Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 19, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38860 | |
Entity Registrant Name | Tradeweb Markets Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-2456358 | |
Entity Address, Address Line One | 1177 Avenue of the Americas | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10036 | |
City Area Code | 646 | |
Local Phone Number | 430-6000 | |
Title of 12(b) Security | Class A common stock, par value $0.00001 | |
Trading Symbol | TW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001758730 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 114,725,695 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 96,933,192 | |
Class C Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 | |
Class D Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 23,080,571 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 1,493,410 | $ 1,257,229 |
Restricted cash | 1,000 | 1,000 |
Receivable from brokers and dealers and clearing organizations | 4,966 | 11,632 |
Deposits with clearing organizations | 26,433 | 23,906 |
Accounts receivable, net of allowance for credit losses of $187 and $129 at September 30, 2023 and December 31, 2022, respectively | 167,039 | 142,676 |
Furniture, equipment, purchased software and leasehold improvements, net of accumulated depreciation and amortization | 36,151 | 37,413 |
Lease right-of-use assets | 19,406 | 24,933 |
Software development costs, net of accumulated amortization | 134,275 | 141,833 |
Goodwill | 2,815,317 | 2,780,259 |
Intangible assets, net of accumulated amortization | 1,032,354 | 1,072,818 |
Receivable and due from affiliates | 3,165 | 2,728 |
Deferred tax asset | 693,171 | 689,442 |
Other assets | 77,866 | 74,262 |
Total assets | 6,504,553 | 6,260,131 |
Liabilities | ||
Payable to brokers and dealers and clearing organizations | 4,966 | 11,264 |
Accrued compensation | 121,227 | 150,884 |
Deferred revenue | 31,404 | 22,827 |
Accounts payable, accrued expenses and other liabilities | 46,668 | 46,690 |
Lease liabilities | 22,040 | 27,943 |
Payable and due to affiliates | 527 | 7,232 |
Deferred tax liability | 18,004 | 21,251 |
Tax receivable agreement liability | 447,976 | 425,724 |
Total liabilities | 692,812 | 713,815 |
Commitments and contingencies (Note 13) | ||
Equity | ||
Preferred stock, $0.00001 par value; 250,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Additional paid-in capital | 4,706,499 | 4,577,270 |
Accumulated other comprehensive income (loss) | (10,836) | (10,113) |
Retained earnings | 570,149 | 386,632 |
Total stockholders’ equity attributable to Tradeweb Markets Inc. | 5,265,814 | 4,953,791 |
Non-controlling interests | 545,927 | 592,525 |
Total equity | 5,811,741 | 5,546,316 |
Total liabilities and equity | 6,504,553 | 6,260,131 |
Class A Common Stock | ||
Equity | ||
Common stock | 1 | 1 |
Class B Common Stock | ||
Equity | ||
Common stock | 1 | 1 |
Class C Common Stock | ||
Equity | ||
Common stock | 0 | 0 |
Class D Common Stock | ||
Equity | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance for credit losses | $ 187 | $ 129 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 114,711,483 | 110,746,606 |
Common stock, shares outstanding (in shares) | 114,711,483 | 110,746,606 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 96,933,192 | 96,933,192 |
Common stock, shares outstanding (in shares) | 96,933,192 | 96,933,192 |
Class C Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 0 | 3,251,177 |
Common stock, shares outstanding (in shares) | 0 | 3,251,177 |
Class D Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 23,080,571 | 23,092,704 |
Common stock, shares outstanding (in shares) | 23,080,571 | 23,092,704 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenue | $ 328,357 | $ 287,115 | $ 968,219 | $ 895,739 |
Expenses | ||||
Employee compensation and benefits | 116,016 | 102,720 | 334,433 | 330,601 |
Depreciation and amortization | 46,559 | 44,778 | 137,850 | 133,998 |
Technology and communications | 19,733 | 16,816 | 56,001 | 48,626 |
General and administrative | 6,700 | 6,892 | 31,692 | 24,806 |
Professional fees | 10,479 | 9,400 | 32,321 | 25,832 |
Occupancy | 4,132 | 3,699 | 12,283 | 10,857 |
Total expenses | 203,619 | 184,305 | 604,580 | 574,720 |
Operating income | 124,738 | 102,810 | 363,639 | 321,019 |
Net interest income (expense) | 17,465 | 3,413 | 45,065 | 3,507 |
Other income (loss), net | (1,907) | 0 | (2,022) | 0 |
Income before taxes | 140,296 | 106,223 | 406,682 | 324,526 |
Provision for income taxes | (28,666) | (24,657) | (90,920) | (63,915) |
Net income | 111,630 | 81,566 | 315,762 | 260,611 |
Less: Net income attributable to non-controlling interests | 13,016 | 12,483 | 40,210 | 40,219 |
Net income attributable to Tradeweb Markets Inc. | $ 98,614 | $ 69,083 | $ 275,552 | $ 220,392 |
Earnings per share attributable to Tradeweb Markets Inc. Class A and B common stockholders: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.34 | $ 1.31 | $ 1.08 |
Diluted (in dollars per share) | $ 0.46 | $ 0.33 | $ 1.30 | $ 1.06 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 211,618,475 | 205,721,162 | 210,444,082 | 204,767,261 |
Diluted (in shares) | 213,491,634 | 208,329,469 | 212,276,908 | 207,748,037 |
Transaction fees and commissions | ||||
Revenues | ||||
Total revenue | $ 263,485 | $ 228,015 | $ 776,544 | $ 717,489 |
Subscription fees | ||||
Revenues | ||||
Total revenue | 46,361 | 41,342 | 136,483 | 124,337 |
Refinitiv market data fees | ||||
Revenues | ||||
Total revenue | 15,460 | 15,370 | 46,515 | 46,354 |
Other | ||||
Revenues | ||||
Total revenue | $ 3,051 | $ 2,388 | $ 8,677 | $ 7,559 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 111,630 | $ 81,566 | $ 315,762 | $ 260,611 |
Foreign currency translation adjustments, with no tax benefit for each of the three and nine months ended September 30, 2023 and 2022 | (4,456) | (12,406) | (623) | (26,181) |
Other comprehensive income (loss), net of tax | (4,456) | (12,406) | (623) | (26,181) |
Comprehensive income | 107,174 | 69,160 | 315,139 | 234,430 |
Less: Net income attributable to non-controlling interests | 13,016 | 12,483 | 40,210 | 40,219 |
Less: Foreign currency translation adjustments attributable to non-controlling interests | (438) | (1,521) | (24) | (3,288) |
Comprehensive income attributable to Tradeweb Markets Inc. | $ 94,596 | $ 58,198 | $ 274,953 | $ 197,499 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustment, tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Common Stock Class C Common Stock | Common Stock Class D Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non- Controlling Interests |
Beginning balance at Dec. 31, 2021 | $ 5,308,943 | $ 1 | $ 1 | $ 0 | $ 0 | $ 4,401,366 | $ 1,604 | $ 242,623 | $ 663,348 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock from equity incentive plans | 692 | 692 | |||||||
Share repurchases pursuant to share repurchase programs | (47,323) | (47,323) | |||||||
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans | 38,676 | 38,676 | |||||||
Adjustments to non-controlling interests | 0 | 30,005 | (30,005) | ||||||
Distributions to non-controlling interests | (2,178) | (2,178) | |||||||
Dividends | (16,350) | (16,350) | |||||||
Stock-based compensation expense | 13,682 | 13,682 | |||||||
Payroll taxes paid for stock-based compensation | (95,758) | (95,758) | |||||||
Net income | 97,445 | 82,965 | 14,480 | ||||||
Foreign currency translation adjustments | (4,098) | (3,568) | (530) | ||||||
Ending balance at Mar. 31, 2022 | 5,293,731 | 1 | 1 | 0 | 0 | 4,388,663 | (1,964) | 261,915 | 645,115 |
Beginning balance at Dec. 31, 2021 | 5,308,943 | 1 | 1 | 0 | 0 | 4,401,366 | 1,604 | 242,623 | 663,348 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Payroll taxes paid for stock-based compensation | (100,300) | ||||||||
Net income | 260,611 | ||||||||
Foreign currency translation adjustments | (26,181) | ||||||||
Ending balance at Sep. 30, 2022 | 5,453,567 | 1 | 1 | 0 | 0 | 4,542,160 | (21,601) | 348,329 | 584,677 |
Beginning balance at Mar. 31, 2022 | 5,293,731 | 1 | 1 | 0 | 0 | 4,388,663 | (1,964) | 261,915 | 645,115 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock from equity incentive plans | 6,924 | 6,924 | |||||||
Share repurchases pursuant to share repurchase programs | (9,000) | (9,000) | |||||||
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans | 7,449 | 7,449 | |||||||
Adjustments to non-controlling interests | 0 | (1,300) | 1,300 | ||||||
Distributions to non-controlling interests | (2,568) | (2,568) | |||||||
Dividends | (16,360) | (16,360) | |||||||
Stock-based compensation expense | 20,887 | 20,887 | |||||||
Payroll taxes paid for stock-based compensation | (2,218) | (2,218) | |||||||
Net income | 81,600 | 68,344 | 13,256 | ||||||
Foreign currency translation adjustments | (9,677) | (8,440) | (1,237) | ||||||
Ending balance at Jun. 30, 2022 | 5,370,768 | 1 | 1 | 0 | 0 | 4,420,405 | (10,404) | 304,899 | 655,866 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock from equity incentive plans | 2,059 | 2,059 | |||||||
Share repurchases pursuant to share repurchase programs | (9,000) | (9,000) | |||||||
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans | 27,740 | 27,740 | |||||||
Adjustments to non-controlling interests | 0 | 79,606 | (312) | (79,294) | |||||
Distributions to non-controlling interests | (2,857) | (2,857) | |||||||
Dividends | (16,653) | (16,653) | |||||||
Stock-based compensation expense | 14,622 | 14,622 | |||||||
Payroll taxes paid for stock-based compensation | (2,272) | (2,272) | |||||||
Net income | 81,566 | 69,083 | 12,483 | ||||||
Foreign currency translation adjustments | (12,406) | (10,885) | (1,521) | ||||||
Ending balance at Sep. 30, 2022 | 5,453,567 | 1 | 1 | 0 | 0 | 4,542,160 | (21,601) | 348,329 | 584,677 |
Beginning balance at Dec. 31, 2022 | 5,546,316 | 1 | 1 | 0 | 0 | 4,577,270 | (10,113) | 386,632 | 592,525 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock from equity incentive plans | 6,320 | 6,320 | |||||||
Share repurchases pursuant to share repurchase programs | (22,706) | (22,706) | |||||||
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans | 15,082 | 15,082 | |||||||
Adjustments to non-controlling interests | 0 | 6,910 | (4) | (6,906) | |||||
Distributions to non-controlling interests | (2,283) | (2,283) | |||||||
Dividends | (18,733) | (18,733) | |||||||
Stock-based compensation expense | 11,905 | 11,905 | |||||||
Payroll taxes paid for stock-based compensation | (39,878) | (39,878) | |||||||
Net income | 102,193 | 87,856 | 14,337 | ||||||
Foreign currency translation adjustments | 2,649 | 2,352 | 297 | ||||||
Ending balance at Mar. 31, 2023 | 5,600,865 | 1 | 1 | 0 | 0 | 4,577,609 | (7,765) | 433,049 | 597,970 |
Beginning balance at Dec. 31, 2022 | 5,546,316 | 1 | 1 | 0 | 0 | 4,577,270 | (10,113) | 386,632 | 592,525 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Payroll taxes paid for stock-based compensation | (49,500) | ||||||||
Net income | 315,762 | ||||||||
Foreign currency translation adjustments | (623) | ||||||||
Ending balance at Sep. 30, 2023 | 5,811,741 | 1 | 1 | 0 | 0 | 4,706,499 | (10,836) | 570,149 | 545,927 |
Beginning balance at Mar. 31, 2023 | 5,600,865 | 1 | 1 | 0 | 0 | 4,577,609 | (7,765) | 433,049 | 597,970 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock from equity incentive plans | 1,262 | 1,262 | |||||||
Share repurchases pursuant to share repurchase programs | (7,602) | (7,602) | |||||||
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans | 27,827 | 27,827 | |||||||
Adjustments to non-controlling interests | 0 | 72,870 | (120) | (72,750) | |||||
Distributions to non-controlling interests | (3,286) | (3,286) | |||||||
Dividends | (19,048) | (19,048) | |||||||
Stock-based compensation expense | 16,097 | 16,097 | |||||||
Payroll taxes paid for stock-based compensation | (1,870) | (1,870) | |||||||
Net income | 101,939 | 89,082 | 12,857 | ||||||
Foreign currency translation adjustments | 1,184 | 1,067 | 117 | ||||||
Ending balance at Jun. 30, 2023 | 5,717,368 | 1 | 1 | 0 | 0 | 4,693,795 | (6,818) | 495,481 | 534,908 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock from equity incentive plans | 412 | 412 | |||||||
Share repurchases pursuant to share repurchase programs | (4,897) | (4,897) | |||||||
Tax receivable agreement liability and deferred taxes arising from LLC Interest ownership exchanges and the issuance of common stock from equity incentive plans | 2,801 | 2,801 | |||||||
Adjustments to non-controlling interests | 0 | (404) | 404 | ||||||
Distributions to non-controlling interests | (1,963) | (1,963) | |||||||
Dividends | (19,049) | (19,049) | |||||||
Stock-based compensation expense | 17,668 | 17,668 | |||||||
Payroll taxes paid for stock-based compensation | (7,773) | (7,773) | |||||||
Net income | 111,630 | 98,614 | 13,016 | ||||||
Foreign currency translation adjustments | (4,456) | (4,018) | (438) | ||||||
Ending balance at Sep. 30, 2023 | $ 5,811,741 | $ 1 | $ 1 | $ 0 | $ 0 | $ 4,706,499 | $ (10,836) | $ 570,149 | $ 545,927 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Limited Liability Company (LLC) Members' Equity [Abstract] | ||||||
Dividends (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.08 | $ 0.08 | $ 0.08 |
Condensed Consolidated Statem_8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income | $ 315,762 | $ 260,611 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 137,850 | 133,998 |
Stock-based compensation expense | 44,670 | 49,432 |
Deferred taxes | 70,071 | 49,078 |
Other (income) loss, net | 2,022 | 0 |
(Increase) decrease in operating assets: | ||
Receivable from/payable to brokers and dealers and clearing organizations, net | 368 | (1) |
Deposits with clearing organizations | (2,502) | (5,074) |
Accounts receivable | (22,330) | (29,938) |
Receivable and due from affiliates/payable and due to affiliates, net | (8,071) | (5,167) |
Other assets | (2,890) | (4,433) |
Increase (decrease) in operating liabilities: | ||
Accrued compensation | (33,814) | (26,155) |
Deferred revenue | 8,510 | 3,856 |
Accounts payable, accrued expenses and other liabilities | (8,318) | (1,385) |
Net cash provided by operating activities | 501,328 | 424,822 |
Cash flows from investing activities | ||
Cash paid for acquisitions, net of cash acquired | (69,648) | 0 |
Cash paid for foreign currency call option, net of sale proceeds | (1,289) | 0 |
Purchases of furniture, equipment, software and leasehold improvements | (17,467) | (17,959) |
Capitalized software development costs | (32,105) | (27,470) |
Net cash used in investing activities | (120,509) | (45,429) |
Cash flows from financing activities | ||
Share repurchases pursuant to share repurchase programs | (32,874) | (65,323) |
Proceeds from stock-based compensation exercises | 7,994 | 9,675 |
Dividends | (56,830) | (49,363) |
Distributions to non-controlling interests | (7,532) | (7,603) |
Payroll taxes paid for stock-based compensation | (49,184) | (100,248) |
Payments on tax receivable agreement liability | (5,724) | (8,995) |
Net cash used in financing activities | (144,150) | (221,857) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (488) | (19,357) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 236,181 | 138,179 |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 1,258,229 | 973,048 |
End of period | 1,494,410 | 1,111,227 |
Supplemental disclosure of cash flow information | ||
Income taxes paid, net of (refunds) | 24,624 | 10,992 |
Non-cash investing and financing activities | ||
Furniture, equipment, software and leasehold improvement additions included in accounts payable | 478 | 702 |
Unsettled share repurchases included in other liabilities | 2,331 | 0 |
Withholding taxes payable relating to stock-based compensation settlements included in accrued compensation | 337 | 0 |
Reconciliation of cash, cash equivalents and restricted cash as shown on the statements of financial condition: | ||
Cash and cash equivalents | 1,493,410 | |
Restricted cash | 1,000 | |
Cash, cash equivalents and restricted cash shown in the statement of cash flows | 1,494,410 | 1,111,227 |
Adjusted For Refinitiv Transaction | ||
Non-cash investing and financing activities | ||
Establishment of liabilities under tax receivable agreement | 27,976 | 35,894 |
Deferred tax asset | $ 73,686 | $ 109,759 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Tradeweb Markets Inc. (the “Corporation”) was incorporated as a Delaware corporation on November 7, 2018 to carry on the business of Tradeweb Markets LLC (“TWM LLC”) following the completion of a series of reorganization transactions on April 4, 2019 (the “Reorganization Transactions”), in connection with Tradeweb Markets Inc.’s initial public offering (the “IPO”), which closed on April 8, 2019. Following the Reorganization Transactions, Refinitiv (as defined below) owned an indirect majority ownership interest in the Company (as defined below). On January 29, 2021, London Stock Exchange Group plc (“LSEG”) completed its acquisition of the Refinitiv business from a consortium, including certain investment funds affiliated with The Blackstone Group Inc. (f/k/a The Blackstone Group L.P.) (“Blackstone”) as well as Thomson Reuters Corporation (“TR”), in an all share transaction (the “LSEG Transaction”). In connection with the LSEG Transaction, the Corporation became a consolidating subsidiary of LSEG. Prior to the LSEG Transaction, the Corporation was a consolidating subsidiary of BCP York Holdings (“BCP”), a company owned by certain investment funds affiliated with Blackstone, through BCP’s previous majority ownership interest in Refinitiv. As used herein, “Refinitiv,” prior to the LSEG Transaction, means Refinitiv Holdings Limited, and unless otherwise stated or the context otherwise requires, all of its direct and indirect subsidiaries, and subsequent to the LSEG Transaction, refers to Refinitiv Parent Limited, and unless otherwise stated or the context otherwise requires, all of its subsidiaries. Refinitiv owns substantially all of the former financial and risk business of Thomson Reuters (as defined below), including, prior to and following the completion of the Reorganization Transactions, an indirect majority ownership interest in the Company. 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 condensed consolidated financial statements. As of September 30, 2023, Tradeweb Markets Inc. owned 90.2% of TWM LLC and the non-controlling interest holders owned the remaining 9.8% of TWM LLC. As of December 31, 2022, Tradeweb Markets Inc. owned 88.7% of TWM LLC and the non-controlling interest holders owned the remaining 11.3% 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, 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, as amended (the “Exchange Act”), a member of the Financial Industry Regulatory Authority (“FINRA”), a member of the Municipal Securities Rulemaking Board (“MSRB”), a registered independent introducing broker with the Commodities Future Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”). • Dealerweb Inc. (“DW”) (formerly known as Hilliard Farber & Co., Inc.), a registered broker-dealer under the Exchange Act and a member of FINRA and MSRB. DW is also registered as an introducing broker with the CFTC and a member of the NFA. • Tradeweb Direct LLC (“TWD”) (formerly known as BondDesk Trading LLC), a registered broker-dealer under the Exchange Act and a member of FINRA and MSRB. • Tradeweb Europe Limited (“TEL”), a MiFID Investment Firm regulated by the Financial Conduct Authority (the “FCA”) in the UK and certain other global regulators and that maintains branches in Asia. • TW SEF LLC (“TW SEF”), a Swap Execution Facility (“SEF”) regulated by the CFTC and certain other global regulators. • DW SEF LLC (“DW SEF”), a SEF regulated by the CFTC and certain other global regulators. • 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 MiFID Investment Firm regulated by the Netherlands Authority for the Financial Markets (“AFM”), the De Nederlandsche Bank (“DNB”) and certain other global regulators and that maintains a branch in France. • Tradeweb Execution Services Limited (“TESL”), an Investment Firm (“BIPRU Firm”) regulated by the FCA in the UK. • Tradeweb Commercial Information Consulting (Shanghai) Co., Ltd. a wholly-owned foreign enterprise (WOFE) for the purpose of providing consulting and marketing activities in China. The offshore electronic trading platform is recognized by the People’s Bank of China for the provision of Bond Connect and CIBM Direct. • Tradeweb Execution Services B.V. (“TESBV”), a MiFID investment firm authorized and regulated by the AFM, with permission to trade on a matched principal basis. • Yieldbroker Pty Limited (“YB” or “Yieldbroker”), acquired in August 2023, a Tier 1 Australian Markets Licensee in Australia, regulated by the Australian Securities & Investments Commission (“ASIC”), that maintains a branch in Singapore which is regulated by the Monetary Authority of Singapore (“MAS”) as a Regulated Market Operator. In May 2023, the Company announced that it had entered into a definitive agreement to acquire all of the outstanding equity interests of Yieldbroker. Yieldbroker is a leading Australian trading platform for Australian and New Zealand government bonds and interest rate derivatives covering the institutional and wholesale client sectors. This acquisition combines Australia and New Zealand’s highly attractive, fast-growing markets with Tradeweb’s international reach and scale. The A$123.6 million, all-cash transaction closed on August 31, 2023 (the “Yieldbroker Acquisition”), following the satisfaction of closing conditions and regulatory reviews. See Note 4 – Acquisitions for additional details on this acquisition. In June 2021, the Company acquired Nasdaq’s U.S. fixed income electronic trading platform, formerly known as eSpeed (the “NFI Acquisition”), which is a fully executable central limit order book (CLOB) for electronic trading in on-the-run (OTR) U.S. government bonds. The NFI Acquisition included the acquisition of Execution Access, LLC, (“EA”), a registered broker-dealer under the Exchange Act and a member of FINRA. In November 2022, EA merged with and into DW with DW being the surviving entity. A majority interest of Refinitiv (formerly the