Information The Company operates electronic marketplaces for the trading of products across the rates, credit, money markets and equities asset classes and provides related pre-trade pricing and post-trade processing services. The Company’s operations constitute a single business segment because of the integrated nature of these marketplaces and services. Information regarding revenue by client sector is as follows (in thousands): Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Net revenue: Institutional $ 103,971 $ 301,918 $ 318,038 $ 285,801 Wholesale 38,153 99,028 118,451 109,945 Retail 19,780 57,766 70,857 67,471 Market Data 16,733 47,059 55,622 55,187 Other — (26,830) (58,520) (26,224) Net revenue 178,637 478,941 504,448 492,180 Operating expenses 146,702 338,607 415,356 399,049 Operating income $ 31,935 $ 140,334 $ 89,092 $ 93,131 The Company operates in the U.S. and internationally, primarily in Europe and Asia. Revenues are attributed to geographic area based on the jurisdiction where the underlying transactions take place. Long-lived assets are attributed to the geographic area based on the location of the particular subsidiary. Information regarding revenue for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016 and long-lived assets as of December 31, 2018 and December 31, 2017 is as follows (in thousands): Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Net revenue: U.S. $ 115,907 $ 324,304 $ 385,176 $ 365,308 International 62,730 181,467 177,792 153,096 Gross revenue 178,637 505,771 562,968 518,404 Contingent consideration — (26,830) (58,520) (26,224) Total $ 178,637 $ 478,941 $ 504,448 $ 492,180 Successor Predecessor December 31, 2018 December 31, 2017 Long-lived assets U.S. $ 4,276,568 $ 845,599 International 7,787 7,987 Total $ 4,284,355 $ 853,586 |
Subsequent Events_2
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Subsequent Events | 19. Subsequent Events On August 1, 2019, London Stock Exchange Group plc announced that it has agreed definitive terms with a consortium including certain investment funds affiliated with Blackstone as well as Thomson Reuters to acquire Refinitiv in an all share transaction for a total enterprise value of approximately $27 billion. The transaction is subject to customary regulatory and shareholder approvals, and is expected to close during the second half of 2020. Refinitiv currently holds a 54% economic interest in the Company. On August 7, 2019, the board of directors of Tradeweb Markets Inc. declared a cash dividend of $0.08 per share of Class A common stock and Class B common stock for the third quarter of 2019. This dividend will be payable on September 16, 2019 to stockholders of record as of September 3, 2019. On August 6, 2019, Tradeweb Markets Inc., as the sole manager, approved a distribution by TWM LLC to its equityholders, including Tradeweb Markets Inc., in an aggregate amount of $33.0 million payable on September 13, 2019. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Subsequent Events | 22. Subsequent Events The Company is in the process of preparing for an IPO. The Company's expectation is that the IPO will occur during the first half of 2019, though no assurances can be made. On March 21, 2019, the Board of Directors approved that the Company will effect a series of reorganization transactions, including a recapitalization of the Company’s issued and vested shares, immediately prior to the consummation of the IPO. In addition, the Company expects to enter into a $500 million revolving credit facility upon the closing of the IPO. On March 22, 2019, the Company paid a $20.0 million distribution to the current owners of the Company. There were no other subsequent events requiring adjustment to the financial statements or disclosure, except as disclosed in note 1, through March 25, 2019, the date that the Company’s financial statements were issued. |
Significant Accounting Polici_4
Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Basis of Accounting | Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented, are normal and recurring in nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. | |
Basis of Consolidation | Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the Continuing LLC Owners. | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360. | |
Software Development Costs | Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. | |
Intangible Assets | Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. | |
Goodwill | Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. | |
Deferred IPO costs | Deferred IPO Costs In 2018 the Company began incurring costs in connection with the filing of a Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25 in the consolidated statements of financial condition. IPO costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. As of June 30, 2019, $15.9 million of deferred costs were reclassified from other assets to additional paid-in capital on the consolidated statements of financial condition. See Note 9 – Stockholders’ Equity. | |
Translation of Foreign Currency | Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. | |
Income Tax | Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation, on a pro rata basis. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. | |
Revenue Recognition | Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis. This income is recognized by the Company when the transactions settle. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 | |
Share-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Company’s Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. In October 2018, following the closing of the Refinitiv Transaction, the Company made a special award of options to management and other employees (the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for the options issued under the Option Plan, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to these options will be recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019, with a charge of $20.4 million, and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. | |
Net Income Per Share | Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Corporation’s Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. | |
Fair Value Measurement | Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – Not Yet Adopted In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses. The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This ASU is applicable for the Company in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this ASU on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company's consolidated financial statements. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Basis of Accounting | Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |
Recapitalization | Recapitalization On April 4, 2019, the Company’s limited liability company agreement (“LLC Agreement”) was amended and restated to, among other things, (i) provide for a single class of common membership interests in the Company (“LLC Interests”) and (ii) exchange all of the existing membership interests of the Company’s existing equityholders for LLC Interests. For purposes of calculating net income per share on the consolidated statements of income, the number of outstanding shares has been adjusted retroactively for all periods to reflect the above-mentioned amendment and resulting recapitalization (the “Recapitalization”). Other share amounts and related disclosures in the notes to the consolidated financial statements reflect the share classes and amounts prior to the Recapitalization unless otherwise indicated. | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting, is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset's carrying value may not be fully recoverable in accordance with Accounting Standards Codification ("ASC") 360. | |
Software Development Costs | Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Once the product is ready for its intended use, such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. | |
Intangible Assets | Intangible Assets Intangible assets with a finite life are amortized over the estimated lives in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding fair value. Intangible assets are amortized over their estimated useful lives of seven to sixteen years. | |
Goodwill | Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting and is the cost of acquired companies in excess of the fair value of identifiable net assets at acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually on July 1st and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. | |
Deferred IPO costs | Deferred IPO Costs In 2018, the Company began incurring costs in connection with the filing of its Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25, Equity - Recognition in the consolidated statements of financial condition. Initial public offering (“IPO”) costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. If the IPO becomes effective, these deferred costs will be offset against proceeds received from the offering and reclassified to equity on the consolidated statements of financial condition. Should the Company terminate or more than temporarily delay its planned offering, these costs will be expensed in the consolidated statements of income. | |
Translation of Foreign Currency | Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. | |
Income Tax | Income Tax The Company is a multiple member limited liability company which is taxed as a partnership. No income tax provision is required on the earnings of the Company as it is a partnership, and therefore the remaining tax effects of its activities accrue directly to its partners. As a partnership, the Company and certain subsidiaries are subject to unincorporated business taxes on income earned, or losses incurred, by conducting business in certain state and local jurisdictions and income taxes in foreign jurisdictions on certain of their operations. TWIDB and its subsidiary DW are C Corporations and therefore incur federal, state and local income tax expense. Income taxes are accounted for in accordance with ASC 740. The Company recorded deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act ("TCJA") effective for tax years ending after December 31, 2017. This legislation replaces the prior corporate tax rate structure with a flat 21% rate, effective in 2018. There were many other future impacts of the tax reform such as the repeal of the corporate alternative minimum tax rate, tax loss carryback and carryforward limitations. This legislation impacted the financial statements for the year ended December 31, 2017 by reducing the deferred tax asset by $1,982,000 as a result of the revaluation of the deferred tax asset based on the reduced federal corporate tax rate. During 2018 the Company finalized its calculations related to the impacts of the TCJA with no adjustment to the Company's previously recorded provisional tax expense. The TCJA also requires a U.S. shareholder of a controlled foreign corporation ("CFC") to include in income, as a deemed dividend, the global intangible low-taxed income ("GILTI") of the CFC. This provision is effective for taxable years of foreign corporations beginning after December 31, 2017, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the GILTI provision as a current period expense when incurred. | |
Revenue Recognition | Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s markets through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees on the consolidated statements of income are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly until annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis, as if the transactions have settled. This income is received by the Company when the transactions settle or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or timing of recognition of revenue in any prior reporting periods. However, in the current reporting period, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some commission and transaction fees earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees and variable components such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the year ended December 31, 2017 and 2016 is as follows: Successor Predecessor October 1, 2018 to January 1, 2018 to For the Year Ended For the Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 (in thousands) (in thousands) (in thousands) (in thousands) Revenues Variable Fixed Variable Fixed Variable Fixed Variable Fixed Transaction fees $ 73,800 $ 23,330 $ 208,049 $ 65,702 $ 210,198 $ 56,822 $ 176,060 $ 54,111 Subscription fees including Refinitiv market data fees 425 46,094 1,305 142,676 1,575 192,959 1,496 190,487 Commissions 22,608 10,232 49,367 30,463 57,118 39,627 54,194 37,469 Other — 2,148 40 8,169 36 4,633 30 4,557 Gross revenues $ 96,833 $ 81,804 $ 258,761 $ 247,010 $ 268,927 $ 294,041 $ 231,780 $ 286,624 | |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for share-based payments. Under ASC 718, the shared-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to members' capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. Under ASC 718, the grant-date fair value of share based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of share-based employee awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of share-based employee awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. Determining the appropriate fair value model and calculating the fair value of the share-based payment awards requires the input of highly subjective assumptions, including the expected life of the share-based payment awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its share-based awards. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the Company's consolidated statements of income. The Company has elected to account for forfeitures when they occur. If in a reporting period a forfeiture occurs, any expenses already recognized relating to the forfeited awards in prior reporting periods are reversed in the current reporting period. | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted net income per share, the weighted-average number of the Company's shares reflects the dilutive effect that could occur if convertible securities were converted into or exercised for the Company's shares using the treasury stock method. | |
Fair Value Measurement | Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions), are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU2016-02, Leases. This standard requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases. The asset will reflect the present value of unpaid lease payments coupled with initial direct costs, prepaid lease payments, and lease incentives. The amount of the lease liability will be calculated as the present value of unpaid lease payments. ASU2016-02 will be effective for the Company in the fiscal year beginning January 1, 2019. The new standard must be adopted using a modified retrospective transition. The Company will adopt the transition method provided by ASU 2018 - 11, Leases - Targeted Improvements, in which the Company will initially apply the new lease standard on the adoption date of January 1, 2019, recognizing the cumulative-effect adjustment to members' capital. The Company is evaluating its current lease contracts and currently intends to use the package of practical expedients allowing entities to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. The Company has not quantified the impact on its consolidated financial statements, but it anticipates an increase in the recognition of right-of-use assets and lease liabilities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. This standard provided new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This guidance will be effective in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this standard on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This update provides specific guidance on the eight cash flow classification and presentation issues on the statements of cash flow. ASU 2016-15 was adopted by the Company beginning on January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows — Restricted Cash. This update requires that a statement of cash flows explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The standard must be adopted using a retrospective transition method to each period presented. ASU 2016-18 was adopted by the Company beginning on January 1, 2018. The adoption resulted in the Company presenting a reconciliation of cash and cash equivalents and restricted cash that sum to the amounts shown in the consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company’s financial statements. |
Significant Accounting Polici_5
Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Breakdown of revenues between fixed and variable revenues | The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Breakdown of revenues between fixed and variable revenues | The breakdown of revenues between fixed and variable revenues, in thousands, for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the year ended December 31, 2017 and 2016 is as follows: Successor Predecessor October 1, 2018 to January 1, 2018 to For the Year Ended For the Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 (in thousands) (in thousands) (in thousands) (in thousands) Revenues Variable Fixed Variable Fixed Variable Fixed Variable Fixed Transaction fees $ 73,800 $ 23,330 $ 208,049 $ 65,702 $ 210,198 $ 56,822 $ 176,060 $ 54,111 Subscription fees including Refinitiv market data fees 425 46,094 1,305 142,676 1,575 192,959 1,496 190,487 Commissions 22,608 10,232 49,367 30,463 57,118 39,627 54,194 37,469 Other — 2,148 40 8,169 36 4,633 30 4,557 Gross revenues $ 96,833 $ 81,804 $ 258,761 $ 247,010 $ 268,927 $ 294,041 $ 231,780 $ 286,624 |
Pushdown Accounting (Tables)
Pushdown Accounting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Allocation applying pushdown accounting | The allocation applying pushdown accounting is summarized in the table below (in thousands): Fair value of the Company $ 4,575,000 Less: fair value of the net assets and liabilities of the Company (1,880,203) Goodwill $ 2,694,797 Net assets and liabilities of the Company at October 1, 2018: Cash and cash equivalents $ 350,183 Restricted cash 1,200 Receivable from brokers and dealers and clearing organizations 4,642 Deposits with clearing organizations 9,200 Accounts receivable 95,959 Furniture, equipment, purchased software and leasehold improvements: Computer hardware 15,787 Leasehold improvements 11,460 Purchased software 2,866 Furniture 1,616 Office equipment 572 Software development costs 168,500 Intangible assets: Tradename 154,300 Content and Data 154,400 Licenses 168,800 Customer relationships 928,200 Receivables from affiliates 3,350 Other assets 20,404 Total assets 2,091,439 Accrued compensation 82,201 Deferred revenue 28,280 Accounts payable, accrued expenses and other liabilities 39,291 Leasehold interests 3,020 Employee equity compensation payable 33,914 Payable to affiliates 5,856 Deferred tax liability 18,674 Total liabilities 211,236 Fair value of net assets and liabilities of the Company $ 1,880,203 |
Furniture, Equipment, Purchas_2
Furniture, Equipment, Purchased Software and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Components of furniture, equipment, purchased software and leasehold improvements. | The components of furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization are as follows (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Computer hardware $ 22,818 $ 67,852 Leasehold improvements 12,339 27,139 Purchased software 3,039 12,991 Furniture and office equipment 2,968 6,350 Accumulated depreciation and amortization (3,036) (87,301) Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization $ 38,128 $ 27,031 |
Software Development Cost (Tabl
Software Development Cost (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Components of software development costs | The components of Software development costs, net of accumulated amortization are as follows (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Software development costs $ 175,656 $ 218,382 Accumulated amortization (5,074) (177,201) Software development costs, net of accumulated amortization $ 170,582 $ 41,181 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Summary of intangible assets which have an indefinite useful life | The following is a summary of intangible assets which have an indefinite useful life at both June 30, 2019 and December 31, 2018 (in thousands): Licenses $ 168,800 Tradename 154,300 Total $ 323,100 | |
Intangible assets that are subject to amortization | Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Successor June 30, 2019 December 31, 2018 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships - Refinitiv Transaction 12 Years $ 928,200 $ (58,012) $ 870,188 $ 928,200 $ (19,338) $ 908,862 Content and data 7 Years 154,400 (16,543) 137,857 154,400 (5,514) 148,886 $ 1,082,600 $ (74,555) $ 1,008,045 $ 1,082,600 $ (24,852) $ 1,057,748 | |
Estimated annual future amortization for existing intangible assets | The estimated annual future amortization for existing intangibles assets through December 31, 2023 is as follows (in thousands): Remainder of 2019 $ 49,704 2020 99,408 2021 99,408 2022 99,408 2023 99,408 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Summary of goodwill | The following is a summary of goodwill (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Refinitiv Transaction $ 2,694,797 $ — TR Acquisition — 334,185 Merger — 66,484 RaffCap Business — 49,200 BondDesk — 103,158 Other — 10,394 Total $ 2,694,797 $ 563,421 | |
Summary of intangible assets which have an indefinite useful life | The following is a summary of intangible assets which have an indefinite useful life (in thousands): Successor Predecessor December 31, December 31, 2018 2017 Licences $ 168,800 $ 12,000 Tradename 154,300 — Total $ 323,100 $ 12,000 | |
Intangible assets that are subject to amortization | Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Predecessor December 31, 2018 December 31, 2017 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships - Refinitiv Transaction 12 Years $ 928,200 $ (19,338) $ 908,862 $ — $ — $ — Content and data 7 Years 154,400 (5,514) 148,886 — — — Customer relationships - Fixed Income Business 13 Years — — — 155,284 (155,270) 14 Customer relationships - DW 11 Years — — — 65,000 (42,348) 22,652 Customer relationships - RaffCap 12 Years — — — 17,600 (9,166) 8,434 Customer relationships - BondDesk 15 Years — — — 104,000 (28,806) 75,194 Customer relationships - Other 10 Years — — — 2,100 (385) 1,715 Tradenames 10 Years — — — 200 (125) 75 Liquidity contracts 16 Years — — — 185,000 (82,865) 102,135 $ 1,082,600 $ (24,852) $ 1,057,748 $ 529,184 $ (318,965) $ 210,219 | |
Estimated annual future amortization for existing intangible assets | The estimated annual future amortization for existing intangibles assets through December 31, 2023 is as follows (in thousands): Year Amount 2019 $ 99,408 2020 99,408 2021 99,408 2022 99,408 2023 99,408 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Schedule of recognized revenue and remaining deferred revenue balance | The recognized revenue and remaining balance is shown below (in thousands): Deferred revenue balance -December 31, 2018 $ 27,883 New billings 54,735 Revenue recognized (57,348) Deferred revenue balance - June 30, 2019 $ 25,270 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Schedule of recognized revenue and remaining deferred revenue balance | The recognized revenue and remaining balance is shown below (in thousands): Successor Predecessor Predecessor October 1, January 1, Year Ended 2018 to 2018 to December 31, December 31, 2018 September 30, 2018 2017 Deferred revenue balance – beginning of period $ 28,280 $ 29,673 $ 42,184 New billings 26,609 100,091 127,312 Revenue recognized (27,006) (101,484) (139,823) Deferred revenue balance – end of period $ 27,883 $ 28,280 $ 29,673 |
Income Taxes (Tables)
Income Taxes (Tables) - Tradeweb Markets LLC | 12 Months Ended |
Dec. 31, 2018 | |
Entity Information [Line Items] | |
Components of provision for income taxes | The provision for income taxes consists of the following (in thousands): Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Current: Federal $ — $ — $ — $ — State and Local 1,235 5,739 4,331 2,772 Foreign 1,212 3,559 2,748 2,826 2,447 9,298 7,079 5,598 Deferred – Federal 680 1,085 (433) (5,783) Deferred – state and local 288 1,517 (517) (540) Total deferred 968 2,602 (950) (6,323) Total $ 3,415 $ 11,900 $ 6,129 $ (725) |
Reconciliation of the statutory tax rate | Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 U.S. federal tax at statutory rate 21.0 % 21.0 % 35.0 % 35.0 % State and local taxes – net of federal benefit 4.7 % 5.1 % 2.8 % 1.6 % Foreign taxes 3.7 % 2.5 % 3.1 % 3.1 % Tax Cuts and Jobs Act provisional tax charge % % 2.2 % % LLC flow-through structure (19.0) % (20.2) % (36.3) % (40.5) % Effective tax rate 10.4 % 8.4 % 6.8 % (0.8) % |
Components of deferred tax assets (Liabilities) | The components of the Company’s deferred tax assets (liabilities) are as follows (in thousands): Successor Predecessor December 31, 2018 December 31, 2017 Deferred tax assets (liabilities): Net operating losses $ 6,810 $ 8,966 Goodwill and intangible assets (28,799) (2,146) Other 2,362 — Total deferred tax assets (liabilities) $ (19,627) $ 6,820 |
Shares (Tradeweb Markets LLC an
Shares (Tradeweb Markets LLC and Subsidiaries) (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Shares | ||
Schedule of issued and vested shares | Class of Par Votes Economic Class A common stock $ 0.00001 1 Yes Class B common stock $ 0.00001 10 Yes Class C common stock $ 0.00001 1 No Class D common stock $ 0.00001 10 No | |
Tradeweb Markets LLC | ||
Shares | ||
Schedule of issued and vested shares | The Company's issued and vested shares are as follows: Successor Predecessor December 31, 2018 December 31, 2017 Number of Vested Shares Issued Class A Shares 146,333 146,333 Class C Shares 447 447 Class P(A) Shares 6,887 6,887 Class P(C) Shares 2 2 Class P-1(A) Shares 6,094 — Class P-1(C) Shares 232 — | |
Tradeweb Markets LLC | Recapitalization | ||
Shares | ||
Schedule of issued and vested shares | The Company’s issued and vested shares adjusted retroactively for the Recapitalization, in their pre-exchange classes, are as follows at December 31, 2018 and 2017: Successor Predecessor December 31, 2018 December 31, 2017 Number of Vested Shares Issued Class A Shares 203,245,361 203,245,361 Class C Shares 612,431 621,431 Class P(A) Shares 9,565,659 9,565,659 Class P(C) Shares 2,520 2,520 Class P-1(A) Shares 8,464,589 — Class P-1(C) Shares 322,637 — |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Share-Based Compensation Plans | ||
Schedule of equity-settled PRSUs issued | The following table summarizes information for equity-settled PRSUs of the Company (in thousands, except weighted average grant date fair value per unit): Successor Successor Three Months Six Months Ended Ended June 30, June 30, Equity-Settled PRSUs 2019 2019 PRSU compensation expense $ 6,894 $ 11,671 Income tax benefit — — PRSU compensation expense, net of taxes $ 6,894 $ 11,671 Weighted-average grant date fair value per unit $ 22.19 $ 22.19 Total fair value of vested PRSUs $ — $ — | |
Schedule of cash-settled PRSUs issued | The following table summarizes information for cash-settled PRSUs of the Company (in thousands, except weighted average fair value per unit): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Cash-Settled PRSUs 2019 2019 2018 2018 PRSU compensation expense $ 419 $ 519 $ 5,209 $ 11,155 Income tax benefit — — — — PRSU compensation expense, net of taxes $ 419 $ 519 $ 5,209 $ 11,155 Weighted-average fair value per unit $ 63,497 $ 63,497 $ 33,672 $ 33,672 Total fair value of vested PRSUs $ — $ — $ — $ — | |
Schedule of activity for options issued | Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Options 2019 2019 2018 2018 Option compensation expense $ 20,403 $ 20,403 $ — $ — Income tax benefit — — — — Option compensation expense, net of taxes $ 20,403 $ 20,403 $ — $ — Weighted-average fair value per unit $ 1.85 $ 1.85 $ — $ — Total fair value of vested options $ 16,309 $ 16,309 $ — $ — | |
Schedule of unrecognized compensation cost | As of June 30, 2019, total unrecognized compensation expense related to non-vested stock-based compensation arrangements and the expected recognition period are as follows (in thousands): Cash-Settled Equity Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 558 $ 41,237 $ 12,923 Weighted-average recognition period 1.3 years 2.0 years 1.7 years | |
Tradeweb Markets LLC | ||
Share-Based Compensation Plans | ||
Schedule of equity-settled PRSUs issued | The following table reports the activity for equity-settled PRSUs issued by the Company: Weighted Average Number of Fair Value Successor PRSUs of PRSUs Outstanding at October 1, 2018 — $ — Converted to equity settled PRSUs 1,442.2 30,482 Outstanding at December 31, 2018 1,442.2 $ 30,482 | |
Schedule of cash-settled PRSUs issued | Weighted Average Number of Fair Value Predecessor PRSUs of PRSUs Outstanding at December 31, 2015 574.7 $ 22,512 Granted 512.8 21,723 Forfeited (12.9) 23,170 Outstanding at December 31, 2016 1,074.6 13,159 Granted 511.7 24,911 Forfeited (8.7) 26,770 Outstanding at December 31, 2017 1,577.6 31,039 Granted 531.9 29,609 Exercised (560.4) 32,246 Forfeited (9.9) 31,130 Outstanding at September 30, 2018 1,539.2 $ 38,017 Successor Outstanding at October 1, 2018 1,539.2 $ 38,017 Granted 36.7 42,892 Forfeited (20.2) 34,891 Converted to equity settled PRSUs (1,033.2) 42,696 Outstanding at December 31, 2018 522.5 $ 34,221 | |
Schedule of significant assumptions used to estimate the fair value of the options | Weighted Average Expected Life (years) 5.7 Weighted Average Risk Free Interest Rate 2.94 % Weighted Average Expected Volatility 20.0 % Weighted Average Expected Dividend Yield 4.02 % Share Price $ 25,657 Exercise Price $ 28,594 | |
Schedule of activity for options issued | The following table reports the activity for options issued by the Company: Weighted Weighted Average Weighted Average Grant Date Intrinsic Average Remaining Number of Fair Value Value Exercise Contract Successor Options of Options (in thousands) Price Life (years) Outstanding at October 1, 2018 — $ — Granted 13,025.8 2,569 $ 28,594 Outstanding at December 31, 2018 13,025.8 $ 2,569 $ 4,741 $ 28,594 9.8 | |