Thomson Reuters Financial & Risk Business) was acquired by BCP on October 1, 2018 (the “Refinitiv Transaction”) from TR. The Refinitiv Transaction resulted in a new basis of accounting for certain of the Company’s assets and liabilities beginning on October 1, 2018. See Note 2 – Significant Accounting Policies for a description of pushdown accounting applied as a result of the Refinitiv Transaction. In connection with the Reorganization Transactions, 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 (the “LLC Interests”), (ii) exchange all of the then existing membership interests in TWM LLC for LLC Interests and (iii) appoint the Corporation as the sole manager of TWM LLC. LLC Interests, other than those held by the Corporation, are redeemable or exchangeable in accordance with the TWM LLC Agreement for shares of Class A common stock, par value $0.00001 per share, of the Corporation (the “Class A common stock”) or Class B common stock, par value $0.00001 per share, of the Corporation (the “Class B common stock”), as the case may be, on a one-for-one basis. As used herein, references to “Continuing LLC Owners” refer collectively to (i) those owners of TWM LLC prior to the Reorganization Transactions (the “Original LLC Owners”), including an indirect subsidiary of Refinitiv, certain investment and commercial banks (collectively, the “Bank Stockholders”), and members of management, that continued to own LLC Interests after the completion of the IPO and Reorganization Transactions and that received shares of Class C common stock, par value $0.00001 per share, of the Corporation (the “Class C common stock”), shares of Class D common stock, par value $0.00001 per share, of the Corporation (the “Class D common stock”) or a combination of both, as the case may be, in connection with the completion of the Reorganization Transactions, (ii) any subsequent transferee of any Original LLC Owner that has executed a joinder agreement to the TWM LLC Agreement and (iii) solely with respect to the Tax Receivable Agreement (as defined in Note 6 – Tax Receivable Agreement), (x) those Original LLC Owners, including certain of the Bank Stockholders, that disposed of all of their LLC Interests for cash in connection with the IPO and (y) any party that has executed a joinder agreement to the Tax Receivable Agreement in accordance with the Tax Receivable Agreement. As of September 30, 2023: • The public investors collectively owned 114,711,483 shares of Class A common stock, representing 8.7% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and indirectly, through Tradeweb Markets Inc., owned 48.9% of the economic interest in TWM LLC; • Refinitiv collectively owned 96,933,192 shares of Class B common stock and 22,988,329 shares of Class D common stock, representing 91.2% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock and directly and indirectly, through Tradeweb Markets Inc., owned 51.1% of the economic interest in TWM LLC; and • Other stockholders that continued to own LLC Interests also collectively owned 92,242 shares of Class D common stock, representing 0.1% of the combined voting power of Tradeweb Markets Inc.’s issued and outstanding common stock. Collectively, these stockholders directly owned less than 0.1% of the economic interest in TWM LLC. In addition, the Company’s basic and diluted earnings per share calculations for the three and nine months ended September 30, 2023 were impacted by 265,681 and 266,453, respectively, of weighted average shares resulting from unvested restricted stock units and unsettled vested performance - based restricted stock units that were considered participating securities for purposes of calculating earnings per share in accordance with the two - class method. The Company’s diluted earnings per share calculations for the three and nine months ended September 30, 2023 also include 1,873,159 and 1,832,826, respectively, of weighted average shares resulting from the dilutive effect of its equity incentive plans. See Note 14 – Earnings Per Share for additional details. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The following is a summary of significant accounting policies: Basis of Presentation The condensed 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 its subsidiaries and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. The condensed 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 Continuing LLC Owners. These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The consolidated financial information as of December 31, 2022 has been derived from audited financial statements not included herein. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to interim financial reporting and Form 10-Q. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. These unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. 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 GAAP 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 condensed 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 condensed consolidated financial statements. Reclassifications Certain reclassifications have been made to the December 31, 2022 consolidated statement of financial condition, and related financial information, to conform to the current period presentation. These primarily include reclassifying approximately $2.7 million of related party balances from other assets to receivable and due from affiliates and $5.8 million of related party balances from accounts payable, accrued expenses and other liabilities to payable and due to affiliates. These reclassifications had no impact on total assets, total liabilities or total equity on the consolidated statement of financial condition, nor did they have any impact on the consolidated statements of income, comprehensive income, changes in equity or cash flows. Business Combinations Business combinations are accounted for under the purchase method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) . The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The fair value of assets acquired and liabilities assumed is determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. Determining the fair value of certain assets acquired and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates, customer attrition rates and asset lives. Transaction costs incurred to effect a business combination are expensed as incurred and are included as a component of professional fees or general and administrative expenses in the condensed consolidated statements of income . Pushdown Accounting In connection with the Refinitiv Transaction, a majority interest of Refinitiv was acquired by BCP on October 1, 2018 from TR. 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 as of October 1, 2018, the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, also accounted for the Refinitiv Transaction using pushdown accounting which resulted in a new fair value basis of accounting for certain of the Company’s assets and liabilities beginning on October 1, 2018. Under the pushdown accounting applied, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company as of October 1, 2018 was 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 adjusted valuations primarily affected the values of the Company’s long-lived and indefinite-lived intangible assets, including software development costs. Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with remaining maturities at the time of purchase of three months or less. Allowance for Credit Losses The Company continually monitors collections and payments from its clients and maintains an allowance for credit losses. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data. Careful analysis of the financial condition of the Company’s counterparties is also performed. Additions to the allowance for credit losses are charged to credit loss expense, which is included in general and administrative expenses in the condensed consolidated statements of income. Aged balances that are determined to be uncollectible are written off against the allowance for credit losses. See Note 12 – Credit Risk for additional information. 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 executed on the Company’s wholesale platform 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. Until the failed transaction settles, a receivable from (and a matching payable to) brokers and dealers and clearing organizations is recognized for the proceeds from the unsettled transaction. Deposits with Clearing Organizations Deposits with clearing organizations are comprised of cash deposits. 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 is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three 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. As of September 30, 2023 and December 31, 2022, accumulated depreciation related to furniture, equipment, purchased software and leasehold improvements totaled $89.4 million and $73.8 million, respectively. Depreciation expense for furniture, equipment, purchased software and leasehold improvements was $5.4 million and $5.0 million for the three months ended September 30, 2023 and 2022, respectively, and $15.9 million and $14.6 million for the nine months ended September 30, 2023 and 2022, respectively. 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. 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. Software development costs acquired as part of the Yieldbroker Acquisition and the NFI Acquisition are both amortized over one year. Costs capitalized as part of the Refinitiv Transaction 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. As of September 30, 2023 and December 31, 2022, accumulated amortization related to software development costs totaled $207.9 million and $166.6 million, respectively. Amortization expense for software development costs was $14.1 million and $13.0 million for the three months ended September 30, 2023 and 2022, respectively, and $41.3 million and $39.0 million for the nine months ended September 30, 2023 and 2022, respectively. Goodwill Goodwill includes the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company as previously applied under pushdown accounting in connection with the Refinitiv Transaction. Goodwill also includes the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date, including the Yieldbroker Acquisition and the NFI Acquisition. Goodwill is not amortized, but is tested for impairment annually on October 1 st 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. The Company consists of one reporting unit for goodwill impairment testing purposes. 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. Goodwill was last tested for impairment on October 1, 2022 and no impairment of goodwill was identified. Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from four As of September 30, 2023 and December 31, 2022, accumulated amortization related to intangible assets totaled $514.9 million and $434.2 million, respectively. Amortization expense fo r definite-lived intangible assets was $27.1 million and $26.8 million for the three months ended September 30, 2023 and 2022, respectively and $80.7 million and $80.4 million for the nine months ended September 30, 2023 and 2022, respectively. Equity Investments Without Readily Determinable Fair Values Equity Investments without a readily determinable fair value are measured at cost, less impairment, plus or minus observable price changes (in orderly transactions) of an identical or similar investment of the same issuer. If the Company determines that the equity investment is impaired on the basis of a qualitative assessment, the Company will recognize an impairment loss equal to the amount by which the investment’s carrying amount exceeds its fair value. Equity investments are included as a component of other assets on the condensed consolidated statements of financial condition. Securities Sold Under Agreements to Repurchase From time to time, the Company sells securities under agreements to repurchase in order to facilitate the clearance of securities. Securities sold under agreements to purchase are treated as collateralized financings and are presented in the condensed consolidated statements of financial condition at the amounts of cash received. Receivables and payables arising from these agreements are not offset in the condensed consolidated statements of financial condition. Leases At lease commencement, a right-of-use asset and a lease liability are recognized for all leases with an initial term in excess of 12 months based on the initial present value of the fixed lease payments over the lease term. The lease right-of-use asset also reflects the present value of any initial direct costs, prepaid lease payments and lease incentives. The Company’s leases do not provide a readily determinable implicit discount rate. Therefore, management estimates the Company’s incremental borrowing rate used to discount the lease payments based on the information available at lease commencement. The Company includes the term covered by an option to extend a lease when the option is reasonably certain to be exercised. The Company has elected not to separate non-lease components from lease components for all leases. Significant assumptions and judgments in calculating the lease right-of-use assets and lease liabilities include the determination of the applicable borrowing rate for each lease. Operating lease expense is recognized on a straight-line basis over the lease term and included as a component of occupancy expense in the consolidated statements of income. Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs directly related to the Company’s efforts to raise cap ital. Th ese costs are recognized as a reduction in additional paid-in capital within the condensed consolidated statements of financial condition when the offering is effective. No offering costs were incurred during the three and nine months ended September 30, 2023 and 2022. Revenue Recognition The Company’s classification of revenues in the condensed consolidated statements of income represents revenues from contracts with customers disaggregated by type of revenue. See Note 5 – Revenue for additional details regarding revenue types and the Company’s policies regarding revenue recognition. Translation of Foreign Currency and Foreign Exchange Derivative Contracts Revenues, expenses, assets and liabilities denominated in non-functional currencies are recorded in the appropriate functional currency for the legal entity at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities that are denominated in non-functional currencies are then remeasured at the end of each reporting period at the exchange rate prevailing at the end of the reporting period. Foreign currency remeasurement gains or losses on monetary assets and liabilities in nonfunctional currencies are recognized in the condensed consolidated statements of income within general and administrative expenses. The realized and unrealized gains/losses totaled $0.7 million gain and a $0.6 million loss during the three months ended September 30, 2023 and 2022, respectively and realized and unrealized losses during the nine months ended September 30, 2023 and 2022 totaled $1.0 million and $2.3 million, respectively. Since the condensed consolidated financial statements are presented in U.S. dollars, the Company also translates all non-U.S. dollar functional currency revenues, expenses, assets and liabilities into U.S. dollars. All non-U.S. dollar functional currency revenue and expense amounts are translated into U.S. dollars monthly at the average exchange rate for the month. All non-U.S. dollar functional currency assets and liabilities are translated at the rate prevailing at the end of the reporting period. Gains or losses on translation in the financial statements, when the functional currency is other than the U.S. dollar, are included as a component of other comprehensive income. The Company enters into foreign currency forward contracts to mitigate its U.S. dollar and British pound sterling versus euro exposure, generally with a duration of less than 12 months. In June 2023, the Company also entered into a foreign currency call option on Australian dollars, see Note 4 – Acquisitions for additional details. The Company’s foreign exchange derivative contracts are not designated as hedges for accounting purposes. Changes in the fair value during the period of foreign currency forward contracts, which were entered into for foreign exchange risk management purposes relating to operating activities, are recognized in the condensed consolidated statements of income within general and administrative expenses and changes in the fair value during the period of the foreign currency call option on Australian dollars, which was entered into for foreign exchange risk management purposes relating to investing activities, are recognized in the condensed consolidated statements of income within other income/loss. The Company does not use derivative instruments for trading or speculative purposes. Realized and unrea lized gains on foreign currency forward contracts during the three months ended September 30, 2023 and 2022 totaled $3.9 million and $6.8 million , respectively, and r ealized and unrea lized gains on foreign currency forward contracts during the nine months ended September 30, 2023 and 2022 totaled $4.9 million and $12.9 million , respectively. Realized and unrea lized losses on the foreign currency call option on the Australian dollar call option during the three and nine months ended September 30, 2023 totaled $1.9 million and $1.3 million, respectively . As of September 30, 2023 and December 31, 2022 , the counterparty on each of the foreign exchange derivative contracts was an affiliate of LSEG and therefore the corresponding assets or liabilities on such contracts were included in receivable and due from affiliates or payable and due to affiliates, respectively, on the accompanying condensed consolidated statements of financial condition. See Note 11 – Fair Value of Financial Instruments for additional details on the Company ’ s derivative instruments. 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. 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. The Company evaluates the need for valuation allowances based on the weight of positive and negative evidence. The Company records valuation allowances wherever management believes it is more likely than not that the Company will not be able to realize its deferred tax assets in the foreseeable future. The Company records uncertain tax positions on the basis of a two-step process whereby (i) 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 (ii) 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% 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 condensed consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the condensed 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 of 2017 as a current period expense when incurred. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA establishes a 15% corporate minimum tax effective for taxable years beginning after December 31, 2022, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded U.S. corporations. The 1% excise tax did not have a material impact to our financial condition, results of operations and cash flows as of and for the three and nine months ended September 30, 2023. The Company will continue to evaluate the impact of the 15% corporate minimum tax on subsequent periods. On October 8, 2021, the Organization for Economic Cooperation and Development announced an accord endorsing and providing an implementation plan focused on global profit allocation, and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “Two Pillar Plan.” On December 15, 2022, the European Council formally adopted a European Union directive on the implementation of the plan by January 1, 2024. The Company may be subject to the provisions of the Two Pillar Plan, and related tax impacts per local country adoption, as it is a consolidating subsidiary of LSEG. The Company will continue to monitor and evaluate the impact of the Two Pillar Plan on future periods as further information becomes available. Stock-Based Compensation The stock-based payments received by the employees of the Company are accounted for as equity awards. 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. The grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. Forfeitures of stock-based compensation awards are recognized as they occur. For grants made during the post-IPO period, the fair value of the equity instruments is determined based on the price of the Class A common stock on the grant date. Prior to the IPO, the Company awarded options to management and other employees (collectively, the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). The significant assumptions used to estimate the fair value as of grant date of the options awarded prior to the IPO did not reflect changes that would have occurred to these assumptions as a result of the IPO. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019. The Company uses the Black-Scholes pricing model to value some of its option awards. Determining the appropriate fair value model and calculating the fair value of the option awards requires the input of highly subjective assumptions, including the expected life of the option awards and the stock price volatility. For performance-based restricted stock units that vest based on market conditions, the Company recognizes stock-based compensation based on the estimated grant date fair value of the awards computed with the assistance of a valuation specialist using a Monte Carlo simulation on a binomial model. The significant assumptions used to estimate the fair value of the performance-based restricted stock units that vest based on market conditions are years of maturity, annualized volatility and the risk-free interest rate. The maturity period represents the period of time that the award granted was modeled into the future, the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the maturity period of the award and the expected volatility is based upon historical volatility of the Company’s Class A common stock. Earnings Per Share Basic and diluted earnings per share are computed in accordance with the two-class method as unvested restricted stock units and unsettled vested performance-based restricted stock units issued to certain retired executives are entitled to non-forfeitable dividend equivalent rights and are considered participating securities prior to being issued and outstanding shares of common stock. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common shareholders. Basic earnings per share is computed by dividing the net income attributable to the Company’s outstanding shares of Class A and Class B common stock 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 all potentially dilutive securities were converted into or exchanged or exercised for the Company’s Class A or Class B common stock. The dilutive effect of stock options and other stock - based payment awards is calculated using the treasury stock method, which assumes the proceeds from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of LLC Interests is evaluated under the if-converted method, where the securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period presented. Performance-based awards are considered contingently issuable shares and their dilutive effect is included in the denominator of the diluted earnings per share calculation for the entire period, if those shares would be issuable as of the end of the reporting period, assuming the end of the reporting period was also the end of the contingency period. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not included in the calculation of basic 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, Fair Value Measurement (“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 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. • 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. In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions |
Restricted Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2023 | |
Restricted Cash Equivalents [Abstract] | |
Restricted Cash | Restricted CashCash 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 broker-dealers (“PAB”) reserve, which requires the Company to maintain minimum segregated cash in the amount of excess total credits per the reserve computation. As of both September 30, 2023 and December 31, 2022, cash in the amount of $1.0 million, has been segregated in the PAB reserve account, exceeding the requirements pursuant to SEC Rule 15c3-3. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Yieldbroker On August 31, 2023, the Company completed its acquisition of all of the outstanding equity interests of Yieldbroker Pty Limited. The all-cash purchase price of A$123.6 million ($80.1 million U.S. dollars as translated as of August 31, 2023) was net of cash acquired and prior to working capital and other closing adjustments. Working capital adjustments will be finalized during the fourth quarter of 2023. Yieldbroker Pty Limited is a corporation registered under the Corporations Act 2001 in Australia and a Tier 1 Australian Markets Licensee in Australia, regulated by the ASIC, that maintains a branch in Singapore which is regulated by the MAS as a Regulated Market Operator. Yieldbroker operates a leading Australian trading platform for Australian and New Zealand government bonds and interest rate derivatives covering the institutional and wholesale client sectors. The acquisition was accounted for as a business combination and the Company utilized the assistance of a third-party valuation specialist to determine the fair value of the assets acquired and liabilities assumed at the date of the closing of the acquisition. The fair values were determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market and primarily included significant unobservable inputs (Level 3). Customer relationships were valued using the income approach, specifically a multi-period excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then examines the excess return that is attributable to the intangible asset being valued. The discount rate used reflects the amount of risk associated with the hypothetical cash flows for the customer relationships relative to the overall business. In developing a discount rate for the customer relationships, the Company estimated a weighted-average cost of capital for the overall business and employed an intangible asset risk premium to this rate when discounting the excess earnings related to customer relationships. The resulting discounted cash flows were then tax-affected at the applicable statutory rate. The preliminary purchase price was allocated as follows: Purchase Price Allocation (in thousands) Cash and cash equivalents $ 12,753 Accounts receivable 1,631 Equipment 384 Lease right-of-use assets 1,453 Software development costs 588 Goodwill 35,058 Intangible assets - Customer relationships 39,746 Intangible assets - Tradename 492 Deferred tax asset 3,361 Other assets 701 Accrued compensation (3,485) Deferred revenue (72) Accounts payable, accrued expenses and other liabilities (8,713) Lease liabilities (1,496) Total cash paid 82,401 Less: Cash acquired (12,753) Less: Preliminary working capital and other closing adjustments 10,432 Purchase price, net of cash acquired and excluding working capital and other closing adjustments $ 80,080 The primary areas of the preliminary purchase price allocation that are not yet finalized as of September 30, 2023 relate primarily to the valuation of the identifiable intangible assets and software and final working capital adjustments. The allocation of the purchase price will be finalized upon completion of the analysis of the acquired assets within one year of the date of the closing of the acquisition. The acquired software development costs will be amortized over a useful life of one year, the acquired tradename will be amortized over a useful life of four years and the customer relationships will be amortized over a useful life of 13 years. The goodwill recognized in connection with the Yieldbroker Acquisition is primarily attributable to the acquisition of an assembled workforce and expected future customers, future technology and synergies from the integration of the operations of Yieldbroker into the Company's operations and its single business segment. All of the goodwill recognized in connection with the Yieldbroker Acquisition is expected to be deductible for income tax purposes. During the three and nine months ended September 30, 2023, the Company recognized $0.5 million and $2.2 million, respectively, in transaction costs incurred to effect the Yieldbroker Acquisition, which are included as a component of professional fees in the accompanying condensed consolidated statements of income. During both the three and nine months ended September 30, 2023, the Company also recognized $0.8 million in transaction costs incurred to effect the Yieldbroker Acquisition, which are included as a component of general and administrative expenses in the accompanying condensed consolidated statements of income. The Yieldbroker Acquisition was not material to the Company's condensed consolidated financial statements and therefore pro forma and current period results of this acquisition have not been presented. On June 1, 2023, the Company entered into a foreign currency call option on Australian dollars, giving the Company an option to buy A$120.7 million, in order to partially mitigate the Company’s U.S. dollar versus Australian dollar foreign exchange exposure on the then-anticipated payment of the Australian dollar denominated purchase price for the Yieldbroker Acquisition. The counterparty on the foreign currency call option contract was an affiliate of LSEG. On August 25, 2023, the Company unwound the out-of-the-money foreign currency call option and received $1.1 million from an affiliate of LSEG. Realized and unrea lized losses on the Australian dollar call option during the three and nine months ended September 30, 2023 totaled $1.9 million and $1.3 million, respectively, included within other income/loss |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue Recognition The Company enters into contracts with its clients to provide a stand-ready connection to its electronic marketplaces, which facilitates the execution of trades by its clients. The access to the Company’s electronic marketplaces includes market data, continuous pricing data refreshes and the processing of trades thereon. The stand-ready connection to the electronic marketplaces is considered a single performance obligation satisfied over time as the client simultaneously receives and consumes the benefit from the Company’s performance as access is provided (that is, the performance obligation constitutes a series of services that are substantially the same in nature and are provided over time using the same measure of progress). For its services, the Company earns subscription fees for granting access to its electronic marketplaces. Subscription fees, which are generally fixed fees, are recognized as revenue on a monthly basis, in the period that access is provided. 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 condensed consolidated statements of financial condition until the revenue recognition criteria have been met. The Company also earns transaction fees and/or commissions from transactions executed on the Company’s electronic marketplaces. 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. Transaction fees and commissions are generated both on a variable and fixed price basis and vary by geographic region, product type and trade size. Fixed monthly transaction fees or commissions, or monthly transaction fees or commission minimums, are earned on a monthly basis in the period the stand-ready trading services are provided and are generally billed monthly. For variable transaction fees or commissions, the Company charges its clients amounts calculated based on the mix of products traded and the volume of transactions executed. Variable transaction fee or commission revenue is recognized and recorded on a trade-date basis when the individual trade occurs and is generally billed when the trade settles or is billed monthly. Variable discounts or rebates on transaction fees or commissions are earned and applied monthly or quarterly, resolved within the same reporting period and are recorded as a reduction to revenue in the period the relevant trades occur. The Company earns fees from Refinitiv 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 monthly on a straight-line basis, as Refinitiv receives and consumes the benefit evenly over the contract period, as the data is provided. Also included in these fees are fees for historical data sets which are recognized when the historical data set is provided to Refinitiv. Significant judgments used in accounting for this contract include the following determinations: • 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. • The transaction price for the performance obligations is determined 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 for the three and nine months ended September 30, 2023 and 2022 is as follows: Three Months Ended Three Months Ended September 30, 2023 September 30, 2022 (in thousands) (in thousands) Variable Fixed Variable Fixed Revenues Transaction fees and commissions $ 225,934 $ 37,551 $ 192,191 $ 35,824 Subscription fees 465 45,896 470 40,872 Refinitiv market data fees — 15,460 — 15,370 Other 328 2,723 212 2,176 Total revenue $ 226,727 $ 101,630 $ 192,873 $ 94,242 Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 (in thousands) (in thousands) Variable Fixed Variable Fixed Revenues Transaction fees and commissions $ 665,749 $ 110,795 $ 607,126 $ 110,363 Subscription fees 1,395 135,088 1,430 122,907 Refinitiv market data fees — 46,515 — 46,354 Other 794 7,883 677 6,882 Total revenue $ 667,938 $ 300,281 $ 609,233 $ 286,506 Deferred Revenue The Company records deferred revenue when cash payments are received or due in advance of services to be performed. The revenue recognized and the remaining deferred revenue balances are shown below: Amount (in thousands) Deferred revenue balance - December 31, 2022 $ 22,827 New billings 100,331 Revenue recognized (91,832) Deferred revenue acquired in connection with the Yieldbroker Acquisition 72 Effect of foreign currency exchange rate changes 6 Deferred revenue balance - September 30, 2023 $ 31,404 During the nine months ended September 30, 2023, the Company recognized $22.2 million in total revenue that was deferred as of December 31, 2022. During the nine months ended September 30, 2022, the Company recognized $23.1 million in total revenue that was deferred as of December 31, 2021. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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 will continue to increase as Continuing LLC Owners that continue to hold LLC Interests redeem or exchange their LLC Interests for shares of Class A common stock or Class B common stock, as applicable, or the Corporation purchases LLC Interests from such Continuing LLC Owners. The Company’s consolidated effective tax rate will also vary from period to period depending on changes in the mix of earnings, tax legislation and tax rates in various jurisdictions. The Company’s provision for income taxes includes U.S., federal, state, local and foreign taxes. The Company’s effective tax rate for the three months ended September 30, 2023 and 2022 was approximately 20.4% an d 23.2%, respectively. The effective tax rate for the three months ended September 30, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to the return-to-provision adjustment and the effect of non-controlling interests, partially offset by the effect of state, local and foreign taxes. The effective tax rate for the three months ended September 30, 2022 differed from the U.S. federal statutory rate of 21.0% primarily due to the effect of state, local and foreign taxes and the return-to-provision adjustments, partially offset by the effect of non-controlling interests and the tax impact of the issuance of common stock from equity incentive plans. The Company’s effective tax rate for the nine months ended September 30, 2023 and 2022 was approximately 22.4% and 19.7%, respectively. The effective tax rate for the nine months ended September 30, 2023 differed from the U.S. federal statutory rate of 21.0% primarily due to state, local and foreign taxes, partially offset by the effect of non-controlling interests, the exercise of equity compensation and the return-to-provision adjustment. The effective tax rate for the nine months ended September 30, 2022 differed from the U.S. federal statutory rate of 21.0% primarily due to the tax impact of the issuance of common stock from equity incentive plans, return-to-provision adjustments and the effect of non-controlling interests, partially offset by state, local and foreign taxes. The Company has obtained, and 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 Continuing LLC Owners and in connection with certain other qualifying transactions. This increase in tax basis has had, and may in the future 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 the Corporation 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 7 – Tax Receivable Agreement for further details. The tax benefit has been recognized in deferred tax assets on the condensed consolidated statement of financial condition. In connection with the Reorganization Transactions, a Refinitiv entity was contributed to the Corporation, pursuant to which the Corporation received 96,933,192 LLC Interests and Refinitiv received 96,933,192 shares of Class B common stock (“Refinitiv Contribution”). As a result of the Refinitiv Contribution, the Company assumed the tax liabilities of the contributed entity. During the second quarter of 2023, the contributed entity reached an audit settlement with the State of New Jersey for the tax years 2008 - 2015. As of September 30, 2023 and December 31, 2022, none and $2.7 million, respectively, is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated statements of financial condition relating to these tax liabilities. The Company is indemnified by Refinitiv for these tax liabilities that were assumed by the Company as a result of the Refinitiv Contribution. As of September 30, 2023 and December 31, 2022, none and $2.7 million, respectively, is included in receivable and due from affiliates on the condensed consolidated statements of financial condition associated with this related party indemnification. |
Tax Receivable Agreement
Tax Receivable Agreement | 9 Months Ended |
Sep. 30, 2023 | |
Tax Receivable Agreement | |
Tax Receivable Agreement | Tax Receivable Agreement In connection with the Reorganization Transactions, the Corporation entered into a tax receivable agreement (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, including with the net proceeds from the IPO and any subsequent offerings 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 within 150 days after the filing of the tax return based on the actual tax savings realized by the Corporation. The first payment of the Tax Receivable Agreement was made in January 2021. Substantially all payments due under the Tax Receivable Agreement are payable over fifteen years following the purchase of LLC Interests from Continuing LLC Owners or redemption or exchanges by Continuing LLC Owners of LLC Interests. The Corporation accounts for the income tax effects resulting from taxable redemptions or exchanges of LLC Interests by Continuing LLC Owners for shares of Class A common stock or Class B common stock or cash, as the case may be, and purchases by the Corporation of LLC Interests from Continuing LLC Owners by recognizing an increase in deferred tax assets, based on enacted tax rates at the date of each redemption, exchange, or purchase, 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. |
Non-Controlling Interests
Non-Controlling Interests | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | 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 condensed consolidated financial statements. The non-controlling interests balance reported on the condensed consolidated statements 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 during the period by Tradeweb Markets Inc. and the other holders of LLC Interests. The following table summarizes the ownership interest in Tradeweb Markets LLC: September 30, 2023 September 30, 2022 LLC Ownership LLC Ownership Number of LLC Interests held by Tradeweb Markets Inc. 211,644,675 90.2 % 208,177,751 88.8 % Number of LLC Interests held by non-controlling interests 23,080,571 9.8 % 26,347,881 11.2 % Total LLC Interests outstanding 234,725,246 100.0 % 234,525,632 100.0 % LLC Interests held by the Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement at the election of the members for shares of Class A common stock or Class B common stock, as applicable, 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. The following table summarizes the impact on Tradeweb Market Inc.’s equity due to changes in the Corporation’s ownership interest in TWM LLC: Net Income Attributable to Tradeweb Markets Inc. and Transfers (to) from the Non-Controlling Interests Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Net income attributable to Tradeweb Markets Inc. $ 98,614 $ 69,083 $ 275,552 $ 220,392 Transfers (to) from non-controlling interests: Increase/(decrease) in Tradeweb Markets Inc.’s additional paid-in capital as a result of ownership changes in TWM LLC (404) 79,606 79,376 108,311 Net transfers (to) from non-controlling interests (404) 79,606 79,376 108,311 Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interests $ 98,210 $ 148,689 $ 354,928 $ 328,703 |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stockholders' Equity and Stock-Based Compensation Plans | Stockholders’ Equity and Stock-Based Compensation Plans The rights and privileges of the Company’s stockholders’ equity and LLC Interests are described in the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and there have been no changes to those rights and privileges during the nine months ended September 30, 2023. Common Stock The following table details the movement in the Company’s outstanding shares of common stock during the period: Class A Class B Class C Class D Total Balance at December 31, 2022 110,746,606 96,933,192 3,251,177 23,092,704 234,023,679 Activities related to exchanges of LLC Interests 8,733 — — (8,733) — Issuance of common stock from equity incentive plans 986,090 — — — 986,090 Share repurchases pursuant to share repurchase programs (313,311) — — — (313,311) Balance at March 31, 2023 111,428,118 96,933,192 3,251,177 23,083,971 234,696,458 Activities related to exchanges of LLC Interests 3,254,577 — (3,251,177) (3,400) — Issuance of common stock from equity incentive plans 92,687 — — — 92,687 Share repurchases pursuant to share repurchase programs (107,365) — — — (107,365) Balance at June 30, 2023 114,668,017 96,933,192 — 23,080,571 234,681,780 Activities related to exchanges of LLC Interests — — — — — Issuance of common stock from equity incentive plans 108,520 — — — 108,520 Share repurchases pursuant to share repurchase programs (65,054) — — — (65,054) Balance at September 30, 2023 114,711,483 96,933,192 — 23,080,571 234,725,246 Class A Class B Class C Class D Total Balance at December 31, 2021 106,286,821 96,933,192 1,654,825 28,873,139 233,747,977 Activities related to exchanges of LLC Interests 552,606 — — (552,606) — Issuance of common stock from equity incentive plans 1,068,080 — — — 1,068,080 Share repurchases pursuant to share repurchase programs (559,428) — — — (559,428) Balance at March 31, 2022 107,348,079 96,933,192 1,654,825 28,320,533 234,256,629 Activities related to exchanges of LLC Interests 3,700 — — (3,700) — Issuance of common stock from equity incentive plans 367,374 — — — 367,374 Share repurchases pursuant to share repurchase programs (103,458) — — — (103,458) Balance at June 30, 2022 107,615,695 96,933,192 1,654,825 28,316,833 234,520,545 Activities related to exchanges of LLC Interests 3,623,777 — 1,596,352 (5,220,129) — Issuance of common stock from equity incentive plans 134,896 — — — 134,896 Share repurchases pursuant to share repurchase programs (129,809) — — — (129,809) Balance at September 30, 2022 111,244,559 96,933,192 3,251,177 23,096,704 234,525,632 On April 3, 2023, the stockholder that owned 3,251,177 LLC Interests and 3,251,177 shares of Class C common stock, redeemed its LLC Interests for 3,251,177 shares of Class A common stock, and the shares of Class C common stock previously held by the stockholder were cancelled. Stock-Based Compensation Plans Under the Tradeweb Markets Inc. 2019 Omnibus Equity Incentive Plan, the Company is authorized to issue up to 8,841,864 new shares of Class A common stock to employees, officers and non-employee directors. Under this plan, the Company may grant awards in respect of shares of Class A common stock, including performance-based restricted stock units, stock options, restricted stock units (“RSUs”) and dividend equivalent rights. The awards may have performance-based and/or time-based vesting conditions. RSUs and performance-based restricted stock units each represent promises to issue actual shares of Class A common stock at the end of a vesting period. Stock options have a maximum contractual term of 10 years. On February 16, 2022, the Company announced that Mr. Olesky would retire as Chief Executive Officer (“CEO”) of the Company, effective December 31, 2022, resulting in an acceleration of the total unamortized stock-based compensation associated with equity awards granted to him. The unamortized expense was accelerated over a revised estimated service period that ended on August 11, 2022, representing Mr. Olesky’s required six month notice period under the Company’s 2019 Omnibus Equity Incentive Plan. In addition, in December 2022, $5.5 million in stock-based compensation awards, relating to 2022 performance, were granted to Mr. Olesky and immediately recognized into expense upon grant. During the year ended December 31, 2022, the Company recorded a total of $15.0 million in accelerated stock-based compensation expenses (“ CEO Retirement Accelerated Stock-Based Compensation Expense ”) and related payroll that would not have been recognized if Mr. Olesky had not announced his retirement, including $2.0 million and $9.4 million recognized during the three and nine months ended September 30, 2022, respectively. There was no CEO Retirement Accelerated Stock-Based Compensation Expense recorded during the three and nine months ended September 30, 2023 . In addition to the performance-based restricted stock units previously awarded pursuant to the 2019 Omnibus Equity Incentive Plan, which vest based on the financial performance of the Company (“PRSUs”), during the nine months ended September 30, 2023, on March 15, 2023, the Company granted to certain executives, an aggregate of 251,113 performance-based restricted stock units that vest based on market conditions (“PSUs”). PSUs are promises to issue actual shares of Class A common stock which cliff vest on January 1 of the third calendar year from the calendar year of the date of grant. The number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of the Company’s total shareholder return over a three-year performance period. The performance modifier can vary between 0% (minimum) and 250% (maximum) of the target (100%) award amount. The PSUs granted on March 15, 2023 had a grant date fair value of $98.33 per share, or $24.7 million in total, which will be expensed on a straight-line basis through December 31, 2025, the end of the three-year performance period. The grant date fair value of the March 2023 PSUs was estimated using the Monte Carlo simulation model and the significant valuation assumptions used in the valuation were a maturity of 2.8 years annualized volatility of 28.81% and a risk-free interest rate of 3.77%. There were no PSUs granted during the three months ended September 30, 2023 or the three and nine months ended September 30, 2022. During the three months ended September 30, 2023, the Company granted 1,743 RSUs at a weighted-average grant-date fair value of $86.43. No PRSUs were granted during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the Company granted 571,980 RSUs and 326,050 PRSUs at a weighted-average grant-date fair value of $69.66 and $69.56, respectively. RSU awards granted to employees will generally vest one-third each year over a three-year period, and RSU awards granted to non-employee directors will vest after one year. PRSUs generally cliff vest on January 1 of the third calendar year from the calendar year of the date of grant and the number of shares a participant will receive 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. The performance modifier can vary between 0% (minimum) and 200% (maximum) of the target (100%) award amount for awards granted during 2022 and prior years. PRSUs granted during 2023 have a 250% maximum performance modifier. A summary of the Company ’ s total stock-based compensation expense, including the CEO Retirement Accelerated Stock-Based Compensation Expense, is presented below: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Total stock-based compensation expense $ 17,348 $ 14,757 $ 44,670 $ 49,432 The stock-based compensation expense above excludes $0.4 million and $1.0 million of stock-based compensation expense capitalized to software development costs during the three and nine months ended September 30, 2023, respectively. Share Repurchase Program On December 5, 2022, the Company announced that its board of directors authorized a new share repurchase program (the “2022 Share Repurchase Program”), after completing in October 2022, the $150.0 million of total repurchases of the Company’s Class A common stock previously authorized in February 2021 (the “2021 Share Repurchase Program”). The 2022 Share Repurchase Program was authorized to continue to offset annual dilution from stock-based compensation plans, as well as to opportunistically repurchase the Company’s Class A common stock. The 2022 Share Repurchase Program authorizes the purchase of up to $300.0 million of the Company’s Class A common stock at the Company’s discretion and has no termination date. The 2022 Share Repurchase Program can be effected through regular open-market purchases (which may include repurchase plans designed to comply with Rule 10b5-1), through privately negotiated transactions or through accelerated share repurchases, each in accordance with applicable securities laws and other restrictions. The amounts, timing and manner of the repurchases will be subject to general market conditions, the prevailing price and trading volumes of the Company’s Class A common stock and other factors. The 2022 Share Repurchase Program does not require the Company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. During the three months ended September 30, 2023 and 2022, the Company acquired a total of 65,054 and 129,809 shares of Class A common stock, at an average price of $75.28 and $69.33, for purchases totaling $4.9 million and $9.0 million, respectively. During the nine months ended September 30, 2023 and 2022, the Company acquired a total of 485,730 and 792,695 shares of Class A common stock, at an average price of $72.48 and $82.41, for purchases totaling $35.2 million and $65.3 million, respectively. Each share of Class A common stock repurchased pursuant to the 2021 and 2022 Share Repurchase Programs was funded with the proceeds, on a dollar-for-dollar basis, from the repurchase by Tradeweb Markets LLC of an LLC Interest from the Corporation in order to maintain the one-to-one ratio between outstanding shares of the Class A common stock and Class B common stock and the LLC Interests owned by the Corporation. Subsequent to their repurchase, the shares of Class A common stock and the LLC Interests were all cancelled and retired. As of September 30, 2023, a total of $239.8 million remained available for repurchase pursuant to the 2022 Share Repurchase Program. For shares repurchased pursuant to the 2021 and 2022 Share Repurchase Programs, the excess of the repurchase price paid over the par value of the Class A common stock is be recorded as a reduction to retained earnings. Other Share Repurchases During the three months ended September 30, 2023 and 2022, the Company withheld 92,373 and 33,348 shares, respectively, of common stock from employee stock option, PRSU and RSU awards, at an average price per share of $84.15 and $68.13, respectively, and an aggregate value of $7.8 million and $2.3 million, respectively, based on the price of the Class A common stock on the date the relevant withholding occurred. During the nine months ended September 30, 2023 and 2022, the Company withheld 693,456 and 1,048,837 shares, respectively, of common stock from employee stock option, PRSU and RSU awards, at an average price per share of $71.38 and $95.59, respectively, and an aggregate value of $49.5 million and $100.3 million, respectively, based on the price of the Class A common stock on the date the relevant withholding occurred. These shares are withheld in order for the Company to cover the payroll tax withholding obligations upon the exercise of stock options and settlement of RSUs and PRSUs and such shares were not withheld in connection with the share repurchase programs discussed above. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company enters into transactions with its affiliates from time to time which are considered to be related party transactions. As of September 30, 2023 and December 31, 2022, the following balances with such affiliates were included in the condensed consolidated statements of financial condition in the following line items: September 30, December 31, 2023 2022 (in thousands) Accounts receivable $ 1,812 $ 70 Receivable and due from affiliates 3,165 2,728 Other assets 74 261 Accounts payable, accrued expenses and other liabilities 1,467 335 Deferred revenue 5,099 5,076 Payable and due to affiliates 527 7,232 The following balances with such affiliates were included in the condensed consolidated statements of income in the following line items: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Revenue: Subscription fees $ 460 $ 282 $ 1,931 $ 799 Refinitiv market data fees (1) 15,460 15,370 46,515 46,354 Other fees 218 110 468 353 Expenses: (2) Employee compensation and benefits 9 — 26 613 Technology and communications 1,496 1,231 4,147 3,546 General and administrative 4 47 4 244 Professional fees 9 1 10 46 Occupancy 21 — 41 — (1) The Company maintains a market data license agreement with Refinitiv. Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees and royalties for these feeds. (2) The Company maintains agreements with Refinitiv to provide the Company with certain real estate, payroll, benefits administration and other administrative services. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial Instruments Measured at Fair Value The Company’s financial instruments measured at fair value on the condensed consolidated statements of financial condition as of September 30, 2023 and December 31, 2022 have been categorized based upon the fair value hierarchy as follows: Quoted Prices in active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in thousands) As of September 30, 2023 Assets Cash equivalents – Money market funds $ 1,361,198 $ — $ — $ 1,361,198 Receivable and due from affiliates – Foreign exchange derivative contracts — 3,019 — 3,019 Total assets measured at fair value $ 1,361,198 $ 3,019 $ — $ 1,364,217 Liabilities Payable and due to affiliates – Foreign exchange derivative contracts $ — $ — $ — $ — Total liabilities measured at fair value $ — $ — $ — $ — As of December 31, 2022 Assets Cash equivalents – Money market funds $ 1,106,916 $ — $ — $ 1,106,916 Total assets measured at fair value $ 1,106,916 $ — $ — $ 1,106,916 Liabilities Payable and due to affiliates – F oreign exchange derivative contracts $ — $ 1,002 $ — $ 1,002 Total liabilities measured at fair value $ — $ 1,002 $ — $ 1,002 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 enters into foreign currency forward contracts to mitigate its U.S. dollar and British pound sterling versus euro exposure, generally with a duration of less than 12 months. The valuations for the Company’s foreign currency forward contracts are primarily based on the difference between the exchange rate associated with the contract and the exchange rate at the current period end for the tenor of the contract. Foreign currency forward contracts are categorized as Level 2 in the fair value hierarchy. As of September 30, 2023 and December 31, 2022 , the counterparty on each of these foreign exchange derivative contracts was an affiliate of LSEG and therefore the corresponding assets or liabilities on such contracts were included in receivable and due from affiliates or payable and due to affiliates, respectively, on the accompanying condensed consolidated statements of financial condition. The following table summarizes the aggregate U.S. dollar equivalent notional amount of the Company ’ s foreign exchange derivative contracts not designated as hedges for accounting purposes: September 30, December 31, 2023 2022 (in thousands) Foreign currency forward contracts – Gross notional amount $ 178,620 $ 162,845 The Company’s foreign exchange derivative contracts are not designated as hedges for accounting purposes and changes in the fair value of these contracts during the period are recognized in the condensed consolidated statements of income. The total realized and unrealized gains (losses) on foreign exchange derivative contracts recorded within the condensed consolidated statements of income are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Foreign currency forward contracts not designated in accounting hedge relationship – General and administrative (expenses)/income $ 3,883 $ 6,767 $ 4,921 $ 12,937 Foreign currency call option contract not designated in accounting hedge relationship – Other income/(loss) (1) $ (1,907) $ — $ (1,289) $ — (1) On June 1, 2023, the Company entered into a foreign currency call option on Australian dollars, in order to partially mitigate the Company’s U.S. dollar versus Australian dollar foreign exchange exposure on the then-anticipated payment of the Australian dollar denominated purchase price for the Yieldbroker Acquisition. On August 25, 2023, the Company unwound the out-of-the-money foreign currency call option and received $1.1 million. See Note 4 – Acquisitions for additional details. Financial Instruments Not Measured at Fair Value The Company’s financial instruments not measured at fair value on the condensed consolidated statements of financial condition as of September 30, 2023 and December 31, 2022 have been categorized based upon the fair value hierarchy as follows: Carrying Value Quoted Prices in Significant Observable Inputs (Level 2) Significant Total Fair Value As of September 30, 2023 (in thousands) Assets Cash and restricted cash $ 133,212 $ 133,212 $ — $ — $ 133,212 Receivable from brokers and dealers and clearing organizations 4,966 — 4,966 — 4,966 Deposits with clearing organizations 26,433 26,433 — — 26,433 Accounts receivable 167,039 — 167,039 — 167,039 Other assets – Memberships in clearing organizations 2,423 — — 2,423 2,423 Total $ 334,073 $ 159,645 $ 172,005 $ 2,423 $ 334,073 Liabilities Payable to brokers and dealers and clearing organizations $ 4,966 $ — $ 4,966 $ — $ 4,966 Total $ 4,966 $ — $ 4,966 $ — $ 4,966 As of December 31, 2022 Assets Cash and restricted cash $ 151,313 $ 151,313 $ — $ — $ 151,313 Receivable from brokers and dealers and clearing organizations 11,632 — 11,632 — 11,632 Deposits with clearing organizations 23,906 23,906 — — 23,906 Accounts receivable 142,676 — 142,676 — 142,676 Other assets – Memberships in clearing organizations 2,406 — — 2,406 2,406 Total $ 331,933 $ 175,219 $ 154,308 $ 2,406 $ 331,933 Liabilities Payable to brokers and dealers and clearing organizations $ 11,264 $ — $ 11,264 $ — $ 11,264 Total $ 11,264 $ — $ 11,264 $ — $ 11,264 The carrying value of financial instruments not measured at fair value classified within level 1 or level 2 of the fair value hierarchy approximates fair value because of the relatively short term nature of the underlying assets or liabilities. The memberships in clearing organizations, which are included in other assets on the condensed consolidated statements of financial condition, are classified within level 3 of the fair value hierarchy because the valuation requires assumptions that are both significant and unobservable. Financial Instruments Without Readily Determinable Fair Values Included in other assets on the condensed consolidated statements of financial condition are equity investments without readily determinable fair values of $20.0 million as of both September 30, 2023 and December 31, 2022. |
Credit Risk
Credit Risk | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Credit Risk | Credit Risk Cash and cash equivalents includes cash and money market instruments held by a limited number of global financial institutions, including cash amounts in excess of federally insured limits. To mitigate this concentration of credit risk, the Company invests through high-credit-quality financial institutions, monitors the concentration of credit exposure of investments with any single obligor and diversifies as determined appropriate. 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 will recognize a receivable from (and a matching payable to) brokers and dealers and clearing organizations for the proceeds from the unsettled transaction, until the failed transaction settles. 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. However, from time to time, the Company enters into repurchase and/or reverse repurchase agreements to facilitate the clearance of securities relating to fails to deliver or receive. We seek to manage credit exposure related to these agreements to repurchase (or reverse repurchase), including the risk related to a decline in market value of collateral (pledged or received), by entering into agreements to repurchase with overnight or short-term maturity dates and only entering into repurchase transactions with netting members of the Fixed Income Clearing Corporation (“FICC”). The FICC operates a continuous net settlement system, whereby as trades are submitted and compared, the FICC becomes the counterparty. A substantial number of the Company’s transactions are collateralized and executed with, and on behalf of, a limited number of broker-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. Allowance for Credit Losses The Company may be exposed to credit risk regarding its receivables, which are primarily receivables from financial institutions, including investment managers and broker-dealers. The Company maintains an allowance for credit losses based upon an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data. Careful analysis of the financial condition of the Company’s counterparties is also performed. Account balances are pooled based on the following risk characteristics: 1. Geographic location 2. Transaction fee type (billing type) 3. Legal entity Write-Offs Once determined uncollectible, aged balances are written off against the allowance for credit losses. This determination is based on careful analysis of individual receivables and aging schedules, which are disaggregated based on the risk characteristics described above. Based on current policy, this generally occurs when the receivable is 360 days past due. As of September 30, 2023 and December 31, 2022, the Company maintained an allowance for credit losses with regard to these receivables of $0.2 million and $0.1 million, respectively. For the three months ended September 30, 2023 and 2022, credit loss expense was $13,000 and $60,000, respectively. For the nine months ended September 30, 2023 and 2022 credit loss expense was $60,000 and $34,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesFrom time to time, the Company is subject to various claims, lawsuits and other legal proceedings, including reviews, investigations and proceedings by governmental and self-regulatory agencies regarding its business. While the ultimate resolution of these matters cannot presently be determined, the Company does not believe that, taking into account any applicable insurance coverage, any of the pending legal proceedings, including the matters set forth below, could reasonably be expected to have a material adverse effect on its business, financial condition or results of operations. In the normal course of business, the Company enters into agreements with its customers which provide the customers with indemnification rights, including 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 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 two consolidated antitrust class actions relating to trading practices in United States Treasury securities auctions. The cases were dismissed in March 2021, with the Court granting the Plaintiffs leave to further amend the complaint by no later than May 14, 2021. The plaintiffs filed an amended complaint on or about May 14, 2021, and the Company moved to dismiss the amended complaint on June 14, 2021. By order dated March 31, 2022, the Court granted the Company’s motion and dismissed all of the claims against it in the amended complaint. The Court also denied the plaintiffs’ request for leave to file a further amended complaint. On April 28, 2022, the Plaintiffs filed a Notice of Appeal of the decision and filed their opening brief on the appeal in the United States Court of Appeals for the Second Circuit on August 18, 2022. The Company filed its brief in response on November 17, 2022. Plaintiffs filed their brief in reply in further support of their appeal on December 14, 2022. Oral argument in the appeal was held on October 3, 2023, and the Second Circuit now has the appeal under advisement. We believe that we have meritorious defenses to the claims set forth in the complaint and intend to continue to vigorously defend our position. Additionally, the Company was dismissed from a cla ss action relating to an interest rate swaps matter in 2017, but that matter continues against the remaining defendant financial institutions. 