Schedule of activity for SARs issued | Weighted Average Number of Exercise Price Predecessor SARS of SARs Outstanding at December 31, 2015 6,315.5 $ 16,839 Forfeited (91.0) 17,280 Exercised (3,338.4) 16,389 Outstanding at December 31, 2016 2,886.1 $ 17,344 Exercised (2,886.1) 17,344 Outstanding at December 31, 2017 — $ — | |
Schedule of unrecognized compensation cost | As of December 31 , 2018, total unrecognized compensation cost related to non-vested share-based compensation arrangements and the expected recognition period are as follows: Cash-Settled Equity Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 419,000 $ 24,853,000 $ 33,460,000 Weighted average recognition period 1.8 years 1.7 years 0.9 years | |
Schedule of Employee Shares | Class C Class P(C) Class P-1(C) Predecessor Shares Shares Shares Outstanding at December 31, 2015 528 2 — Sold (24) — — Outstanding at December 31, 2016 504 2 — Purchased 5 — — Sold (62) — — Outstanding at December 31, 2017 447 2 — Sold — — 232 Outstanding at September 30, 2018 447 2 232 Successor Outstanding at October 1, 2018 447 2 232 Sold — — — Outstanding at December 31, 2018 447 2 232 | |
Tradeweb Markets LLC | Recapitalization | ||
Share-Based Compensation Plans | ||
Schedule of equity-settled PRSUs issued | The following table reports the activity for equity-settled PRSUs issued by the Company adjusted retroactively for the Recapitalization described in Note 2: Weighted Average Number of Fair Value Successor PRSUs of PRSUs Outstanding at October 1, 2018 — $ — Converted to equity settled PRSUs 2,003,100 21.95 Outstanding at December 31, 2018 2,003,100 $ 21.95 | |
Schedule of activity for options issued | The following table reports the activity for options issued by the Company adjusted retroactively for the Recapitalization described in Note 2: Weighted Weighted Average Weighted Average Grant Date Intrinsic Average Remaining Number of Fair Value Value Exercise Contract Successor Options of Options (in thousands) Price Life (years) Outstanding at October 1, 2018 — $ — Granted 18,091,793 1.85 $ 20.59 Outstanding at December 31, 2018 18,091,793 $ 1.85 $ 4,741 $ 20.59 9.8 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Schedule of balances from transactions with affiliates included in the consolidated statements | At June 30, 2019 and December 31, 2018, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Successor June 30, 2019 December 31, 2018 Cash and cash equivalents $ — $ 283,790 Receivables from brokers and dealers and clearing organizations — 3,332 Deposits with clearing organizations — 500 Accounts receivable — 40,730 Receivable from affiliates 2,849 3,243 Other assets — 9 Payable to brokers and dealers and clearing organizations — 2,404 Deferred revenue 4,772 9,151 Payable to affiliates 6,004 5,009 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Schedule of balances from transactions with affiliates included in the consolidated statements | At December 31, 2018 and December 31, 2017, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Predecessor December 31, 2018 December 31, 2017 Cash and cash equivalents $ 283,790 $ 234,107 Receivables from brokers and dealers and clearing organizations 3,332 — Deposits with clearing organizations 500 500 Accounts receivable 40,730 27,163 Receivable from affiliates 3,243 375 Other assets 9 27 Payable to brokers and dealers and clearing organizations 2,404 — Deferred revenue 9,151 5,106 Contingent consideration payable — 129,393 Accounts payable, accrued expenses and other liabilities — 2,555 Payable to affiliates 5,009 5,578 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) - Tradeweb Markets LLC | 12 Months Ended |
Dec. 31, 2018 | |
Entity Information [Line Items] | |
Schedule of inputs in the valuation | At December 31, 2017, the inputs in the valuation are as follows: Standard deviation $ 1,666,667 Revenue multiple 7.03x Discount rate 1.64 % |
Schedule of fair value measurements | The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Indentical Observable Unobservable Assets Inputs Inputs Predecessor (Level 1) (Level 2) (Level 3) Total As of December 31, 2017 Assets Money market funds $ 101,154 $ — $ — $ 101,154 $ 101,154 $ — $ — $ 101,154 Liabilities Contingent consideration payable $ — $ — $ 129,393 $ 129,393 $ — $ — $ 129,393 $ 129,393 Successor As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tradeweb Markets LLC | |
Entity Information [Line Items] | |
Schedule of future minimum rental payments | The terms of the leases require the following remaining future minimum rental payments at December 31, 2018 (in thousands): Year ending December 31, Amount 2019 $ 11,393 2020 7,580 2021 5,317 2022 4,051 2023 3,877 Thereafter 11,156 $ 43,374 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Net Income Per Share | Successor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 EPS: Pre-IPO net income attributable to Tradeweb Markets LLC (1) (in thousands, except share and per share amounts) Numerator: Pre-IPO net income attributable to Tradeweb Markets LLC $ 42,352 38,897 84,205 Denominator: Weighted average LLC Interests outstanding - Basic 222,222,197 213,435,314 213,435,314 Dilutive effect of equity-settled PRSUs 1,098,260 — — Weighted average LLC Interests outstanding - Diluted 223,320,457 213,435,314 213,435,314 Earnings per share - Basic $ 0.19 $ 0.18 $ 0.39 Earnings per share - Diluted $ 0.19 $ 0.18 $ 0.39 EPS: Post-IPO net income attributable to Tradeweb Markets Inc. Numerator: Post-IPO net income attributable to Tradeweb Markets Inc. $ 12,828 $ 12,828 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 142,933,192 142,933,192 Dilutive effect of equity-settled PRSUs 2,214,480 2,214,480 Dilutive effect of options 5,699,511 5,699,511 Weighted average shares of Class A and Class B common stock outstanding - Diluted 150,847,183 150,847,183 Earnings per share - Basic $ 0.09 $ 0.09 Earnings per share - Diluted $ 0.09 $ 0.09 (1) Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the TWM LLC Agreement to, among other things, (i) provide for LLC Interests and (ii) exchange all of the original members’ existing membership interests for LLC interests. | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Net Income Per Share | Successor Predecessor Predecessor Predecessor October 1, January 1, Year Year 2018 to 2018 to Ended Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Net Income (in thousands) $ 29,307 $ 130,160 $ 83,648 $ 93,161 Basic Weighted Average Shares Outstanding 222,221,628 215,365,920 212,568,635 210,979,704 Dilutive Effect of Conversion to Equity Settled PRSU 22,223 — — — Diluted Weighted Average Shares Outstanding 222,243,851 215,365,920 212,568,635 210,979,704 Basic Net Income Per Share $ 0.13 $ 0.60 $ 0.39 $ 0.44 Diluted Net Income Per Share $ 0.13 $ 0.60 $ 0.39 $ 0.44 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Schedule of regulatory capital requirements | At June 30, 2019 and December 31, 2018, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL, TWJ and TWEU were as follows (in thousands): As of June 30, 2019 TWL DW TWD TEL TWJ TWEU Regulatory Capital $ 21,837 $ 42,786 $ 25,858 $ 47,555 $ 12,286 $ 6,472 Regulatory Capital Requirement 1,615 1,559 386 17,515 4,368 6,472 Excess Regulatory Capital $ 20,222 $ 41,227 $ 25,472 $ 30,040 $ 7,918 $ — As of December 31, 2018 TWL DW TWD TEL TWJ Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 | |
Schedule of financial resources and liquid financial resources | The required and maintained financial resources and liquid financial assets at June 30, 2019 and December 31, 2018 are as follows (in thousands): As of June 30, 2019 As of December 31, 2018 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 30,137 $ 15,032 $ 31,232 $ 17,837 Required Financial Resources 10,500 5,589 10,500 5,169 Excess Financial Resources $ 19,637 $ 9,443 $ 20,732 $ 12,668 Liquid Financial Assets $ 16,961 $ 8,719 $ 16,662 $ 11,888 Required Liquid Financial Assets 5,250 2,795 5,250 2,585 Excess Liquid Financial Assets $ 11,711 $ 5,924 $ 11,412 $ 9,303 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Schedule of regulatory capital requirements | At December 31, 2018 and December 31, 2017, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL and TWJ were as follows (in thousands): Predecessor TWL DW TWD TEL TWJ As of December 31, 2017 Regulatory Capital $ 22,551 $ 35,546 $ 16,965 $ 31,509 $ 5,326 Regulatory Capital Requirement 1,589 1,612 378 18,034 961 Excess Regulatory Capital $ 20,962 $ 33,934 $ 16,587 $ 13,475 $ 4,365 Successor TWL DW TWD TEL TWJ As of December 31, 2018 Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 | |
Schedule of financial resources and liquid financial resources | The required and maintained financial resources and liquid financial assets at December 31, 2018 and December 31, 2017 are as follows (in thousands): Successor Predecessor As of December 31, 2018 As of December 31, 2017 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 31,232 $ 17,837 $ 23,349 $ 20,069 Required Financial Resources 10,500 5,169 10,500 5,875 Excess Financial Resources $ 20,732 $ 12,668 $ 12,849 $ 14,194 Liquid Financial Assets $ 16,662 $ 11,888 $ 14,084 $ 13,865 Required Liquid Financial Assets 5,250 2,585 5,250 2,893 Excess Liquid Financial Assets $ 11,412 $ 9,303 $ 8,834 $ 10,972 |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Schedule of information regarding revenue by client sector | Information regarding revenue by client sector is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net revenue: Institutional $ 111,057 $ 220,309 $ 102,095 $ 204,415 Wholesale 41,945 81,376 32,265 64,860 Retail 19,939 41,145 20,918 39,954 Market Data 17,544 34,447 15,737 31,289 Contingent consideration — — (19,297) (29,367) Net revenue 190,485 377,277 151,718 311,151 Operating expenses 159,530 300,045 111,556 223,634 Operating income $ 30,955 $ 77,232 $ 40,162 $ 87,517 | |
Schedule of revenue and long-lived assets by geographic location | Information regarding revenue for the three and six months ended June 30, 2019 and 2018 and long-lived assets as of June 30, 2019 and December 31, 2018 is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net Revenue: U.S. $ 122,693 $ 242,090 $ 109,540 $ 217,322 International 67,792 135,187 61,475 123,196 Gross revenue 190,485 377,277 171,015 340,518 Contingent consideration — — (19,297) (29,367) Total $ 190,485 $ 377,277 $ 151,718 $ 311,151 June 30, 2019 December 31, 2018 Long-lived assets U.S. $ 4,251,030 $ 4,276,568 International 13,413 7,787 Total $ 4,264,443 $ 4,284,355 | |
Tradeweb Markets LLC | ||
Entity Information [Line Items] | ||
Schedule of information regarding revenue by client sector | Information regarding revenue by client sector is as follows (in thousands): Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Net revenue: Institutional $ 103,971 $ 301,918 $ 318,038 $ 285,801 Wholesale 38,153 99,028 118,451 109,945 Retail 19,780 57,766 70,857 67,471 Market Data 16,733 47,059 55,622 55,187 Other — (26,830) (58,520) (26,224) Net revenue 178,637 478,941 504,448 492,180 Operating expenses 146,702 338,607 415,356 399,049 Operating income $ 31,935 $ 140,334 $ 89,092 $ 93,131 | |
Schedule of revenue and long-lived assets by geographic location | Information regarding revenue for October 1, 2018 to December 31, 2018, January 1, 2018 to September 30, 2018 and for the years ended December 31, 2017 and 2016 and long-lived assets as of December 31, 2018 and December 31, 2017 is as follows (in thousands): Successor Predecessor Predecessor Predecessor October 1, 2018 to January 1, 2018 to Year Ended Year Ended December 31, 2018 September 30, 2018 December 31, 2017 December 31, 2016 Net revenue: U.S. $ 115,907 $ 324,304 $ 385,176 $ 365,308 International 62,730 181,467 177,792 153,096 Gross revenue 178,637 505,771 562,968 518,404 Contingent consideration — (26,830) (58,520) (26,224) Total $ 178,637 $ 478,941 $ 504,448 $ 492,180 Successor Predecessor December 31, 2018 December 31, 2017 Long-lived assets U.S. $ 4,276,568 $ 845,599 International 7,787 7,987 Total $ 4,284,355 $ 853,586 |
Significant Accounting Polici_6
Significant Accounting Policies - Useful Lives of Assets (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Minimum | ||
Furniture, Equipment, Purchased Software and Leasehold Improvements | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Maximum | ||
Furniture, Equipment, Purchased Software and Leasehold Improvements | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Software Development Costs | ||
Furniture, Equipment, Purchased Software and Leasehold Improvements | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Amortization of pushdown accounting allocation | 9 years | |
Tradeweb Markets LLC | Furniture, Equipment, Purchased Software and Leasehold Improvements | Minimum | ||
Furniture, Equipment, Purchased Software and Leasehold Improvements | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Tradeweb Markets LLC | Furniture, Equipment, Purchased Software and Leasehold Improvements | Maximum | ||
Furniture, Equipment, Purchased Software and Leasehold Improvements | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Tradeweb Markets LLC | Software Development Costs | ||
Furniture, Equipment, Purchased Software and Leasehold Improvements | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Amortization of pushdown accounting allocation | 9 years |
Significant Accounting Polici_7
Significant Accounting Policies - Intangible Assets (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Minimum | ||
Intangible Assets | ||
Useful life of intangible assets | 7 years | |
Maximum | ||
Intangible Assets | ||
Useful life of intangible assets | 16 years | |
Tradeweb Markets LLC | Minimum | ||
Intangible Assets | ||
Useful life of intangible assets | 7 years | |
Tradeweb Markets LLC | Maximum | ||
Intangible Assets | ||
Useful life of intangible assets | 16 years |
Significant Accounting Polici_8
Significant Accounting Policies - Income Tax (Details) - Tradeweb Markets LLC | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Entity Information [Line Items] | |
Federal statutory income tax rate | 21.00% |
Remeasurement of deferred tax asset | $ (1,982,000) |
Adjustment to previously recorded provisional tax expense | $ 0 |
Significant Accounting Polici_9
Significant Accounting Policies - Breakdown of Revenues Between Fixed and Variable (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition | ||||||||
Gross revenues | $ 190,485 | $ 377,277 | ||||||
Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 103,952 | 206,592 | ||||||
Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 36,413 | 70,610 | ||||||
Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 2,169 | 4,063 | ||||||
Variable | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 106,949 | 210,932 | ||||||
Variable | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 79,577 | 158,492 | ||||||
Variable | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 435 | 890 | ||||||
Variable | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 26,635 | 50,945 | ||||||
Variable | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 302 | 605 | ||||||
Fixed | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 83,536 | 166,345 | ||||||
Fixed | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 24,375 | 48,100 | ||||||
Fixed | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 47,516 | 95,122 | ||||||
Fixed | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 9,778 | 19,665 | ||||||
Fixed | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 1,867 | $ 3,458 | ||||||
Predecessor | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 171,015 | $ 340,518 | ||||||
Predecessor | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 91,030 | 181,169 | ||||||
Predecessor | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 27,553 | 55,436 | ||||||
Predecessor | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 2,704 | 5,622 | ||||||
Predecessor | Variable | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 87,342 | 175,246 | ||||||
Predecessor | Variable | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 69,557 | 139,194 | ||||||
Predecessor | Variable | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 425 | 900 | ||||||
Predecessor | Variable | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 17,346 | 35,126 | ||||||
Predecessor | Variable | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 14 | 26 | ||||||
Predecessor | Fixed | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 83,673 | 165,272 | ||||||
Predecessor | Fixed | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 21,473 | 41,975 | ||||||
Predecessor | Fixed | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 49,303 | 97,391 | ||||||
Predecessor | Fixed | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 10,207 | 20,310 | ||||||
Predecessor | Fixed | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 2,690 | $ 5,596 | ||||||
Tradeweb Markets LLC | Successor | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 178,637 | |||||||
Tradeweb Markets LLC | Successor | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 97,130 | |||||||
Tradeweb Markets LLC | Successor | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 32,840 | |||||||
Tradeweb Markets LLC | Successor | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 2,148 | |||||||
Tradeweb Markets LLC | Successor | Variable | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 96,833 | |||||||
Tradeweb Markets LLC | Successor | Variable | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 73,800 | |||||||
Tradeweb Markets LLC | Successor | Variable | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 425 | |||||||
Tradeweb Markets LLC | Successor | Variable | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 22,608 | |||||||
Tradeweb Markets LLC | Successor | Fixed | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 81,804 | |||||||
Tradeweb Markets LLC | Successor | Fixed | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 23,330 | |||||||
Tradeweb Markets LLC | Successor | Fixed | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 46,094 | |||||||
Tradeweb Markets LLC | Successor | Fixed | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 10,232 | |||||||
Tradeweb Markets LLC | Successor | Fixed | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 2,148 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 505,771 | $ 562,968 | $ 518,404 | |||||
Tradeweb Markets LLC | Predecessor | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 273,751 | 267,020 | 230,171 | |||||
Tradeweb Markets LLC | Predecessor | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 79,830 | 96,745 | 91,663 | |||||
Tradeweb Markets LLC | Predecessor | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 8,209 | 4,669 | 4,587 | |||||
Tradeweb Markets LLC | Predecessor | Variable | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 258,761 | 268,927 | 231,780 | |||||
Tradeweb Markets LLC | Predecessor | Variable | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 208,049 | 210,198 | 176,060 | |||||
Tradeweb Markets LLC | Predecessor | Variable | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 1,305 | 1,575 | 1,496 | |||||
Tradeweb Markets LLC | Predecessor | Variable | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 49,367 | 57,118 | 54,194 | |||||
Tradeweb Markets LLC | Predecessor | Variable | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 40 | 36 | 30 | |||||
Tradeweb Markets LLC | Predecessor | Fixed | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 247,010 | 294,041 | 286,624 | |||||
Tradeweb Markets LLC | Predecessor | Fixed | Transaction Fee Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 65,702 | 56,822 | 54,111 | |||||
Tradeweb Markets LLC | Predecessor | Fixed | Subscription Fees including Refinitiv market data | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 142,676 | 192,959 | 190,487 | |||||
Tradeweb Markets LLC | Predecessor | Fixed | Commissions Revenue | ||||||||
Revenue Recognition | ||||||||
Gross revenues | 30,463 | 39,627 | 37,469 | |||||
Tradeweb Markets LLC | Predecessor | Fixed | Other | ||||||||
Revenue Recognition | ||||||||
Gross revenues | $ 8,169 | $ 4,633 | $ 4,557 |
Pushdown Accounting - Goodwill
Pushdown Accounting - Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Oct. 01, 2018 |
Pushdown Accounting | |||
Goodwill | $ 2,694,797 | $ 2,694,797 | |
Tradeweb Markets LLC | Refinitiv | |||
Pushdown Accounting | |||
Fair value of the Company | $ 4,575,000 | ||
Less: fair value of the net assets and liabilities of the Company | (1,880,203) | ||
Goodwill | $ 2,694,797 |
Pushdown Accounting - Net asset
Pushdown Accounting - Net assets and liabilities (Details) - Tradeweb Markets LLC - Refinitiv $ in Thousands | Oct. 01, 2018USD ($) |
Net assets and liabilities of the Company at October 1, 2018: | |
Cash and cash equivalents | $ 350,183 |
Restricted cash | 1,200 |
Receivable from brokers and dealers and clearing organizations | 4,642 |
Deposits with clearing organizations | 9,200 |
Accounts receivable | 95,959 |
Software development costs | 168,500 |
Receivables from affiliates | 3,350 |
Other assets | 20,404 |
Total assets | 2,091,439 |
Accrued compensation | 82,201 |
Deferred revenue | 28,280 |
Accounts payable, accrued expenses and other liabilities | 39,291 |
Leasehold interests | 3,020 |
Employee equity compensation payable | 33,914 |
Payable to affiliates | 5,856 |
Deferred tax liability | 18,674 |
Total liabilities | 211,236 |
Fair value of net assets and liabilities of the Company | 1,880,203 |
Tradenames | |
Net assets and liabilities of the Company at October 1, 2018: | |
Intangible assets | 154,300 |
Content and data | |
Net assets and liabilities of the Company at October 1, 2018: | |
Intangible assets | 154,400 |
Licenses | |
Net assets and liabilities of the Company at October 1, 2018: | |
Intangible assets | 168,800 |
Customer relationships | |
Net assets and liabilities of the Company at October 1, 2018: | |
Intangible assets | 928,200 |
Computer hardware | |
Net assets and liabilities of the Company at October 1, 2018: | |
Furniture, equipment, purchased software and leasehold improvements | 15,787 |
Leasehold improvements | |
Net assets and liabilities of the Company at October 1, 2018: | |
Furniture, equipment, purchased software and leasehold improvements | 11,460 |
Purchased software | |
Net assets and liabilities of the Company at October 1, 2018: | |
Furniture, equipment, purchased software and leasehold improvements | 2,866 |
Furniture | |
Net assets and liabilities of the Company at October 1, 2018: | |
Furniture, equipment, purchased software and leasehold improvements | 1,616 |
Office equipment | |
Net assets and liabilities of the Company at October 1, 2018: | |
Furniture, equipment, purchased software and leasehold improvements | $ 572 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Entity Information [Line Items] | |||||
Restricted cash | $ 1,200,000 | $ 1,200,000 | |||
Predecessor | |||||
Entity Information [Line Items] | |||||
Restricted cash | 1,200,000 | ||||
Tradeweb Markets LLC | Successor | |||||
Entity Information [Line Items] | |||||
Restricted cash | $ 1,200,000 | ||||
Tradeweb Markets LLC | Predecessor | |||||
Entity Information [Line Items] | |||||
Restricted cash | $ 1,200,000 | $ 1,200,000 | $ 1,000,000 |
Furniture, Equipment, Purchas_3
Furniture, Equipment, Purchased Software and Leasehold Improvements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | $ 38,128,000 | $ 35,742,000 | |||
Tradeweb Markets LLC | Successor | |||||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 38,128,000 | ||||
Depreciation and amortization expense | 3,094,000 | ||||
Tradeweb Markets LLC | Successor | Furniture, equipment, purchased software and leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Accumulated depreciation and amortization | (3,036,000) | ||||
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 38,128,000 | ||||
Tradeweb Markets LLC | Successor | Computer hardware | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | 22,818,000 | ||||
Tradeweb Markets LLC | Successor | Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | 12,339,000 | ||||
Tradeweb Markets LLC | Successor | Purchased software | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | 3,039,000 | ||||
Tradeweb Markets LLC | Successor | Furniture and office equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | $ 2,968,000 | ||||
Tradeweb Markets LLC | Predecessor | |||||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | $ 27,031,000 | ||||
Depreciation and amortization expense | $ 9,270,000 | 11,959,000 | $ 12,910,000 | ||
Tradeweb Markets LLC | Predecessor | Furniture, equipment, purchased software and leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Accumulated depreciation and amortization | (87,301,000) | ||||
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 27,031,000 | ||||
Tradeweb Markets LLC | Predecessor | Computer hardware | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | 67,852,000 | ||||
Tradeweb Markets LLC | Predecessor | Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | 27,139,000 | ||||
Tradeweb Markets LLC | Predecessor | Purchased software | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | 12,991,000 | ||||
Tradeweb Markets LLC | Predecessor | Furniture and office equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross amount | $ 6,350,000 |
Software Development Cost (Deta
Software Development Cost (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2019 | Oct. 01, 2018 | |
Software Development Cost | ||||||
Software development costs, net of accumulated amortization | $ 170,582,000 | $ 172,614,000 | ||||
Tradeweb Markets LLC | Successor | ||||||
Software Development Cost | ||||||
Software development costs | 175,656,000 | |||||
Accumulated amortization | (5,074,000) | |||||
Software development costs, net of accumulated amortization | 170,582,000 | |||||
Software development costs capitalized | 7,156,000 | |||||
Fair value assigned to software development costs as a result of the Refinitiv Transaction | $ 168,500,000 | |||||
Amortization expense | $ 5,074,000 | |||||
Tradeweb Markets LLC | Predecessor | ||||||
Software Development Cost | ||||||
Software development costs | $ 218,382,000 | |||||
Accumulated amortization | (177,201,000) | |||||
Software development costs, net of accumulated amortization | 41,181,000 | |||||
Software development costs capitalized | $ 19,523,000 | 27,157,000 | $ 25,351,000 | |||
Amortization expense | $ 19,962,000 | $ 25,420,000 | $ 26,824,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Summary of Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Oct. 01, 2018 | Dec. 31, 2017 |
Goodwill | ||||
Goodwill | $ 2,694,797 | $ 2,694,797 | ||
Tradeweb Markets LLC | Refinitiv | ||||
Goodwill | ||||
Goodwill | $ 2,694,797 | |||
Tradeweb Markets LLC | Successor | ||||
Goodwill | ||||
Goodwill | 2,694,797 | |||
Tradeweb Markets LLC | Successor | Refinitiv | ||||
Goodwill | ||||
Goodwill | $ 2,694,797 | |||
Tradeweb Markets LLC | Predecessor | ||||
Goodwill | ||||
Goodwill | $ 563,421 | |||
Tradeweb Markets LLC | Predecessor | TR | ||||
Goodwill | ||||
Goodwill | 334,185 | |||
Tradeweb Markets LLC | Predecessor | Merger | ||||
Goodwill | ||||
Goodwill | 66,484 | |||
Tradeweb Markets LLC | Predecessor | RaffCap | ||||
Goodwill | ||||
Goodwill | 49,200 | |||
Tradeweb Markets LLC | Predecessor | BondDesk | ||||
Goodwill | ||||
Goodwill | 103,158 | |||
Tradeweb Markets LLC | Predecessor | Other | ||||
Goodwill | ||||
Goodwill | $ 10,394 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | $ 323,100 | ||
Licenses | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | 168,800 | ||
Tradenames | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | $ 154,300 | ||
Tradeweb Markets LLC | Successor | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | $ 323,100 | ||
Tradeweb Markets LLC | Successor | Licenses | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | 168,800 | ||
Tradeweb Markets LLC | Successor | Tradenames | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | $ 154,300 | ||
Tradeweb Markets LLC | Predecessor | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | $ 12,000 | ||
Tradeweb Markets LLC | Predecessor | Licenses | |||
Intangible assets with indefinite useful lives | |||
Intangible assets which have an indefinite useful life | $ 12,000 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible assets that are subject to amortization | |||
Cost | $ 1,082,600 | $ 1,082,600 | |
Accumulated Amortization | (74,555) | (24,852) | |
Net Carrying Amount | 1,008,045 | 1,057,748 | |
Customer relationships | |||
Intangible assets that are subject to amortization | |||
Cost | 928,200 | 928,200 | |
Accumulated Amortization | (58,012) | (19,338) | |
Net Carrying Amount | 870,188 | 908,862 | |
Content and data | |||
Intangible assets that are subject to amortization | |||
Cost | 154,400 | 154,400 | |
Accumulated Amortization | (16,543) | (5,514) | |
Net Carrying Amount | $ 137,857 | $ 148,886 | |
Successor | Customer relationships | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 12 years | 12 years | |
Successor | Content and data | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 7 years | 7 years | |
Tradeweb Markets LLC | Successor | |||
Intangible assets that are subject to amortization | |||
Cost | $ 1,082,600 | ||
Accumulated Amortization | (24,852) | ||
Net Carrying Amount | $ 1,057,748 | ||
Tradeweb Markets LLC | Successor | Customer relationships | Refinitiv | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 12 years | ||
Cost | $ 928,200 | ||
Accumulated Amortization | (19,338) | ||
Net Carrying Amount | $ 908,862 | ||
Tradeweb Markets LLC | Successor | Content and data | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 7 years | ||
Cost | $ 154,400 | ||
Accumulated Amortization | (5,514) | ||
Net Carrying Amount | $ 148,886 | ||
Tradeweb Markets LLC | Predecessor | |||
Intangible assets that are subject to amortization | |||
Cost | $ 529,184 | ||
Accumulated Amortization | (318,965) | ||
Net Carrying Amount | $ 210,219 | ||
Tradeweb Markets LLC | Predecessor | Customer relationships | Fixed Income Business | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 13 years | ||
Cost | $ 155,284 | ||
Accumulated Amortization | (155,270) | ||
Net Carrying Amount | $ 14 | ||
Tradeweb Markets LLC | Predecessor | Customer relationships | DW | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 11 years | ||
Cost | $ 65,000 | ||
Accumulated Amortization | (42,348) | ||
Net Carrying Amount | $ 22,652 | ||