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, $500.0 million senior secured revolving credit facility (“Revolving Credit Facility”) with a syndicate of banks. The Revolving Credit Facility was subsequently amended on November 7, 2019 and March 31, 2023. The Revolving 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 Revolving Credit Facility, borrowings under the Revolving 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 1.00% and (iii) one month Term SOFR plus 1.00% plus a credit adjustment spread of 0.10%, in each case plus 0.75%, (b) Term SOFR plus 1.75% plus a credit adjustment spread of 0.10%, subject to a 0.00% floor, (c) SONIA plus 1.75%, subject to a 0.00% floor or (d) EURIBOR 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 Revolving 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 both September 30, 2023 and December 31, 2022, there were $0.5 million in letters of credit issued under the Revolving Credit Facility and no borrowings outstanding. Leases The Company has operating leases for corporate offices and data centers with initial lease terms ranging from one Amount (in thousands) Remainder of 2023 $ 3,495 2024 8,925 2025 4,046 2026 3,264 2027 3,261 Thereafter 223 Total future lease payments 23,214 Less imputed interest (1,174) Lease liability $ 22,040 Other Commitments |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table summarizes the calculations of basic and diluted earnings per share of Class A and Class B common stock for Tradeweb Markets Inc.: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands, except share and per share amounts) Numerator: Net income attributable to Tradeweb Markets Inc. $ 98,614 $ 69,083 $ 275,552 $ 220,392 Less: Distributed and undistributed earnings allocated to unvested RSUs and unsettled vested PRSUs (1) (124) (82) (348) (111) Net income attributable to outstanding shares of Class A and Class B common stock - Basic and Diluted $ 98,490 $ 69,001 $ 275,204 $ 220,281 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 211,618,475 205,721,162 210,444,082 204,767,261 Dilutive effect of PRSUs 504,945 746,043 380,740 796,090 Dilutive effect of options 1,110,175 1,661,705 1,240,923 1,940,970 Dilutive effect of RSUs 258,039 200,559 211,163 243,716 Dilutive effect of PSUs — — — — Weighted average shares of Class A and Class B common stock outstanding - Diluted 213,491,634 208,329,469 212,276,908 207,748,037 Earnings per share - Basic $ 0.47 $ 0.34 $ 1.31 $ 1.08 Earnings per share - Diluted $ 0.46 $ 0.33 $ 1.30 $ 1.06 (1) During the three months ended September 30, 2023 and 2022, there was a total of 265,681 and 246,238, respectively, and during the nine months ended September 30, 2023 and 2022, there was a total of 266,453 and 121,115, respectively, weighted average unvested RSUs and unsettled vested PRSUs that were considered a participating security for purposes of calculating earnings per share in accordance with the two-class method. LLC Interests held by Continuing LLC Owners are redeemable in accordance with the TWM LLC Agreement, at the election of such holders, for shares of Class A or Class B common stock, as applicable, of Tradeweb Markets Inc. The potential dilutive effect of LLC Interests are evaluated under the if-converted method. The potential dilutive effect of PRSUs, shares underlying options, RSUs and PSUs are evaluated under the treasury stock method. The following table summarizes the PRSUs, shares underlying options, RSUs, PSUs and weighted-average LLC Interests that were anti-dilutive for the periods indicated. As a result, these shares, which were outstanding, were excluded from the computation of diluted earnings per share for the periods indicated: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Anti-dilutive Shares: PRSUs — 324,467 — — Options — — — — RSUs 110,927 321,920 110,927 38,761 PSUs 144,666 — 144,666 — LLC Interests 23,080,571 28,750,603 24,179,583 29,667,383 Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not included in the calculation of basic earnings per share and are not participating securities for purposes of the computation of diluted earnings per share. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 9 Months Ended |
Sep. 30, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Regulatory Capital Requirements | Regulatory Capital Requirements TWL, DW and TWD are subject to the Uniform Net Capital Rule 15c3-1 under the Exchange Act. TEL and TESL are 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, TWEU and TESBV are subject to certain finance resource requirements with the AFM in the Netherlands and YB is subject to certain financial resource requirements with ASIC. At September 30, 2023 and December 31, 2022, the regulatory capital requirements and regulatory capital for these entities are as follows: As of September 30, 2023 TWL DW TWD TEL TWJ TWEU TESL TESBV YB (in thousands) Regulatory Capital $ 41,514 $ 149,497 $ 40,524 $ 74,995 $ 7,166 $ 11,381 $ 1,740 $ 1,558 $ 1,974 Regulatory Capital Requirement 2,639 2,852 741 33,024 2,022 5,358 917 860 1,014 Excess Regulatory Capital $ 38,875 $ 146,645 $ 39,783 $ 41,971 $ 5,144 $ 6,023 $ 823 $ 698 $ 960 As of December 31, 2022 TWL DW TWD TEL TWJ TWEU TESL TESBV (in thousands) Regulatory Capital $ 41,933 $ 131,026 $ 44,094 $ 59,904 $ 7,320 $ 8,794 $ 1,607 $ 1,677 Regulatory Capital Requirement 3,669 3,574 775 32,589 1,695 4,517 904 801 Excess Regulatory Capital $ 38,264 $ 127,452 $ 43,319 $ 27,315 $ 5,625 $ 4,277 $ 703 $ 876 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 September 30, 2023 and December 31, 2022 are as follows: As of September 30, 2023 As of December 31, 2022 TW SEF DW SEF TW SEF DW SEF (in thousands) Financial Resources $ 40,661 $ 12,861 $ 30,837 $ 14,714 Required Financial Resources 12,500 8,694 12,500 8,080 Excess Financial Resources $ 28,161 $ 4,167 $ 18,337 $ 6,634 Liquid Financial Assets $ 17,915 $ 7,523 $ 15,566 $ 9,493 Required Liquid Financial Assets 3,125 2,174 3,125 2,020 Excess Liquid Financial Assets $ 14,790 $ 5,349 $ 12,441 $ 7,473 |
Business Segment and Geographic
Business Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Information | 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 and post-trade 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: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Revenues Institutional $ 195,094 $ 172,814 $ 577,774 $ 551,322 Wholesale 77,975 64,584 227,404 205,532 Retail 32,332 28,495 94,875 75,267 Market Data 22,956 21,222 68,166 63,618 Total revenue 328,357 287,115 968,219 895,739 Operating expenses 203,619 184,305 604,580 574,720 Operating income $ 124,738 $ 102,810 $ 363,639 $ 321,019 The Company operates in the U.S. and internationally, primarily in the Europe and Asia regions. 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. The following table provides revenue by geographic area: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Revenues U.S. $ 207,842 $ 185,097 $ 617,463 $ 565,540 International 120,515 102,018 350,756 330,199 Total revenue $ 328,357 $ 287,115 $ 968,219 $ 895,739 The following table provides information on the attribution of long-lived assets by geographic area: September 30, December 31, 2023 2022 (in thousands) Long-lived assets U.S. $ 4,022,318 $ 4,044,230 International 15,185 13,026 Total $ 4,037,503 $ 4,057,256 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 26, 2023, the board of directors of Tradeweb Markets Inc. declared a cash dividend of $0.09 per share of Class A common stock and Class B common stock for the third quarter of 2023. This dividend will be payable on December 15, 2023 to stockholders of record as of December 1, 2023. On October 26, 2023, 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 $49.9 million, as adjusted by required state and local tax withholdings that will be determined prior to the record date of December 1, 2023, payable on December 13, 2023. On October 25, 2023, the Company entered into a master data license agreement (the “Master Data Agreement”) with Refinitiv US LLC and Refinitiv US Organization LLC (together, the “Refinitiv Parties”), which effective as of November 1, 2023 amends and restates in its entirety the Second Amended and Restated Market Data Agreement, dated November 1, 2018, by and among Tradeweb Markets and the Refinitiv Parties, as amended. Pursuant to the Master Data Agreement, on October 25, 2023, Tradeweb Markets and the Refinitiv Parties entered into separate data schedules (the “Current Data Schedules”) under which Tradeweb Markets will license certain data sets to Refinitiv US LLC and its relevant affiliates (collectively, the “Refinitiv Subscriber”) in exchange for either fixed license fees or fees payable based on a percentage of revenue generated by the Refinitiv Subscriber. As of the date hereof, Tradeweb Markets will provide the Refinitiv Subscriber with certain market data (including real time feeds) for multiple fixed income and derivatives products under a partially exclusive license pursuant to which the Refinitiv Subscriber is permitted to distribute such market data to its customers subject to the terms of the Master Data Agreement. Tradeweb Markets will also earn revenues from the Refinitiv Subscriber for servicing certain of its customers, as well as earn a share of revenue generated from the licensing of 19901 data sets to clients, which utilizes Tradeweb Markets data. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) Attributable to Parent | $ 98,614 | $ 69,083 | $ 275,552 | $ 220,392 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | The following table describes trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, as defined in Item 408 of Regulation S-K (“Rule 10b5-1 trading arrangements”), adopted, modified or terminated by our executive officers and directors during the three months ended September 30, 2023. Name and Title Action Date Aggregate Number of Securities to be Purchased or Sold Scheduled Expiration Date (1) Steven Berns Director Adoption August 4, 2023 Sale of up to 760 shares of Class A common stock to be issued upon the vesting on May 15, 2024 of previously awarded restricted stock units. May 30, 2024 Scott Zucker Chief Administrative and Risk Officer Adoption September 1, 2023 Sale of an amount equal to up to: (A) 3,048 shares of Class A common stock and (B) (i) 10,180 shares of Class A common stock to be issued upon the vesting on January 1, 2024 of previously awarded performance-based restricted stock units, plus (ii) the number of shares issued upon vesting on January 1, 2024 in settlement of dividend equivalent rights in respect of the 10,180 shares subject to the performance-based restricted stock units that accrued during the award’s vesting period of March 15, 2021 - January 1, 2024, pursuant to the terms of the award agreement and determined on the vesting date, less (iii) the number of shares withheld for taxes, to be determined on the vesting date. June 1, 2024 Billy Hult Chief Executive Officer and Director Modification (2) September 8, 2023 Sale of an amount equal to up to: (A) 35,000 shares of Class A common stock to be issued upon the exercise of options in accordance with the terms of the Rule 10b5-1 trading arrangement and (B) (i) 49,688 shares of Class A common stock to be issued upon the vesting on January 1, 2024 of previously awarded performance-based restricted stock units, plus (ii) the number of shares issued upon vesting on January 1, 2024 in settlement of dividend equivalent rights in respect of the 49,688 shares subject to the performance-based restricted stock units that accrued during the award’s vesting period of March 15, 2021 - January 1, 2024, pursuant to the terms of the award agreement and determined on the vesting date, less (iii) the number of shares withheld for taxes, to be determined on the vesting date. May 16, 2024 (1) In each case, the Rule 10b5-1 trading arrangement may also expire on such earlier date as all such transactions under the trading arrangement are completed or at such time as such trading arrangement is otherwise terminated in accordance with its terms. (2) Modified the Rule 10b5-1 trading arrangement originally adopted by Mr. Hult on May 16, 2023 (the “Original Hult Plan”) to increase the number of shares covered by such trading arrangement. The Original Hult Plan provided for the potential sale of an amount of shares of Class A common stock equal to up to: (i) 49,688 shares of Class A common stock to be issued upon the vesting on January 1, 2024 of previously awarded performance-based restricted stock units, plus (ii) the number of shares issued upon vesting on January 1, 2024 in settlement of dividend equivalent rights in respect of the 49,688 shares subject to the performance-based restricted stock units that accrued during the award’s vesting period of March 15, 2021 - January 1, 2024, pursuant to the terms of the award agreement and determined on the vesting date, less (iii) the number of shares withheld for taxes, to be determined on the vesting date. As of the date of modification, no shares of Class A common stock had been sold under the Original Hult Plan. | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Steven Berns [Member] | ||
Trading Arrangements, by Individual | ||
Name | Steven Berns | |
Title | Director | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | August 4, 2023 | |
Arrangement Duration | 300 days | |
Aggregate Available | 760 | 760 |
Scott Zucker [Member] | ||
Trading Arrangements, by Individual | ||
Name | Scott Zucker | |
Title | Chief Administrative and Risk Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 1, 2023 | |
Arrangement Duration | 274 days | |
Scott Zucker Trading Arrangement, Common Stock [Member] | Scott Zucker [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 3,048 | 3,048 |
Scott Zucker Trading Arrangement, Performance-based Restricted Stock Units [Member] | Scott Zucker [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 10,180 | 10,180 |
May 2023 Plan [Member] | Billy Hult [Member] | ||
Trading Arrangements, by Individual | ||
Name | Billy Hult | |
Title | Chief Executive Officer and Director | |
Adoption Date | May 16, 2023 | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | September 8, 2023 | |
Aggregate Available | 49,688 | 49,688 |
September 2023 Plan [Member] | Billy Hult [Member] | ||
Trading Arrangements, by Individual | ||
Name | Billy Hult | |
Title | Chief Executive Officer and Director | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 8, 2023 | |
Arrangement Duration | 251 days | |
Billy Hult Trading Arrangement, Stock Options [Member] | Billy Hult [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 35,000 | 35,000 |
Billy Hult Trading Arrangement, Performance-based Restricted Stock Units [Member] | Billy Hult [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 49,688 | 49,688 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed 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 its subsidiaries and TWM LLC is considered to be the predecessor to Tradeweb Markets Inc. for financial reporting purposes. Tradeweb Markets Inc. had no business transactions or activities and no substantial assets or liabilities prior to the Reorganization Transactions. The condensed 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 Continuing LLC Owners. These condensed consolidated financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The consolidated financial information as of December 31, 2022 has been derived from audited financial statements not included herein. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) with respect to interim financial reporting and Form 10-Q. In accordance with such rules and regulations, certain disclosures that are normally included in annual financial statements have been omitted. These unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. 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 GAAP 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 condensed 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 condensed consolidated financial statements. |
Reclassifications | Reclassifications Certain reclassifications have been made to the December 31, 2022 consolidated statement of financial condition, and related financial information, to conform to the current period presentation. These primarily include reclassifying approximately $2.7 million of related party balances from other assets to receivable and due from affiliates and $5.8 million of related party balances from accounts payable, accrued expenses and other liabilities to payable and due to affiliates. These reclassifications had no impact on total assets, total liabilities or total equity on the consolidated statement of financial condition, nor did they have any impact on the consolidated statements of income, comprehensive income, changes in equity or cash flows. |
Business Combinations | Business Combinations Business combinations are accounted for under the purchase method of accounting pursuant to Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) . The total cost of an acquisition is allocated to the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The fair value of assets acquired and liabilities assumed is determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market for the asset or liability. Determining the fair value of certain assets acquired and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, growth rates, customer attrition rates and asset lives. Transaction costs incurred to effect a business combination are expensed as incurred and are included as a component of professional fees or general and administrative expenses in the condensed consolidated statements of income . |
Pushdown Accounting | Pushdown Accounting In connection with the Refinitiv Transaction, a majority interest of Refinitiv was acquired by BCP on October 1, 2018 from TR. 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 as of October 1, 2018, the date of the Refinitiv Transaction. The Company, as a consolidating subsidiary of Refinitiv, also accounted for the Refinitiv Transaction using pushdown accounting which resulted in a new fair value basis of accounting for certain of the Company’s assets and liabilities beginning on October 1, 2018. Under the pushdown accounting applied, the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company as of October 1, 2018 was 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 adjusted valuations primarily affected the values of the Company’s long-lived and indefinite-lived intangible assets, including software development costs. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with remaining maturities at the time of purchase of three months or less. |
Allowance for Credit Losses | Allowance for Credit Losses The Company continually monitors collections and payments from its clients and maintains an allowance for credit losses. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data. Careful analysis of the financial condition of the Company’s counterparties is also performed. |
Receivable from and Payable to Broker and Dealers and Clearing Organizations | 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 executed on the Company’s wholesale platform 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. Until the failed transaction settles, a receivable from (and a matching payable to) brokers and dealers and clearing organizations is recognized for the proceeds from the unsettled transaction. |
Deposits with Clearing Organizations | Deposits with Clearing OrganizationsDeposits with clearing organizations are comprised of cash deposits. |
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 is computed on a straight-line basis over the estimated useful lives of the related assets, ranging from three 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. |
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. 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. Software development costs acquired as part of the Yieldbroker Acquisition and the NFI Acquisition are both amortized over one year. Costs capitalized as part of the Refinitiv Transaction 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. |
Goodwill | Goodwill Goodwill includes the excess of the fair value of the Company above the fair value accounting basis of the net assets and liabilities of the Company as previously applied under pushdown accounting in connection with the Refinitiv Transaction. Goodwill also includes the cost of acquired companies in excess of the fair value of identifiable net assets at the acquisition date, including the Yieldbroker Acquisition and the NFI Acquisition. Goodwill is not amortized, but is tested for impairment annually on October 1 st 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. The Company consists of one reporting unit for goodwill impairment testing purposes. 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. |
Intangible Assets | Intangible Assets Intangible assets with a finite life are amortized over the estimated lives, ranging from four |
Equity Investments Without Readily Determinable Fair Values | Equity Investments Without Readily Determinable Fair Values Equity Investments without a readily determinable fair value are measured at cost, less impairment, plus or minus observable price changes (in orderly transactions) of an identical or similar investment of the same issuer. If the Company determines that the equity investment is impaired on the basis of a qualitative assessment, the Company will recognize an impairment loss equal to the amount by which the investment’s carrying amount exceeds its fair value. Equity investments are included as a component of other assets on the condensed consolidated statements of financial condition. |
Securities Sold Under Agreements to Repurchase | Securities Sold Under Agreements to Repurchase From time to time, the Company sells securities under agreements to repurchase in order to facilitate the clearance of securities. Securities sold under agreements to purchase are treated as collateralized financings and are presented in the condensed consolidated statements of financial condition at the amounts of cash received. Receivables and payables arising from these agreements are not offset in the condensed consolidated statements of financial condition. |