Tradeweb Markets LLC | Predecessor | Customer relationships | RaffCap | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 12 years | ||
Cost | $ 17,600 | ||
Accumulated Amortization | (9,166) | ||
Net Carrying Amount | $ 8,434 | ||
Tradeweb Markets LLC | Predecessor | Customer relationships | BondDesk | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 15 years | ||
Cost | $ 104,000 | ||
Accumulated Amortization | (28,806) | ||
Net Carrying Amount | $ 75,194 | ||
Tradeweb Markets LLC | Predecessor | Customer relationships | Other | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 10 years | ||
Cost | $ 2,100 | ||
Accumulated Amortization | (385) | ||
Net Carrying Amount | $ 1,715 | ||
Tradeweb Markets LLC | Predecessor | Tradenames | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 10 years | ||
Cost | $ 200 | ||
Accumulated Amortization | (125) | ||
Net Carrying Amount | 75 | ||
Tradeweb Markets LLC | Predecessor | Liquidity contracts | |||
Intangible assets that are subject to amortization | |||
Amortization Period | 16 years | ||
Cost | 185,000 | ||
Accumulated Amortization | (82,865) | ||
Net Carrying Amount | $ 102,135 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Future Amortization (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Estimated annual future amortization for existing intangibles assets | ||||||||
2020 | $ 99,408,000 | $ 99,408,000 | ||||||
2021 | 99,408,000 | 99,408,000 | ||||||
2022 | 99,408,000 | 99,408,000 | ||||||
2023 | 99,408,000 | 99,408,000 | ||||||
Successor | ||||||||
Intangible assets that are subject to amortization | ||||||||
Amortization expense | $ 24,852,000 | $ 49,704,000 | ||||||
Predecessor | ||||||||
Intangible assets that are subject to amortization | ||||||||
Amortization expense | $ 6,557,000 | $ 13,063,000 | ||||||
Tradeweb Markets LLC | Successor | ||||||||
Intangible assets that are subject to amortization | ||||||||
Amortization expense | $ 24,852,000 | |||||||
Estimated annual future amortization for existing intangibles assets | ||||||||
2019 | 99,408,000 | |||||||
2020 | 99,408,000 | |||||||
2021 | 99,408,000 | |||||||
2022 | 99,408,000 | |||||||
2023 | $ 99,408,000 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Intangible assets that are subject to amortization | ||||||||
Amortization expense | $ 19,576,000 | $ 31,236,000 | $ 41,125,000 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | |
Changes in deferred revenue | ||||
Deferred revenue balance - beginning of period | $ 27,883 | |||
New billings | 54,735 | |||
Revenue recognized | (57,348) | |||
Deferred revenue balance - end of period | $ 27,883 | 25,270 | ||
Tradeweb Markets LLC | Successor | ||||
Changes in deferred revenue | ||||
Deferred revenue balance - beginning of period | 28,280 | $ 27,883 | ||
New billings | 26,609 | |||
Revenue recognized | (27,006) | |||
Deferred revenue balance - end of period | 27,883 | $ 28,280 | ||
Tradeweb Markets LLC | Predecessor | ||||
Changes in deferred revenue | ||||
Deferred revenue balance - beginning of period | $ 28,280 | 29,673 | $ 42,184 | |
New billings | 100,091 | 127,312 | ||
Revenue recognized | (101,484) | (139,823) | ||
Deferred revenue balance - end of period | $ 28,280 | $ 29,673 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | ||||||||
Total deferred | $ (3,596) | |||||||
Total | $ 6,314 | $ 11,097 | ||||||
Predecessor | ||||||||
Current: | ||||||||
Total deferred | $ 1,409 | |||||||
Total | $ 1,847 | $ 4,365 | ||||||
Tradeweb Markets LLC | Successor | ||||||||
Current: | ||||||||
State and Local | $ 1,235 | |||||||
Foreign | 1,212 | |||||||
Total current | 2,447 | |||||||
Deferred - Federal | 680 | |||||||
Deferred - state and local | 288 | |||||||
Total deferred | 968 | |||||||
Total | $ 3,415 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Current: | ||||||||
State and Local | $ 5,739 | $ 4,331 | $ 2,772 | |||||
Foreign | 3,559 | 2,748 | 2,826 | |||||
Total current | 9,298 | 7,079 | 5,598 | |||||
Deferred - Federal | 1,085 | (433) | (5,783) | |||||
Deferred - state and local | 1,517 | (517) | (540) | |||||
Total deferred | 2,602 | (950) | (6,323) | |||||
Total | $ 11,900 | $ 6,129 | $ (725) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Rate (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the statutory tax rate | |||||||||
Effective tax rate | 20.30% | 4.50% | 14.20% | 4.90% | |||||
Tradeweb Markets LLC | |||||||||
Reconciliation of the statutory tax rate | |||||||||
U.S. federal tax at statutory rate | 21.00% | ||||||||
Tradeweb Markets LLC | Successor | |||||||||
Reconciliation of the statutory tax rate | |||||||||
U.S. federal tax at statutory rate | 21.00% | ||||||||
State and local taxes - net of federal benefit | 4.70% | ||||||||
Foreign taxes | 3.70% | ||||||||
Tax Cuts and Jobs Act provisional tax charge | 0.00% | ||||||||
LLC flow-through structure | (19.00%) | ||||||||
Effective tax rate | 10.40% | ||||||||
Tradeweb Markets LLC | Predecessor | |||||||||
Reconciliation of the statutory tax rate | |||||||||
U.S. federal tax at statutory rate | 21.00% | 35.00% | 35.00% | ||||||
State and local taxes - net of federal benefit | 5.10% | 2.80% | 1.60% | ||||||
Foreign taxes | 2.50% | 3.10% | 3.10% | ||||||
Tax Cuts and Jobs Act provisional tax charge | 0.00% | 2.20% | 0.00% | ||||||
LLC flow-through structure | (20.20%) | (36.30%) | (40.50%) | ||||||
Effective tax rate | 8.40% | 6.80% | (0.80%) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Liabilities) (Details) - Tradeweb Markets LLC - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Successor | ||
Components of deferred tax assets (liabilities) | ||
Net operating losses | $ 6,810 | |
Goodwill and intangible assets | (28,799) | |
Other | 2,362 | |
Deferred Tax Liabilities, Net, Total | $ (19,627) | |
Predecessor | ||
Components of deferred tax assets (liabilities) | ||
Net operating losses | $ 8,966 | |
Goodwill and intangible assets | (2,146) | |
Total deferred tax assets, net | $ 6,820 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - Tradeweb Markets LLC - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Successor | Federal | ||
Income Taxes | ||
Net operating loss carryforwards | $ 17,196,000 | |
Successor | New York state | ||
Income Taxes | ||
Net operating loss carryforwards | 24,449,000 | |
Successor | New York City | ||
Income Taxes | ||
Net operating loss carryforwards | 22,654,000 | |
Successor | New York City | Tax periods from 2009 - 2013 | Accounts payable, accrued expenses and other liabilities | ||
Income Taxes | ||
Tax, penalties and interest expense | 26,000 | |
Successor | New York City | Tax periods from 2012 - 2016 | Provision for income taxes | ||
Income Taxes | ||
Tax, penalties and interest provision | $ 70,000 | |
Predecessor | New York City | Tax periods from 2009 - 2013 | Accounts payable, accrued expenses and other liabilities | ||
Income Taxes | ||
Tax, penalties and interest expense | $ 1,288,000 | |
Predecessor | New York City | Tax periods from 2012 - 2016 | Provision for income taxes | ||
Income Taxes | ||
Tax, penalties and interest provision | $ 2,003,000 |
Shares (Details)
Shares (Details) - Tradeweb Markets LLC - shares | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Class A common stock | ||||||
Shares | ||||||
Number of Vested Shares Issued | 146,333 | |||||
Class C common stock | ||||||
Shares | ||||||
Number of Vested Shares Issued | 447 | |||||
Class P(A) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 6,887 | |||||
Class P(C) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 2 | |||||
Class P-1(A) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 6,094 | |||||
Class P-1(C) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 232 | |||||
Successor | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 222,222,197 | |||||
Successor | Class A common stock | ||||||
Shares | ||||||
Number of Vested Shares Issued | 146,333 | |||||
Successor | Class A common stock | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 203,245,361 | |||||
Successor | Class C common stock | ||||||
Shares | ||||||
Number of Vested Shares Issued | 447 | 447 | ||||
Successor | Class C common stock | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 612,431 | |||||
Successor | Class P(A) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 6,887 | |||||
Successor | Class P(A) Shares | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 9,565,659 | |||||
Successor | Class P(C) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 2 | 2 | ||||
Successor | Class P(C) Shares | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 2,520 | |||||
Successor | Class P-1(A) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 6,094 | |||||
Successor | Class P-1(A) Shares | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 8,464,589 | |||||
Successor | Class P-1(C) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 232 | 232 | ||||
Successor | Class P-1(C) Shares | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 322,637 | |||||
Predecessor | Class A common stock | ||||||
Shares | ||||||
Number of Vested Shares Issued | 146,333 | |||||
Predecessor | Class A common stock | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 203,245,361 | |||||
Predecessor | Class C common stock | ||||||
Shares | ||||||
Number of Vested Shares Issued | 447 | 447 | 504 | 528 | ||
Predecessor | Class C common stock | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 621,431 | |||||
Predecessor | Class P(A) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 6,887 | |||||
Predecessor | Class P(A) Shares | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 9,565,659 | |||||
Predecessor | Class P(C) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 2 | 2 | 2 | 2 | ||
Predecessor | Class P(C) Shares | Recapitalization | ||||||
Shares | ||||||
Number of Vested Shares Issued, Recapitalization | 2,520 | |||||
Predecessor | Class P-1(C) Shares | ||||||
Shares | ||||||
Number of Vested Shares Issued | 232 | 0 | 0 | 0 |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Performance Restricted Share Units (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($)employee$ / sharesshares | Sep. 30, 2018$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016$ / sharesshares | Jun. 30, 2019USD ($) | |
Share-Based Compensation Plans | |||||
Employee equity compensation payable | $ | $ 24,187,000 | $ 728,000 | |||
Members' capital | $ | $ 4,573,200,000 | ||||
Tradeweb Markets LLC | Successor | |||||
Share-Based Compensation Plans | |||||
Number of employees impacted by modification | employee | 54 | ||||
Employee equity compensation payable | $ | $ 24,187,000 | ||||
Members' capital | $ | 4,573,200,000 | ||||
Tradeweb Markets LLC | Successor | Adjustment | |||||
Share-Based Compensation Plans | |||||
Employee equity compensation payable | $ | (19,072,000) | ||||
Members' capital | $ | $ 19,072,000 | ||||
Tradeweb Markets LLC | Successor | Equity-settled PRSUs | |||||
Number of PRSUs | |||||
Outstanding, beginning of period | shares | 0 | ||||
Converted to equity settled PRSUs | shares | 1,442.2 | ||||
Outstanding, end of period | shares | 1,442.2 | 0 | |||
Weighted Average Fair Value of PRSUs | |||||
Outstanding, beginning of period | $ / shares | $ 0 | ||||
Converted to equity settled PRSUs | $ / shares | 30,482 | ||||
Outstanding, end of period | $ / shares | $ 30,482 | $ 0 | |||
Tradeweb Markets LLC | Successor | Equity-settled PRSUs | Recapitalization | |||||
Number of PRSUs | |||||
Outstanding, beginning of period | shares | 0 | ||||
Converted to equity settled PRSUs | shares | 2,003,100 | ||||
Outstanding, end of period | shares | 2,003,100 | 0 | |||
Weighted Average Fair Value of PRSUs | |||||
Outstanding, beginning of period | $ / shares | $ 0 | ||||
Converted to equity settled PRSUs | $ / shares | 21.95 | ||||
Outstanding, end of period | $ / shares | $ 21.95 | $ 0 | |||
Tradeweb Markets LLC | Successor | Cash-settled PRSUs | |||||
Number of PRSUs | |||||
Outstanding, beginning of period | shares | 1,539.2 | ||||
Granted | shares | 36.7 | ||||
Forfeited | shares | (20.2) | ||||
Converted to equity settled PRSUs | shares | (1,033.2) | ||||
Outstanding, end of period | shares | 522.5 | 1,539.2 | |||
Weighted Average Fair Value of PRSUs | |||||
Outstanding, beginning of period | $ / shares | $ 38,017 | ||||
Granted | $ / shares | 42,892 | ||||
Forfeited | $ / shares | 34,891 | ||||
Converted to equity settled PRSUs | $ / shares | 42,696 | ||||
Outstanding, end of period | $ / shares | $ 34,221 | $ 38,017 | |||
Tradeweb Markets LLC | Predecessor | |||||
Share-Based Compensation Plans | |||||
Employee equity compensation payable | $ | $ 31,019,000 | ||||
Members' capital | $ | $ 999,735,000 | ||||
Tradeweb Markets LLC | Predecessor | Cash-settled PRSUs | |||||
Number of PRSUs | |||||
Outstanding, beginning of period | shares | 1,539.2 | 1,577.6 | 1,074.6 | 574.7 | |
Granted | shares | 531.9 | 511.7 | 512.8 | ||
Exercised | shares | (560.4) | ||||
Forfeited | shares | (9.9) | (8.7) | (12.9) | ||
Outstanding, end of period | shares | 1,539.2 | 1,577.6 | 1,074.6 | ||
Weighted Average Fair Value of PRSUs | |||||
Outstanding, beginning of period | $ / shares | $ 38,017 | $ 31,039 | $ 13,159 | $ 22,512 | |
Granted | $ / shares | 29,609 | 24,911 | 21,723 | ||
Exercised | $ / shares | 32,246 | ||||
Forfeited | $ / shares | 31,130 | 26,770 | 23,170 | ||
Outstanding, end of period | $ / shares | $ 38,017 | $ 31,039 | $ 13,159 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Oct. 31, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Apr. 08, 2019 | |
Stock Options | ||||
Share-Based Compensation Plans | ||||
Exercise period following a change in control | 15 days | |||
Tradeweb Markets LLC | ||||
Assumption used in the Black-Scholes model | ||||
Share Price | $ 27 | |||
Tradeweb Markets LLC | Successor | Stock Options | ||||
Assumption used in the Black-Scholes model | ||||
Weighted Average Expected Life (years) | 5 years 8 months 12 days | |||
Weighted Average Risk Free Interest Rate | 2.94% | |||
Weighted Average Expected Volatility | 20.00% | |||
Weighted Average Expected Dividend Yield | 4.02% | |||
Share Price | $ 25,657 | |||
Exercise Price | $ 28,594 | |||
Number of Options | ||||
Outstanding, beginning of period | 0 | 0 | 13,025.8 | |
Granted | 13,025.8 | |||
Outstanding, end of period | 13,025.8 | |||
Weighted Average Grant Date Fair Value of Options | ||||
Outstanding, beginning of period | $ 0 | $ 0 | $ 2,569 | |
Granted | 2,569 | |||
Outstanding, end of period | $ 2,569 | |||
Additional disclosures | ||||
Intrinsic value, options outstanding, end of period | $ 4,741 | |||
Weighted Average Exercise Price | $ 28,594 | |||
Weighted Average Remaining Contractual Life (years) | 9 years 9 months 18 days | |||
Tradeweb Markets LLC | Successor | Stock Options | Recapitalization | ||||
Number of Options | ||||
Outstanding, beginning of period | 0 | 0 | 18,091,793 | |
Granted | 18,091,793 | |||
Outstanding, end of period | 18,091,793 | |||
Weighted Average Grant Date Fair Value of Options | ||||
Outstanding, beginning of period | $ 0 | $ 0 | $ 1.85 | |
Granted | 1.85 | |||
Outstanding, end of period | $ 1.85 | |||
Additional disclosures | ||||
Intrinsic value, options outstanding, end of period | $ 4,741 | |||
Weighted Average Exercise Price | $ 20.59 | |||
Weighted Average Remaining Contractual Life (years) | 9 years 9 months 18 days | |||
Tradeweb Markets LLC | Successor | Option Plan | Stock Options | ||||
Share-Based Compensation Plans | ||||
Shares reserved for future issuance | 13,912.7 | |||
Vesting period | 10 years | |||
Exercise period following a change in control | 15 days |
Share-Based Compensation Plan_4
Share-Based Compensation Plans - SARs (Details) - Tradeweb Markets LLC - Predecessor - SARs - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of SARS | ||
Outstanding, beginning of period | 2,886.1 | 6,315.5 |
Forfeited | (91) | |
Exercised | (2,886.1) | (3,338.4) |
Outstanding, end of period | 0 | 2,886.1 |
Weighted Average Exercise Price of SARs | ||
Outstanding, beginning of period | $ 17,344 | $ 16,839 |
Forfeited | 17,280 | |
Exercised | 17,344 | 16,389 |
Outstanding, end of period | $ 0 | $ 17,344 |
Share-Based Compensation Plan_5
Share-Based Compensation Plans - Unrecognized Compensation (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Equity-settled PRSUs | ||
Share-Based Compensation Plans | ||
Total unrecognized compensation cost | $ 41,237,000 | |
Weighted average recognition period | 2 years | |
Cash-settled PRSUs | ||
Share-Based Compensation Plans | ||
Total unrecognized compensation cost | $ 558,000 | |
Weighted average recognition period | 1 year 3 months 18 days | |
Stock Options | ||
Share-Based Compensation Plans | ||
Total unrecognized compensation cost | $ 12,923,000 | |
Weighted average recognition period | 1 year 8 months 12 days | |
Tradeweb Markets LLC | Successor | Equity-settled PRSUs | ||
Share-Based Compensation Plans | ||
Total unrecognized compensation cost | $ 24,853,000 | |
Weighted average recognition period | 1 year 8 months 12 days | |
Tradeweb Markets LLC | Successor | Cash-settled PRSUs | ||
Share-Based Compensation Plans | ||
Total unrecognized compensation cost | $ 419,000 | |
Weighted average recognition period | 1 year 9 months 18 days | |
Tradeweb Markets LLC | Successor | Stock Options | ||
Share-Based Compensation Plans | ||
Total unrecognized compensation cost | $ 33,460,000 | |
Weighted average recognition period | 10 months 24 days |
Share-Based Compensation Plan_6
Share-Based Compensation Plans - Employee Shares (Details) - Tradeweb Markets LLC - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Class C common stock | |||||
Activity of the Employee Shares | |||||
Outstanding, end of period | 447 | ||||
Class P(C) Shares | |||||
Activity of the Employee Shares | |||||
Outstanding, end of period | 2 | ||||
Class P-1(C) Shares | |||||
Activity of the Employee Shares | |||||
Outstanding, end of period | 232 | ||||
Predecessor | |||||
Activity of the Employee Shares | |||||
Employee Shares compensation payable | $ 0 | ||||
Compensation expense relating to PRSUs, options and shares | $ 15,949,000 | $ 26,100,000 | $ 19,032,000 | ||
Predecessor | Class C common stock | |||||
Activity of the Employee Shares | |||||
Outstanding, beginning of period | 447 | 447 | 504 | 528 | |
Purchased | 0 | 5 | |||
Sold | (62) | (24) | |||
Outstanding, end of period | 447 | 447 | 504 | ||
Predecessor | Class P(C) Shares | |||||
Activity of the Employee Shares | |||||
Outstanding, beginning of period | 2 | 2 | 2 | 2 | |
Purchased | 0 | 0 | |||
Sold | 0 | 0 | |||
Outstanding, end of period | 2 | 2 | 2 | ||
Predecessor | Class P-1(C) Shares | |||||
Activity of the Employee Shares | |||||
Outstanding, beginning of period | 232 | 0 | 0 | 0 | |
Purchased | 232 | 0 | |||
Sold | 0 | 0 | |||
Outstanding, end of period | 232 | 0 | 0 | ||
Successor | |||||
Activity of the Employee Shares | |||||
Period of time to determine classification as compensation payable | 6 months | ||||
Employee Shares compensation payable | $ 6,727,000 | ||||
Compensation expense relating to PRSUs, options and shares | $ 9,413,000 | ||||
Successor | Class C common stock | |||||
Activity of the Employee Shares | |||||
Outstanding, beginning of period | 447 | 447 | |||
Sold | 0 | ||||
Outstanding, end of period | 447 | 447 | |||
Successor | Class P(C) Shares | |||||
Activity of the Employee Shares | |||||
Outstanding, beginning of period | 2 | 2 | |||
Sold | 0 | ||||
Outstanding, end of period | 2 | 2 | |||
Successor | Class P-1(C) Shares | |||||
Activity of the Employee Shares | |||||
Outstanding, beginning of period | 232 | 232 | |||
Sold | 0 | ||||
Outstanding, end of period | 232 | 232 |
Related Party Transactions - Ba
Related Party Transactions - Balances (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions | |||
Cash and cash equivalents | $ 283,790,000 | ||
Receivables from brokers and dealers and clearing organizations | 3,332,000 | ||
Deposits with clearing organizations | 500,000 | ||
Accounts receivable | 40,730,000 | ||
Receivable from affiliates | $ 2,849,000 | 3,243,000 | |
Other assets | 9,000 | ||
Payable to brokers and dealers and clearing organizations | 2,404,000 | ||
Deferred revenue | 4,772,000 | 9,151,000 | |
Payable to affiliates | $ 6,004,000 | 5,009,000 | |
Tradeweb Markets LLC | Successor | |||
Related Party Transactions | |||
Cash and cash equivalents | 283,790,000 | ||
Receivables from brokers and dealers and clearing organizations | 3,332,000 | ||
Deposits with clearing organizations | 500,000 | ||
Accounts receivable | 40,730,000 | ||
Receivable from affiliates | 3,243,000 | ||
Other assets | 9,000 | ||
Payable to brokers and dealers and clearing organizations | 2,404,000 | ||
Deferred revenue | 9,151,000 | ||
Payable to affiliates | $ 5,009,000 | ||
Tradeweb Markets LLC | Predecessor | |||
Related Party Transactions | |||
Cash and cash equivalents | $ 234,107,000 | ||
Deposits with clearing organizations | 500,000 | ||
Accounts receivable | 27,163,000 | ||
Receivable from affiliates | 375,000 | ||
Other assets | 27,000 | ||
Deferred revenue | 5,106,000 | ||
Contingent consideration payable | 129,393,000 | ||
Accounts payable, accrued expenses and other liabilities | 2,555,000 | ||
Payable to affiliates | $ 5,578,000 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with Related Parties (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Refinitiv | Operating Expense Reimbursement | ||||||||
Related Party Transactions | ||||||||
Related party expense | $ 3,211,000 | $ 6,258,000 | $ 4,238,000 | $ 28,408,000 | ||||
Tradeweb Markets LLC | Successor | ||||||||
Related Party Transactions | ||||||||
Interest income from money market funds invested and savings deposited | $ 17,000 | |||||||
Tradeweb Markets LLC | Successor | Refinitiv | Shared Services | ||||||||
Related Party Transactions | ||||||||
Related party expense | 1,075,000 | |||||||
Tradeweb Markets LLC | Successor | Refinitiv | Market Data License Agreements | ||||||||
Related Party Transactions | ||||||||
Related party revenue | 13,467,000 | |||||||
Tradeweb Markets LLC | Successor | Refinitiv | Operating Expense Reimbursement | ||||||||
Related Party Transactions | ||||||||
Related party expense | 3,837,000 | |||||||
Tradeweb Markets LLC | Successor | Banks | ||||||||
Related Party Transactions | ||||||||
Interest income from money market funds invested and savings deposited | 17,000 | |||||||
Tradeweb Markets LLC | Successor | Banks | Transaction, subscription and other fees | ||||||||
Related Party Transactions | ||||||||
Related party revenue | $ 90,845,000 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Related Party Transactions | ||||||||
Interest income from money market funds invested and savings deposited | $ 34,000 | $ 40,000 | $ 80,000 | |||||
Tradeweb Markets LLC | Predecessor | TR | Shared Services | ||||||||
Related Party Transactions | ||||||||
Related party expense | 3,225,000 | 4,300,000 | 4,300,000 | |||||
Tradeweb Markets LLC | Predecessor | TR | Market Data License Agreements | ||||||||
Related Party Transactions | ||||||||
Related party revenue | 36,851,000 | 50,125,000 | 50,564,000 | |||||
Tradeweb Markets LLC | Predecessor | TR | Operating Expense Reimbursement | ||||||||
Related Party Transactions | ||||||||
Related party expense | 28,736,000 | 38,361,000 | 34,350,000 | |||||
Tradeweb Markets LLC | Predecessor | Banks | ||||||||
Related Party Transactions | ||||||||
Interest income from money market funds invested and savings deposited | 34,000 | 40,000 | 80,000 | |||||
Tradeweb Markets LLC | Predecessor | Banks | Transaction, subscription and other fees | ||||||||
Related Party Transactions | ||||||||
Related party revenue | $ 211,234,000 | $ 232,436,000 | $ 211,743,000 |
Related Party Transactions - Co
Related Party Transactions - Convertible Term Note (Details) - Tradeweb Markets LLC - USD ($) | May 05, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Apr. 08, 2019 |
Related Party Transactions | |||||
Share Price (per share) | $ 27 | ||||
Predecessor | TR | Convertible term note | |||||
Related Party Transactions | |||||
Amount of loan | $ 29,285,000 | ||||
Debt interest expense | $ 455,000 | $ 1,339,000 | |||
Predecessor | TR | Convertible term note | LIBOR | |||||
Related Party Transactions | |||||
Variable interest rate basis | LIBOR | ||||
Basis spread on variable rate | 1.50% | ||||
Variable rate additional adjustment | 3.00% | ||||
Effective interest rate percentage | 4.50% | 4.50% | |||
Predecessor | TR | Convertible term note | Class A common stock | |||||
Related Party Transactions | |||||
Number of equity shares issued upon conversion of debt | 1,835 | ||||
Share Price (per share) | $ 15,958 |
Related Party Transactions - Cl
Related Party Transactions - Class of Shares (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | Jun. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2015 | |
Related Party Transactions | ||||||||||
Employee equity compensation payable | $ 728,000 | $ 24,187,000 | ||||||||
Contingent consideration recognized | $ 19,297,000 | $ 29,367,000 | ||||||||
Banks | ||||||||||
Related Party Transactions | ||||||||||
Capital contribution | $ 120,000,000 | |||||||||
Employees | ||||||||||
Related Party Transactions | ||||||||||
Investment by employees | 5,266,000 | |||||||||
Predecessor | ||||||||||
Related Party Transactions | ||||||||||
Members' equity | 988,615,000 | 988,615,000 | $ 986,468,000 | $ 1,008,704,000 | ||||||
Contingent consideration recognized | $ 19,297,000 | $ 29,367,000 | ||||||||
Tradeweb Markets LLC | Successor | ||||||||||
Related Party Transactions | ||||||||||
Members' equity | $ 4,562,154,000 | 4,572,334,000 | ||||||||
Employee equity compensation payable | 24,187,000 | |||||||||
Tradeweb Markets LLC | Successor | Banks | Class P-1(A) Shares | ||||||||||
Related Party Transactions | ||||||||||
Members' equity | 150,495,000 | |||||||||
Tradeweb Markets LLC | Successor | Employees | Class P-1(C) Shares | ||||||||||
Related Party Transactions | ||||||||||
Employee equity compensation payable | $ 6,727,000 | |||||||||
Tradeweb Markets LLC | Predecessor | ||||||||||
Related Party Transactions | ||||||||||
Capital contribution | 82,000 | |||||||||
Members' equity | 1,125,165,000 | 986,468,000 | $ 1,024,759,000 | $ 1,067,944,000 | ||||||
Employee equity compensation payable | 31,019,000 | |||||||||
Contingent consideration recognized | $ 26,830,000 | 58,520,000 | $ 26,224,000 | |||||||
Contingent consideration payable to related parties | $ 129,393,000 | |||||||||
Tradeweb Markets LLC | Predecessor | Banks | Capital contribution | ||||||||||
Related Party Transactions | ||||||||||
Capital contribution | 120,000,000 | |||||||||
Tradeweb Markets LLC | Predecessor | Employees | Capital contribution | ||||||||||
Related Party Transactions | ||||||||||
Investment by employees | $ 5,266,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Contingent Consideration (Details) - Tradeweb Markets LLC - Predecessor | Dec. 31, 2017item |
Standard deviation | |
Fair Value of Financial Instruments | |
Contingent consideration, measurement input | 1,666,667 |
Revenue multiple | |
Fair Value of Financial Instruments | |
Contingent consideration, measurement input | 7.03 |
Discount rate | |
Fair Value of Financial Instruments | |
Contingent consideration, measurement input | 0.0164 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Fair Value Measurements (Details) - Tradeweb Markets LLC - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value of Financial Instruments | |||
Total assets measured at fair value | $ 113,180 | $ 127,927 | |
Level 1 | |||
Fair Value of Financial Instruments | |||
Total assets measured at fair value | $ 113,180 | 127,927 | |
Predecessor | |||
Fair Value of Financial Instruments | |||
Money market funds | $ 101,154 | ||
Total assets measured at fair value | 101,154 | ||
Contingent consideration payable | 129,393 | ||
Total Liabilities, at fair value | 129,393 | ||
Predecessor | Level 1 | |||
Fair Value of Financial Instruments | |||
Money market funds | 101,154 | ||
Total assets measured at fair value | 101,154 | ||
Predecessor | Level 3 | |||
Fair Value of Financial Instruments | |||
Contingent consideration payable | 129,393 | ||
Total Liabilities, at fair value | $ 129,393 | ||
Successor | |||
Fair Value of Financial Instruments | |||
Money market funds | 127,927 | ||
Total assets measured at fair value | 127,927 | ||
Successor | Level 1 | |||
Fair Value of Financial Instruments | |||
Money market funds | 127,927 | ||
Total assets measured at fair value | $ 127,927 |
Credit Risk (Details)
Credit Risk (Details) - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Credit Risk | |||
Allowance for doubtful accounts | $ 1,273,000 | $ 1,169,000 | |
Tradeweb Markets LLC | Successor | Credit Risk | |||
Credit Risk | |||
Allowance for doubtful accounts | $ 1,169,000 | ||
Tradeweb Markets LLC | Predecessor | Credit Risk | |||
Credit Risk | |||
Allowance for doubtful accounts | $ 928,000 |
Commitments and Contingencies -
Commitments and Contingencies - Commitments (Details) - Tradeweb Markets LLC - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Successor | ||||
Future minimum rental payments | ||||
2019 | $ 11,393,000 | |||
2020 | 7,580,000 | |||
2021 | 5,317,000 | |||
2022 | 4,051,000 | |||
2023 | 3,877,000 | |||
Thereafter | 11,156,000 | |||
Total | 43,374,000 | |||
Rent expense | 2,733,000 | |||
Successor | Letter of credit | Guaranteed by Refinitiv | ||||
Future minimum rental payments | ||||
Line of credit, maximum borrowing capacity | $ 1,200,000 | |||
Predecessor | ||||
Future minimum rental payments | ||||
Rent expense | $ 9,011,000 | $ 11,774,000 | $ 13,253,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingencies (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($)item | |
Litigation relating to distribution of financial strength ratings | ||
Commitments and Contingencies | ||
Damages sought | $ 80,000,000 | |
Tradeweb Markets LLC | Successor | Antitrust Actions Related To Trading Practices and Interest Rate Swaps | ||
Commitments and Contingencies | ||
Number of actions | item | 2 | |
Tradeweb Markets LLC | Successor | Litigation relating to distribution of financial strength ratings | ||
Commitments and Contingencies | ||
Damages sought | $ 80,000,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Income Per Share | ||||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 12,828 | $ 12,828 | ||||||
Weighted average outstanding - Diluted | 150,847,183 | 150,847,183 | ||||||
Earnings per share - Basic | $ 0.09 | $ 0.09 | ||||||
Earnings per share - Diluted | $ 0.09 | $ 0.09 | ||||||
Shares excluded from computation of diluted earnings per share | 8,045,000 | 6,789,000 | ||||||
Successor | ||||||||
Net Income Per Share | ||||||||
Weighted average outstanding - Diluted | 150,847,183 | 150,847,183 | ||||||
Earnings per share - Basic | $ 0.09 | |||||||
Earnings per share - Diluted | $ 0.09 | $ 0.09 | ||||||
Tradeweb Markets LLC | ||||||||
Net Income Per Share | ||||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 42,352 | |||||||
Weighted average outstanding - Diluted | 223,320,457 | |||||||
Earnings per share - Basic | $ 0.19 | |||||||
Earnings per share - Diluted | $ 0.19 | |||||||
Tradeweb Markets LLC | Successor | ||||||||
Net Income Per Share | ||||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 29,307 | |||||||
Basic weighted average shares outstanding | 222,221,628 | |||||||
Dilutive effect of equity settled PRSUs | 22,223 | |||||||
Weighted average outstanding - Diluted | 222,243,851 | 223,320,457 | ||||||
Earnings per share - Basic | $ 0.13 | $ 0.19 | ||||||
Earnings per share - Diluted | $ 0.13 | $ 0.19 | ||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Net Income Per Share | ||||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 38,897 | $ 84,205 | $ 130,160 | $ 83,648 | $ 93,161 | |||
Basic weighted average shares outstanding | 215,365,920 | 212,568,635 | 210,979,704 | |||||
Weighted average outstanding - Diluted | 213,435,314 | 213,435,314 | 215,365,920 | 212,568,635 | 210,979,704 | |||
Earnings per share - Basic | $ 0.18 | $ 0.39 | $ 0.60 | $ 0.39 | $ 0.44 | |||
Earnings per share - Diluted | $ 0.18 | $ 0.39 | $ 0.60 | $ 0.39 | $ 0.44 | |||
Shares excluded from computation of diluted earnings per share | 340 | 340 | ||||||
Tradeweb Markets LLC | Predecessor | Convertible term note | ||||||||
Net Income Per Share | ||||||||
Shares excluded from computation of diluted earnings per share | 894,464 | 2,548,668 | ||||||
Tradeweb Markets LLC | Predecessor | Contingent consideration | ||||||||
Net Income Per Share | ||||||||
Shares excluded from computation of diluted earnings per share | 5,444,566 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) - Reportable Legal Entities - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
TW SEF | |||
Regulatory Capital Requirements | |||
Financial Resources | $ 30,137 | $ 31,232 | |
Required Financial Resources | 10,500 | 10,500 | |
Excess Financial Resources | 19,637 | 20,732 | |
Liquid Financial Assets | 16,961 | 16,662 | |
Required Liquid Financial Assets | 5,250 | 5,250 | |
Excess Liquid Financial Assets | 11,711 | 11,412 | |
DW SEF | |||
Regulatory Capital Requirements | |||
Financial Resources | 15,032 | 17,837 | |
Required Financial Resources | 5,589 | 5,169 | |
Excess Financial Resources | 9,443 | 12,668 | |
Liquid Financial Assets | 8,719 | 11,888 | |
Required Liquid Financial Assets | 2,795 | 2,585 | |
Excess Liquid Financial Assets | $ 5,924 | 9,303 | |
Tradeweb Markets LLC | Successor | TWL | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 18,986 | ||
Regulatory Capital Requirement | 2,698 | ||
Excess Regulatory Capital | 16,288 | ||
Tradeweb Markets LLC | Successor | DW | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 41,164 | ||
Regulatory Capital Requirement | 1,803 | ||
Excess Regulatory Capital | 39,361 | ||
Tradeweb Markets LLC | Successor | TWD | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 24,042 | ||
Regulatory Capital Requirement | 599 | ||
Excess Regulatory Capital | 23,443 | ||
Tradeweb Markets LLC | Successor | TEL | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 46,157 | ||
Regulatory Capital Requirement | 17,493 | ||
Excess Regulatory Capital | 28,664 | ||
Tradeweb Markets LLC | Successor | TWJ | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 10,592 | ||
Regulatory Capital Requirement | 3,413 | ||
Excess Regulatory Capital | 7,179 | ||
Tradeweb Markets LLC | Successor | TW SEF | |||
Regulatory Capital Requirements | |||
Financial Resources | 31,232 | ||
Required Financial Resources | 10,500 | ||
Excess Financial Resources | 20,732 | ||
Liquid Financial Assets | 16,662 | ||
Required Liquid Financial Assets | 5,250 | ||
Excess Liquid Financial Assets | 11,412 | ||
Tradeweb Markets LLC | Successor | DW SEF | |||
Regulatory Capital Requirements | |||
Financial Resources | 17,837 | ||
Required Financial Resources | 5,169 | ||
Excess Financial Resources | 12,668 | ||
Liquid Financial Assets | 11,888 | ||
Required Liquid Financial Assets | 2,585 | ||
Excess Liquid Financial Assets | $ 9,303 | ||
Tradeweb Markets LLC | Predecessor | TWL | |||
Regulatory Capital Requirements | |||
Regulatory Capital | $ 22,551 | ||
Regulatory Capital Requirement | 1,589 | ||
Excess Regulatory Capital | 20,962 | ||
Tradeweb Markets LLC | Predecessor | DW | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 35,546 | ||
Regulatory Capital Requirement | 1,612 | ||
Excess Regulatory Capital | 33,934 | ||
Tradeweb Markets LLC | Predecessor | TWD | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 16,965 | ||
Regulatory Capital Requirement | 378 | ||
Excess Regulatory Capital | 16,587 | ||
Tradeweb Markets LLC | Predecessor | TEL | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 31,509 | ||
Regulatory Capital Requirement | 18,034 | ||
Excess Regulatory Capital | 13,475 | ||
Tradeweb Markets LLC | Predecessor | TWJ | |||
Regulatory Capital Requirements | |||
Regulatory Capital | 5,326 | ||
Regulatory Capital Requirement | 961 | ||
Excess Regulatory Capital | 4,365 | ||
Tradeweb Markets LLC | Predecessor | TW SEF | |||
Regulatory Capital Requirements | |||
Financial Resources | 23,349 | ||
Required Financial Resources | 10,500 | ||
Excess Financial Resources | 12,849 | ||
Liquid Financial Assets | 14,084 | ||
Required Liquid Financial Assets | 5,250 | ||
Excess Liquid Financial Assets | 8,834 | ||
Tradeweb Markets LLC | Predecessor | DW SEF | |||
Regulatory Capital Requirements | |||
Financial Resources | 20,069 | ||
Required Financial Resources | 5,875 | ||
Excess Financial Resources | 14,194 | ||
Liquid Financial Assets | 13,865 | ||
Required Liquid Financial Assets | 2,893 | ||
Excess Liquid Financial Assets | $ 10,972 |
Employee Savings Plan - 401(k)
Employee Savings Plan - 401(k) Plan (Details) - Tradeweb Markets LLC - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Successor | U.S. | |||||
Employees Savings Plan | |||||
401(k) Savings Plan | us-gaap:QualifiedPlanMember | us-gaap:QualifiedPlanMember | |||
Employees' voluntary contribution percentage | 75.00% | ||||
Company match, as a percent of the employee's contribution | 100.00% | ||||
Employer match limit, as a percent of employee's compensation | 4.00% | ||||
Expense recognized | $ 738,000 | ||||
Successor | UK and Asia | |||||
Employees Savings Plan | |||||
Expense recognized | $ 423,000 | ||||
Predecessor | U.S. | |||||
Employees Savings Plan | |||||
Expense recognized | $ 3,758,000 | $ 4,137,000 | $ 4,179,000 | ||
Predecessor | UK and Asia | |||||
Employees Savings Plan | |||||
Expense recognized | $ 1,113,000 | $ 1,242,000 | $ 1,181,000 |
Business Segment and Geograph_3
Business Segment and Geographic Information - Revenue by Client Sector (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 190,485,000 | $ 377,277,000 | ||||||
Contingent consideration to related parties | $ (19,297,000) | $ (29,367,000) | ||||||
Net revenue | 190,485,000 | 377,277,000 | ||||||
Operating expenses | 159,530,000 | 300,045,000 | ||||||
Operating income | 30,955,000 | 77,232,000 | ||||||
Institutional | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 111,057,000 | 220,309,000 | ||||||
Wholesale | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 41,945,000 | 81,376,000 | ||||||
Retail | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 19,939,000 | 41,145,000 | ||||||
Market Data | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 17,544,000 | $ 34,447,000 | ||||||
Predecessor | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 171,015,000 | 340,518,000 | ||||||
Contingent consideration to related parties | (19,297,000) | (29,367,000) | ||||||
Net revenue | 151,718,000 | 311,151,000 | ||||||
Operating expenses | 111,556,000 | 223,634,000 | ||||||
Operating income | 40,162,000 | 87,517,000 | ||||||
Predecessor | Institutional | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 102,095,000 | 204,415,000 | ||||||
Predecessor | Wholesale | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 32,265,000 | 64,860,000 | ||||||
Predecessor | Retail | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 20,918,000 | 39,954,000 | ||||||
Predecessor | Market Data | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 15,737,000 | $ 31,289,000 | ||||||
Tradeweb Markets LLC | Successor | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 178,637,000 | |||||||
Net revenue | 178,637,000 | |||||||
Operating expenses | 146,702,000 | |||||||
Operating income | 31,935,000 | |||||||
Tradeweb Markets LLC | Successor | Institutional | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 103,971,000 | |||||||
Tradeweb Markets LLC | Successor | Wholesale | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 38,153,000 | |||||||
Tradeweb Markets LLC | Successor | Retail | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 19,780,000 | |||||||
Tradeweb Markets LLC | Successor | Market Data | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 16,733,000 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 505,771,000 | $ 562,968,000 | $ 518,404,000 | |||||
Contingent consideration to related parties | (26,830,000) | (58,520,000) | (26,224,000) | |||||
Net revenue | 478,941,000 | 504,448,000 | 492,180,000 | |||||
Operating expenses | 338,607,000 | 415,356,000 | 399,049,000 | |||||
Operating income | 140,334,000 | 89,092,000 | 93,131,000 | |||||
Tradeweb Markets LLC | Predecessor | Institutional | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 301,918,000 | 318,038,000 | 285,801,000 | |||||
Tradeweb Markets LLC | Predecessor | Wholesale | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 99,028,000 | 118,451,000 | 109,945,000 | |||||
Tradeweb Markets LLC | Predecessor | Retail | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 57,766,000 | 70,857,000 | 67,471,000 | |||||
Tradeweb Markets LLC | Predecessor | Market Data | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 47,059,000 | $ 55,622,000 | $ 55,187,000 |
Business Segment and Geograph_4
Business Segment and Geographic Information - Revenue and Long-lived Assets by Geographic Region (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 190,485,000 | $ 377,277,000 | ||||||
Contingent consideration to related parties | $ (19,297,000) | $ (29,367,000) | ||||||
Net revenue | 190,485,000 | 377,277,000 | ||||||
Long-lived assets | 4,264,443,000 | $ 4,284,355,000 | 4,264,443,000 | |||||
U.S. | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 122,693,000 | 242,090,000 | ||||||
Long-lived assets | 4,251,030,000 | 4,276,568,000 | 4,251,030,000 | |||||
International | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 67,792,000 | 135,187,000 | ||||||
Long-lived assets | $ 13,413,000 | 7,787,000 | $ 13,413,000 | |||||
Predecessor | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 171,015,000 | 340,518,000 | ||||||
Contingent consideration to related parties | (19,297,000) | (29,367,000) | ||||||
Net revenue | 151,718,000 | 311,151,000 | ||||||
Predecessor | U.S. | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 109,540,000 | 217,322,000 | ||||||
Predecessor | International | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 61,475,000 | $ 123,196,000 | ||||||
Tradeweb Markets LLC | Successor | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 178,637,000 | |||||||
Net revenue | 178,637,000 | |||||||
Long-lived assets | 4,284,355,000 | |||||||
Tradeweb Markets LLC | Successor | U.S. | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 115,907,000 | |||||||
Long-lived assets | 4,276,568,000 | |||||||
Tradeweb Markets LLC | Successor | International | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 62,730,000 | |||||||
Long-lived assets | $ 7,787,000 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 505,771,000 | $ 562,968,000 | $ 518,404,000 | |||||
Contingent consideration to related parties | (26,830,000) | (58,520,000) | (26,224,000) | |||||
Net revenue | 478,941,000 | 504,448,000 | 492,180,000 | |||||
Long-lived assets | 853,586,000 | |||||||
Tradeweb Markets LLC | Predecessor | U.S. | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | 324,304,000 | 385,176,000 | 365,308,000 | |||||
Long-lived assets | 845,599,000 | |||||||
Tradeweb Markets LLC | Predecessor | International | ||||||||
Business Segment and Geographic Information | ||||||||
Gross revenues | $ 181,467,000 | 177,792,000 | $ 153,096,000 | |||||
Long-lived assets | $ 7,987,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Tradeweb Markets LLC - Subsequent Event - USD ($) $ in Millions | Mar. 22, 2019 | Jun. 30, 2019 |
Subsequent Events | ||
Distribution paid to current owners of the Company | $ 20 | |
Planned event, contingent on closing of IPO | Revolving credit facility | ||
Subsequent Events | ||
Line of credit, maximum borrowing capacity | $ 500 |
Consolidated Statements of Fi_5
Consolidated Statements of Financial Condition - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 313,582,000 | $ 410,104,000 |
Restricted cash | 1,200,000 | 1,200,000 |
Receivable from brokers and dealers and clearing organizations | 255,250,000 | 174,591,000 |
Deposits with clearing organizations | 13,398,000 | 11,427,000 |
Account receivable, net of allowance | 92,854,000 | 87,192,000 |
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 35,742,000 | 38,128,000 |
Right-of-use assets | 30,145,000 | |
Software development costs, net of accumulated amortization | 172,614,000 | 170,582,000 |
Intangible assets, net of accumulated amortization | 1,331,145,000 | 1,380,848,000 |
Goodwill | 2,694,797,000 | 2,694,797,000 |
Receivable from affiliates | 2,849,000 | 3,243,000 |
Deferred tax asset | 98,469,000 | |
Other assets | 30,302,000 | 25,027,000 |
Total assets | 5,072,347,000 | 4,997,139,000 |
Liabilities | ||
Payable to brokers and dealers and clearing organizations | 255,163,000 | 171,214,000 |
Accrued compensation | 68,622,000 | 120,158,000 |
Deferred revenue | 25,270,000 | 27,883,000 |
Accounts payable, accrued expenses and other liabilities | 34,502,000 | 42,548,000 |
Employee equity compensation payable | 728,000 | 24,187,000 |
Lease liability | 34,528,000 | |
Payable to affiliates | 6,004,000 | 5,009,000 |
Deferred tax liability | 21,304,000 | 19,627,000 |
Tax receivable agreement liability | 171,426,000 | |
Total liabilities | 617,547,000 | 410,626,000 |
Commitments and contingencies (Note 15) | ||
Mezzanine Capital | ||
Class C Shares and Class P(C) Shares | 14,179,000 | |
Stockholders' Equity/Members' Capital | ||
Members' capital | 4,573,200,000 | |
Additional paid-in capital | 2,846,681,000 | |
Accumulated other comprehensive income | (525,000) | (866,000) |
Retained earnings | 1,393,000 | |
Total stockholders' equity attributable to Tradeweb Markets Inc./members' equity | 2,847,551,000 | 4,572,334,000 |
Non-controlling interests | 1,607,249,000 | |
Total equity | 4,454,800,000 | 4,572,334,000 |
Total liabilities and stockholders' equity/members' capital | 5,072,347,000 | 4,997,139,000 |
Class B common stock | ||
Stockholders' Equity/Members' Capital | ||
Common stock | 1,000 | |
Total equity | 1,000 | |
Class D common stock | ||
Stockholders' Equity/Members' Capital | ||
Common stock | 1,000 | |
Total equity | 1,000 | |
Successor | ||
Assets | ||
Deferred tax asset | $ 93,194,000 | |
Predecessor | ||
Assets | ||
Cash and cash equivalents | 410,104,000 | |
Restricted cash | $ 1,200,000 |
Consolidated Statements of Fi_6
Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.00001 | |
Preferred stock, shares authorized | 250,000,000 | |
Successor | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 250,000,000 | 250,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 1,000,000,000 | |
Class A common stock | Successor | ||
Common Stock, par value per share | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 46,000,000 | 46,000,000 |
Common stock, shares outstanding | 46,000,000 | |
Class B common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 450,000,000 | |
Class B common stock | Successor | ||
Common Stock, par value per share | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 96,933,192 | 96,933,192 |
Common stock, shares outstanding | 96,933,192 | |
Class C common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 350,000,000 | |
Class C common stock | Successor | ||
Common Stock, par value per share | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 10,006,269 | 10,006,269 |
Common stock, shares outstanding | 10,006,269 | |
Class D common stock | ||
Common Stock, par value per share | $ 0.00001 | |
Common Stock, shares authorized | 300,000,000 | |
Class D common stock | Successor | ||
Common Stock, par value per share | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 69,282,736 | 69,282,736 |
Common stock, shares outstanding | 69,282,736 |
Consolidated Statements of In_3
Consolidated Statements of Income - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | ||||||||
Gross revenue | $ 190,485,000 | $ 377,277,000 | ||||||
Contingent consideration | $ (19,297,000) | $ (29,367,000) | ||||||
Net revenue | 190,485,000 | 377,277,000 | ||||||
Expenses | ||||||||
Employee compensation and benefits | 95,995,000 | 173,268,000 | ||||||
Depreciation and amortization | 34,292,000 | 67,795,000 | ||||||
Technology and communications | 9,519,000 | 19,559,000 | ||||||
General and administrative | 9,365,000 | 18,454,000 | ||||||
Professional fees | 6,738,000 | 13,709,000 | ||||||
Occupancy | 3,621,000 | 7,260,000 | ||||||
Total expenses | 159,530,000 | 300,045,000 | ||||||
Operating income | 30,955,000 | 77,232,000 | ||||||
Net interest income | 175,000 | 1,033,000 | ||||||
Income before taxes | 31,130,000 | 78,265,000 | ||||||
Provision for income taxes | (6,314,000) | (11,097,000) | ||||||
Net income | 24,816,000 | 67,168,000 | ||||||
Less: Pre-IPO net income attributable to Tradeweb Markets LLC | 42,352,000 | |||||||
Net income attributable to Tradeweb Markets Inc. and non-controlling interests | 24,816,000 | 24,816,000 | ||||||
Less: Net income attributable to non-controlling interests | 11,988,000 | 11,988,000 | ||||||
Net income attributable to Tradeweb Markets Inc. | $ 12,828,000 | $ 12,828,000 | ||||||
Earnings per share | ||||||||
Basic | $ 0.09 | $ 0.09 | ||||||
Diluted | $ 0.09 | $ 0.09 | ||||||
Weighted average interests outstanding | ||||||||
Basic | 142,933,192 | 142,933,192 | ||||||
Diluted | 150,847,183 | 150,847,183 | ||||||
Transaction fees | ||||||||
Revenues | ||||||||
Gross revenue | $ 103,952,000 | $ 206,592,000 | ||||||
Subscription fees | ||||||||
Revenues | ||||||||
Gross revenue | 34,566,000 | 69,011,000 | ||||||
Commissions | ||||||||
Revenues | ||||||||
Gross revenue | 36,413,000 | 70,610,000 | ||||||
Refinitiv market data fees | ||||||||
Revenues | ||||||||
Gross revenue | 13,385,000 | 27,001,000 | ||||||
Other | ||||||||
Revenues | ||||||||
Gross revenue | $ 2,169,000 | $ 4,063,000 | ||||||
Successor | ||||||||
Earnings per share | ||||||||
Basic | $ 0.09 | |||||||
Diluted | $ 0.09 | $ 0.09 | ||||||
Weighted average interests outstanding | ||||||||
Basic | 142,933,192 | |||||||
Diluted | 150,847,183 | 150,847,183 | ||||||
Predecessor | ||||||||
Revenues | ||||||||
Gross revenue | 171,015,000 | 340,518,000 | ||||||
Contingent consideration | (19,297,000) | (29,367,000) | ||||||
Net revenue | 151,718,000 | 311,151,000 | ||||||
Expenses | ||||||||
Employee compensation and benefits | 68,407,000 | 139,977,000 | ||||||
Depreciation and amortization | 16,178,000 | 32,446,000 | ||||||
Technology and communications | 9,023,000 | 17,486,000 | ||||||
General and administrative | 7,153,000 | 13,670,000 | ||||||
Professional fees | 7,276,000 | 12,814,000 | ||||||
Occupancy | 3,519,000 | 7,241,000 | ||||||
Total expenses | 111,556,000 | 223,634,000 | ||||||
Operating income | 40,162,000 | 87,517,000 | ||||||
Net interest income | 582,000 | 1,053,000 | ||||||
Income before taxes | 40,744,000 | 88,570,000 | ||||||
Provision for income taxes | (1,847,000) | (4,365,000) | ||||||
Net income | 38,897,000 | 84,205,000 | ||||||
Predecessor | Transaction fees | ||||||||
Revenues | ||||||||
Gross revenue | 91,030,000 | 181,169,000 | ||||||
Predecessor | Subscription fees | ||||||||
Revenues | ||||||||
Gross revenue | 37,647,000 | 73,973,000 | ||||||
Predecessor | Commissions | ||||||||
Revenues | ||||||||
Gross revenue | 27,553,000 | 55,436,000 | ||||||
Predecessor | Refinitiv market data fees | ||||||||
Revenues | ||||||||
Gross revenue | 12,081,000 | 24,318,000 | ||||||
Predecessor | Other | ||||||||
Revenues | ||||||||
Gross revenue | 2,704,000 | 5,622,000 | ||||||
Tradeweb Markets LLC | ||||||||
Expenses | ||||||||
Less: Pre-IPO net income attributable to Tradeweb Markets LLC | $ 42,352,000 | |||||||
Net income attributable to Tradeweb Markets Inc. | $ 42,352,000 | |||||||
Earnings per share | ||||||||
Basic | $ 0.19 | |||||||
Diluted | $ 0.19 | |||||||
Weighted average interests outstanding | ||||||||
Basic | 222,222,197 | |||||||
Diluted | 223,320,457 | |||||||
Tradeweb Markets LLC | Successor | ||||||||
Revenues | ||||||||
Gross revenue | $ 178,637,000 | |||||||
Net revenue | 178,637,000 | |||||||
Expenses | ||||||||
Employee compensation and benefits | 80,436,000 | |||||||
Depreciation and amortization | 33,020,000 | |||||||
Technology and communications | 9,907,000 | |||||||
General and administrative | 11,837,000 | |||||||
Professional fees | 8,194,000 | |||||||
Occupancy | 3,308,000 | |||||||
Total expenses | 146,702,000 | |||||||
Operating income | 31,935,000 | |||||||
Net interest income | 787,000 | |||||||
Income before taxes | 32,722,000 | |||||||
Provision for income taxes | (3,415,000) | |||||||
Net income | 29,307,000 | |||||||
Net income attributable to Tradeweb Markets Inc. | $ 29,307,000 | |||||||
Earnings per share | ||||||||
Basic | $ 0.13 | $ 0.19 | ||||||
Diluted | $ 0.13 | $ 0.19 | ||||||
Weighted average interests outstanding | ||||||||
Basic | 222,221,628 | 222,222,197 | ||||||
Diluted | 222,243,851 | 223,320,457 | ||||||
Tradeweb Markets LLC | Successor | Transaction fees | ||||||||
Revenues | ||||||||
Gross revenue | $ 97,130,000 | |||||||
Tradeweb Markets LLC | Successor | Subscription fees | ||||||||
Revenues | ||||||||
Gross revenue | 33,052,000 | |||||||
Tradeweb Markets LLC | Successor | Commissions | ||||||||
Revenues | ||||||||
Gross revenue | 32,840,000 | |||||||
Tradeweb Markets LLC | Successor | Refinitiv market data fees | ||||||||
Revenues | ||||||||
Gross revenue | 13,467,000 | |||||||
Tradeweb Markets LLC | Successor | Other | ||||||||
Revenues | ||||||||
Gross revenue | $ 2,148,000 | |||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Revenues | ||||||||
Gross revenue | $ 505,771,000 | $ 562,968,000 | $ 518,404,000 | |||||
Contingent consideration | (26,830,000) | (58,520,000) | (26,224,000) | |||||
Net revenue | 478,941,000 | 504,448,000 | 492,180,000 | |||||
Expenses | ||||||||
Employee compensation and benefits | 209,053,000 | 248,963,000 | 228,584,000 | |||||
Depreciation and amortization | 48,808,000 | 68,615,000 | 80,859,000 | |||||
Technology and communications | 26,598,000 | 30,013,000 | 28,239,000 | |||||
General and administrative | 23,056,000 | 33,973,000 | 27,392,000 | |||||
Professional fees | 20,360,000 | 19,351,000 | 18,158,000 | |||||
Occupancy | 10,732,000 | 14,441,000 | 15,817,000 | |||||
Total expenses | 338,607,000 | 415,356,000 | 399,049,000 | |||||
Operating income | 140,334,000 | 89,092,000 | 93,131,000 | |||||
Net interest income | 1,726,000 | 1,140,000 | 644,000 | |||||
Income before taxes | 142,060,000 | 89,777,000 | 92,436,000 | |||||
Provision for income taxes | (11,900,000) | (6,129,000) | 725,000 | |||||
Net income | 130,160,000 | 83,648,000 | 93,161,000 | |||||
Less: Pre-IPO net income attributable to Tradeweb Markets LLC | 38,897,000 | 84,205,000 | ||||||
Net income attributable to Tradeweb Markets Inc. | $ 38,897,000 | $ 84,205,000 | $ 130,160,000 | $ 83,648,000 | $ 93,161,000 | |||
Earnings per share | ||||||||
Basic | $ 0.18 | $ 0.39 | $ 0.60 | $ 0.39 | $ 0.44 | |||
Diluted | $ 0.18 | $ 0.39 | $ 0.60 | $ 0.39 | $ 0.44 | |||
Weighted average interests outstanding | ||||||||
Basic | 213,435,314 | 213,435,314 | 215,365,920 | 212,568,635 | 210,979,704 | |||
Diluted | 213,435,314 | 213,435,314 | 215,365,920 | 212,568,635 | 210,979,704 | |||
Tradeweb Markets LLC | Predecessor | Transaction fees | ||||||||
Revenues | ||||||||
Gross revenue | $ 273,751,000 | $ 267,020,000 | $ 230,171,000 | |||||
Tradeweb Markets LLC | Predecessor | Subscription fees | ||||||||
Revenues | ||||||||
Gross revenue | 107,130,000 | 144,409,000 | 141,419,000 | |||||
Tradeweb Markets LLC | Predecessor | Commissions | ||||||||
Revenues | ||||||||
Gross revenue | 79,830,000 | 96,745,000 | 91,663,000 | |||||
Tradeweb Markets LLC | Predecessor | Refinitiv market data fees | ||||||||
Revenues | ||||||||
Gross revenue | 36,851,000 | 50,125,000 | 50,564,000 | |||||
Tradeweb Markets LLC | Predecessor | Other | ||||||||
Revenues | ||||||||
Gross revenue | $ 8,209,000 | $ 4,669,000 | $ 4,587,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income attributable to Tradeweb Markets | $ 12,828 | $ 12,828 | |||||
Foreign currency translation adjustments attributable to non-controlling interests | (647) | (647) | |||||
Comprehensive income attributable to non-controlling interests | 12,181 | 12,181 | |||||
Net income attributable to non-controlling interests | 11,988 | 11,988 | |||||
Foreign currency translation adjustments attributable to noncontrolling interests | (359) | (359) | |||||
Comprehensive income attributable to non-controlling interests | $ 11,629 | 11,629 | |||||
Tradeweb Markets LLC | |||||||
Net income attributable to Tradeweb Markets | 42,352 | ||||||
Foreign currency translation adjustments attributable to non-controlling interests | 988 | ||||||
Comprehensive income attributable to non-controlling interests | $ 43,340 | ||||||
Predecessor | Tradeweb Markets LLC | |||||||
Net income attributable to Tradeweb Markets | $ 38,897 | $ 84,205 | $ 130,160 | $ 83,648 | $ 93,161 | ||
Foreign currency translation adjustments attributable to non-controlling interests | (2,058) | (3,986) | (3,064) | 2,885 | (4,679) | ||
Comprehensive income attributable to non-controlling interests | $ 36,839 | $ 80,219 | $ 127,096 | $ 86,533 | $ 88,482 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Members' Capital | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Non-Controlling Interests | Class A common stock | Class B common stock | Class C common stock | Class D common stock | Total |
Members' capital end of period (Predecessor) at Dec. 31, 2017 | $ 999,735 | $ (13,267) | $ 986,468 | |||||||
Comprehensive income: | ||||||||||
Capital distributions | Predecessor | (25,000) | (25,000) | ||||||||
Net income | Predecessor | 45,308 | 45,308 | ||||||||
Foreign currency translation adjustments | Predecessor | 1,928 | 1,928 | ||||||||
Members' capital end of period (Predecessor) at Mar. 31, 2018 | 1,020,043 | (11,339) | 1,008,704 | |||||||
Members' capital beginning of period (Predecessor) at Dec. 31, 2017 | 999,735 | (13,267) | 986,468 | |||||||
Comprehensive income: | ||||||||||
Net income | Predecessor | 84,205 | |||||||||
Members' capital end of period (Predecessor) at Jun. 30, 2018 | 1,003,940 | (15,325) | 988,615 | |||||||
Members' capital beginning of period (Predecessor) at Dec. 31, 2017 | 999,735 | (13,267) | 986,468 | |||||||
Members' capital beginning of period (Predecessor) at Mar. 31, 2018 | 1,020,043 | (11,339) | 1,008,704 | |||||||
Comprehensive income: | ||||||||||
Capital distributions | Predecessor | (55,000) | (55,000) | ||||||||
Net income | Predecessor | 38,897 | 38,897 | ||||||||
Foreign currency translation adjustments | Predecessor | (3,986) | (3,986) | ||||||||
Members' capital end of period (Predecessor) at Jun. 30, 2018 | 1,003,940 | (15,325) | 988,615 | |||||||
Members' capital end of period at Dec. 31, 2018 | 4,573,200 | |||||||||
Equity at end of period at Dec. 31, 2018 | (866) | 4,572,334 | ||||||||
Comprehensive income: | ||||||||||
Adjustment to Class C Shares and Class P shares in mezzanine capital | (2,369) | (2,369) | ||||||||
Capital distributions | (20,000) | (20,000) | ||||||||
Stock-based compensation | 4,674 | 4,674 | ||||||||
Net income | 42,352 | 42,352 | ||||||||
Foreign currency translation adjustments | 988 | 988 | ||||||||
Members' capital end of period at Mar. 31, 2019 | 4,597,857 | |||||||||
Equity at end of period at Mar. 31, 2019 | 122 | 4,597,979 | ||||||||
Members' capital beginning of period at Dec. 31, 2018 | 4,573,200 | |||||||||
Equity at beginning of period at Dec. 31, 2018 | (866) | 4,572,334 | ||||||||
Comprehensive income: | ||||||||||
Net income | 67,168 | |||||||||
Equity at end of period at Jun. 30, 2019 | $ 2,846,681 | (525) | $ 1,393 | $ 1,607,249 | $ 1 | $ 1 | 4,454,800 | |||
Equity at end of period (in shares) at Jun. 30, 2019 | 46,000,000 | 96,933,192 | 10,006,269 | 69,282,736 | ||||||
Members' capital beginning of period at Mar. 31, 2019 | 4,597,857 | |||||||||
Equity at beginning of period at Mar. 31, 2019 | 122 | 4,597,979 | ||||||||
Comprehensive income: | ||||||||||
Effect of the reorganization transactions | (4,497,857) | 4,521,132 | 23,275 | |||||||
Issuance of common stock, net of offering costs and cancellations | (15,856) | $ 1 | $ 1 | (15,854) | ||||||
Issuance of common stock, net of offering costs and cancellations (in shares) | 46,000,000 | 96,933,192 | 10,006,269 | 69,282,736 | ||||||
Tax receivable agreement liability and deferred taxes arising from the reorganization transactions and IPO | (78,232) | (78,232) | ||||||||
Allocation of equity to non-controlling interests | (1,607,529) | 1,607,529 | ||||||||
Distributions to non-controlling interests | (11,909) | (11,909) | ||||||||
Dividends ($0.08 per share) | (11,435) | (11,435) | ||||||||
Capital distributions | $ (100,000) | (100,000) | ||||||||
Share-based compensation expense under the PRSU Plan | 6,763 | 6,763 | ||||||||
Share-based compensation expense under the Option Plan | 20,403 | 20,403 | ||||||||
Net income | 12,828 | 11,988 | 24,816 | |||||||
Foreign currency translation adjustments | (647) | (359) | (1,006) | |||||||
Equity at end of period at Jun. 30, 2019 | $ 2,846,681 | $ (525) | $ 1,393 | $ 1,607,249 | $ 1 | $ 1 | $ 4,454,800 | |||