Leases | Leases At lease commencement, a right-of-use asset and a lease liability are recognized for all leases with an initial term in excess of 12 months based on the initial present value of the fixed lease payments over the lease term. The lease right-of-use asset also reflects the present value of any initial direct costs, prepaid lease payments and lease incentives. The Company’s leases do not provide a readily determinable implicit discount rate. Therefore, management estimates the Company’s incremental borrowing rate used to discount the lease payments based on the information available at lease commencement. The Company includes the term covered by an option to extend a lease when the option is reasonably certain to be exercised. The Company has elected not to separate non-lease components from lease components for all leases. Significant assumptions and judgments in calculating the lease right-of-use assets and lease liabilities include the determination of the applicable borrowing rate for each lease. Operating lease expense is recognized on a straight-line basis over the lease term and included as a component of occupancy expense in the consolidated statements of income. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs directly related to the Company’s efforts to raise cap ital. Th |
Revenue Recognition | Revenue RecognitionThe Company’s classification of revenues in the condensed consolidated statements of income represents revenues from contracts with customers disaggregated by type of revenue. |
Translation of Foreign Currency and Foreign Exchange Derivative Contracts | Translation of Foreign Currency and Foreign Exchange Derivative Contracts Revenues, expenses, assets and liabilities denominated in non-functional currencies are recorded in the appropriate functional currency for the legal entity at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities that are denominated in non-functional currencies are then remeasured at the end of each reporting period at the exchange rate prevailing at the end of the reporting period. Foreign currency remeasurement gains or losses on monetary assets and liabilities in nonfunctional currencies are recognized in the condensed consolidated statements of income within general and administrative expenses. The realized and unrealized gains/losses totaled $0.7 million gain and a $0.6 million loss during the three months ended September 30, 2023 and 2022, respectively and realized and unrealized losses during the nine months ended September 30, 2023 and 2022 totaled $1.0 million and $2.3 million, respectively. Since the condensed consolidated financial statements are presented in U.S. dollars, the Company also translates all non-U.S. dollar functional currency revenues, expenses, assets and liabilities into U.S. dollars. All non-U.S. dollar functional currency revenue and expense amounts are translated into U.S. dollars monthly at the average exchange rate for the month. All non-U.S. dollar functional currency assets and liabilities are translated at the rate prevailing at the end of the reporting period. Gains or losses on translation in the financial statements, when the functional currency is other than the U.S. dollar, are included as a component of other comprehensive income. The Company enters into foreign currency forward contracts to mitigate its U.S. dollar and British pound sterling versus euro exposure, generally with a duration of less than 12 months. In June 2023, the Company also entered into a foreign currency call option on Australian dollars, see Note 4 – Acquisitions for additional details. The Company’s foreign exchange derivative contracts are not designated as hedges for accounting purposes. Changes in the fair value during the period of foreign currency forward contracts, which were entered into for foreign exchange risk management purposes relating to operating activities, are recognized in the condensed consolidated statements of income within general and administrative expenses and changes in the fair value during the period of the foreign currency call option on Australian dollars, which was entered into for foreign exchange risk management purposes relating to investing activities, are recognized in the condensed consolidated statements of income within other income/loss. The Company does not use derivative instruments for trading or speculative purposes. Realized and unrea lized gains on foreign currency forward contracts during the three months ended September 30, 2023 and 2022 totaled $3.9 million and $6.8 million , respectively, and r ealized and unrea lized gains on foreign currency forward contracts during the nine months ended September 30, 2023 and 2022 totaled $4.9 million and $12.9 million , respectively. Realized and unrea lized losses on the foreign currency call option on the Australian dollar call option during the three and nine months ended September 30, 2023 totaled $1.9 million and $1.3 million, respectively . As of September 30, 2023 and December 31, 2022 , the counterparty on each of the foreign exchange derivative contracts was an affiliate of LSEG |
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. 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. The Company evaluates the need for valuation allowances based on the weight of positive and negative evidence. The Company records valuation allowances wherever management believes it is more likely than not that the Company will not be able to realize its deferred tax assets in the foreseeable future. The Company records uncertain tax positions on the basis of a two-step process whereby (i) 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 (ii) 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% 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 condensed consolidated statements of income. Accrued interest and penalties are included within accounts payable, accrued expenses and other liabilities in the condensed 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 of 2017 as a current period expense when incurred. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA establishes a 15% corporate minimum tax effective for taxable years beginning after December 31, 2022, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded U.S. corporations. The 1% excise tax did not have a material impact to our financial condition, results of operations and cash flows as of and for the three and nine months ended September 30, 2023. The Company will continue to evaluate the impact of the 15% corporate minimum tax on subsequent periods. |
Stock-Based Compensation | Stock-Based Compensation The stock-based payments received by the employees of the Company are accounted for as equity awards. 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. The grant-date fair value of stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. Forfeitures of stock-based compensation awards are recognized as they occur. For grants made during the post-IPO period, the fair value of the equity instruments is determined based on the price of the Class A common stock on the grant date. Prior to the IPO, the Company awarded options to management and other employees (collectively, the “Special Option Award”) under the Amended and Restated Tradeweb Markets Inc. Option Plan (the “Option Plan”). The significant assumptions used to estimate the fair value as of grant date of the options awarded prior to the IPO did not reflect changes that would have occurred to these assumptions as a result of the IPO. The non-cash stock-based compensation expense associated with the Special Option Award began being expensed in the second quarter of 2019. The Company uses the Black-Scholes pricing model to value some of its option awards. Determining the appropriate fair value model and calculating the fair value of the option awards requires the input of highly subjective assumptions, including the expected life of the option awards and the stock price volatility. For performance-based restricted stock units that vest based on market conditions, the Company recognizes stock-based compensation based on the estimated grant date fair value of the awards computed with the assistance of a valuation specialist using a Monte Carlo simulation on a binomial model. The significant assumptions used to estimate the fair value of the performance-based restricted stock units that vest based on market conditions are years of maturity, annualized volatility and the risk-free interest rate. The maturity period represents the period of time that the award granted was modeled into the future, the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the maturity period of the award and the expected volatility is based upon historical volatility of the Company’s Class A common stock. |
Earnings Per Share | Earnings Per Share Basic and diluted earnings per share are computed in accordance with the two-class method as unvested restricted stock units and unsettled vested performance-based restricted stock units issued to certain retired executives are entitled to non-forfeitable dividend equivalent rights and are considered participating securities prior to being issued and outstanding shares of common stock. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common shareholders. Basic earnings per share is computed by dividing the net income attributable to the Company’s outstanding shares of Class A and Class B common stock 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 all potentially dilutive securities were converted into or exchanged or exercised for the Company’s Class A or Class B common stock. The dilutive effect of stock options and other stock - based payment awards is calculated using the treasury stock method, which assumes the proceeds from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of LLC Interests is evaluated under the if-converted method, where the securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period presented. Performance-based awards are considered contingently issuable shares and their dilutive effect is included in the denominator of the diluted earnings per share calculation for the entire period, if those shares would be issuable as of the end of the reporting period, assuming the end of the reporting period was also the end of the contingency period. Shares of Class C and Class D common stock do not have economic rights in Tradeweb Markets Inc. and, therefore, are not included in the calculation of basic 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, Fair Value Measurement (“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 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. • 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Purchase Price Allocated | The preliminary purchase price was allocated as follows: Purchase Price Allocation (in thousands) Cash and cash equivalents $ 12,753 Accounts receivable 1,631 Equipment 384 Lease right-of-use assets 1,453 Software development costs 588 Goodwill 35,058 Intangible assets - Customer relationships 39,746 Intangible assets - Tradename 492 Deferred tax asset 3,361 Other assets 701 Accrued compensation (3,485) Deferred revenue (72) Accounts payable, accrued expenses and other liabilities (8,713) Lease liabilities (1,496) Total cash paid 82,401 Less: Cash acquired (12,753) Less: Preliminary working capital and other closing adjustments 10,432 Purchase price, net of cash acquired and excluding working capital and other closing adjustments $ 80,080 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Breakdown of Revenues Between Fixed and Variable Revenues | The breakdown of revenues between fixed and variable revenues for the three and nine months ended September 30, 2023 and 2022 is as follows: Three Months Ended Three Months Ended September 30, 2023 September 30, 2022 (in thousands) (in thousands) Variable Fixed Variable Fixed Revenues Transaction fees and commissions $ 225,934 $ 37,551 $ 192,191 $ 35,824 Subscription fees 465 45,896 470 40,872 Refinitiv market data fees — 15,460 — 15,370 Other 328 2,723 212 2,176 Total revenue $ 226,727 $ 101,630 $ 192,873 $ 94,242 Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 (in thousands) (in thousands) Variable Fixed Variable Fixed Revenues Transaction fees and commissions $ 665,749 $ 110,795 $ 607,126 $ 110,363 Subscription fees 1,395 135,088 1,430 122,907 Refinitiv market data fees — 46,515 — 46,354 Other 794 7,883 677 6,882 Total revenue $ 667,938 $ 300,281 $ 609,233 $ 286,506 |
Schedule of Recognized Revenue and Remaining Deferred Revenue Balance | The revenue recognized and the remaining deferred revenue balances are shown below: Amount (in thousands) Deferred revenue balance - December 31, 2022 $ 22,827 New billings 100,331 Revenue recognized (91,832) Deferred revenue acquired in connection with the Yieldbroker Acquisition 72 Effect of foreign currency exchange rate changes 6 Deferred revenue balance - September 30, 2023 $ 31,404 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of the Ownership Interest in Noncontrolling Interest | The following table summarizes the ownership interest in Tradeweb Markets LLC: September 30, 2023 September 30, 2022 LLC Ownership LLC Ownership Number of LLC Interests held by Tradeweb Markets Inc. 211,644,675 90.2 % 208,177,751 88.8 % Number of LLC Interests held by non-controlling interests 23,080,571 9.8 % 26,347,881 11.2 % Total LLC Interests outstanding 234,725,246 100.0 % 234,525,632 100.0 % |
Schedule of the Impact on Equity Due to Changes in the Company’s Ownership Interest in Noncontrolling Interest | The following table summarizes the impact on Tradeweb Market Inc.’s equity due to changes in the Corporation’s ownership interest in TWM LLC: Net Income Attributable to Tradeweb Markets Inc. and Transfers (to) from the Non-Controlling Interests Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Net income attributable to Tradeweb Markets Inc. $ 98,614 $ 69,083 $ 275,552 $ 220,392 Transfers (to) from non-controlling interests: Increase/(decrease) in Tradeweb Markets Inc.’s additional paid-in capital as a result of ownership changes in TWM LLC (404) 79,606 79,376 108,311 Net transfers (to) from non-controlling interests (404) 79,606 79,376 108,311 Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interests $ 98,210 $ 148,689 $ 354,928 $ 328,703 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Outstanding Shares Of Common Stock | The following table details the movement in the Company’s outstanding shares of common stock during the period: Class A Class B Class C Class D Total Balance at December 31, 2022 110,746,606 96,933,192 3,251,177 23,092,704 234,023,679 Activities related to exchanges of LLC Interests 8,733 — — (8,733) — Issuance of common stock from equity incentive plans 986,090 — — — 986,090 Share repurchases pursuant to share repurchase programs (313,311) — — — (313,311) Balance at March 31, 2023 111,428,118 96,933,192 3,251,177 23,083,971 234,696,458 Activities related to exchanges of LLC Interests 3,254,577 — (3,251,177) (3,400) — Issuance of common stock from equity incentive plans 92,687 — — — 92,687 Share repurchases pursuant to share repurchase programs (107,365) — — — (107,365) Balance at June 30, 2023 114,668,017 96,933,192 — 23,080,571 234,681,780 Activities related to exchanges of LLC Interests — — — — — Issuance of common stock from equity incentive plans 108,520 — — — 108,520 Share repurchases pursuant to share repurchase programs (65,054) — — — (65,054) Balance at September 30, 2023 114,711,483 96,933,192 — 23,080,571 234,725,246 Class A Class B Class C Class D Total Balance at December 31, 2021 106,286,821 96,933,192 1,654,825 28,873,139 233,747,977 Activities related to exchanges of LLC Interests 552,606 — — (552,606) — Issuance of common stock from equity incentive plans 1,068,080 — — — 1,068,080 Share repurchases pursuant to share repurchase programs (559,428) — — — (559,428) Balance at March 31, 2022 107,348,079 96,933,192 1,654,825 28,320,533 234,256,629 Activities related to exchanges of LLC Interests 3,700 — — (3,700) — Issuance of common stock from equity incentive plans 367,374 — — — 367,374 Share repurchases pursuant to share repurchase programs (103,458) — — — (103,458) Balance at June 30, 2022 107,615,695 96,933,192 1,654,825 28,316,833 234,520,545 Activities related to exchanges of LLC Interests 3,623,777 — 1,596,352 (5,220,129) — Issuance of common stock from equity incentive plans 134,896 — — — 134,896 Share repurchases pursuant to share repurchase programs (129,809) — — — (129,809) Balance at September 30, 2022 111,244,559 96,933,192 3,251,177 23,096,704 234,525,632 |
Schedule of Total Stock-based Compensation Expense | A summary of the Company ’ s total stock-based compensation expense, including the CEO Retirement Accelerated Stock-Based Compensation Expense, is presented below: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Total stock-based compensation expense $ 17,348 $ 14,757 $ 44,670 $ 49,432 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Balances From Transactions with Affiliates Included in the Consolidated Statements | As of September 30, 2023 and December 31, 2022, the following balances with such affiliates were included in the condensed consolidated statements of financial condition in the following line items: September 30, December 31, 2023 2022 (in thousands) Accounts receivable $ 1,812 $ 70 Receivable and due from affiliates 3,165 2,728 Other assets 74 261 Accounts payable, accrued expenses and other liabilities 1,467 335 Deferred revenue 5,099 5,076 Payable and due to affiliates 527 7,232 The following balances with such affiliates were included in the condensed consolidated statements of income in the following line items: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Revenue: Subscription fees $ 460 $ 282 $ 1,931 $ 799 Refinitiv market data fees (1) 15,460 15,370 46,515 46,354 Other fees 218 110 468 353 Expenses: (2) Employee compensation and benefits 9 — 26 613 Technology and communications 1,496 1,231 4,147 3,546 General and administrative 4 47 4 244 Professional fees 9 1 10 46 Occupancy 21 — 41 — (1) The Company maintains a market data license agreement with Refinitiv. Under the agreement, the Company delivers to Refinitiv certain market data feeds which Refinitiv redistributes to its customers. The Company earns license fees and royalties for these feeds. (2) The Company maintains agreements with Refinitiv to provide the Company with certain real estate, payroll, benefits administration and other administrative services. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement | The Company’s financial instruments measured at fair value on the condensed consolidated statements of financial condition as of September 30, 2023 and December 31, 2022 have been categorized based upon the fair value hierarchy as follows: Quoted Prices in active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in thousands) As of September 30, 2023 Assets Cash equivalents – Money market funds $ 1,361,198 $ — $ — $ 1,361,198 Receivable and due from affiliates – Foreign exchange derivative contracts — 3,019 — 3,019 Total assets measured at fair value $ 1,361,198 $ 3,019 $ — $ 1,364,217 Liabilities Payable and due to affiliates – Foreign exchange derivative contracts $ — $ — $ — $ — Total liabilities measured at fair value $ — $ — $ — $ — As of December 31, 2022 Assets Cash equivalents – Money market funds $ 1,106,916 $ — $ — $ 1,106,916 Total assets measured at fair value $ 1,106,916 $ — $ — $ 1,106,916 Liabilities Payable and due to affiliates – F oreign exchange derivative contracts $ — $ 1,002 $ — $ 1,002 Total liabilities measured at fair value $ — $ 1,002 $ — $ 1,002 |
Schedule of Derivative Values | The following table summarizes the aggregate U.S. dollar equivalent notional amount of the Company ’ s foreign exchange derivative contracts not designated as hedges for accounting purposes: September 30, December 31, 2023 2022 (in thousands) Foreign currency forward contracts – Gross notional amount $ 178,620 $ 162,845 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Foreign currency forward contracts not designated in accounting hedge relationship – General and administrative (expenses)/income $ 3,883 $ 6,767 $ 4,921 $ 12,937 Foreign currency call option contract not designated in accounting hedge relationship – Other income/(loss) (1) $ (1,907) $ — $ (1,289) $ — |