Equity at end of period (in shares) at Jun. 30, 2019 | 46,000,000 | 96,933,192 | 10,006,269 | 69,282,736 |
Consolidated Statements of Ch_3
Consolidated Statements of Changes in Equity (Parenthetical) | 3 Months Ended |
Jun. 30, 2019$ / shares | |
Successor | |
Dividends | $ 0.08 |
Consolidated Statements of Ca_3
Consolidated Statements of Cash Flows $ in Thousands | 6 Months Ended | |
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | |
Cash flows from operating activities | ||
Net income | $ 67,168 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 67,795 | |
Share-based compensation expense | 31,960 | |
Deferred taxes | (3,596) | |
(Increase) decrease in operating assets: | ||
Receivable from brokers and dealers and clearing organizations | (80,659) | |
Deposits with clearing organizations | (1,965) | |
Accounts receivable | (5,756) | |
Receivable from affiliates | 394 | |
Other assets | (8,825) | |
Increase (decrease) in operating liabilities: | ||
Payable to brokers and dealers and clearing organizations | 83,949 | |
Accrued compensation | (51,569) | |
Deferred revenue | (2,613) | |
Accounts payable, accrued expenses and other liabilities | (3,661) | |
Employee equity compensation payable | (16,732) | |
Payable to affiliates | 1,083 | |
Net cash provided by operating activities | 76,973 | |
Cash flows from investing activities | ||
Purchase of furniture, equipment, software and leasehold improvements | (3,793) | |
Capitalized software development costs | (13,914) | |
Net cash (used in) investing activities | (17,707) | |
Cash flows from financing activities | ||
Pre-IPO capital distributions | (120,000) | |
Proceeds from issuance of Class A common stock in the IPO, net of underwriting discounts | 1,161,270 | |
Purchase of LLC Interests | (1,161,270) | |
Offering costs from issuance of Class A common stock in the IPO | (12,306) | |
Dividends | (11,435) | |
Capital distributions to non-controlling interests | (11,909) | |
Net cash (used in) financing activities | (155,650) | |
Effect of exchange rate changes on cash and cash equivalents | (138) | |
Net decrease in cash and cash equivalents | (96,522) | |
Cash and cash equivalents and restricted cash | ||
Beginning of period | 411,304 | |
End of period | 314,782 | |
Supplemental disclosure of cash flow information | ||
Income taxes paid | 24,989 | |
Non-cash financing activities - tems arising from the reorganization transactions and IPO | ||
Deferred tax asset | 98,469 | |
Successor | ||
Non-cash financing activities - tems arising from the reorganization transactions and IPO | ||
Establishment of liabilities under tax receivable agreement | 171,426 | |
Deferred tax asset | 93,194 | |
Predecessor | ||
Cash flows from operating activities | ||
Net income | $ 84,205 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 32,446 | |
Contingent consideration | 29,367 | |
Deferred taxes | 1,409 | |
(Increase) decrease in operating assets: | ||
Receivable from brokers and dealers and clearing organizations | 4,324 | |
Deposits with clearing organizations | 654 | |
Accounts receivable | (30,042) | |
Receivable from affiliates | (243) | |
Other assets | (4,973) | |
Increase (decrease) in operating liabilities: | ||
Payable to brokers and dealers and clearing organizations | (4,322) | |
Accrued compensation | (34,135) | |
Deferred revenue | (6,823) | |
Accounts payable, accrued expenses and other liabilities | 1,129 | |
Employee equity compensation payable | (7,501) | |
Payable to affiliates | (468) | |
Net cash provided by operating activities | 65,027 | |
Cash flows from investing activities | ||
Purchase of furniture, equipment, software and leasehold improvements | (3,125) | |
Capitalized software development costs | (12,765) | |
Net cash (used in) investing activities | (15,890) | |
Cash flows from financing activities | ||
Pre-IPO capital distributions | (80,000) | |
Net cash (used in) financing activities | (80,000) | |
Effect of exchange rate changes on cash and cash equivalents | (1,198) | |
Net decrease in cash and cash equivalents | (32,061) | |
Cash and cash equivalents and restricted cash | ||
Beginning of period | $ 411,304 | 353,798 |
End of period | 321,737 | |
Supplemental disclosure of cash flow information | ||
Income taxes paid | $ 3,807 |
Consolidated Statements of Ca_4
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Cash | $ 410,104 | ||
Restricted cash | 1,200 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 411,304 | ||
Predecessor | |||
Cash | 410,104 | ||
Restricted cash | 1,200 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 411,304 | $ 321,737 | $ 353,798 |
Organization_2_3
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Organization | |
Organization | 1. Organization Tradeweb Markets Inc. (the “Corporation”) was incorporated as a Delaware corporation on November 7, 2018 for the purpose of completing certain reorganization transactions in order to carry on the business of Tradeweb Markets LLC (“TWM LLC”) and conducting an initial public offering (“IPO”) as described below under “—Initial Public Offering” and “—Reorganization Transactions.” The Corporation is a consolidating subsidiary of BCP York Holdings, (“BCP”) a company owned by certain investment funds affiliated with The Blackstone Group L.P. (“Blackstone”), through BCP’s majority ownership interest in Refinitiv Holdings Limited (“Refinitiv” or the “Parent”). As of June 30, 2019, Refinitiv owns a majority ownership interest in the Company (as defined below). The Corporation is a holding company whose principal asset is LLC Interests (as defined below) of TWM LLC. As the sole manager of TWM LLC, the Corporation operates and controls all of the business and affairs of TWM LLC and, through TWM LLC and its subsidiaries, conducts the Corporation’s business. As a result of this control, and because the Corporation has a substantial financial interest in TWM LLC, the Corporation consolidates the financial results of TWM LLC and reports a non-controlling interest in the Corporation’s consolidated financial statements. As of June 30, 2019, Tradeweb Markets Inc. owns 64.3% of TWM LLC and the Continuing LLC Owners (defined below) own the remaining 35.7% of TWM LLC. Unless the context otherwise requires, references to the “Company” refer to Tradeweb Markets Inc. and its consolidated subsidiaries, including TWM LLC, following the completion of the Reorganization Transactions (as defined below), and TWM LLC and its consolidated subsidiaries prior to the completion of the Reorganization Transactions. The Company is a leader in building and operating electronic marketplaces for a global network of clients across the institutional, wholesale and retail client sectors. The Company’s principal subsidiaries include: · Tradeweb LLC (“TWL”), a registered broker-dealer under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority (“FINRA”), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”). Tradeweb Europe Limited (“TEL”), a Multilateral Trading Facility regulated by the Financial Conduct Authority (the “FCA”) in the UK, which maintains branches in Asia which are regulated by certain Asian securities regulators. TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC. DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC. Tradeweb Japan K.K. (“TWJ”), a security house regulated by the Japanese Financial Services Agency (“JFSA”) and the Japan Securities Dealers Association (“JSDA”). Tradeweb EU B.V. (“TWEU”), a Trading Venue and Approved Publication Arrangement regulated by the Netherlands Authority for the Financial Markets (“AFM”). The Company, through its subsidiary Tradeweb IDB Markets Inc. (“TWIDB”) (formerly known as Hydrogen Holdings Corporation), owns Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.). DW is a registered broker-dealer under the Securities Exchange Act of 1934 and a member of FINRA. DW is also registered as an introducing broker with the CFTC and NFA. Initial Public Offering On April 8, 2019, the Corporation completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which includes 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1,161,270,000 in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase membership interests of TWM LLC from certain existing equityholders of TWM LLC (and cancelled the corresponding shares of common stock as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. Reorganization Transactions Prior to the closing of the IPO, a series of reorganization transactions (the “Reorganization Transactions”) was completed among the Corporation, TWM LLC and the following parties: The Owners of TWM LLC prior to the Reorganization Transactions, including an indirect subsidiary (the “Refinitiv LLC Owner”) of Refinitiv, certain investment and commercial banks (collectively, the “Bank Stockholders”) and members of management, that continued to own LLC Interests (as defined below) immediately prior to the closing of the IPO and who received shares of the Corporation’s Class C common stock, shares of the Corporation’s Class D common stock or a combination of both, as the case may be (collectively, the “Continuing LLC Owners”); and An indirect subsidiary (the “Refinitiv Direct Owner” and, together with the Refinitiv LLC Owner, the “Refinitiv Owners”) of Refinitiv that owned interests in an entity that held membership interests of TWM LLC prior to the Reorganization Transactions and contributed such entity to the Corporation (the “Refinitiv Contribution”). The following Reorganization Transactions occurred: TWM LLC’s limited liability company agreement (the “TWM LLC Agreement”) was amended and restated to, among other things, (i) provide for a new single class of common membership interests in TWM LLC (“LLC Interests”), (ii) exchange all of the existing membership interests of TWM LLC’s existing equityholders for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. See Note 9 – Stockholders’ Equity. The Corporation’s certificate of incorporation was amended and restated to, among other things, provide for Class A common stock, Class B common stock, Class C common stock and Class D common stock. See Note 9 – Stockholders’ Equity. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Continuing LLC Owners, on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (and the Corporation canceled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). · As a result of the Refinitiv Contribution (described above), the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. See Note 9 – Stockholders’ Equity. The Corporation’s board of directors adopted a new omnibus equity incentive plan, under which equity awards may be made in respect of shares of the Corporation’s Class A common stock. It also assumed sponsorship of an option plan and PRSU plan formerly sponsored by TWM LLC. See Note 11 – Stock-Based Compensation Plans. The Corporation entered into a tax receivable agreement (the “Tax Receivable Agreement”) with TWM LLC and the Continuing LLC Owners. See Note 8 – Tax Receivable Agreement. Acquisition of Parent Company and Presentation of Financial Statements A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from Thomson Reuters Corporation (“TR”). The accompanying consolidated financial statements are presented for two periods: predecessor and successor, which relate to the periods preceding and succeeding the Refinitiv Transaction, respectively. The Refinitiv Transaction results in a new basis of accounting beginning on October 1, 2018 and the financial reporting periods are presented as follows: · The successor period of the Company, reflecting the Refinitiv Transaction, as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019. · The predecessor period of the Company for the three and six months ended June 30, 2018. See Note 3 – Pushdown Accounting. |
Significant Accounting Polic_10
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies The following is a summary of significant accounting policies: Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented, are normal and recurring in nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the Continuing LLC Owners. Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360. Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. Deferred IPO Costs In 2018 the Company began incurring costs in connection with the filing of a Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25 in the consolidated statements of financial condition. IPO costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. As of June 30, 2019, $15.9 million of deferred costs were reclassified from other assets to additional paid-in capital on the consolidated statements of financial condition. See Note 9 – Stockholders’ Equity. Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation, on a pro rata basis. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis. This income is recognized by the Company when the transactions settle. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Company’s Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. In October 2018, following the closing of the Refinitiv Transaction, the Company made a special award of options to management and other employees (the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for the options issued under the Option Plan, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to these options will be recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019, with a charge of $20.4 million, and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Corporation’s Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Recent Accounting Pronouncements – Not Yet Adopted In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses. The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This ASU is applicable for the Company in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this ASU on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company's consolidated financial statements. |
Pushdown Accounting_2
Pushdown Accounting | 6 Months Ended |
Jun. 30, 2019 | |
Pushdown Accounting | |
Pushdown Accounting | 3. Pushdown Accounting The Refinitiv Transaction was accounted for by Refinitiv in accordance with the acquisition method of accounting pursuant to ASC 805, and pushdown accounting was applied to Refinitiv to record the fair value of the assets and liabilities of Refinitiv on the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, also accounted for the Refinitiv Transaction using pushdown accounting. Under pushdown accounting, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company was recorded as goodwill. At June 30, 2019 and December 31, 2018, goodwill amounted to $2,695,000. The Company has one year from the date of the Refinitiv Transaction to finalize these amounts. The adjusted valuations resulted in an increase in depreciation and amortization expense, due to the increased carrying value of the Company’s assets and the related increase in depreciation of tangible assets and amortization of intangible assets, and a decrease in occupancy expense as a result of the recognition of a leasehold interest liability. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | 4. Leases Effective January 1, 2019, the Company adopted ASC 842. This standard requires the Company to recognize a right-of-use asset and a lease liability for all leases with an initial term in excess of twelve months. The Company accounts for an option to extend a lease when the option is reasonably certain to be exercised. The asset reflects the present value of unpaid lease payments coupled with initial direct costs, prepaid lease payments and lease incentives. The amount of the lease liability is calculated as the present value of unpaid lease payments. The Company adopted ASC 842 using a modified retrospective approach and did not restate comparative periods. The Company elected to take the package of practical expedients allowing the Company to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. The Company has elected to account for nonlease components in a contract as part of the single lease component to which they are related. Significant assumptions and judgements in calculating the right-of-use assets and lease liability include the determination of the applicable borrowing rate for each lease. On January 1, 2019, upon the adoption of ASC 842, the Company recorded, for office space and data center leases in the US and UK, right-of-use assets of $34,760,000, lease liabilities of $39,635,000 and eliminated deferred rent of $4,875,000. The leases have initial lease terms ranging from 3 to 11 years. Activity related to the Company's leases for the three and six months ended June 30, 2019 is as follows (in thousands): Three Months Six Months Ended Ended June 30, June 30, 2019 2019 Operating lease expense 2,558 $ 5,147 Cash for amounts included in the measurement of operating liability 2,803 5,637 Right-of-use assets obtained in exchange for operating liabilities — — At June 30, 2019, the weighted average borrowing rate and weighted average lease term are as follows: Weighted average borrowing rate 2.9 % Weighted average remaining lease term (years) 6.0 The following table presents the maturity of lease liabilities as of June 30, 2019 (in thousands): Remainder of 2019 $ 5,640 2020 7,684 2021 5,349 2022 4,050 2023 3,876 Thereafter 11,151 Total future minimum lease payments 37,750 Less imputed interest (3,222) Lease liability $ 34,528 At June 30, 2019, the future minimum lease payments are as follows (in thousands): Remainder of 2019 $ 5,640 2020 7,684 2021 5,349 2022 4,050 2023 3,876 Thereafter 11,151 $ 37,750 One US lease is secured by a letter of credit in the amount of $1,200,000, which is guaranteed by Refinitiv. |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill Intangible assets and goodwill relate to the allocation of purchase price associated with the Refinitiv Transaction (see Note 3 – Pushdown Accounting). The following is a summary of intangible assets which have an indefinite useful life at both June 30, 2019 and December 31, 2018 (in thousands): Licenses $ 168,800 Tradename 154,300 Total $ 323,100 Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Successor June 30, 2019 December 31, 2018 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships - Refinitiv Transaction 12 Years $ 928,200 $ (58,012) $ 870,188 $ 928,200 $ (19,338) $ 908,862 Content and data 7 Years 154,400 (16,543) 137,857 154,400 (5,514) 148,886 $ 1,082,600 $ (74,555) $ 1,008,045 $ 1,082,600 $ (24,852) $ 1,057,748 Amortization expense relating to intangible assets was $24,852,000 and $49,704,000, respectively, for the three and six months ended June 30, 2019, and $6,557,000 and $13,063,000, respectively, for the three and six months ended June 30, 2018. The estimated annual future amortization for existing intangibles assets through December 31, 2023 is as follows (in thousands): Remainder of 2019 $ 49,704 2020 99,408 2021 99,408 2022 99,408 2023 99,408 |
Deferred Revenue_2
Deferred Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Revenue | |
Deferred Revenue | 6. Deferred Revenue The Company records deferred revenue when cash payments are received or due in advance of services to be performed. The recognized revenue and remaining balance is shown below (in thousands): Deferred revenue balance -December 31, 2018 $ 27,883 New billings 54,735 Revenue recognized (57,348) Deferred revenue balance - June 30, 2019 $ 25,270 |
Income Taxes_2
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The Company's effective tax rate was 20.3% and 4.5% for the three months ended June 30, 2019 and 2018, respectively, and 14.2% and 4.9% for the six months ended June 30, 2019 and 2018, respectively. The significant increase in the effective tax rate for the three months and six months ended June 30, 2019 was primarily due to the Reorganization Transactions. Prior to the Reorganization Transactions, incomes taxes consisted only of business taxes incurred by TWM LLC and certain subsidiaries for business conducted in certain state, local and foreign jurisdictions as well as federal, state and local taxes for certain subsidiaries that are taxed as corporations for U.S. tax purposes. As a result of the Reorganization Transactions, the Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. The Company’s actual effective tax rate will be impacted by the Corporation’s ownership share of TWM LLC, which may increase over time if the Continuing LLC Owners redeem or exchange their LLC Interests for shares of Class A common stock or Class B common stock, as applicable. The Company's consolidated effective tax rate will vary from period to period depending on redemptions or exchanges by the Continuing LLC Owners, changes in the geographic mix of its earnings and changes in tax legislation and tax rates. The Company expects to obtain an increase in its share of the tax basis of the assets of TWM LLC when LLC Interests are redeemed or exchanged by the Continuing LLC Owners and in connection with certain other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that the Corporation would otherwise pay in the future to various tax authorities. Pursuant to the Tax Receivable Agreement, the Corporation is required to make cash payments to the Continuing LLC Owners equal to 50% of the amount of U.S. federal, state and local income or franchise tax savings, if any, that the Corporation actually realizes (or in some circumstances are deemed to realize) as a result of certain future tax benefits to which we may become entitled. The Corporation expects to benefit from the remaining 50% of tax benefits, if any, that the Corporation may actually realize. See Note 8 – Tax Receivable Agreement. As a result of the IPO, the Company assumed a tax benefit of $93,194,000, due to an increase in amortizable tax basis that will be amortized primarily over 15 years pursuant to Section 197 of the Internal Revenue Code of 1986, as amended, offset by other factors. The tax benefit has been recognized in deferred tax asset on the June 30, 2019 consolidated statement of financial condition. As a result of the Refinitiv Contribution, the Company assumed the tax liabilities of the contributed entity. The contributed entity is under audit by the State of New Jersey for the tax years 2012-2015 and is appealing a tax assessment from an audit by the State of New Jersey for the tax years 2008-2011. The Company recognized a tax liability of $2,722,000 as a result of the Refinitiv Contribution which is included in accounts payable, accrued expenses and other liabilities on the June 30, 2019 consolidated statement of financial condition. The Company is indemnified by Refinitiv for tax liabilities that were assumed by the Company as a result of the Refinitiv Contribution. See Note 12 – Related Party Transactions. |
Tax Receivable Agreement Liabil
Tax Receivable Agreement Liability | 6 Months Ended |
Jun. 30, 2019 | |
Tax receivable agreement liability | |
Tax receivable agreement liability | 8. Tax Receivable Agreement In connection with the Reorganization Transactions, the Corporation entered into the Tax Receivable Agreement with TWM LLC and the Continuing LLC Owners, which provides for the payment by the Corporation to a Continuing LLC Owner of 50% of the amount of U.S. federal, state and local income or franchise tax savings, if any, that the Corporation actually realizes (or in some circumstances is deemed to realize) as a result of (i) increases in the tax basis of TWM LLC’s assets resulting from (a) the purchase of LLC Interests from such Continuing LLC Owner using the net proceeds of the IPO or any future offering or (b) redemptions or exchanges by such Continuing LLC Owner of LLC Interests for shares of Class A common stock or Class B common stock or for cash, as applicable, and (ii) certain other tax benefits related to the Corporation making payments under the Tax Receivable Agreement. Payments under the Tax Receivable Agreement are made annually based on the actual tax savings realized by the Corporation in its previous tax year. In connection with the IPO, the Company recorded an initial liability of $171,426,000 related to its projected obligations under the Tax Receivable Agreement for LLC Interests that were purchased by the Corporation using the net proceeds of the IPO. The Corporation accounts for the income tax effects resulting from taxable redemptions or exchanges of LLC Interests by the Continuing LLC Owners for shares of Class A common stock or Class B common stock or cash, as the case may be, by recognizing an increase in deferred tax assets, based on enacted tax rates at the date of each redemption or exchange, as the case may be. Further, the Corporation evaluates the likelihood that it will realize the benefit represented by the deferred tax asset, and, to the extent that the Corporation estimates that it is more likely than not that it will not realize the benefit, it reduces the carrying amount of the deferred tax asset with a valuation allowance. The impact of any changes in the projected obligations under the Tax Receivable Agreement as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Corporation’s tax savings will be reflected in income before taxes on the consolidated statement of income in the period in which the change occurs. |
Stockholder's Equity_2
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholder's Equity | |
Stockholders' Equity | 9. Stockholders’ Equity Initial Public Offering As described in Note 1 – Organization, in April 2019 Tradeweb Markets Inc. completed its IPO of 46,000,000 shares of Class A common stock at a public offering price of $27.00, which includes 6,000,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. The Corporation received $1,161,270,000 in net proceeds, after deducting underwriting discounts and commissions but before deducting offering expenses, which were used to purchase LLC Interests from certain of the Bank Stockholders (and cancelled the corresponding shares of common stock as described below), at a purchase price per interest equal to the public offering price of $27.00, less the underwriting discounts and commissions payable thereon. Reorganization Transactions In connection with the IPO, the Reorganization Transactions described below were completed. Amendment and Restatement of Certificate of Incorporation On April 3, 2019, the certificate of incorporation of Tradeweb Markets Inc. was amended and restated to, among other things, provide for the authorization of (i) 250,000,000 shares of preferred stock with a par value of $0.00001 per share (ii) 1,000,000,000 shares of Class A common stock with a par value of $0.00001 per share; (iii) 450,000,000 shares of Class B common stock with a par value of $0.00001 per share; (iv) 350,000,000 shares of Class C common stock with a par value of $0.00001 per share; and (v) 300,000,000 shares of Class D common stock with a par value of $0.00001 per share. Each share of Class A common stock and Class C common stock entitles its holder to one vote on all matters presented to the Corporation’s stockholders generally. Each share of Class B common stock and Class D common stock entitles its holder to ten votes on all matters presented to the Corporation’s stockholders generally. The holders of Class C common stock and Class D common stock have no economic interests in the Corporation (where “economic interests” means the right to receive any dividends or distributions, whether cash or stock, in connection with common stock). These attributes are summarized in the following table: Class of Par Votes Economic Class A common stock $ 0.00001 1 Yes Class B common stock $ 0.00001 10 Yes Class C common stock $ 0.00001 1 No Class D common stock $ 0.00001 10 No Holders of outstanding shares of Class A common stock, Class B common stock, Class C common stock and Class D common stock will vote together as a single class on all matters presented to the Corporation’s stockholders for their vote or approval, except as otherwise required by applicable law. Holders of Class B common stock may from time to time exchange all or a portion of their shares of Class B common stock for newly issued shares of Class A common stock on a one-for-one basis (in which case their shares of Class B common stock will be cancelled on a one-for-one basis upon any such issuance). Holders of Class D common stock may also from time to time exchange all or a portion of their shares of Class D common stock for newly issued shares of Class C common stock on a one-for-one basis (in which case their shares of Class D common stock will be cancelled on a one-for-one basis upon such issuance). In addition, with respect to each Bank Stockholder that holds shares of Class D common stock, immediately prior to the occurrence of any event that would cause the combined voting power held by such Bank Stockholder to exceed 4.9%, the minimum number of shares of Class D common stock of such Bank Stockholder that would need to convert into shares of Class C common stock such that the combined voting power held by such Bank Stockholder would not exceed 4.9% will automatically convert into shares of Class C common stock. Each share of Class B common stock will automatically convert into one share of Class A common stock and each share of Class D common stock will automatically convert into one share of Class C common stock (i) immediately prior to any sale or other transfer of such share by a holder or its permitted transferees to a non-permitted transferee or (ii) once the Refinitiv Owners and their affiliates together no longer beneficially own a number of shares of common stock and LLC Interests that together entitle them to at least 10% of TWM LLC’s economic interest. Holders of LLC Interests that receive shares of Class C common stock upon any such conversion may continue to elect to have their LLC Interests redeemed for newly issued shares of Class A common stock as described below (in which case their shares of Class C common stock will be cancelled on a one-for-one basis upon such issuance). Recapitalization of Tradeweb Markets LLC On April 4, 2019, the TWM LLC Agreement was amended and restated to, among other things, (i) provide for the LLC Interests, (ii) exchange all of the existing membership interests of TWM LLC’s existing equityholders for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. All of the shares of TWM LLC outstanding prior to the Reorganization Transactions were exchanged for 222,222,197 LLC Interests. TWM LLC’s outstanding shares prior to the Reorganization Transactions consisted of the following classes of shares: Class A Shares 146,333 Class C Shares 447 Class P(A) Shares 6,887 Class P(C) Shares 2 Class P-1(A) Shares 6,094 Class P-1(C) Shares 232 The TWM LLC Agreement requires that TWM LLC at all times maintain (i) a one-to-one ratio between the number of shares of Class A common stock and Class B common stock issued by the Corporation and the number of LLC Interests owned by the Corporation and (ii) a one-to-one ratio between the number of shares of Class C common stock and Class D common stock issued by the Corporation and the number of LLC Interests owned by the holders of such Class C common stock and Class D common stock. LLC Interests held by the Continuing LLC Owners are redeemable, at the election of such holders, for newly issued shares of Class A common stock or Class B common stock, as the case may be, on a one-for-one basis (and such holders’ shares of Class C common stock or Class D common stock, as the case may be, will be cancelled on a one-for-one basis upon any such issuance). In the event of such election by a Continuing LLC Owner, the Corporation may, at its option, effect a direct exchange of Class A common stock or Class B common stock for such LLC Interests of the redeeming holders in lieu of such redemption. In addition, the Corporation’s board of directors may, at its option, instead of the foregoing redemptions or exchanges of LLC Interests, cause the Corporation to make a cash payment equal to the volume weighted average market price of one share of Class A common stock for each LLC Interest redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the TWM LLC Agreement. Issuance and Cancellation of Common Stock · As a result of the Refinitiv Contribution, the Corporation received 96,933,192 LLC Interests and the Refinitiv Direct Owner received 96,933,192 shares of Class B common stock. · The Corporation issued 20,000,000 shares of Class C common stock and 105,289,005 shares of Class D common stock to the Continuing LLC Owners, on a one-to-one basis with the number of LLC Interests they owned immediately following the amendment and restatement of the TWM LLC Agreement for nominal consideration (the Corporation canceled 9,993,731 shares of such Class C common stock and 36,006,269 shares of such Class D common stock in connection with the Corporation’s purchase of LLC Interests from certain of the Bank Stockholders using the net proceeds of the IPO). Following the completion of the Reorganization Transactions, including the IPO and the application of the proceeds therefrom as described above, (i) the investors in the IPO collectively owned 46,000,000 shares of Class A common, representing 2.7% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 20.7% of the economic interest in TWM LLC; (ii) the Refinitiv Direct Owner owned 96,933,192 shares of Class B common stock, representing 56.4% of the combined voting power of all of the Corporation’s common stock and, through the Corporation’s ownership of LLC Interests, 43.6% of the economic interest in TWM LLC; (iii) the Refinitiv LLC Owner owned 22,988,329 shares of Class D common stock, representing 13.4% of the combined voting power of all of the Corporation’s common stock, and 22,988,329 LLC Interests, representing 10.3% of the economic interest in TWM LLC, (iv) the Continuing LLC Owners that continue to own LLC Interests (other than the Refinitiv LLC Owner) collectively owned 10,006,269 shares of Class C common stock and 46,294,407 shares of Class D common stock, representing 27.5% of the combined voting power of all of the Corporation’s common stock, and 56,300,676 LLC Interests, representing 25.3% of the economic interest in TWM LLC; and (v) the Corporation owned 142,933,192 LLC Interests, representing 64.3% of the economic interest in TWM LLC. |
Non-Controlling Interests
Non-Controlling Interests | 6 Months Ended |
Jun. 30, 2019 | |
Non-Controlling Interests | |
Non-Controlling Interests | 10. Non-Controlling Interests In connection with the Reorganization Transactions, Tradeweb Markets Inc. became the sole manager of TWM LLC and, as a result of this control, and because Tradeweb Markets Inc. has a substantial financial interest in TWM LLC, consolidates the financial results of TWM LLC into its consolidated financial statements. The non-controlling interests balance reported on the June 30, 2019 statement of financial condition represents the economic interests of TWM LLC held by the holders of LLC Interests other than Tradeweb Markets Inc. Income or loss is attributed to the non-controlling interests based on the relative ownership percentages of LLC Interests held by Tradeweb Markets Inc., on the one hand, and the other holders of LLC Interests, on the other hand, during the period. The following table summarizes the ownership interest in Tradeweb Markets LLC: June 30, 2019 LLC Ownership Interests % Number of LLC Interests held by Tradeweb Markets Inc. 142,933,192 64.3% Number of LLC Interests held by non-controlling interests 79,289,005 35.7% Total LLC Interests outstanding 222,222,197 100% LLC Interests held by the Continuing LLC Owners are redeemable at the election of the members for shares of Class A common stock or Class B common stock, on a one-for-one basis or, at the Company's option, a cash payment in accordance with the terms of the TWM LLC Agreement. See Note 9 – Stockholders’ Equity. The following table summarizes the impact on equity due to changes in the Company’s ownership interest in Tradeweb Markets LLC (in thousands): Successor Successor Three Months Six Months Ended Ended June 30, June 30, Net Income Attributable to Tradeweb Markets Inc. and Transfers (to) from the Non-controlling Interest 2019 2019 Net income attributable to Tradeweb Markets Inc. $ 12,828 $ 12,828 Transfers (to) from non-controlling interest: Allocation of equity to non-controlling interests arising from the reorganization transactions and IPO (1,607,529) (1,607,529) Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interest $ (1,594,701) $ (1,594,701) |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 6 Months Ended |
Jun. 30, 2019 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 11. Stock-Based Compensation Plans The Company maintains a stock-based incentive plan (the “PRSU Plan”) which provides for the grant of performance-based restricted share units (“PRSUs”) to encourage employees of the Company to participate in the long-term success of the Company. PRSUs generally vest in the third plan year following the year of grant and are equity-settled in shares of Class A common stock (except as described below). The outstanding PRSUs vest on January 1, 2020, 2021 and 2022. The number of PRSUs initially awarded is subsequently adjusted (upward or downward) by a performance modifier, based on the financial performance of the Company in the year of the grant. If an employee’s employment with the Company is terminated, subject to certain exceptions, all unvested PRSUs are forfeited. The following table summarizes information for equity-settled PRSUs of the Company (in thousands, except weighted average grant date fair value per unit): Successor Successor Three Months Six Months Ended Ended June 30, June 30, Equity-Settled PRSUs 2019 2019 PRSU compensation expense $ 6,894 $ 11,671 Income tax benefit — — PRSU compensation expense, net of taxes $ 6,894 $ 11,671 Weighted-average grant date fair value per unit $ 22.19 $ 22.19 Total fair value of vested PRSUs $ — $ — The Company previously granted cash-settled PRSUs, some of which are still outstanding and are accounted for as liability awards. The Company measures the cost of employee services received in exchange for the award based on the fair value of the Company and the value of accumulated dividend rights associated with each award. The fair value of that award is remeasured subsequently at each reporting date through to settlement. Changes in the award's fair value during the requisite service period is recognized as compensation cost over that period. The following table summarizes information for cash-settled PRSUs of the Company (in thousands, except weighted average fair value per unit): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Cash-Settled PRSUs 2019 2019 2018 2018 PRSU compensation expense $ 419 $ 519 $ 5,209 $ 11,155 Income tax benefit — — — — PRSU compensation expense, net of taxes $ 419 $ 519 $ 5,209 $ 11,155 Weighted-average fair value per unit $ 63,497 $ 63,497 $ 33,672 $ 33,672 Total fair value of vested PRSUs $ — $ — $ — $ — The Corporation maintains an option plan (the “Option Plan”) which provides for the grant of stock options. In October 2018, the Company made a special award of options under the Option Plan. Each option vests one half based solely on the passage of time and one half only if the Company achieves certain performance targets. The time vesting portion of the options has a graded vesting schedule with vesting dates of January 1, 2019, 2020, 2021 and 2022, with accelerated vesting for time-based options with vesting dates of January 1, 2021 and 2022 upon the completion of an initial public offering. In accounting for the options issued under the Option Plan, the Company measures and recognizes compensation expense for all awards based on their estimated fair values measured as of the grant date. These options are exercisable only any time following the closing of an initial public offering or during a 15‑day period following a change in control of the Company (and certain other sales of equity by the Company’s shareholders). Costs related to these options are recognized as an expense in the consolidated statements of income over the requisite service period, when exercisability is considered probable, with an offsetting increase to additional paid-in capital. As a result, expense recognition commenced upon the completion of the IPO, with $18,883,000 recognized as compensation expense related to these options immediately upon the completion of the IPO. The following table summarizes information for options of the Company (in thousands, except weighted average fair value per unit): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Options 2019 2019 2018 2018 Option compensation expense $ 20,403 $ 20,403 $ — $ — Income tax benefit — — — — Option compensation expense, net of taxes $ 20,403 $ 20,403 $ — $ — Weighted-average fair value per unit $ 1.85 $ 1.85 $ — $ — Total fair value of vested options $ 16,309 $ 16,309 $ — $ — As of June 30, 2019, total unrecognized compensation expense related to non-vested stock-based compensation arrangements and the expected recognition period are as follows (in thousands): Cash-Settled Equity Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 558 $ 41,237 $ 12,923 Weighted-average recognition period 1.3 years 2.0 years 1.7 years |
Related Party Transactions_2
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions The Company enters into transactions with affiliates of Refinitiv which are considered to be related party transactions. The Company also enters into transactions with affiliates of the Bank Stockholders. Prior to the Reorganization Transactions, the Bank Stockholders were considered to be related parties of the Company. As a result of the Reorganization Transactions, they are no longer considered to be related parties. As a result, the related party transactions listed below include transactions with affiliates of Refinitiv for all periods presented and only includes transactions with affiliates of the Bank Stockholders for pre-IPO periods. At June 30, 2019 and December 31, 2018, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Successor June 30, 2019 December 31, 2018 Cash and cash equivalents $ — $ 283,790 Receivables from brokers and dealers and clearing organizations — 3,332 Deposits with clearing organizations — 500 Accounts receivable — 40,730 Receivable from affiliates 2,849 3,243 Other assets — 9 Payable to brokers and dealers and clearing organizations — 2,404 Deferred revenue 4,772 9,151 Payable to affiliates 6,004 5,009 The following balances with such affiliates were included in the consolidated statements of income in the following line items (in thousands): Successor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Revenue: Transaction fees (1) $ — $ 59,643 $ 53,949 $ 106,867 Subscription fees (1) — 5,670 5,961 11,181 Commissions (1) — 16,186 11,505 23,136 Refinitiv market data fees (2) 13,385 27,001 12,081 24,318 Operating Income: (3) Interest income — 858 7 28 Expenses Shared Services Fees (4) : Technology and communications 740 1,480 740 1,480 General and administrative 191 371 180 360 Occupancy 155 310 155 310 (1) For pre-IPO periods, represents fees and commissions from affiliates of the Bank Stockholders. (2) The Company maintains a market data license agreement with Refinitiv (TR in the predecessor period). Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees or royalties for these feeds. (3) For pre-IPO periods, represents interest income from money market funds invested with and savings accounts deposited with affiliates of the Bank Stockholders. (4) The Company maintains a shared services agreement with Refinitiv (TR in the predecessor period). Under the terms of the agreement, Refinitiv provides the Company with certain real estate, payroll, benefits administration, insurance, content, financial reporting and tax support. The Company reimburses affiliates of Refinitiv (TR in the predecessor period) for expenses paid on behalf of the Company for various services including salaries and bonuses, marketing, professional fees, communications, data costs and certain other administrative services. For the three and six months ended June 30, 2019, the Company reimbursed such affiliates approximately $3,211,000 and $4,238,000, respectively, for these expenses. For the three and six months ended June 30, 2018, the Company reimbursed such affiliates approximately $6,258,000 and $28,408,000, respectively, for these expenses. The Company is indemnified by Refinitiv for any tax liabilities that existed in the entity contributed by Refinitiv as a result of the Refinitiv Contribution. At June 30, 2019, $2,722,000 is included in other assets on the June 30, 2019 consolidated statement of financial condition related to this indemnification. During 2014, the Company issued Class A Shares and unvested Class P-1(A) Shares to some of the Bank Stockholders as a result of a $120,000,000 capital contribution. In connection with this investment, employees invested $5,266,000 in the Company and were issued Class C Shares and unvested Class P-1(C) Shares. Certain Class P-1(A) Shares and Class P-1(C) Shares vested on July 31, 2018, based on a formula determined by the Company’s new credit platforms’ revenues and any remaining unvested Class P-1(A) Shares and Class P-1(C) Shares were cancelled and as a result no contingent consideration has been recognized related to these shares subsequent to that date. The Company recognized contingent consideration for the three months and six months ended June 30, 2018 of $19,297,000 and $29,367,000, respectively, relating to these shares, which is included in net revenue on the consolidated statements of income. |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 13. Fair Value of Financial Instruments Certain financial instruments that are not carried at fair value on the consolidated statements of financial condition are carried at amounts that approximate fair value. These instruments include deposits with clearing organizations and accounts receivable. The Company's money market funds are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company has no instruments that are classified within level 2 or level 3 of the fair value hierarchy. The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Identical Observable Unobservable Assets Inputs Inputs Successor (Level 1) (Level 2) (Level 3) Total As of June 30, 2019 Assets Money market funds $ 113,180 $ — $ — $ 113,180 $ 113,180 $ — $ — $ 113,180 As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 |
Credit Risk_2
Credit Risk | 6 Months Ended |
Jun. 30, 2019 | |
Credit Risk | |
Credit Risk | 14. Credit Risk The Company may be exposed to credit risk regarding its receivables, which are primarily receivables from financial institutions, including investment managers and broker/dealers. At June 30, 2019 and December 31, 2018, the Company established an allowance for doubtful accounts of $1,273,000 and $1,169,000, respectively, with regard to these receivables. In the normal course of business the Company, as agent, executes transactions with, and on behalf of, other brokers and dealers. If the agency transactions do not settle because of failure to perform by either counterparty, the Company may be obligated to discharge the obligation of the non-performing party and, as a result, may incur a loss if the market value of the security is different from the contract amount of the transaction. A substantial number of the Company's transactions are collateralized and executed with, and on behalf of, a limited number of brokers and dealers. The Company's exposure to credit risk associated with the nonperformance of these clients in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair the clients' ability to satisfy their obligations to the Company. The Company does not expect nonperformance by counterparties in the above situations. However, the Company's policy is to monitor its market exposure and counterparty risk. In addition, the Company has a policy of reviewing, as considered necessary, the credit standing of each counterparty with which it conducts business. |
Commitments and Contingencies_3
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. Commitments and Contingencies In the normal course of business, the Company enters into user agreements with its dealers which provide the dealers with indemnification from third parties in the event that the electronic marketplaces of the Company infringe upon the intellectual property or other proprietary right of a third party. The Company's exposure under these user agreements is unknown as this would involve estimating future claims against the Company which have not yet occurred. However, based on its experience, the Company expects the risk of a material loss to be remote. The Company has been named as a defendant, along with other financial institutions, in antitrust class actions (consolidated into two actions) relating to trading practices in United States Treasury securities auctions. The Company has filed a motion to dismiss the actions, believes it has substantial defenses to the other plaintiff's claims and intends to defend itself vigorously. The Company was dismissed from a class action relating to an interest rate swaps matter in 2017, but that matter continues against the remaining defendant financial institutions. The Company is a co-defendant in a matter relating to the distribution of financial strength ratings over the Company's trading platform to one of its customers. The matter alleges that while certain business units of the client were licensed to receive the data via the Company's platform, the data was also distributed without authorization to certain end clients of the customer. The plaintiff claims to have suffered approximately $80,000,000 in damages and also seeks punitive damages, attorneys' fees and costs. The Company intends to continue to vigorously defend what the Company believes to be meritless and excessive claims. The Company records its best estimate of a loss, including estimated defense costs, when the loss is considered probable and the amount of such loss can be reasonably estimated. Based on its experience, the Company believes that the amount of damages claimed in a legal proceeding is not a meaningful indicator of the potential liability. At this time, the Company cannot reasonably predict the timing or outcomes of, or estimate the amount of loss, or range of loss, if any, related to its pending legal proceedings, including the matters described above, and therefore does not have any contingency reserves established for any of these matters. Revolving Credit Facility On April 8, 2019, the Company entered into a five year, $500 million senior secured revolving credit facility (“Credit Facility”) with a syndicate of banks. The Credit Facility provides additional borrowing capacity to be used to fund ongoing working capital needs, letters of credit and for general corporate purposes, including potential future acquisitions and expansions. Under the terms of the credit agreement that governs the Credit Facility, borrowings under the Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) a base rate equal to the greatest of (i) the administrative agent’s prime rate, (ii) the federal funds effective rate plus ½ of 1.0% and (iii) one month LIBOR plus 1.0%, in each case plus 0.75%, or (b) LIBOR plus 1.75%, subject to a 0.00% floor. The credit agreement also includes a commitment fee of 0.25% for available but unborrowed amounts and other administrative fees that are payable quarterly. The Credit Facility is available until April 2024, provided the Company is in compliance with all covenants. Financial covenant requirements include maintaining minimum ratios related to interest coverage and leverage. As of June 30, 2019, there were no amounts outstanding under the Credit Facility. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share | |
Earnings Per Share | 16. Earnings Per Share In April 2019, the Company completed the Reorganization Transactions and the IPO, which, among other things, resulted in the Corporation becoming the successor of TWM LLC for financial reporting purposes. As a result, earnings per share information for the pre-IPO period is not comparable to earnings per share information for the post-IPO period. Thus, earnings per share information is being presented separately for the pre-IPO and post-IPO periods. The following tables summarize the basic and diluted earnings per share calculations for Tradeweb Markets LLC (pre-IPO period) and Tradeweb Markets Inc. (post-IPO period) : Successor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 EPS: Pre-IPO net income attributable to Tradeweb Markets LLC (1) (in thousands, except share and per share amounts) Numerator: Pre-IPO net income attributable to Tradeweb Markets LLC $ 42,352 38,897 84,205 Denominator: Weighted average LLC Interests outstanding - Basic 222,222,197 213,435,314 213,435,314 Dilutive effect of equity-settled PRSUs 1,098,260 — — Weighted average LLC Interests outstanding - Diluted 223,320,457 213,435,314 213,435,314 Earnings per share - Basic $ 0.19 $ 0.18 $ 0.39 Earnings per share - Diluted $ 0.19 $ 0.18 $ 0.39 EPS: Post-IPO net income attributable to Tradeweb Markets Inc. Numerator: Post-IPO net income attributable to Tradeweb Markets Inc. $ 12,828 $ 12,828 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 142,933,192 142,933,192 Dilutive effect of equity-settled PRSUs 2,214,480 2,214,480 Dilutive effect of options 5,699,511 5,699,511 Weighted average shares of Class A and Class B common stock outstanding - Diluted 150,847,183 150,847,183 Earnings per share - Basic $ 0.09 $ 0.09 Earnings per share - Diluted $ 0.09 $ 0.09 (1) Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the TWM LLC Agreement to, among other things, (i) provide for LLC Interests and (ii) exchange all of the original members’ existing membership interests for LLC interests. For the three and six months ended June 30, 2019, there were approximately 340 shares that were anti-dilutive and thus excluded from the computation of diluted earnings per share. For the three and six months ended June 30, 2018, there were approximately 8,045,000 and 6,789,000 shares, respectively, that were anti-dilutive and thus excluded from the computation of diluted earnings per share. LLC Interests held by the Continuing LLC Owners are redeemable, at the election of such holders, for shares of Class A or Class B common stock of Tradeweb Markets Inc. After evaluating the potential dilutive effect under the if-converted method, the 79,289,005 LLC Interests for the assumed exchange of non-controlling interests were determined to be anti-dilutive and thus were excluded from the computation of diluted earnings per share for the post-IPO periods. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. |
Regulatory Capital Requiremen_4
Regulatory Capital Requirements | 6 Months Ended |
Jun. 30, 2019 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | 17. Regulatory Capital Requirements TWL, DW and TWD are subject to the Uniform Net Capital Rule 15c3‑1 under the Securities Exchange Act of 1934. TEL is subject to certain financial resource requirements with the FCA in the UK, TWJ is subject to certain financial resource requirements with the FCA in Japan and TWEU is subject to certain finance resource requirements with the AFM in the Netherlands. At June 30, 2019 and December 31, 2018, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL, TWJ and TWEU were as follows (in thousands): As of June 30, 2019 TWL DW TWD TEL TWJ TWEU Regulatory Capital $ 21,837 $ 42,786 $ 25,858 $ 47,555 $ 12,286 $ 6,472 Regulatory Capital Requirement 1,615 1,559 386 17,515 4,368 6,472 Excess Regulatory Capital $ 20,222 $ 41,227 $ 25,472 $ 30,040 $ 7,918 $ — As of December 31, 2018 TWL DW TWD TEL TWJ Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 As SEFs, TW SEF and DW SEF are required to maintain adequate financial resources and liquid financial assets in accordance with CFTC regulations. The required and maintained financial resources and liquid financial assets at June 30, 2019 and December 31, 2018 are as follows (in thousands): As of June 30, 2019 As of December 31, 2018 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 30,137 $ 15,032 $ 31,232 $ 17,837 Required Financial Resources 10,500 5,589 10,500 5,169 Excess Financial Resources $ 19,637 $ 9,443 $ 20,732 $ 12,668 Liquid Financial Assets $ 16,961 $ 8,719 $ 16,662 $ 11,888 Required Liquid Financial Assets 5,250 2,795 5,250 2,585 Excess Liquid Financial Assets $ 11,711 $ 5,924 $ 11,412 $ 9,303 |
Business Segment and Geograph_5
Business Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2019 | |
Business Segment and Geographic Information | |
Business Segment and Geographic Information | 18. Business Segment and Geographic Information The Company operates electronic marketplaces for the trading of products across the rates, credit, equities and money markets asset classes and provides related pre-trade pricing and post-trade processing services. The Company’s operations constitute a single business segment because of the integrated nature of these marketplaces and services. Information regarding revenue by client sector is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net revenue: Institutional $ 111,057 $ 220,309 $ 102,095 $ 204,415 Wholesale 41,945 81,376 32,265 64,860 Retail 19,939 41,145 20,918 39,954 Market Data 17,544 34,447 15,737 31,289 Contingent consideration — — (19,297) (29,367) Net revenue 190,485 377,277 151,718 311,151 Operating expenses 159,530 300,045 111,556 223,634 Operating income $ 30,955 $ 77,232 $ 40,162 $ 87,517 The Company operates in the U.S. and internationally, primarily in Europe and Asia. Revenues are attributed to geographic area based on the jurisdiction where the underlying transactions take place. The results by geographic region are not meaningful in understanding the Company's business. Long-lived assets are attributed to the geographic area based on the location of the particular subsidiary. Information regarding revenue for the three and six months ended June 30, 2019 and 2018 and long-lived assets as of June 30, 2019 and December 31, 2018 is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net Revenue: U.S. $ 122,693 $ 242,090 $ 109,540 $ 217,322 International 67,792 135,187 61,475 123,196 Gross revenue 190,485 377,277 171,015 340,518 Contingent consideration — — (19,297) (29,367) Total $ 190,485 $ 377,277 $ 151,718 $ 311,151 June 30, 2019 December 31, 2018 Long-lived assets U.S. $ 4,251,030 $ 4,276,568 International 13,413 7,787 Total $ 4,264,443 $ 4,284,355 |
Subsequent Events_2_3
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
SUBSEQUENT EVENTS | 19. Subsequent Events On August 1, 2019, London Stock Exchange Group plc announced that it has agreed definitive terms with a consortium including certain investment funds affiliated with Blackstone as well as Thomson Reuters to acquire Refinitiv in an all share transaction for a total enterprise value of approximately $27 billion. The transaction is subject to customary regulatory and shareholder approvals, and is expected to close during the second half of 2020. Refinitiv currently holds a 54% economic interest in the Company. On August 7, 2019, the board of directors of Tradeweb Markets Inc. declared a cash dividend of $0.08 per share of Class A common stock and Class B common stock for the third quarter of 2019. This dividend will be payable on September 16, 2019 to stockholders of record as of September 3, 2019. On August 6, 2019, Tradeweb Markets Inc., as the sole manager, approved a distribution by TWM LLC to its equityholders, including Tradeweb Markets Inc., in an aggregate amount of $33.0 million payable on September 13, 2019. |
Significant Accounting Polic_11
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Significant Accounting Policies | |