Schedule of Financial Instruments Not Measured at Fair Value | The Company’s financial instruments not measured at fair value on the condensed consolidated statements of financial condition as of September 30, 2023 and December 31, 2022 have been categorized based upon the fair value hierarchy as follows: Carrying Value Quoted Prices in Significant Observable Inputs (Level 2) Significant Total Fair Value As of September 30, 2023 (in thousands) Assets Cash and restricted cash $ 133,212 $ 133,212 $ — $ — $ 133,212 Receivable from brokers and dealers and clearing organizations 4,966 — 4,966 — 4,966 Deposits with clearing organizations 26,433 26,433 — — 26,433 Accounts receivable 167,039 — 167,039 — 167,039 Other assets – Memberships in clearing organizations 2,423 — — 2,423 2,423 Total $ 334,073 $ 159,645 $ 172,005 $ 2,423 $ 334,073 Liabilities Payable to brokers and dealers and clearing organizations $ 4,966 $ — $ 4,966 $ — $ 4,966 Total $ 4,966 $ — $ 4,966 $ — $ 4,966 As of December 31, 2022 Assets Cash and restricted cash $ 151,313 $ 151,313 $ — $ — $ 151,313 Receivable from brokers and dealers and clearing organizations 11,632 — 11,632 — 11,632 Deposits with clearing organizations 23,906 23,906 — — 23,906 Accounts receivable 142,676 — 142,676 — 142,676 Other assets – Memberships in clearing organizations 2,406 — — 2,406 2,406 Total $ 331,933 $ 175,219 $ 154,308 $ 2,406 $ 331,933 Liabilities Payable to brokers and dealers and clearing organizations $ 11,264 $ — $ 11,264 $ — $ 11,264 Total $ 11,264 $ — $ 11,264 $ — $ 11,264 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturity of Lease Liabilities and Future Minimum Lease Payments | The following table presents the future minimum lease payments and the maturity of lease liabilities as of September 30, 2023: Amount (in thousands) Remainder of 2023 $ 3,495 2024 8,925 2025 4,046 2026 3,264 2027 3,261 Thereafter 223 Total future lease payments 23,214 Less imputed interest (1,174) Lease liability $ 22,040 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table summarizes the calculations of basic and diluted earnings per share of Class A and Class B common stock for Tradeweb Markets Inc.: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands, except share and per share amounts) Numerator: Net income attributable to Tradeweb Markets Inc. $ 98,614 $ 69,083 $ 275,552 $ 220,392 Less: Distributed and undistributed earnings allocated to unvested RSUs and unsettled vested PRSUs (1) (124) (82) (348) (111) Net income attributable to outstanding shares of Class A and Class B common stock - Basic and Diluted $ 98,490 $ 69,001 $ 275,204 $ 220,281 Denominator: Weighted average shares of Class A and Class B common stock outstanding - Basic 211,618,475 205,721,162 210,444,082 204,767,261 Dilutive effect of PRSUs 504,945 746,043 380,740 796,090 Dilutive effect of options 1,110,175 1,661,705 1,240,923 1,940,970 Dilutive effect of RSUs 258,039 200,559 211,163 243,716 Dilutive effect of PSUs — — — — Weighted average shares of Class A and Class B common stock outstanding - Diluted 213,491,634 208,329,469 212,276,908 207,748,037 Earnings per share - Basic $ 0.47 $ 0.34 $ 1.31 $ 1.08 Earnings per share - Diluted $ 0.46 $ 0.33 $ 1.30 $ 1.06 (1) During the three months ended September 30, 2023 and 2022, there was a total of 265,681 and 246,238, respectively, and during the nine months ended September 30, 2023 and 2022, there was a total of 266,453 and 121,115, respectively, weighted average unvested RSUs and unsettled vested PRSUs that were considered a participating security for purposes of calculating earnings per share in accordance with the two-class method. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the PRSUs, shares underlying options, RSUs, PSUs and weighted-average LLC Interests that were anti-dilutive for the periods indicated. As a result, these shares, which were outstanding, were excluded from the computation of diluted earnings per share for the periods indicated: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Anti-dilutive Shares: PRSUs — 324,467 — — Options — — — — RSUs 110,927 321,920 110,927 38,761 PSUs 144,666 — 144,666 — LLC Interests 23,080,571 28,750,603 24,179,583 29,667,383 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of Regulatory Capital Requirements | At September 30, 2023 and December 31, 2022, the regulatory capital requirements and regulatory capital for these entities are as follows: As of September 30, 2023 TWL DW TWD TEL TWJ TWEU TESL TESBV YB (in thousands) Regulatory Capital $ 41,514 $ 149,497 $ 40,524 $ 74,995 $ 7,166 $ 11,381 $ 1,740 $ 1,558 $ 1,974 Regulatory Capital Requirement 2,639 2,852 741 33,024 2,022 5,358 917 860 1,014 Excess Regulatory Capital $ 38,875 $ 146,645 $ 39,783 $ 41,971 $ 5,144 $ 6,023 $ 823 $ 698 $ 960 As of December 31, 2022 TWL DW TWD TEL TWJ TWEU TESL TESBV (in thousands) Regulatory Capital $ 41,933 $ 131,026 $ 44,094 $ 59,904 $ 7,320 $ 8,794 $ 1,607 $ 1,677 Regulatory Capital Requirement 3,669 3,574 775 32,589 1,695 4,517 904 801 Excess Regulatory Capital $ 38,264 $ 127,452 $ 43,319 $ 27,315 $ 5,625 $ 4,277 $ 703 $ 876 |
Schedule of Financial Resources and Liquid Financial Resources | The required and maintained financial resources and liquid financial assets at September 30, 2023 and December 31, 2022 are as follows: As of September 30, 2023 As of December 31, 2022 TW SEF DW SEF TW SEF DW SEF (in thousands) Financial Resources $ 40,661 $ 12,861 $ 30,837 $ 14,714 Required Financial Resources 12,500 8,694 12,500 8,080 Excess Financial Resources $ 28,161 $ 4,167 $ 18,337 $ 6,634 Liquid Financial Assets $ 17,915 $ 7,523 $ 15,566 $ 9,493 Required Liquid Financial Assets 3,125 2,174 3,125 2,020 Excess Liquid Financial Assets $ 14,790 $ 5,349 $ 12,441 $ 7,473 |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Information Regarding Revenue by Client Sector | Information regarding revenue by client sector is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Revenues Institutional $ 195,094 $ 172,814 $ 577,774 $ 551,322 Wholesale 77,975 64,584 227,404 205,532 Retail 32,332 28,495 94,875 75,267 Market Data 22,956 21,222 68,166 63,618 Total revenue 328,357 287,115 968,219 895,739 Operating expenses 203,619 184,305 604,580 574,720 Operating income $ 124,738 $ 102,810 $ 363,639 $ 321,019 |
Schedule of Revenue and Long-Lived Assets by Geographic Location | The following table provides revenue by geographic area: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in thousands) Revenues U.S. $ 207,842 $ 185,097 $ 617,463 $ 565,540 International 120,515 102,018 350,756 330,199 Total revenue $ 328,357 $ 287,115 $ 968,219 $ 895,739 The following table provides information on the attribution of long-lived assets by geographic area: September 30, December 31, 2023 2022 (in thousands) Long-lived assets U.S. $ 4,022,318 $ 4,044,230 International 15,185 13,026 Total $ 4,037,503 $ 4,057,256 |
Organization (Details)
Organization (Details) $ / shares in Units, $ in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Aug. 31, 2023 AUD ($) | Aug. 31, 2023 USD ($) | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 shares | Dec. 31, 2022 $ / shares | |
Stock split ratio, common stock | 1 | ||||||
Weighted average unvested RSUs and unsettled vested PRSUs that were considered participating securities (in shares) | 265,681 | 246,238 | 266,453 | 121,115 | |||
Dilutive securities (in shares) | 1,873,159 | 1,832,826 | |||||
Class A Common Stock | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Class B Common Stock | |||||||
Common stock, par value (in dollars per share) | $ / shares | 0.00001 | 0.00001 | 0.00001 | ||||
Class C Common Stock | |||||||
Common stock, par value (in dollars per share) | $ / shares | 0.00001 | 0.00001 | 0.00001 | ||||
Class D Common Stock | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Yieldbroker | |||||||
Purchase price, net of cash acquired and excluding working capital and other closing adjustments | $ 123.6 | $ 80,080 | |||||
Tradeweb Markets LLC | |||||||
Ownership interest | 90.20% | 88.80% | 90.20% | 88.80% | 88.70% | ||
Ownership percentage, continuing LLC Owners | 9.80% | 11.20% | 9.80% | 11.20% | 11.30% | ||
Tradeweb Markets LLC | Refinitiv | |||||||
Ownership interest | 51.10% | 51.10% | |||||
Tradeweb Markets LLC | Public Investors | |||||||
Ownership percentage, continuing LLC Owners | 48.90% | 48.90% | |||||
Tradeweb Markets LLC | Class D Common Stock | Other Stockholders | |||||||
Ownership percentage, continuing LLC Owners | 10% | 10% | |||||
Tradeweb Markets Inc | Refinitiv | |||||||
Ownership interest | 91.20% | 91.20% | |||||
Tradeweb Markets Inc | Public Investors | |||||||
Voting power percentage | 8.70% | 8.70% | |||||
Tradeweb Markets Inc | Class A Common Stock | Public Investors | |||||||
Number of share owned (in shares) | 114,711,483 | 114,711,483 | |||||
Tradeweb Markets Inc | Class B Common Stock | Refinitiv | |||||||
Number of share owned (in shares) | 96,933,192 | 96,933,192 | |||||
Tradeweb Markets Inc | Class D Common Stock | Refinitiv | |||||||
Number of share owned (in shares) | 22,988,329 | 22,988,329 | |||||
Tradeweb Markets Inc | Class D Common Stock | Other Stockholders | |||||||
Number of share owned (in shares) | 92,242 | 92,242 | |||||
Voting power percentage | 0.10% | 0.10% |
Significant Accounting Polici_3
Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Reclassification [Line Items] | ||
Receivable and due from affiliates | $ 3,165 | $ 2,728 |
Payable and due to affiliates | 527 | 7,232 |
Affiliated Entity | ||
Reclassification [Line Items] | ||
Receivable and due from affiliates | 3,165 | 2,728 |
Payable and due to affiliates | $ 527 | 7,232 |
Revision of Prior Period, Reclassification, Adjustment | Affiliated Entity | ||
Reclassification [Line Items] | ||
Receivable and due from affiliates | 2,700 | |
Payable and due to affiliates | $ 5,800 |
Significant Accounting Polici_4
Significant Accounting Policies - Furniture, Equipment, Purchased Software, Leasehold Improvements and Software Development Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Software development costs | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Accumulated depreciation and amortization | $ 207.9 | $ 207.9 | $ 166.6 | ||
Useful life of intangible assets | 3 years | 3 years | |||
Amortization of pushdown accounting allocation | 9 years | ||||
Amortization expense | $ 14.1 | $ 13 | $ 41.3 | $ 39 | |
Software development costs | Yieldbroker Acquisition | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Useful life of intangible assets | 1 year | 1 year | |||
Software development costs | NFI Acquisition | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Useful life of intangible assets | 1 year | 1 year | |||
Minimum | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Useful life of intangible assets | 4 years | 4 years | |||
Maximum | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Useful life of intangible assets | 13 years | 13 years | |||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Accumulated depreciation and amortization | $ 89.4 | $ 89.4 | $ 73.8 | ||
Depreciation expense | $ 5.4 | $ 5 | $ 15.9 | $ 14.6 | |
Furniture, Equipment, Purchased Software and Leasehold Improvements | Minimum | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Useful life | 3 years | 3 years | |||
Furniture, Equipment, Purchased Software and Leasehold Improvements | Maximum | |||||
Furniture, Equipment, Purchased Software and Leasehold Improvements | |||||
Useful life | 7 years | 7 years |
Significant Accounting Polici_5
Significant Accounting Policies - Goodwill (Details) | 9 Months Ended | |
Oct. 01, 2022 USD ($) | Sep. 30, 2023 reporting_unit | |
Accounting Policies [Abstract] | ||
Number of reporting units | reporting_unit | 1 | |
Impairment of goodwill | $ | $ 0 |
Significant Accounting Polici_6
Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Intangible Assets | |||||
Accumulated amortization | $ 514.9 | $ 514.9 | $ 434.2 | ||
Amortization expense | $ 27.1 | $ 26.8 | $ 80.7 | $ 80.4 | |
Minimum | |||||
Intangible Assets | |||||
Useful life of intangible assets | 4 years | 4 years | |||
Maximum | |||||
Intangible Assets | |||||
Useful life of intangible assets | 13 years | 13 years |
Significant Accounting Polici_7
Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Offering costs incurred | $ 0 | $ 0 | $ 0 | $ 0 |
Significant Accounting Polici_8
Significant Accounting Policies - Translation of Foreign Currency and Exchange Derivative Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative [Line Items] | ||||
Realized and unrealized gains (losses) | $ 700 | $ (600) | $ (1,000) | $ (2,300) |
Foreign currency forward contracts – Gross notional amount | Selling, General and Administrative Expenses | ||||
Derivative [Line Items] | ||||
Realized and unrealized gains (losses) on derivative contracts | 3,883 | 6,767 | 4,921 | 12,937 |
Foreign Exchange Option | Other Income (Loss) | ||||
Derivative [Line Items] | ||||
Realized and unrealized gains (losses) on derivative contracts | $ (1,907) | $ 0 | $ (1,289) | $ 0 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Restricted Cash Equivalents [Abstract] | ||
Restricted cash | $ 1,000 | $ 1,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Aug. 31, 2023 AUD ($) | Aug. 31, 2023 USD ($) | Aug. 25, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 01, 2023 AUD ($) | |
Foreign Exchange Option | ||||||||
Business Acquisition [Line Items] | ||||||||
Gross notional amount | $ 120.7 | |||||||
Proceeds from unwinding of out-of-the-money derivative | $ 1,100 | |||||||
Other Income (Loss) | Foreign Exchange Option | ||||||||
Business Acquisition [Line Items] | ||||||||
Realized and unrealized losses on derivative contracts | $ 1,907 | $ 0 | $ 1,289 | $ 0 | ||||
Software development costs | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life of intangible assets | 3 years | 3 years | ||||||
Yieldbroker | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price, net of cash acquired and excluding working capital and other closing adjustments | $ 123.6 | $ 80,080 | ||||||
Yieldbroker | Professional Fees | ||||||||
Business Acquisition [Line Items] | ||||||||
Transaction costs | $ 500 | $ 2,200 | ||||||
Yieldbroker | General and Administrative Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Transaction costs | $ 800 | $ 800 | ||||||
Yieldbroker | Software development costs | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life of intangible assets | 1 year | 1 year | ||||||
Yieldbroker | Intangible assets - Tradename | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life of intangible assets | 4 years | 4 years | ||||||
Yieldbroker | Customer Relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life of intangible assets | 13 years | 13 years |
Acquisitions - Schedule of Prel
Acquisitions - Schedule of Preliminary Purchase Price (Details) $ in Thousands, $ in Millions | Aug. 31, 2023 USD ($) | Aug. 31, 2023 AUD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Goodwill | $ 2,815,317 | $ 2,780,259 | ||
Yieldbroker | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Cash and cash equivalents | $ 12,753 | |||
Accounts receivable | 1,631 | |||
Equipment | 384 | |||
Lease right-of-use assets | 1,453 | |||
Goodwill | 35,058 | |||
Deferred tax asset | 3,361 | |||
Other assets | 701 | |||
Accrued compensation | (3,485) | |||
Deferred revenue | (72) | |||
Accounts payable, accrued expenses and other liabilities | (8,713) | |||
Lease liabilities | (1,496) | |||
Total cash paid | 82,401 | |||
Less: Cash acquired | (12,753) | |||
Less: Preliminary working capital and other closing adjustments | 10,432 | |||
Purchase price, net of cash acquired and excluding working capital and other closing adjustments | 80,080 | $ 123.6 | ||
Yieldbroker | Software development costs | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | 588 | |||
Yieldbroker | Intangible assets - Customer relationships | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | 39,746 | |||
Yieldbroker | Intangible assets - Tradename | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Intangible assets | $ 492 |
Revenue - Schedule of Breakdown
Revenue - Schedule of Breakdown of Revenues Between Fixed and Variable Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenue | $ 328,357 | $ 287,115 | $ 968,219 | $ 895,739 |
Transaction fees and commissions | ||||
Revenues | ||||
Total revenue | 263,485 | 228,015 | 776,544 | 717,489 |
Refinitiv market data fees | ||||
Revenues | ||||
Total revenue | 15,460 | 15,370 | 46,515 | 46,354 |
Other | ||||
Revenues | ||||
Total revenue | 3,051 | 2,388 | 8,677 | 7,559 |
Variable | ||||
Revenues | ||||
Total revenue | 226,727 | 192,873 | 667,938 | 609,233 |
Variable | Transaction fees and commissions | ||||
Revenues | ||||
Total revenue | 225,934 | 192,191 | 665,749 | 607,126 |
Variable | Subscription fees | ||||
Revenues | ||||
Total revenue | 465 | 470 | 1,395 | 1,430 |
Variable | Refinitiv market data fees | ||||
Revenues | ||||
Total revenue | 0 | 0 | 0 | 0 |
Variable | Other | ||||
Revenues | ||||
Total revenue | 328 | 212 | 794 | 677 |
Fixed | ||||
Revenues | ||||
Total revenue | 101,630 | 94,242 | 300,281 | 286,506 |
Fixed | Transaction fees and commissions | ||||
Revenues | ||||
Total revenue | 37,551 | 35,824 | 110,795 | 110,363 |
Fixed | Subscription fees | ||||
Revenues | ||||
Total revenue | 45,896 | 40,872 | 135,088 | 122,907 |
Fixed | Refinitiv market data fees | ||||
Revenues | ||||
Total revenue | 15,460 | 15,370 | 46,515 | 46,354 |
Fixed | Other | ||||
Revenues | ||||
Total revenue | $ 2,723 | $ 2,176 | $ 7,883 | $ 6,882 |
Revenue - Schedule of Recognize
Revenue - Schedule of Recognized Revenue and Remaining Deferred Revenue Balance (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Change in Contract with Customer | |
Deferred revenue balance - beginning of period | $ 22,827 |
New billings | 100,331 |
Revenue recognized | (91,832) |
Deferred revenue acquired in connection with the Yieldbroker Acquisition | 72 |
Effect of foreign currency exchange rate changes | 6 |
Deferred revenue balance - ending of period | $ 31,404 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that was previously deferred | $ 22.2 | $ 23.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Apr. 08, 2019 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Line Items] | ||||||
Effective tax rate | 20.40% | 23.20% | 22.40% | 19.70% | ||
Remaining percentage of tax benefits | 50% | |||||
Other assets | $ 77,866,000 | $ 77,866,000 | $ 74,262,000 | |||
Affiliated Entity | ||||||
Income Tax Disclosure [Line Items] | ||||||
Other assets | 74,000 | 74,000 | 261,000 | |||
Accounts Payable and Accrued Liabilities | ||||||
Income Tax Disclosure [Line Items] | ||||||
Tax liability | 0 | 0 | 2,700,000 | |||
Receivable and Due From Affiliates | Affiliated Entity | ||||||
Income Tax Disclosure [Line Items] | ||||||
Other assets | $ 0 | $ 0 | $ 2,700,000 | |||
Class B Common Stock | ||||||
Income Tax Disclosure [Line Items] | ||||||
Common stock, shares issued (in shares) | 96,933,192 | 96,933,192 | 96,933,192 | |||
Refinitiv Direct Owner | ||||||
Income Tax Disclosure [Line Items] | ||||||
Shares contributed by refinitiv owner (in shares) | 96,933,192 | |||||
Refinitiv Direct Owner | Class B Common Stock | ||||||
Income Tax Disclosure [Line Items] | ||||||
Common stock, shares issued (in shares) | 96,933,192 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Tax Receivable Agreement | |||||
Percentage of amount of U.S. federal, state and local income or franchise tax savings | 50% | ||||
Tax receivable agreement, payment term | 15 years | ||||
Tax receivable agreement liability | $ 447,976,000 | $ 447,976,000 | $ 425,724,000 | ||
Tax receivable agreement liability adjustment | $ 0 | $ 0 | $ 0 | $ 0 |
Non-Controlling Interests -Sche
Non-Controlling Interests -Schedule of the Ownership Interest in Noncontrolling Interest (Details) | 9 Months Ended | ||
Sep. 30, 2023 shares | Sep. 30, 2022 shares | Dec. 31, 2022 | |
Class A Common Stock | |||
Non-Controlling Interests | |||
Conversion ratio | 1 | ||
Class B Common Stock | |||
Non-Controlling Interests | |||
Conversion ratio | 1 | ||
Tradeweb Markets LLC | |||
Non-Controlling Interests | |||
Number of LLC Interests held by Tradeweb Markets Inc. (in shares) | 211,644,675 | 208,177,751 | |
Number of LLC Interests held by non-controlling interests (in shares) | 23,080,571 | 26,347,881 | |
Total LLC Interests outstanding (in shares) | 234,725,246 | 234,525,632 | |
Number of LLC Interests held by Tradeweb Markets Inc. | 90.20% | 88.80% | 88.70% |
Number of LLC Interests held by non-controlling interests | 9.80% | 11.20% | 11.30% |
Total LLC Interests outstanding | 100% | 100% |
Non-Controlling Interests - Sch
Non-Controlling Interests - Schedule of the Impact on Equity Due to Changes in the Company’s Ownership Interest in Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | ||||
Net income attributable to Tradeweb Markets Inc. | $ 98,614 | $ 69,083 | $ 275,552 | $ 220,392 |
Increase/(decrease) in Tradeweb Markets Inc.’s additional paid-in capital as a result of ownership changes in TWM LLC | (404) | |||
Increase/(decrease) in Tradeweb Markets Inc.’s additional paid-in capital as a result of ownership changes in TWM LLC | 79,606 | 79,376 | 108,311 | |
Net transfers (to) from non-controlling interests | (404) | 79,606 | 79,376 | 108,311 |
Change from net income attributable to Tradeweb Markets Inc. and transfers (to) from non-controlling interests | $ 98,210 | $ 148,689 | $ 354,928 | $ 328,703 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation Plans - Schedule of Outstanding Shares of Common Stock (Details) - shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 234,681,780 | 234,696,458 | 234,023,679 | 234,520,545 | 234,256,629 | 233,747,977 |
Activities related to exchanges of LLC Interests (in shares) | 0 | 0 | 0 | 0 | 0 | |
Issuance of common stock from equity incentive plans (in shares) | 108,520 | 92,687 | 986,090 | 134,896 | 367,374 | 1,068,080 |
Share repurchases pursuant to the Share Repurchase Program (in shares) | (65,054) | (107,365) | (313,311) | (129,809) | (103,458) | (559,428) |
Common stock ending balance (in shares) | 234,725,246 | 234,681,780 | 234,696,458 | 234,525,632 | 234,520,545 | 234,256,629 |
Class A Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 110,746,606 | |||||
Common stock ending balance (in shares) | 114,711,483 | |||||
Class A Common Stock | Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 114,668,017 | 111,428,118 | 110,746,606 | 107,615,695 | 107,348,079 | 106,286,821 |
Activities related to exchanges of LLC Interests (in shares) | 3,254,577 | 8,733 | 3,623,777 | 3,700 | 552,606 | |
Issuance of common stock from equity incentive plans (in shares) | 108,520 | 92,687 | 986,090 | 134,896 | 367,374 | 1,068,080 |
Share repurchases pursuant to the Share Repurchase Program (in shares) | (65,054) | (107,365) | (313,311) | (129,809) | (103,458) | (559,428) |
Common stock ending balance (in shares) | 114,711,483 | 114,668,017 | 111,428,118 | 111,244,559 | 107,615,695 | 107,348,079 |
Class B Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 96,933,192 | |||||
Common stock ending balance (in shares) | 96,933,192 | |||||
Class B Common Stock | Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 96,933,192 | 96,933,192 | 96,933,192 | 96,933,192 | 96,933,192 | 96,933,192 |
Common stock ending balance (in shares) | 96,933,192 | 96,933,192 | 96,933,192 | 96,933,192 | 96,933,192 | 96,933,192 |
Class C Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 3,251,177 | |||||
Common stock ending balance (in shares) | 0 | |||||
Class C Common Stock | Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 0 | 3,251,177 | 3,251,177 | 1,654,825 | 1,654,825 | 1,654,825 |
Activities related to exchanges of LLC Interests (in shares) | (3,251,177) | 1,596,352 | ||||
Common stock ending balance (in shares) | 0 | 0 | 3,251,177 | 3,251,177 | 1,654,825 | 1,654,825 |
Class D Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 23,092,704 | |||||
Common stock ending balance (in shares) | 23,080,571 | |||||