Basis of Accounting | Basis of Accounting The consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented, are normal and recurring in nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the difference may be material to the consolidated financial statements. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. As discussed in Note 1—Organization, as a result of the Reorganization Transactions, Tradeweb Markets Inc. consolidates TWM LLC and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. As a result, the consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. However, Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. As such, for periods prior to the completion of the Reorganization Transactions, the consolidated financial statements represent the historical financial condition and results of operations of TWM LLC and its subsidiaries. For periods after the completion of the Reorganization Transactions, the consolidated financial statements represent the financial condition and results of operations of the Company and report a non-controlling interest related to the LLC Interests held by the Continuing LLC Owners. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with original maturities of less than three months. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company continually monitors collections and payments from its clients and maintains an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the historical collection experience and specific collection issues that have been identified. Additions, if any, to the allowance for doubtful accounts are charged to bad debt expense, which is included in general and administrative expenses on the consolidated statements of income. |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Furniture, Equipment, Purchased Software and Leasehold Improvements Furniture, equipment, purchased software and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture, equipment and purchased software, including the allocated fair value of assets as a result of pushdown accounting (see Note 3 – Pushdown Accounting), is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three to seven years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the leasehold improvements or the remaining term of the lease for office space. Furniture, equipment, purchased software and leasehold improvements are tested for impairment whenever events or changes in circumstances suggest that an asset’s carrying value may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 360. |
Software Development Costs | Software Development Costs The Company capitalizes costs associated with the development of internal use software at the point at which the conceptual formulation, design and testing of possible software project alternatives have been completed, in accordance with ASC 350. The Company capitalizes employee compensation and related benefits and third party consulting costs incurred during the application development stage which directly contribute to such development. Such costs are amortized on a straight-line basis over three years. Costs capitalized as part of the pushdown accounting allocation (see Note 3 – Pushdown Accounting) are amortized over nine years. The Company reviews the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable, or that their useful lives are shorter than originally expected. Non-capitalized software costs and routine maintenance costs are expensed as incurred. |
Intangible Assets | Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from seven to sixteen years, in accordance with ASC 350. Intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances suggest that an asset's or asset group's carrying value may not be fully recoverable in accordance with ASC 360. Intangible assets with an indefinite useful life are tested for impairment at least annually. An impairment loss is recognized if the sum of the estimated discounted cash flows relating to the asset or asset group is less than the corresponding book value. |
Goodwill | Goodwill Goodwill is the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company under pushdown accounting. Goodwill is also the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date. Goodwill is not amortized, but in accordance with ASC 350, goodwill is tested for impairment annually and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. In 2019, the Company changed the annual date on which goodwill is tested for impairment from July 1 st to October 1 st to align with the annual impairment testing date of the Company’s Parent. This change did not accelerate, delay, avoid or cause an impairment charge, nor did this change result in adjustments to any previously issued financial statements. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. An impairment loss is recognized if the estimated fair value of a reporting unit is less than its net book value. Such loss is calculated as the difference between the estimated fair value of goodwill and its carrying value. |
Deferred IPO costs | Deferred IPO Costs In 2018 the Company began incurring costs in connection with the filing of a Registration Statement on Form S-1, which are deferred in other assets in accordance with ASC 505-10-25 in the consolidated statements of financial condition. IPO costs consist of legal, accounting, and other costs directly related to the Company’s efforts to raise capital through an IPO. As of June 30, 2019, $15.9 million of deferred costs were reclassified from other assets to additional paid-in capital on the consolidated statements of financial condition. See Note 9 – Stockholders’ Equity. |
Translation of Foreign Currency | Translation of Foreign Currency Revenues and expenses denominated in foreign currencies are translated at the rate of exchange prevailing at the transaction date. Assets and liabilities denominated in foreign currencies are translated at the rate prevailing at the consolidated statements of financial condition date. Foreign currency re-measurement gains or losses on transactions in nonfunctional currencies are recognized in the consolidated statements of income. Gains or losses on translation in the financial statements of a non-U.S. operation, when the functional currency is other than the U.S. dollar, are included as a component of comprehensive income. |
Income Tax | Income Tax The Corporation is subject to U.S. federal, state and local income taxes with respect to its taxable income, including its allocable share of any taxable income of TWM LLC, and is taxed at prevailing corporate tax rates. TWM LLC is a multiple member limited liability company taxed as a partnership and accordingly any taxable income generated by TWM LLC is passed through to and included in the taxable income of its members, including the Corporation, on a pro rata basis. Income taxes also include unincorporated business taxes on income earned or losses incurred for conducting business in certain state and local jurisdictions, income taxes on income earned or losses incurred in foreign jurisdictions on certain operations and federal and state income taxes on income earned or losses incurred, both current and deferred, on subsidiaries that are taxed as corporations for U.S. tax purposes. The Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company measures deferred taxes using the enacted tax rates and laws that will be in effect when such temporary differences are expected to reverse. Based on the weight of the positive and negative evidence considered, management believes that it is more likely than not that the Company will be able to realize its deferred tax assets in the future, therefore, no valuation allowance is necessary. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to income taxes within the provision for income taxes in the consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the consolidated statements of financial condition. The Company has elected to treat taxes due on future U.S. inclusions in taxable income under the global intangible low-taxed income (“GILTI”) provision of the Tax Cuts and Jobs Act as a current period expense when incurred. |
Revenue Recognition | Revenue Recognition The Company earns transaction fees from transactions executed on the Company’s trading platforms through various fee plans. Transaction fees are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. For variable transaction fees, the Company charges clients fees based on the mix of products traded and the volume of transactions executed. Transaction fee revenue is recorded at a point in time when the trade occurs and is generally billed monthly. The Company earns subscription fees from granting access to institutional investors to the Company's electronic marketplaces. Subscription fees are recognized into income in the period that access is provided on a monthly basis. Also included in subscription fees are viewer fees earned monthly from institutional investors accessing fixed income market data. The frequency of subscription fee billings varies from monthly to annually, depending on contract terms. Fees received by the Company which are not yet earned are included in deferred revenue on the consolidated statements of financial condition until the revenue recognition criteria has been met. The Company earns commission revenue from its electronic and voice brokerage services on a riskless principal basis. Riskless principal revenues are derived on matched principal transactions where revenues are earned on the spread between the buy and sell price of the transacted product. Securities transactions and related commission income for brokerage transactions are recorded on a trade-date basis. This income is recognized by the Company when the transactions settle. Commission revenue is collected by the Company when the trade settles or is billed monthly. The Company earns fees from Refinitiv, formerly TR in the predecessor periods, relating to the sale of market data to Refinitiv, which redistributes that data. Included in these fees, which are billed quarterly, are real-time market data fees which are recognized in the period that the data is provided, generally on a monthly basis and historical data sets which are recognized when the historical data set is provided to Refinitiv. On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the measurement or recognition of revenue in any prior reporting periods. However, subsequent to the adoption, the Company was required to make significant judgements for the Refinitiv market data fees. Significant judgements used in accounting for this contract include: · The provision of real-time market data feeds and annual historical data sets are distinct performance obligations. · The performance obligations under this contract are recognized over time from the initial delivery of the data feeds or each historical data set until the end of the contract term. · Determining the transaction price for the performance obligations by using a market assessment analysis. Inputs in this analysis include a consultant study which determined the overall value of the Company's market data and pricing information for historical data sets provided by other companies. Some revenues earned by the Company have fixed fee components, such as monthly minimums or fixed monthly fees, and variable components, such as transaction based fees. The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 |
Share-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718. ASC 718 focuses primarily on accounting for a transaction in which an entity obtains employee services in exchange for stock-based payments. Under ASC 718, the stock-based payments received by the employees of the Company are accounted for either as equity awards or as liability awards. As an equity award, the Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period, with an offsetting increase to additional paid-in capital. As a liability award, the cost of employee services received in exchange for an award of equity instruments is generally measured based on the grant-date fair value of the award. The fair value of that award is remeasured subsequently at each reporting date through the settlement in accordance with ASC 505. Changes in the equity instrument's fair value during the requisite service period are recognized as compensation cost over that period. For periods following the Reorganization Transactions and the IPO, the fair value of new equity instrument grants is determined based on the price of the Company’s Class A common stock on the grant date. Under ASC 718, the grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The grant-date fair value of stock-based awards that require future service, and are graded-vesting awards, are amortized over the relevant service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of stock-based awards that require both future service and the achievement of Company performance-based conditions, are amortized over the relevant service period for the performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. In October 2018, following the closing of the Refinitiv Transaction, the Company made a special award of options to management and other employees (the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). In accounting for the options issued under the Option Plan, compensation expense is measured and recognized for all awards based on their estimated fair values measured as of the grant date. Costs related to these options will be recognized as an expense in the consolidated statements of income over the requisite service period, with an offsetting increase to additional paid-in capital. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019, with a charge of $20.4 million, and will continue to be expensed over the following three years. Determining the appropriate fair value model and calculating the fair value of the stock-based awards requires the input of highly subjective assumptions, including the expected life of the stock-based awards and the stock price volatility. The Company uses the Black-Scholes pricing model to value some of its stock-based awards. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to the Company's shares by the weighted-average number of the Company's shares outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average number of the Company’s shares reflects the dilutive effect that could occur if securities that qualify as participating securities were converted into or exchanged or exercised for TWM LLC’s shares, in the pre-IPO period, and the Corporation’s Class A or Class B common stock, in the post-IPO period, using the treasury stock method, as applicable. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not participating securities for purposes of the computation of earnings per share. |
Fair Value Measurement | Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement Level 1: Level 2: Level 3: A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – Not Yet Adopted In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses. The ASU provides new guidance for estimating credit losses on certain types of financial instruments by introducing an approach based on expected losses. This ASU is applicable for the Company in the fiscal year beginning January 1, 2020. The Company is currently evaluating the impact of this ASU on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other. The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. The ASU is applicable for the Company in the fiscal year beginning January 1, 2021. The Company does not anticipate the adoption of this ASU to have a material impact on the Company's consolidated financial statements. |
Significant Accounting Polic_12
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Significant Accounting Policies | |
Breakdown of revenues between fixed and variable revenues | The breakdown of revenues between fixed and variable revenues, in thousands, for the three and six months ended June 30, 2019 and 2018 is as follows: Successor Successor Predecessor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 (in thousands) (in thousands) Variable Fixed Variable Fixed Variable Fixed Variable Fixed Revenues Transaction fees $ 79,577 $ 24,375 $ 158,492 $ 48,100 $ 69,557 $ 21,473 $ 139,194 $ 41,975 Subscription Fees including Refinitiv market data fees 435 47,516 890 95,122 425 49,303 900 97,391 Commissions 26,635 9,778 50,945 19,665 17,346 10,207 35,126 20,310 Other 302 1,867 605 3,458 14 2,690 26 5,596 Gross revenue $ 106,949 $ 83,536 $ 210,932 $ 166,345 $ 87,342 $ 83,673 $ 175,246 $ 165,272 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Activity related to the company's leases | Activity related to the Company's leases for the three and six months ended June 30, 2019 is as follows (in thousands): Three Months Six Months Ended Ended June 30, June 30, 2019 2019 Operating lease expense 2,558 $ 5,147 Cash for amounts included in the measurement of operating liability 2,803 5,637 Right-of-use assets obtained in exchange for operating liabilities — — At June 30, 2019, the weighted average borrowing rate and weighted average lease term are as follows: Weighted average borrowing rate 2.9 % Weighted average remaining lease term (years) 6.0 |
Schedule of maturity of lease liabilities and future minimum lease payments | The following table presents the maturity of lease liabilities as of June 30, 2019 (in thousands): Remainder of 2019 $ 5,640 2020 7,684 2021 5,349 2022 4,050 2023 3,876 Thereafter 11,151 Total future minimum lease payments 37,750 Less imputed interest (3,222) Lease liability $ 34,528 At June 30, 2019, the future minimum lease payments are as follows (in thousands): Remainder of 2019 $ 5,640 2020 7,684 2021 5,349 2022 4,050 2023 3,876 Thereafter 11,151 $ 37,750 |
Intangible Assets and Goodwil_7
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets and Goodwill | |
Summary of intangible assets which have an indefinite useful life | The following is a summary of intangible assets which have an indefinite useful life at both June 30, 2019 and December 31, 2018 (in thousands): Licenses $ 168,800 Tradename 154,300 Total $ 323,100 |
Intangible assets that are subject to amortization | Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised as follows (in thousands): Successor Successor June 30, 2019 December 31, 2018 Amortization Accumulated Net Carrying Accumulated Net Carrying Period Cost Amortization Amount Cost Amortization Amount Customer relationships - Refinitiv Transaction 12 Years $ 928,200 $ (58,012) $ 870,188 $ 928,200 $ (19,338) $ 908,862 Content and data 7 Years 154,400 (16,543) 137,857 154,400 (5,514) 148,886 $ 1,082,600 $ (74,555) $ 1,008,045 $ 1,082,600 $ (24,852) $ 1,057,748 |
Estimated annual future amortization for existing intangible assets | The estimated annual future amortization for existing intangibles assets through December 31, 2023 is as follows (in thousands): Remainder of 2019 $ 49,704 2020 99,408 2021 99,408 2022 99,408 2023 99,408 |
Deferred Revenue (Tables)_2
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Revenue | |
Schedule of recognized revenue and remaining deferred revenue balance | The recognized revenue and remaining balance is shown below (in thousands): Deferred revenue balance -December 31, 2018 $ 27,883 New billings 54,735 Revenue recognized (57,348) Deferred revenue balance - June 30, 2019 $ 25,270 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholder's Equity | |
Schedule of class of common stock par value, votes and economic rights | Class of Par Votes Economic Class A common stock $ 0.00001 1 Yes Class B common stock $ 0.00001 10 Yes Class C common stock $ 0.00001 1 No Class D common stock $ 0.00001 10 No |
Schedule of common units outstanding | Class A Shares 146,333 Class C Shares 447 Class P(A) Shares 6,887 Class P(C) Shares 2 Class P-1(A) Shares 6,094 Class P-1(C) Shares 232 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Non-Controlling Interests | |
Summary of the ownership interest in noncontrolling interest | June 30, 2019 LLC Ownership Interests % Number of LLC Interests held by Tradeweb Markets Inc. 142,933,192 64.3% Number of LLC Interests held by non-controlling interests 79,289,005 35.7% Total LLC Interests outstanding 222,222,197 100% |
Summary of the impact on equity due to changes in the Company's ownership interest in noncontrolling interest | The following table summarizes the impact on equity due to changes in the Company’s ownership interest in Tradeweb Markets LLC (in thousands): Successor Successor Three Months Six Months Ended Ended June 30, June 30, Net Income Attributable to Tradeweb Markets Inc. and Transfers (to) from the Non-controlling Interest 2019 2019 Net income attributable to Tradeweb Markets Inc. $ 12,828 $ 12,828 Transfers (to) from non-controlling interest: Allocation of equity to non-controlling interests arising from the reorganization transactions and IPO (1,607,529) (1,607,529) Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interest $ (1,594,701) $ (1,594,701) |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock-Based Compensation Plans | |
Schedule of equity-settled PRSUs issued | The following table summarizes information for equity-settled PRSUs of the Company (in thousands, except weighted average grant date fair value per unit): Successor Successor Three Months Six Months Ended Ended June 30, June 30, Equity-Settled PRSUs 2019 2019 PRSU compensation expense $ 6,894 $ 11,671 Income tax benefit — — PRSU compensation expense, net of taxes $ 6,894 $ 11,671 Weighted-average grant date fair value per unit $ 22.19 $ 22.19 Total fair value of vested PRSUs $ — $ — |
Schedule of cash-settled PRSUs issued | The following table summarizes information for cash-settled PRSUs of the Company (in thousands, except weighted average fair value per unit): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Cash-Settled PRSUs 2019 2019 2018 2018 PRSU compensation expense $ 419 $ 519 $ 5,209 $ 11,155 Income tax benefit — — — — PRSU compensation expense, net of taxes $ 419 $ 519 $ 5,209 $ 11,155 Weighted-average fair value per unit $ 63,497 $ 63,497 $ 33,672 $ 33,672 Total fair value of vested PRSUs $ — $ — $ — $ — |
Schedule of options issued | Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, Options 2019 2019 2018 2018 Option compensation expense $ 20,403 $ 20,403 $ — $ — Income tax benefit — — — — Option compensation expense, net of taxes $ 20,403 $ 20,403 $ — $ — Weighted-average fair value per unit $ 1.85 $ 1.85 $ — $ — Total fair value of vested options $ 16,309 $ 16,309 $ — $ — |
Schedule of unrecognized compensation expense | As of June 30, 2019, total unrecognized compensation expense related to non-vested stock-based compensation arrangements and the expected recognition period are as follows (in thousands): Cash-Settled Equity Settled PRSUs PRSUs Options Total unrecognized compensation cost $ 558 $ 41,237 $ 12,923 Weighted-average recognition period 1.3 years 2.0 years 1.7 years |
Related Party Transactions (T_2
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions | |
Schedule of balances from transactions with affiliates included in the consolidated statements | At June 30, 2019 and December 31, 2018, the following balances with such affiliates were included in the consolidated statements of financial condition in the following line items (in thousands): Successor Successor June 30, 2019 December 31, 2018 Cash and cash equivalents $ — $ 283,790 Receivables from brokers and dealers and clearing organizations — 3,332 Deposits with clearing organizations — 500 Accounts receivable — 40,730 Receivable from affiliates 2,849 3,243 Other assets — 9 Payable to brokers and dealers and clearing organizations — 2,404 Deferred revenue 4,772 9,151 Payable to affiliates 6,004 5,009 |
Schedule of affiliates were included in the consolidated statements of income | The following balances with such affiliates were included in the consolidated statements of income in the following line items (in thousands): Successor Predecessor Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Revenue: Transaction fees (1) $ — $ 59,643 $ 53,949 $ 106,867 Subscription fees (1) — 5,670 5,961 11,181 Commissions (1) — 16,186 11,505 23,136 Refinitiv market data fees (2) 13,385 27,001 12,081 24,318 Operating Income: (3) Interest income — 858 7 28 Expenses Shared Services Fees (4) : Technology and communications 740 1,480 740 1,480 General and administrative 191 371 180 360 Occupancy 155 310 155 310 (1) For pre-IPO periods, represents fees and commissions from affiliates of the Bank Stockholders. (2) The Company maintains a market data license agreement with Refinitiv (TR in the predecessor period). Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees or royalties for these feeds. (3) For pre-IPO periods, represents interest income from money market funds invested with and savings accounts deposited with affiliates of the Bank Stockholders. (4) The Company maintains a shared services agreement with Refinitiv (TR in the predecessor period). Under the terms of the agreement, Refinitiv provides the Company with certain real estate, payroll, benefits administration, insurance, content, financial reporting and tax support. |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value of Financial Instruments | |
Schedule of fair value measurements | The fair value measurements are as follows (in thousands): Quoted Prices in active Markets Significant Significant for Identical Observable Unobservable Assets Inputs Inputs Successor (Level 1) (Level 2) (Level 3) Total As of June 30, 2019 Assets Money market funds $ 113,180 $ — $ — $ 113,180 $ 113,180 $ — $ — $ 113,180 As of December 31, 2018 Assets Money market funds $ 127,927 $ — $ — $ 127,927 $ 127,927 $ — $ — $ 127,927 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share | |
Schedule of basic and Diluted earnings per share | Successor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 EPS: Pre-IPO net income attributable to Tradeweb Markets LLC (1) (in thousands, except share and per share amounts) Numerator: Pre-IPO net income attributable to Tradeweb Markets LLC $ 42,352 38,897 84,205 Denominator: Weighted average LLC Interests outstanding - Basic 222,222,197 213,435,314 213,435,314 Dilutive effect of equity-settled PRSUs 1,098,260 — — Weighted average LLC Interests outstanding - Diluted 223,320,457 213,435,314 213,435,314 Earnings per share - Basic $ 0.19 $ 0.18 $ 0.39 Earnings per share - Diluted $ 0.19 $ 0.18 $ 0.39 EPS: Post-IPO net income attributable to Tradeweb Markets Inc. Numerator: Post-IPO net income attributable to Tradeweb Markets Inc. $ 12,828 $ 12,828 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 142,933,192 142,933,192 Dilutive effect of equity-settled PRSUs 2,214,480 2,214,480 Dilutive effect of options 5,699,511 5,699,511 Weighted average shares of Class A and Class B common stock outstanding - Diluted 150,847,183 150,847,183 Earnings per share - Basic $ 0.09 $ 0.09 Earnings per share - Diluted $ 0.09 $ 0.09 (1) Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the TWM LLC Agreement to, among other things, (i) provide for LLC Interests and (ii) exchange all of the original members’ existing membership interests for LLC interests. |
Regulatory Capital Requiremen_5
Regulatory Capital Requirements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Regulatory Capital Requirements | |
Schedule of regulatory capital requirements | At June 30, 2019 and December 31, 2018, the regulatory capital requirements and regulatory capital for TWL, DW, TWD, TEL, TWJ and TWEU were as follows (in thousands): As of June 30, 2019 TWL DW TWD TEL TWJ TWEU Regulatory Capital $ 21,837 $ 42,786 $ 25,858 $ 47,555 $ 12,286 $ 6,472 Regulatory Capital Requirement 1,615 1,559 386 17,515 4,368 6,472 Excess Regulatory Capital $ 20,222 $ 41,227 $ 25,472 $ 30,040 $ 7,918 $ — As of December 31, 2018 TWL DW TWD TEL TWJ Regulatory Capital $ 18,986 $ 41,164 $ 24,042 $ 46,157 $ 10,592 Regulatory Capital Requirement 2,698 1,803 599 17,493 3,413 Excess Regulatory Capital $ 16,288 $ 39,361 $ 23,443 $ 28,664 $ 7,179 |
Schedule of financial resources and liquid financial resources | The required and maintained financial resources and liquid financial assets at June 30, 2019 and December 31, 2018 are as follows (in thousands): As of June 30, 2019 As of December 31, 2018 TW SEF DW SEF TW SEF DW SEF Financial Resources $ 30,137 $ 15,032 $ 31,232 $ 17,837 Required Financial Resources 10,500 5,589 10,500 5,169 Excess Financial Resources $ 19,637 $ 9,443 $ 20,732 $ 12,668 Liquid Financial Assets $ 16,961 $ 8,719 $ 16,662 $ 11,888 Required Liquid Financial Assets 5,250 2,795 5,250 2,585 Excess Liquid Financial Assets $ 11,711 $ 5,924 $ 11,412 $ 9,303 |
Business Segment and Geograph_6
Business Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Segment and Geographic Information | |
Schedule of information regarding revenue by client sector | Information regarding revenue by client sector is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net revenue: Institutional $ 111,057 $ 220,309 $ 102,095 $ 204,415 Wholesale 41,945 81,376 32,265 64,860 Retail 19,939 41,145 20,918 39,954 Market Data 17,544 34,447 15,737 31,289 Contingent consideration — — (19,297) (29,367) Net revenue 190,485 377,277 151,718 311,151 Operating expenses 159,530 300,045 111,556 223,634 Operating income $ 30,955 $ 77,232 $ 40,162 $ 87,517 |
Schedule of revenue and long-lived assets by geographic location | Information regarding revenue for the three and six months ended June 30, 2019 and 2018 and long-lived assets as of June 30, 2019 and December 31, 2018 is as follows (in thousands): Successor Successor Predecessor Predecessor Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2019 June 30, 2019 June 30, 2018 June 30, 2018 Net Revenue: U.S. $ 122,693 $ 242,090 $ 109,540 $ 217,322 International 67,792 135,187 61,475 123,196 Gross revenue 190,485 377,277 171,015 340,518 Contingent consideration — — (19,297) (29,367) Total $ 190,485 $ 377,277 $ 151,718 $ 311,151 June 30, 2019 December 31, 2018 Long-lived assets U.S. $ 4,251,030 $ 4,276,568 International 13,413 7,787 Total $ 4,264,443 $ 4,284,355 |
Organization (Details)
Organization (Details) - USD ($) | Apr. 08, 2019 | Jun. 30, 2019 |
Shares contributed by Refinitiv Owner | 96,933,192 | |
Class A common stock | ||
Shares issued | 46,000,000 | |
Class B common stock | ||
Shares issued | 96,933,192 | |
Shares issued to acquire TWM LLC | 20,000,000 | |
Number of shares canceled | 9,993,731 | |
Shares contributed by Refinitiv Owner | 96,933,192 | |
Class C common stock | ||
Shares issued | 10,006,269 | |
Shares issued to acquire TWM LLC | 20,000,000 | |
Number of shares canceled | 9,993,731 | |
Class D common stock | ||
Shares issued | 69,282,736 | |
Shares issued to acquire TWM LLC | 105,289,005 | |
Number of shares canceled | 36,006,269 | |
Tradeweb Markets LLC | ||
Ownership interest | 64.30% | 64.30% |
Number of LLC Interests held by non-controlling interest holders | 35.70% | |
Share Price | $ 27 | |
Net proceeds | $ 1,161,270,000 | |
Initial Public Offering | ||
Shares issued | 46,000,000 | |
Share Price | $ 27 | |
Initial Public Offering | Class A common stock | ||
Shares issued | 46,000,000 | |
Share Price | $ 27 | |
Underwriters option | ||
Shares issued | 6,000,000 | |
Underwriters option | Class A common stock | ||
Shares issued | 6,000,000 |
Significant Accounting Polic_13
Significant Accounting Policies - Useful Lives of Assets (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Minimum | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Maximum | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 7 years |
Software Development Costs | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 3 years |
Amortization of pushdown accounting allocation | 9 years |
Significant Accounting Polic_14
Significant Accounting Policies - Useful Lives of Intangible Assets (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Minimum | |
Intangible Assets | |
Useful life of intangible assets | 7 years |
Maximum | |
Intangible Assets | |
Useful life of intangible assets | 16 years |
Significant Accounting Polic_15
Significant Accounting Policies - Deferred IPO Cost (Details) $ in Millions | Jun. 30, 2019USD ($) |
Significant Accounting Policies | |
Deferred costs | $ 15.9 |
Significant Accounting Polic_16
Significant Accounting Policies - Breakdown of Revenues Between Fixed and Variable (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue Recognition | ||||
Gross revenues | $ 190,485 | $ 377,277 | ||
Transaction fees | ||||
Revenue Recognition | ||||
Gross revenues | 103,952 | 206,592 | ||
Commissions | ||||
Revenue Recognition | ||||
Gross revenues | 36,413 | 70,610 | ||
Other | ||||
Revenue Recognition | ||||
Gross revenues | 2,169 | 4,063 | ||
Variable | ||||
Revenue Recognition | ||||
Gross revenues | 106,949 | 210,932 | ||
Variable | Transaction fees | ||||
Revenue Recognition | ||||
Gross revenues | 79,577 | 158,492 | ||
Variable | Subscription Fees including Refinitiv market data | ||||
Revenue Recognition | ||||
Gross revenues | 435 | 890 | ||
Variable | Commissions | ||||
Revenue Recognition | ||||
Gross revenues | 26,635 | 50,945 | ||
Variable | Other | ||||
Revenue Recognition | ||||
Gross revenues | 302 | 605 | ||
Fixed | ||||
Revenue Recognition | ||||
Gross revenues | 83,536 | 166,345 | ||
Fixed | Transaction fees | ||||
Revenue Recognition | ||||
Gross revenues | 24,375 | 48,100 | ||
Fixed | Subscription Fees including Refinitiv market data | ||||
Revenue Recognition | ||||
Gross revenues | 47,516 | 95,122 | ||
Fixed | Commissions | ||||
Revenue Recognition | ||||
Gross revenues | 9,778 | 19,665 | ||
Fixed | Other | ||||
Revenue Recognition | ||||
Gross revenues | 1,867 | $ 3,458 | ||
Predecessor | ||||
Revenue Recognition | ||||
Gross revenues | $ 171,015 | $ 340,518 | ||
Predecessor | Transaction fees | ||||
Revenue Recognition | ||||
Gross revenues | 91,030 | 181,169 | ||
Predecessor | Commissions | ||||
Revenue Recognition | ||||
Gross revenues | 27,553 | 55,436 | ||
Predecessor | Other | ||||
Revenue Recognition | ||||
Gross revenues | 2,704 | 5,622 | ||
Predecessor | Variable | ||||
Revenue Recognition | ||||
Gross revenues | 87,342 | 175,246 | ||
Predecessor | Variable | Transaction fees | ||||
Revenue Recognition | ||||
Gross revenues | 69,557 | 139,194 | ||
Predecessor | Variable | Subscription Fees including Refinitiv market data | ||||
Revenue Recognition | ||||
Gross revenues | 425 | 900 | ||
Predecessor | Variable | Commissions | ||||
Revenue Recognition | ||||
Gross revenues | 17,346 | 35,126 | ||
Predecessor | Variable | Other | ||||
Revenue Recognition | ||||
Gross revenues | 14 | 26 | ||
Predecessor | Fixed | ||||
Revenue Recognition | ||||
Gross revenues | 83,673 | 165,272 | ||
Predecessor | Fixed | Transaction fees | ||||
Revenue Recognition | ||||
Gross revenues | 21,473 | 41,975 | ||
Predecessor | Fixed | Subscription Fees including Refinitiv market data | ||||
Revenue Recognition | ||||
Gross revenues | 49,303 | 97,391 | ||
Predecessor | Fixed | Commissions | ||||
Revenue Recognition | ||||
Gross revenues | 10,207 | 20,310 | ||
Predecessor | Fixed | Other | ||||
Revenue Recognition | ||||
Gross revenues | $ 2,690 | $ 5,596 | ||
Special Mention | ||||
Revenue Recognition | ||||
Compensation expense | $ 20,400 | |||
Allocation term | 3 years |
Pushdown Accounting (Details)
Pushdown Accounting (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Pushdown Accounting | ||
Goodwill | $ 2,694,797 | $ 2,694,797 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2019 |
Lessee, Lease, Description [Line Items] | |||
Package of practical expedients | true | ||
Right-of-use assets | $ 30,145 | $ 30,145 | |
Lease liability | 34,528 | 34,528 | |
Activity related to the Company's leases | |||
Operating lease expense | 2,558 | 5,147 | |
Cash for amounts included in the measurement of operating liability | 2,803 | 5,637 | |
Right of use assets obtained in exchange for operating liabilities | $ 0 | $ 0 | |
Weighted average borrowing rate | 2.90% | 2.90% | |
Weighted average remaining lease term (years) | 6 years | 6 years | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Initial term of lease | 3 years | 3 years | |
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Initial term of lease | 11 years | 11 years | |
ASC 842 | Adjustment | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 34,760,000 | ||
Lease liability | 39,635,000 | ||
Deferred rent | $ 4,875,000 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities and Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Maturity of lease liabilities | |
Remainder of 2019 | $ 5,640 |
2020 | 7,684 |
2021 | 5,349 |
2022 | 4,050 |
2023 | 3,876 |
Thereafter | 11,151 |
Total future minimum lease payments | 37,750 |
Less imputed interest | (3,222) |
Lease liability | 34,528 |
future minimum lease payments | |
Remainder of 2019 | 5,640 |
2020 | 7,684 |
2021 | 5,349 |
2022 | 4,050 |
2023 | 3,876 |
Thereafter | 11,151 |
Total future minimum lease payments | $ 37,750 |
Leases - Guaranteed (Details)
Leases - Guaranteed (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Refinitiv | US lease secured by letter of credit | |
Guarantor Obligations [Line Items] | |
Letter of credit guaranteed by Refinitiv | $ 1,200,000 |
Intangible Assets and Goodwil_8
Intangible Assets and Goodwill - Indefinite Lived Intangible Assets (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Intangible assets with indefinite useful lives | |
Intangible assets which have an indefinite useful life | $ 323,100 |
Licenses | |
Intangible assets with indefinite useful lives | |
Intangible assets which have an indefinite useful life | 168,800 |
Tradenames | |
Intangible assets with indefinite useful lives | |
Intangible assets which have an indefinite useful life | $ 154,300 |
Intangible Assets and Goodwil_9
Intangible Assets and Goodwill - Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Intangible assets that are subject to amortization | ||
Cost | $ 1,082,600 | $ 1,082,600 |
Accumulated Amortization | (74,555) | (24,852) |
Net Carrying Amount | 1,008,045 | 1,057,748 |
Customer relationships | ||
Intangible assets that are subject to amortization | ||
Cost | 928,200 | 928,200 |
Accumulated Amortization | (58,012) | (19,338) |
Net Carrying Amount | 870,188 | 908,862 |
Content and data | ||
Intangible assets that are subject to amortization | ||
Cost | 154,400 | 154,400 |
Accumulated Amortization | (16,543) | (5,514) |
Net Carrying Amount | $ 137,857 | $ 148,886 |
Successor | Customer relationships | ||
Intangible assets that are subject to amortization | ||
Amortization Period | 12 years | 12 years |
Successor | Content and data | ||
Intangible assets that are subject to amortization | ||
Amortization Period | 7 years | 7 years |
Intangible Assets and Goodwi_10
Intangible Assets and Goodwill - Future Amortization (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Estimated annual future amortization for existing intangibles assets | ||||
Remainder of 2019 | $ 49,704,000 | $ 49,704,000 | ||
2020 | 99,408,000 | 99,408,000 | ||
2021 | 99,408,000 | 99,408,000 | ||
2022 | 99,408,000 | 99,408,000 | ||
2023 | 99,408,000 | 99,408,000 | ||
Successor | ||||
Intangible assets that are subject to amortization | ||||
Amortization expense | $ 24,852,000 | $ 49,704,000 | ||
Predecessor | ||||
Intangible assets that are subject to amortization | ||||
Amortization expense | $ 6,557,000 | $ 13,063,000 |
Deferred Revenue (Details)_2
Deferred Revenue (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Changes in deferred revenue | |
Deferred revenue balance - beginning of period | $ 27,883 |
New billings | 54,735 |
Revenue recognized | (57,348) |
Deferred revenue balance - end of period | $ 25,270 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Line Items] | ||||
Effective tax rate | 20.30% | 4.50% | 14.20% | 4.90% |
Percentage of amount of U.S. federal, state and local income or franchise tax savings | 50.00% | |||
Remaining percentage of tax benefits | 50.00% | |||
Tax benefit assumed due to increase in amortizable tax basis | $ 93,194,000 | |||
Tax amortization period | 15 years | |||
Accounts payable, accrued expenses and other liabilities | ||||
Income Tax Disclosure [Line Items] | ||||
Tax liability | $ 2,722,000 | $ 2,722,000 |
Tax Receivable Agreement Liab_2
Tax Receivable Agreement Liability (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Tax receivable agreement liability | |
Percentage of amount of U.S. federal, state and local income or franchise tax savings | 50.00% |
Tax receivable agreement liability | $ 171,426,000 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) | Apr. 08, 2019USD ($)$ / sharesshares |
Initial Public Offering | |
Subsidiary, Sale of Stock [Line Items] | |
Issuance of common stock, net of offering costs and cancellations (in shares) | shares | 46,000,000 |
Share Price | $ / shares | $ 27 |
Underwriters option | |
Subsidiary, Sale of Stock [Line Items] | |
Issuance of common stock, net of offering costs and cancellations (in shares) | shares | 6,000,000 |
Tradeweb Markets LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Share Price | $ / shares | $ 27 |
Net proceeds | $ | $ 1,161,270,000 |
Stockholder's Equity - Author_2
Stockholder's Equity - Authorized shares (Details) | 6 Months Ended |
Jun. 30, 2019Vote$ / sharesshares | |
Class of Stock [Line Items] | |
Preferred stock, shares authorized | shares | 250,000,000 |
Preferred stock, par value | $ / shares | $ 0.00001 |
Number of votes per common stock | Vote | 1 |
Class A common stock | |
Class of Stock [Line Items] | |
Common Stock, shares authorized | shares | 1,000,000,000 |
Common stock, par value | $ / shares | $ 0.00001 |
Number of votes per common stock | Vote | 1 |
Conversion ratio | 1 |
Class B common stock | |
Class of Stock [Line Items] | |
Common Stock, shares authorized | shares | 450,000,000 |
Common stock, par value | $ / shares | $ 0.00001 |
Number of votes per common stock | Vote | 10 |
Class C common stock | |
Class of Stock [Line Items] | |
Common Stock, shares authorized | shares | 350,000,000 |
Common stock, par value | $ / shares | $ 0.00001 |
Number of votes per common stock | Vote | 1 |
Conversion ratio | 1 |
Class D common stock | |
Class of Stock [Line Items] | |
Common Stock, shares authorized | shares | 300,000,000 |
Common stock, par value | $ / shares | $ 0.00001 |
Number of votes per common stock | Vote | 10 |
Tradeweb Markets LLC | |
Class of Stock [Line Items] | |
Threshold percentage of economic interest for conversion | 10.00% |
Cancellation ratio | 1 |
Stockholder's Equity - Common U
Stockholder's Equity - Common Units Outstanding (Details) - Tradeweb Markets LLC | 6 Months Ended |
Jun. 30, 2019shares | |
LLC Interests | |
Class of Stock [Line Items] | |
Common units exchanged | 222,222,197 |
Class A common stock | |
Class of Stock [Line Items] | |
Classes shares outstanding | 146,333 |
Class C common stock | |
Class of Stock [Line Items] | |
Classes shares outstanding | 447 |
Class P(A) Shares | |
Class of Stock [Line Items] | |
Classes shares outstanding | 6,887 |
Class P(C) Shares | |
Class of Stock [Line Items] | |
Classes shares outstanding | 2 |
Class P-1(A) Shares | |
Class of Stock [Line Items] | |
Classes shares outstanding | 6,094 |
Class P-1(C) Shares | |
Class of Stock [Line Items] | |
Classes shares outstanding | 232 |
Stockholder's Equity - Narrativ
Stockholder's Equity - Narrative (Details) - shares | Apr. 08, 2019 | Jun. 30, 2019 |
Class of Stock [Line Items] | ||
Shares contributed by Refinitiv Owner | 96,933,192 | |
Continuing LLC Owners | ||
Class of Stock [Line Items] | ||
Percentage of combined voting power | 27.50% | |
Class A common stock | ||
Class of Stock [Line Items] | ||
Number of shares owned | 46,000,000 | |
Percentage of combined voting power | 2.70% | |
Class B common stock | ||
Class of Stock [Line Items] | ||
Shares contributed by Refinitiv Owner | 96,933,192 | |
Shares issued to acquire TWM LLC | 20,000,000 | |
Number of shares canceled | 9,993,731 | |
Class B common stock | Refinitiv Direct Owner [Member] | ||
Class of Stock [Line Items] | ||
Number of shares owned | 96,933,192 | |
Percentage of combined voting power | 56.40% | |
Class C common stock | ||
Class of Stock [Line Items] | ||
Shares issued to acquire TWM LLC | 20,000,000 | |
Number of shares canceled | 9,993,731 | |
Class C common stock | Continuing LLC Owners | ||
Class of Stock [Line Items] | ||
Number of shares owned | 10,006,269 | |
Class D common stock | ||
Class of Stock [Line Items] | ||
Shares issued to acquire TWM LLC | 105,289,005 | |
Number of shares canceled | 36,006,269 | |
Voting power threshold percentage to require conversion of shares | 4.90% | |
Class D common stock | Continuing LLC Owners | ||
Class of Stock [Line Items] | ||
Number of shares owned | 46,294,407 | |
Class D common stock | Refinitiv LLC Owner [Member] | ||
Class of Stock [Line Items] | ||
Number of shares owned | 22,988,329 | |
Percentage of combined voting power | 13.40% | |
Tradeweb Markets LLC | ||
Class of Stock [Line Items] | ||
Percentage of economic interest | 20.70% | |
Number of LLC Interest | 79,289,005 | |
Ownership percentage, Continuing LLC Owners | 35.70% | |
Number of LLC Interest held by parent | 142,933,192 | 142,933,192 |
Ownership interest | 64.30% | 64.30% |
Tradeweb Markets LLC | Continuing LLC Owners | ||
Class of Stock [Line Items] | ||
Number of LLC Interest | 56,300,676 | |
Ownership percentage, Continuing LLC Owners | 25.30% | |
Tradeweb Markets LLC | Class B common stock | Refinitiv Direct Owner [Member] | ||
Class of Stock [Line Items] | ||
Percentage of economic interest | 43.60% | |
Tradeweb Markets LLC | Class D common stock | Refinitiv LLC Owner [Member] | ||
Class of Stock [Line Items] | ||
Number of LLC Interest | 22,988,329 | |
Ownership percentage, Continuing LLC Owners | 10.30% |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details) $ in Thousands | Apr. 08, 2019shares | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($)shares |
Noncontrolling Interest [Line Items] | |||
Net income attributable to Tradeweb Markets | $ 12,828 | $ 12,828 | |
Class A common stock | |||
Noncontrolling Interest [Line Items] | |||
Conversion ratio | 1 | ||
Class B common stock | |||
Noncontrolling Interest [Line Items] | |||
Conversion ratio | 1 | ||
Tradeweb Markets LLC | |||
Noncontrolling Interest [Line Items] | |||
Number of LLC Interests held by Tradeweb Markets Inc | shares | 142,933,192 | 142,933,192 | |
Number of LLC Interests held by non-controlling interest | shares | 79,289,005 | ||
Total LLC Interests outstanding | shares | 222,222,197 | ||
Number of LLC Interests held by Tradeweb Markets Inc | 64.30% | 64.30% | 64.30% |
Number of LLC Interests held by non-controlling interest holders | 35.70% | 35.70% | |
Total LLC Interests outstanding | 100.00% | 100.00% | |
Net income attributable to Tradeweb Markets | $ 12,828 | $ 12,828 | |
Allocation of equity to non-controlling interests arising from the reorganization transactions and IPO | (1,607,529) | (1,607,529) | |
Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interest | $ (1,594,701) | $ (1,594,701) |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity-settled PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 6,894 | $ 11,671 | ||
Compensation expense, net of taxes | $ 6,894 | $ 11,671 | ||
Weighted-average grant date fair value per unit, PRSUs | $ 22.19 | $ 22.19 | ||
Cash-settled PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 419 | $ 519 | ||
Compensation expense, net of taxes | $ 419 | $ 519 | ||
Weighted-average grant date fair value per unit, PRSUs | $ 63,497 | $ 63,497 | ||
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 20,403 | $ 20,403 | ||
Compensation expense, net of taxes | $ 20,403 | $ 20,403 | ||
Weighted-average fair value per unit, options | $ 1.85 | $ 1.85 | ||
Total fair value of vested options | $ 16,309 | $ 16,309 | ||
Successor | Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 18,883,000 | |||
Predecessor | Cash-settled PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 5,209 | $ 11,155 | ||
Compensation expense, net of taxes | $ 5,209 | $ 11,155 | ||
Weighted-average grant date fair value per unit, PRSUs | $ 33,672 | $ 33,672 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Unrecognized Compensation (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash-settled PRSUs | |
Share-Based Compensation Plans | |
Total unrecognized compensation cost | $ 558 |
Weighted average recognition period | 1 year 3 months 18 days |
Equity-settled PRSUs | |
Share-Based Compensation Plans | |
Total unrecognized compensation cost | $ 41,237 |
Weighted average recognition period | 2 years |
Options | |
Share-Based Compensation Plans | |
Total unrecognized compensation cost | $ 12,923 |
Weighted average recognition period | 1 year 8 months 12 days |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Options (Details) - Options - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise period following a change in control | 15 days | |
Compensation expense | $ 20,403 | $ 20,403 |
Successor | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 18,883,000 |
Related Party Transactions - _2
Related Party Transactions - Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Related Party Transactions | ||
Cash and cash equivalents | $ 283,790 | |
Receivables from brokers and dealers and clearing organizations | 3,332 | |
Deposits with clearing organizations | 500 | |
Accounts receivable | 40,730 | |
Receivable from affiliates | $ 2,849 | 3,243 |
Other assets | 9 | |
Payable to brokers and dealers and clearing organizations | 2,404 | |
Deferred revenue | 4,772 | 9,151 |
Payable to affiliates | $ 6,004 | $ 5,009 |
Related Party Transactions - _3
Related Party Transactions - Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Revenue | $ 190,485 | $ 377,277 | ||
Expenses | ||||
Technology and communications | 9,519 | 19,559 | ||
General and administrative | 9,365 | 18,454 | ||
Occupancy | 3,621 | 7,260 | ||
Affiliated Entity | ||||
Operating Income | ||||
Interest income | 858 | |||
Expenses | ||||
Technology and communications | 740 | 1,480 | ||
General and administrative | 191 | 371 | ||
Occupancy | 155 | 310 | ||
Transaction fees | Affiliated Entity | ||||
Revenues | ||||
Revenue | 59,643 | |||
Subscription fees | Affiliated Entity | ||||
Revenues | ||||
Revenue | 5,670 | |||
Commissions | Affiliated Entity | ||||
Revenues | ||||
Revenue | 16,186 | |||
Refinitiv market data fees | Affiliated Entity | ||||
Revenues | ||||
Revenue | $ 13,385 | $ 27,001 | ||
Predecessor | ||||
Revenues | ||||
Revenue | $ 151,718 | $ 311,151 | ||
Expenses | ||||
Technology and communications | 9,023 | 17,486 | ||
General and administrative | 7,153 | 13,670 | ||
Occupancy | 3,519 | 7,241 | ||
Predecessor | Affiliated Entity | ||||
Operating Income | ||||
Interest income | 7 | 28 | ||
Expenses | ||||
Technology and communications | 740 | 1,480 | ||
General and administrative | 180 | 360 | ||
Occupancy | 155 | 310 | ||
Predecessor | Transaction fees | Affiliated Entity | ||||
Revenues | ||||
Revenue | 53,949 | 106,867 | ||
Predecessor | Subscription fees | Affiliated Entity | ||||
Revenues | ||||
Revenue | 5,961 | 11,181 | ||
Predecessor | Commissions | Affiliated Entity | ||||
Revenues | ||||
Revenue | 11,505 | 23,136 | ||
Predecessor | Refinitiv market data fees | Affiliated Entity | ||||
Revenues | ||||
Revenue | $ 12,081 | $ 24,318 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2014 | Dec. 31, 2018 | |
Related Party Transactions | ||||||
Contingent consideration recognized | $ 19,297,000 | $ 29,367,000 | ||||
Other assets | $ 30,302,000 | $ 30,302,000 | $ 25,027,000 | |||
Refinitiv | ||||||
Related Party Transactions | ||||||
Other assets | 2,722,000,000 | 2,722,000,000 | ||||
Refinitiv | Operating Expense Reimbursement | ||||||
Related Party Transactions | ||||||
Related party expense | $ 3,211,000 | $ 6,258,000 | $ 4,238,000 | $ 28,408,000 | ||
Banks | ||||||
Related Party Transactions | ||||||
Capital contribution | $ 120,000,000 | |||||
Employees | ||||||
Related Party Transactions | ||||||
Investment by employees | $ 5,266,000 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments (Details) - Tradeweb Markets LLC - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value of Financial Instruments | ||
Total assets measured at fair value | $ 113,180 | $ 127,927 |
Money market funds | ||
Fair Value of Financial Instruments | ||
Money market funds | 113,180 | 127,927 |
Level 1 | ||
Fair Value of Financial Instruments | ||
Total assets measured at fair value | 113,180 | 127,927 |
Level 1 | Money market funds | ||
Fair Value of Financial Instruments | ||
Money market funds | $ 113,180 | $ 127,927 |
Credit Risk (Details)_2
Credit Risk (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Credit Risk | ||
Allowance for doubtful accounts | $ 1,273,000 | $ 1,169,000 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) | Apr. 08, 2019USD ($) | Jun. 30, 2019USD ($)action |
Litigation relating to distribution of financial strength ratings | ||
Commitments and Contingencies | ||
Damages sought | $ 80,000,000 | |
Antitrust Actions Related To Trading Practices | ||
Commitments and Contingencies | ||
Number of actions | action | 2 | |
Revolving credit facility | ||
Commitments and Contingencies | ||
Term of debt | 5 years | |
Maximum borrowing capacity | $ 500,000,000 | |
Commitment fee (as a percent) | 0.25% | |
Amount outstanding | $ 0 | |
Revolving credit facility | Federal funds | ||
Commitments and Contingencies | ||
Spread (as a percent) | 0.50% | |
Revolving credit facility | One-month LIBOR | ||
Commitments and Contingencies | ||
Spread (as a percent) | 1.00% | |
Revolving credit facility | Base rate | ||
Commitments and Contingencies | ||
Spread (as a percent) | 0.75% | |
Revolving credit facility | LIBOR | ||
Commitments and Contingencies | ||
Spread (as a percent) | 1.75% | |
Floor (as a percent) | 0.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | ||||||||
Pre-IPO net income attributable to Tradeweb Markets LLC | $ 42,352 | |||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 12,828 | $ 12,828 | ||||||
Denominator: | ||||||||
Weighted average outstanding - Basic | 142,933,192 | 142,933,192 | ||||||
Weighted average outstanding - Diluted | 150,847,183 | 150,847,183 | ||||||
Earnings per share - Basic | $ 0.09 | $ 0.09 | ||||||
Earnings per share - Diluted | $ 0.09 | $ 0.09 | ||||||
Shares excluded from computation of diluted earnings per share | 8,045,000 | 6,789,000 | ||||||
PRSU | ||||||||
Denominator: | ||||||||
Dilutive effect | 2,214,480 | 2,214,480 | ||||||
Options | ||||||||
Denominator: | ||||||||
Dilutive effect | 5,699,511 | 5,699,511 | ||||||
Potential Dilutive | ||||||||
Denominator: | ||||||||
Shares excluded from computation of diluted earnings per share | 79,289,005 | |||||||
Successor | ||||||||
Denominator: | ||||||||
Weighted average outstanding - Basic | 142,933,192 | |||||||
Weighted average outstanding - Diluted | 150,847,183 | 150,847,183 | ||||||
Earnings per share - Basic | $ 0.09 | |||||||
Earnings per share - Diluted | $ 0.09 | $ 0.09 | ||||||
Tradeweb Markets LLC | ||||||||
Numerator: | ||||||||
Pre-IPO net income attributable to Tradeweb Markets LLC | $ 42,352 | |||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 42,352 | |||||||
Denominator: | ||||||||
Weighted average outstanding - Basic | 222,222,197 | |||||||
Weighted average outstanding - Diluted | 223,320,457 | |||||||
Earnings per share - Basic | $ 0.19 | |||||||
Earnings per share - Diluted | $ 0.19 | |||||||
Tradeweb Markets LLC | PRSU | ||||||||
Denominator: | ||||||||
Dilutive effect | 1,098,260 | |||||||
Tradeweb Markets LLC | Successor | ||||||||
Numerator: | ||||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 29,307 | |||||||
Denominator: | ||||||||
Weighted average outstanding - Basic | 222,221,628 | 222,222,197 | ||||||
Dilutive effect | 22,223 | |||||||
Weighted average outstanding - Diluted | 222,243,851 | 223,320,457 | ||||||
Earnings per share - Basic | $ 0.13 | $ 0.19 | ||||||
Earnings per share - Diluted | $ 0.13 | $ 0.19 | ||||||
Tradeweb Markets LLC | Predecessor | ||||||||
Numerator: | ||||||||
Pre-IPO net income attributable to Tradeweb Markets LLC | $ 38,897 | $ 84,205 | ||||||
Post-IPO net income attributable to Tradeweb Markets Inc. | $ 38,897 | $ 84,205 | $ 130,160 | $ 83,648 | $ 93,161 | |||
Denominator: | ||||||||
Weighted average outstanding - Basic | 213,435,314 | 213,435,314 | 215,365,920 | 212,568,635 | 210,979,704 | |||
Weighted average outstanding - Diluted | 213,435,314 | 213,435,314 | 215,365,920 | 212,568,635 | 210,979,704 | |||
Earnings per share - Basic | $ 0.18 | $ 0.39 | $ 0.60 | $ 0.39 | $ 0.44 | |||
Earnings per share - Diluted | $ 0.18 | $ 0.39 | $ 0.60 | $ 0.39 | $ 0.44 | |||
Shares excluded from computation of diluted earnings per share | 340 | 340 |
Regulatory Capital Requiremen_6
Regulatory Capital Requirements (Details) - Reportable Legal Entities - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
TWL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | $ 21,837 | $ 18,986 |
Regulatory Capital Requirement | 1,615 | 2,698 |
Excess Regulatory Capital | 20,222 | 16,288 |
DW | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 42,786 | 41,164 |
Regulatory Capital Requirement | 1,559 | 1,803 |
Excess Regulatory Capital | 41,227 | 39,361 |
TWD | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 25,858 | 24,042 |
Regulatory Capital Requirement | 386 | 599 |
Excess Regulatory Capital | 25,472 | 23,443 |
TEL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 47,555 | 46,157 |
Regulatory Capital Requirement | 17,515 | 17,493 |
Excess Regulatory Capital | 30,040 | 28,664 |
TWJ | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 12,286 | 10,592 |
Regulatory Capital Requirement | 4,368 | 3,413 |
Excess Regulatory Capital | 7,918 | 7,179 |
TWEU | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 6,472 | |
Regulatory Capital Requirement | 6,472 | |
TW SEF | ||
Regulatory Capital Requirements | ||
Financial Resources | 30,137 | 31,232 |
Required Financial Resources | 10,500 | 10,500 |
Excess Financial Resources | 19,637 | 20,732 |
Liquid Financial Assets | 16,961 | 16,662 |
Required Liquid Financial Assets | 5,250 | 5,250 |
Excess Liquid Financial Assets | 11,711 | 11,412 |
DW SEF | ||
Regulatory Capital Requirements | ||
Financial Resources | 15,032 | 17,837 |
Required Financial Resources | 5,589 | 5,169 |
Excess Financial Resources | 9,443 | 12,668 |
Liquid Financial Assets | 8,719 | 11,888 |
Required Liquid Financial Assets | 2,795 | 2,585 |
Excess Liquid Financial Assets | $ 5,924 | $ 9,303 |
Business Segment and Geograph_7
Business Segment and Geographic Information - Revenue by Client Sector (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Segment and Geographic Information | ||||
Gross revenues | $ 190,485,000 | $ 377,277,000 | ||
Contingent consideration | $ (19,297,000) | $ (29,367,000) | ||
Net revenue | 190,485,000 | 377,277,000 | ||
Operating expenses | 159,530,000 | 300,045,000 | ||
Operating income | 30,955,000 | 77,232,000 | ||
Institutional | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 111,057,000 | 220,309,000 | ||
Wholesale | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 41,945,000 | 81,376,000 | ||
Retail | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 19,939,000 | 41,145,000 | ||
Market Data | ||||
Business Segment and Geographic Information | ||||
Gross revenues | $ 17,544,000 | $ 34,447,000 | ||
Predecessor | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 171,015,000 | 340,518,000 | ||
Contingent consideration | (19,297,000) | (29,367,000) | ||
Net revenue | 151,718,000 | 311,151,000 | ||
Operating expenses | 111,556,000 | 223,634,000 | ||
Operating income | 40,162,000 | 87,517,000 | ||
Predecessor | Institutional | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 102,095,000 | 204,415,000 | ||
Predecessor | Wholesale | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 32,265,000 | 64,860,000 | ||
Predecessor | Retail | ||||
Business Segment and Geographic Information | ||||
Gross revenues | 20,918,000 | 39,954,000 | ||
Predecessor | Market Data | ||||
Business Segment and Geographic Information | ||||
Gross revenues | $ 15,737,000 | $ 31,289,000 |
Business Segment and Geograph_8
Business Segment and Geographic Information - Revenue and Long-lived Assets by Geographic Region (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Business Segment and Geographic Information | |||||
Gross revenues | $ 190,485,000 | $ 377,277,000 | |||
Contingent consideration | $ (19,297,000) | $ (29,367,000) | |||
Net revenue | 190,485,000 | 377,277,000 | |||
Long-lived assets | 4,264,443,000 | 4,264,443,000 | $ 4,284,355,000 | ||
U.S. | |||||
Business Segment and Geographic Information | |||||
Gross revenues | 122,693,000 | 242,090,000 | |||
Long-lived assets | 4,251,030,000 | 4,251,030,000 | 4,276,568,000 | ||
International | |||||
Business Segment and Geographic Information | |||||
Gross revenues | 67,792,000 | 135,187,000 | |||
Long-lived assets | $ 13,413,000 | $ 13,413,000 | $ 7,787,000 | ||
Predecessor | |||||
Business Segment and Geographic Information | |||||
Gross revenues | 171,015,000 | 340,518,000 | |||
Contingent consideration | (19,297,000) | (29,367,000) | |||
Net revenue | 151,718,000 | 311,151,000 | |||
Predecessor | U.S. | |||||
Business Segment and Geographic Information | |||||
Gross revenues | 109,540,000 | 217,322,000 | |||
Predecessor | International | |||||
Business Segment and Geographic Information | |||||
Gross revenues | $ 61,475,000 | $ 123,196,000 |
Subsequent Events (Details)_2
Subsequent Events (Details) - USD ($) | Aug. 07, 2019 | Aug. 06, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Aug. 01, 2019 |
Subsequent Event [Line Items] | |||||
Cash distribution payable | $ 100,000,000 | $ 20,000,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Total Enterprise Value | $ 27,000,000,000 | ||||
Percentage of economic interest | 54.00% | ||||
Cash distribution payable | $ 33,000,000 | ||||
Subsequent Event | Class A common stock | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared | $ 0.08 | ||||
Subsequent Event | Class B common stock | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared | $ 0.08 |