Class D Common Stock | Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock beginning balance (in shares) | 23,080,571 | 23,083,971 | 23,092,704 | 28,316,833 | 28,320,533 | 28,873,139 |
Activities related to exchanges of LLC Interests (in shares) | (3,400) | (8,733) | (5,220,129) | (3,700) | (552,606) | |
Common stock ending balance (in shares) | 23,080,571 | 23,080,571 | 23,083,971 | 23,096,704 | 28,316,833 | 28,320,533 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-Based Compensation Plans - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Apr. 03, 2023 | Mar. 15, 2023 | Feb. 16, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 05, 2022 | Feb. 28, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock-based compensation expense | $ 400,000 | $ 1,000,000 | ||||||||||||
Average price per share (in dollars per share) | $ 84.15 | $ 68.13 | $ 71.38 | $ 95.59 | ||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 239,800,000 | $ 239,800,000 | ||||||||||||
Number of shares withheld (in shares) | 92,373 | 33,348 | 693,456 | 1,048,837 | ||||||||||
Share-based payment arrangement, decrease for tax withholding obligation | $ 7,773,000 | $ 1,870,000 | $ 39,878,000 | $ 2,272,000 | $ 2,218,000 | $ 95,758,000 | $ 49,500,000 | $ 100,300,000 | ||||||
2019 Omnibus Equity Incentive Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares authorized (in shares) | 8,841,864 | 8,841,864 | ||||||||||||
Maximum contractual term | 10 years | |||||||||||||
PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 251,113 | 0 | 0 | 0 | ||||||||||
Performance period | 3 years | |||||||||||||
Minimum performance modifier, percent | 0% | |||||||||||||
Maximum performance modifier, percent | 250% | |||||||||||||
Target performance modifier, percent | 100% | |||||||||||||
Weighted-average grant-date fair value (in dollars per share) | $ 98.33 | |||||||||||||
Granted in period, fair value | $ 24,700,000 | |||||||||||||
Expected term (in years) | 2 years 9 months 18 days | |||||||||||||
Weighted average volatility rate (as a percent) | 28.81% | |||||||||||||
Risk free interest rate (as a percent) | 3.77% | |||||||||||||
RSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Maximum contractual term | 3 years | |||||||||||||
Granted (in shares) | 1,743 | 571,980 | ||||||||||||
Weighted-average grant-date fair value (in dollars per share) | $ 86.43 | $ 69.66 | ||||||||||||
Vesting percentage | 33% | |||||||||||||
PRSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 0 | 326,050 | ||||||||||||
Weighted-average grant-date fair value (in dollars per share) | $ 69.56 | |||||||||||||
PRSUs | Awarded during 2022 and prior | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Minimum performance modifier, percent | 0% | 0% | ||||||||||||
Maximum performance modifier, percent | 200% | 200% | ||||||||||||
Target performance modifier, percent | 100% | 100% | ||||||||||||
PRSUs | Awarded during 2023 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Maximum performance modifier, percent | 250% | 250% | ||||||||||||
CEO | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Retirement notice, term | 6 months | |||||||||||||
Unrecognized compensation expense | $ 5,500,000 | |||||||||||||
Share-based payment arrangement, accelerated cost | $ 0 | $ 2,000,000 | $ 0 | $ 9,400,000 | $ 15,000,000 | |||||||||
Non-employee director | RSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Maximum contractual term | 1 year | |||||||||||||
Class A Common Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Share repurchase program, amount authorized | $ 300,000,000 | $ 150,000,000 | ||||||||||||
Common stock repurchased (in shares) | 65,054 | 129,809 | 485,730 | 792,695 | ||||||||||
Average price per share (in dollars per share) | $ 75.28 | $ 69.33 | $ 72.48 | $ 82.41 | ||||||||||
Aggregate value of share repurchase | $ 4,900,000 | $ 9,000,000 | $ 35,200,000 | $ 65,300,000 | ||||||||||
Common stock, conversion ratio | 1 | |||||||||||||
Class B Common Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock, conversion ratio | 1 | |||||||||||||
Tradeweb Markets Inc | Class C Common Stock | Bank Stockholders | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of share owned (in shares) | 3,251,177 | |||||||||||||
Tradeweb Markets Inc | Class A Common Stock | Bank Stockholders | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Shares redeemed (in shares) | 3,251,177 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-Based Compensation Plans - Schedule of Outstanding Shares of Common Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Total stock-based compensation expense | $ 17,348 | $ 14,757 | $ 44,670 | $ 49,432 |
Related Party Transactions - Ba
Related Party Transactions - Balances - Schedule of Balances From Transactions with Affiliates Included in the Consolidated Statements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transactions | ||
Accounts receivable | $ 167,039 | $ 142,676 |
Receivable and due from affiliates | 3,165 | 2,728 |
Other assets | 77,866 | 74,262 |
Accounts payable, accrued expenses and other liabilities | 46,668 | 46,690 |
Deferred revenue | 31,404 | 22,827 |
Payable and due to affiliates | 527 | 7,232 |
Affiliated Entity | ||
Related Party Transactions | ||
Accounts receivable | 1,812 | 70 |
Receivable and due from affiliates | 3,165 | 2,728 |
Other assets | 74 | 261 |
Accounts payable, accrued expenses and other liabilities | 1,467 | 335 |
Deferred revenue | 5,099 | 5,076 |
Payable and due to affiliates | $ 527 | $ 7,232 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Affiliates were Included in the Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 328,357 | $ 287,115 | $ 968,219 | $ 895,739 |
Expenses | ||||
Employee compensation and benefits | 116,016 | 102,720 | 334,433 | 330,601 |
Technology and communications | 19,733 | 16,816 | 56,001 | 48,626 |
Professional fees | 10,479 | 9,400 | 32,321 | 25,832 |
Occupancy | 4,132 | 3,699 | 12,283 | 10,857 |
Affiliated Entity | ||||
Expenses | ||||
Employee compensation and benefits | 9 | 0 | 26 | 613 |
Technology and communications | 1,496 | 1,231 | 4,147 | 3,546 |
General and administrative | 4 | 47 | 4 | 244 |
Professional fees | 9 | 1 | 10 | 46 |
Occupancy | 21 | 0 | 41 | 0 |
Subscription fees | ||||
Revenue: | ||||
Total revenue | 46,361 | 41,342 | 136,483 | 124,337 |
Subscription fees | Affiliated Entity | ||||
Revenue: | ||||
Total revenue | 460 | 282 | 1,931 | 799 |
Refinitiv market data fees | ||||
Revenue: | ||||
Total revenue | 15,460 | 15,370 | 46,515 | 46,354 |
Refinitiv market data fees | Affiliated Entity | ||||
Revenue: | ||||
Total revenue | 15,460 | 15,370 | 46,515 | 46,354 |
Other fees | ||||
Revenue: | ||||
Total revenue | 3,051 | 2,388 | 8,677 | 7,559 |
Other fees | Affiliated Entity | ||||
Revenue: | ||||
Total revenue | $ 218 | $ 110 | $ 468 | $ 353 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value of Financial Instruments | ||
Assets | $ 1,364,217 | $ 1,106,916 |
Liabilities | 0 | 1,002 |
Cash equivalents – Money market funds | ||
Fair Value of Financial Instruments | ||
Assets | 1,361,198 | |
Receivable and due from affiliates – Foreign exchange derivative contracts | ||
Fair Value of Financial Instruments | ||
Assets | 3,019 | |
Quoted Prices in active Markets for Identical Assets (Level 1) | ||
Fair Value of Financial Instruments | ||
Assets | 1,361,198 | 1,106,916 |
Liabilities | 0 | 0 |
Quoted Prices in active Markets for Identical Assets (Level 1) | Cash equivalents – Money market funds | ||
Fair Value of Financial Instruments | ||
Assets | 1,361,198 | |
Quoted Prices in active Markets for Identical Assets (Level 1) | Receivable and due from affiliates – Foreign exchange derivative contracts | ||
Fair Value of Financial Instruments | ||
Assets | 0 | |
Significant Observable Inputs (Level 2) | ||
Fair Value of Financial Instruments | ||
Assets | 3,019 | 0 |
Liabilities | 0 | 1,002 |
Significant Observable Inputs (Level 2) | Cash equivalents – Money market funds | ||
Fair Value of Financial Instruments | ||
Assets | 0 | |
Significant Observable Inputs (Level 2) | Receivable and due from affiliates – Foreign exchange derivative contracts | ||
Fair Value of Financial Instruments | ||
Assets | 3,019 | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value of Financial Instruments | ||
Assets | 0 | 0 |
Liabilities | 0 | $ 0 |
Significant Unobservable Inputs (Level 3) | Cash equivalents – Money market funds | ||
Fair Value of Financial Instruments | ||
Assets | 0 | |
Significant Unobservable Inputs (Level 3) | Receivable and due from affiliates – Foreign exchange derivative contracts | ||
Fair Value of Financial Instruments | ||
Assets | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Foreign Exchange Derivative Contracts (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Foreign currency forward contracts – Gross notional amount | Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Gross notional amount | $ 178,620 | $ 162,845 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Unrealized Gains (Losses) on Foreign Currency Forwards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Aug. 25, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Foreign currency forward contracts not designated in accounting hedge relationship – General and administrative (expenses)/income | General and Administrative Expenses | |||||
Derivative [Line Items] | |||||
Realized and unrealized gains (losses) on derivative contracts | $ 3,883 | $ 6,767 | $ 4,921 | $ 12,937 | |
Foreign currency call option contract not designated in accounting hedge relationship – Other income/(loss) (1) | |||||
Derivative [Line Items] | |||||
Proceeds from unwinding of out-of-the-money derivative | $ 1,100 | ||||
Foreign currency call option contract not designated in accounting hedge relationship – Other income/(loss) (1) | Other Income (Loss) | |||||
Derivative [Line Items] | |||||
Realized and unrealized gains (losses) on derivative contracts | $ (1,907) | $ 0 | $ (1,289) | $ 0 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Schedule of Financial Instruments Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value of Financial Instruments | ||
Receivable from brokers and dealers and clearing organizations | $ 4,966 | $ 11,632 |
Deposits with clearing organizations | 26,433 | 23,906 |
Accounts receivable | 167,039 | 142,676 |
Payable to brokers and dealers and clearing organizations | 4,966 | 11,264 |
Equity investment without readily determinable fair values | 20,000 | 20,000 |
Fair Value, Nonrecurring | ||
Fair Value of Financial Instruments | ||
Cash and restricted cash | 133,212 | 151,313 |
Receivable from brokers and dealers and clearing organizations | 4,966 | 11,632 |
Deposits with clearing organizations | 26,433 | 23,906 |
Accounts receivable | 167,039 | 142,676 |
Other assets – Memberships in clearing organizations | 2,423 | 2,406 |
Total assets measured at fair value | 334,073 | 331,933 |
Payable to brokers and dealers and clearing organizations | 4,966 | 11,264 |
Total | 4,966 | 11,264 |
Quoted Prices in active Markets for Identical Assets (Level 1) | Fair Value, Nonrecurring | ||
Fair Value of Financial Instruments | ||
Cash and restricted cash | 133,212 | 151,313 |
Receivable from brokers and dealers and clearing organizations | 0 | 0 |
Deposits with clearing organizations | 26,433 | 23,906 |
Accounts receivable | 0 | 0 |
Other assets – Memberships in clearing organizations | 0 | 0 |
Total assets measured at fair value | 159,645 | 175,219 |
Payable to brokers and dealers and clearing organizations | 0 | 0 |
Total | 0 | 0 |
Significant Observable Inputs (Level 2) | Fair Value, Nonrecurring | ||
Fair Value of Financial Instruments | ||
Cash and restricted cash | 0 | 0 |
Receivable from brokers and dealers and clearing organizations | 4,966 | 11,632 |
Deposits with clearing organizations | 0 | 0 |
Accounts receivable | 167,039 | 142,676 |
Other assets – Memberships in clearing organizations | 0 | 0 |
Total assets measured at fair value | 172,005 | 154,308 |
Payable to brokers and dealers and clearing organizations | 4,966 | 11,264 |
Total | 4,966 | 11,264 |
Significant Unobservable Inputs (Level 3) | Fair Value, Nonrecurring | ||
Fair Value of Financial Instruments | ||
Cash and restricted cash | 0 | 0 |
Receivable from brokers and dealers and clearing organizations | 0 | 0 |
Deposits with clearing organizations | 0 | 0 |
Accounts receivable | 0 | 0 |
Other assets – Memberships in clearing organizations | 2,423 | 2,406 |
Total assets measured at fair value | 2,423 | 2,406 |
Payable to brokers and dealers and clearing organizations | 0 | 0 |
Total | 0 | 0 |
Total Fair Value | Fair Value, Nonrecurring | ||
Fair Value of Financial Instruments | ||
Cash and restricted cash | 133,212 | 151,313 |
Receivable from brokers and dealers and clearing organizations | 4,966 | 11,632 |
Deposits with clearing organizations | 26,433 | 23,906 |
Accounts receivable | 167,039 | 142,676 |
Other assets – Memberships in clearing organizations | 2,423 | 2,406 |
Total assets measured at fair value | 334,073 | 331,933 |
Payable to brokers and dealers and clearing organizations | 4,966 | 11,264 |
Total | $ 4,966 | $ 11,264 |
Credit Risk (Details)
Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |||||
Allowance for doubtful accounts | $ 187 | $ 187 | $ 129 | ||
Credit loss expense | $ 13 | $ 60 | $ 60 | $ 34 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 1 Months Ended | |||
Apr. 08, 2019 USD ($) | Mar. 31, 2021 class_action_case | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Commitments and Contingencies | ||||
Number of claims dismissed | class_action_case | 2 | |||
Minimum | ||||
Commitments and Contingencies | ||||
Initial term of lease | 1 year | |||
Maximum | ||||
Commitments and Contingencies | ||||
Initial term of lease | 10 years | |||
Revolving credit facility | ||||
Commitments and Contingencies | ||||
Revolving credit facility, term | 5 years | |||
Maximum borrowing capacity | $ 500,000,000 | |||
Commitment fee, percentage | 0.25% | |||
Letter of credit issued | $ 500,000 | $ 500,000 | ||
Letters of credit outstanding | $ 0 | $ 0 | ||
Revolving credit facility | Fed Funds Effective Rate | ||||
Commitments and Contingencies | ||||
Basis variable spread rate | 0.50% | |||
Revolving credit facility | One Month SOFR | ||||
Commitments and Contingencies | ||||
Basis variable spread rate | 1% | |||
Credit adjustment spread | 0.10% | |||
Additional adjustment | 0.75% | |||
Revolving credit facility | SOFR | ||||
Commitments and Contingencies | ||||
Basis variable spread rate | 1.75% | |||
Credit adjustment spread | 0.10% | |||
Debt instrument floor rate | 0% | |||
Revolving credit facility | SONIA | ||||
Commitments and Contingencies | ||||
Basis variable spread rate | 1.75% | |||
Revolving credit facility | EURIBOR | ||||
Commitments and Contingencies | ||||
Basis variable spread rate | 1.75% | |||
Debt instrument floor rate | 0% |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Maturity of Lease Liabilities and Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2023 | $ 3,495 | |
2024 | 8,925 | |
2025 | 4,046 | |
2026 | 3,264 | |
2027 | 3,261 | |
Thereafter | 223 | |
Total future lease payments | 23,214 | |
Less imputed interest | (1,174) | |
Lease liabilities | $ 22,040 | $ 27,943 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income attributable to Tradeweb Markets Inc. | $ 98,614 | $ 69,083 | $ 275,552 | $ 220,392 |
Less: Distributed and undistributed earnings allocated to unvested RSUs and unsettled vested PRSUs | (124) | (82) | (348) | (111) |
Net income attributable to outstanding shares of Class A and Class B common stock - Basic | 98,490 | 69,001 | 275,204 | 220,281 |
Net income attributable to outstanding shares of Class A and Class B common stock - Diluted | $ 98,490 | $ 69,001 | $ 275,204 | $ 220,281 |
Denominator: | ||||
Weighted average shares of Class A and Class B common stock outstanding - Basic (in shares) | 211,618,475 | 205,721,162 | 210,444,082 | 204,767,261 |
Dilutive effect (in shares) | 1,873,159 | 1,832,826 | ||
Weighted average shares of Class A and Class B common stock outstanding - Diluted (in shares) | 213,491,634 | 208,329,469 | 212,276,908 | 207,748,037 |
Earnings per share - Basic (in dollars per share) | $ 0.47 | $ 0.34 | $ 1.31 | $ 1.08 |
Earnings per share - Diluted (in dollars per share) | $ 0.46 | $ 0.33 | $ 1.30 | $ 1.06 |
Weighted average unvested RSUs and unsettled vested PRSUs that were considered participating securities (in shares) | 265,681 | 246,238 | 266,453 | 121,115 |
PRSUs | ||||
Denominator: | ||||
Dilutive effect (in shares) | 504,945 | 746,043 | 380,740 | 796,090 |
Options | ||||
Denominator: | ||||
Dilutive effect (in shares) | 1,110,175 | 1,661,705 | 1,240,923 | 1,940,970 |
RSUs | ||||
Denominator: | ||||
Dilutive effect (in shares) | 258,039 | 200,559 | 211,163 | 243,716 |
PSUs | ||||
Denominator: | ||||
Dilutive effect (in shares) | 0 | 0 | 0 | 0 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
PRSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares (in shares) | 0 | 324,467 | 0 | 0 |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares (in shares) | 0 | 0 | 0 | 0 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares (in shares) | 110,927 | 321,920 | 110,927 | 38,761 |
PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares (in shares) | 144,666 | 0 | 144,666 | 0 |
LLC Interests | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares (in shares) | 23,080,571 | 28,750,603 | 24,179,583 | 29,667,383 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements - Schedule of Regulatory Capital Requirements and Schedule of Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
TWL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | $ 41,514 | $ 41,933 |
Regulatory Capital Requirement | 2,639 | 3,669 |
Excess Regulatory Capital | 38,875 | 38,264 |
DW | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 149,497 | 131,026 |
Regulatory Capital Requirement | 2,852 | 3,574 |
Excess Regulatory Capital | 146,645 | 127,452 |
TWD | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 40,524 | 44,094 |
Regulatory Capital Requirement | 741 | 775 |
Excess Regulatory Capital | 39,783 | 43,319 |
TEL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 74,995 | 59,904 |
Regulatory Capital Requirement | 33,024 | 32,589 |
Excess Regulatory Capital | 41,971 | 27,315 |
TWJ | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 7,166 | 7,320 |
Regulatory Capital Requirement | 2,022 | 1,695 |
Excess Regulatory Capital | 5,144 | 5,625 |
TWEU | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 11,381 | 8,794 |
Regulatory Capital Requirement | 5,358 | 4,517 |
Excess Regulatory Capital | 6,023 | 4,277 |
TESL | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 1,740 | 1,607 |
Regulatory Capital Requirement | 917 | 904 |
Excess Regulatory Capital | 823 | 703 |
TESBV | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 1,558 | 1,677 |
Regulatory Capital Requirement | 860 | 801 |
Excess Regulatory Capital | 698 | 876 |
TW SEF | ||
Regulatory Capital Requirements | ||
Financial Resources | 40,661 | 30,837 |
Required Financial Resources | 12,500 | 12,500 |
Excess Financial Resources | 28,161 | 18,337 |
Liquid Financial Assets | 17,915 | 15,566 |
Required Liquid Financial Assets | 3,125 | 3,125 |
Excess Liquid Financial Assets | 14,790 | 12,441 |
DW SEF | ||
Regulatory Capital Requirements | ||
Financial Resources | 12,861 | 14,714 |
Required Financial Resources | 8,694 | 8,080 |
Excess Financial Resources | 4,167 | 6,634 |
Liquid Financial Assets | 7,523 | 9,493 |
Required Liquid Financial Assets | 2,174 | 2,020 |
Excess Liquid Financial Assets | 5,349 | $ 7,473 |
YB | ||
Regulatory Capital Requirements | ||
Regulatory Capital | 1,974 | |
Regulatory Capital Requirement | 1,014 | |
Excess Regulatory Capital | $ 960 |
Business Segment and Geograph_3
Business Segment and Geographic Information - Schedule of Information Regarding Revenue by Client Sector (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Segment and Geographic Information | ||||
Total revenue | $ 328,357 | $ 287,115 | $ 968,219 | $ 895,739 |
Operating expenses | 203,619 | 184,305 | 604,580 | 574,720 |
Operating income | 124,738 | 102,810 | 363,639 | 321,019 |
Institutional | ||||
Business Segment and Geographic Information | ||||
Total revenue | 195,094 | 172,814 | 577,774 | 551,322 |
Wholesale | ||||
Business Segment and Geographic Information | ||||
Total revenue | 77,975 | 64,584 | 227,404 | 205,532 |
Retail | ||||
Business Segment and Geographic Information | ||||
Total revenue | 32,332 | 28,495 | 94,875 | 75,267 |
Market Data | ||||
Business Segment and Geographic Information | ||||
Total revenue | $ 22,956 | $ 21,222 | $ 68,166 | $ 63,618 |
Business Segment and Geograph_4
Business Segment and Geographic Information - Schedule of Revenue and Long-Lived Assets by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Segment and Geographic Information | |||||
Revenues | $ 328,357 | $ 287,115 | $ 968,219 | $ 895,739 | |
Long-lived assets | 4,037,503 | 4,037,503 | $ 4,057,256 | ||
U.S. | |||||
Business Segment and Geographic Information | |||||
Revenues | 207,842 | 185,097 | 617,463 | 565,540 | |
Long-lived assets | 4,022,318 | 4,022,318 | 4,044,230 | ||
International | |||||
Business Segment and Geographic Information | |||||
Revenues | 120,515 | $ 102,018 | 350,756 | $ 330,199 | |
Long-lived assets | $ 15,185 | $ 15,185 | $ 13,026 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||||||
Nov. 01, 2023 | Oct. 26, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Subsequent Event [Line Items] | ||||||||
Dividends (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.08 | $ 0.08 | $ 0.08 | ||
Subsequent Event | Affiliated Entity | ||||||||
Subsequent Event [Line Items] | ||||||||
Master Data Agreement, term | 5 years | |||||||
Master Data Agreement, transition term | 12 months | |||||||
Master Data Agreement, written notice, term | 30 days | |||||||
Subsequent Event | TWM LLC | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends payable | $ 49.9 | |||||||
Subsequent Event | Class A Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends (in dollars per share) | $ 0.09 | |||||||
Subsequent Event | Class B Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends (in dollars per share) | $ 0.09 |