TW - Earnings call transcript Q3 2019

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Operator

Good morning, and welcome to Tradeweb’s Third Quarter 2019 Earnings Conference Call.

As a reminder, today’s call is being recorded and will be available for playback.

To begin, I will turn the call over to Head of U.S. Corporate Development and Investor Relations, Ashley Serrao. Please go ahead.

Ashley Serrao

morning. good and you, Thank

Joining me Officer, for our Executive call quarter for Olesky who the update. Lee business highlights provide are will and Chief a today review the the

opportunities a Billy President, into the our our will Hult Financial dive financial and Our little results. Warshaw, Bob will some deeper of Officer, review Chief growth

within remind statements Our earnings release, our report, differ this could the on results available periodic to portion the SEC. Q&A Act third may materially to Reform from is accompanying Litigation of volumes may differ from these the cause certain actual forward-looking such quarter future expectations, Information the Investor I’d in and forward-looking website. you presentation to meaning that release to Private statements our forward-looking earnings Securities events like are factors statements in reports results and of XXXX. contained presentation with and that constitute Relations Actual relate statements. filed October as and of concerning

Form More including to included posted release the as measures, call, and be be the reference on will SEC. comparable presented adjusted income, regarding earnings certain filed flow, including cash adjusted the our free EBITDA, currency adjusted applicable, non-GAAP reconciliations EBIT, expenses will today’s constant XX-Q to in GAAP basis. in a measures included presentation and most these certain with adjusted we on are non-GAAP our measures earnings measures, website and On information net

earnings with were morning’s pre-announcement. results this recap, recent consistent To our

$X.XX. of diluted reported GAAP we Specifically, per share earnings

XX-Q tax net of and be additional Refinitiv-related diluted the filed the see for information D&A of income assuming $X.XX. earnings regarding the XX.X%, acquisition we with Excluding certain an historical certain and and results. Form adjusted and non-cash FX release stock-based of per the Please to presentation share SEC reported our expense, items rate effective compensation

over turn to the let Lee. call me Now,

Lee Olesky

for you earnings everyone Thanks, and Ashley. joining thank call. quarter our Good morning, third

to as and has third reported X, continue since business quarter volume new theme been records secular Slide innovation the of growth. investments reoccurring we inception. a our results Tradeweb Turning at Serial fuel various our record drivers to set multiple and

and invest to our for to enhance to their continue easier drive growth will make workflows. it We clients

record during were Specifically is $XXX revenues XX% of XX% a reported both third constant on million currency quarter basis gross a supported up growth, the and by on internationally. which domestically basis, strong year-on-year and

improved in international constant our lot a EBITDA by margins Europe by adjusted to see growth similar a profitability as XX.X% ahead basis potential XXX and of pleased especially translated expanded over This on We’re both and a amount our to and basis. Asia. by year-over-year currency points

greater balancing As expansion ahead, on for create we we to and investments continue value laser-focused both to to growth margin revenue future look shareholders. our drive be

X, see basis. our classes our you on Turning double-digit top-line currency of recording with constant can both the diversity asset That’s reported to and revenue growth a Slide all of growth.

constant Our X% reported data business currency and basis, on X% reported growth and respectively.

interest than and were year-on-year quarter areas; volumes in swaps, Slide growing growth update with XXX% credit total during our Starting global swaps, Treasuries, and me over by both one over swaps the interest XX%. volume revenue, up with our third duration, greater rate by year rates rate ETFs. to brief largest on a four let X, provide on Moving product U.S. main U.S. our

across over emerging long we at there for believe markets This room lots an years Europe and next over exciting of global to grow and Tradeweb fast-growing the the few as is is run. area electronification in

our improve product features set, very with and on to driving We’re electronification partnering and our in functionality, higher our clients this focused market workflows. by enhance broaden

Treasuries, the quarter. third during were to Moving our XX% year-on-year on volumes up

sectors. protocols in share continue take trading here a using We and variety wholesale the of to institutional both

over ways at leverage market. customers innovate for our stands create We had technology proprietary to direct new continue we today to XX% to and new for share a streams of the source as record Our liquidity.

our We for also prices in successful UK. price Gilt partnered closing with Treasuries to for is U.S. bonds big adding FTSE initiative for to introduce with ICE the another closing cash U.S. credit us. focus

yield share for high the and grade quarter Our and third XX.X% respectively. to and high record a increased X.X%,

next-generation our to building we are by believe clients. resonating with that what our integrated, powered We on is a be credit approach multi-sector marketplace

our liquidity demands will differentiate forward, Billy respond to and aggressively to Going here compete continue we our quickly. ability to to momentarily. will invest provide venue client and with color more

to combination and growth ETFs, XX%, market were institutional up a volumes efforts volatility. of broader organic within due Finally,

benefit we our ahead, ETFs growth of from Going remain well continued to globally. positioned

reduce recently which help help settlement EuroCCP, ETFs, disciplined risk navigate rules, new make we accessible customers. with the our We announced for to product European our clients and will new believe settlement partnership

months. this coming the expect We go in to live

With growth initiatives turn a you automation. will that, I of color few our it trading and to Billy some on to give more

Billy Hult

Thank you, Lee.

increased continues. X, solution to So the of Slide adoption trading moving AiEX automated

have prices bonds. Credit, evaluated XX,XXX We Price AiEX market-leading composite which over like and with pricing paired and AI tools benchmarks our pricing

encouraging and is and of there sophisticated volumes Top to are plenty note counts up Our room client most grow our even XXX to nicely, and it’s clients. within that

Moving to slide X.

market is to is currencies. growth increase is ADV to us is offering It rate growth to just we currencies. interest important global key European our continues that note swaps and our Another share area believe not across resonating for where confined

to in platform. We are and invest growth we this continue seeing broad-based

market, interest market traditionally rate swaps We thereby, asset linked voice-traded the recently bond to electronifying swaps market. and complex government the the

their help of OpenGamma rules. requirements uncleared in and margin interest also advance to clients analytics ex-margin integrated We rate upcoming optimization swap best collateral satisfy margin and from Cassini

credit, here the to is message Turning clear.

credit a is working. differentiated to strategy platform Our build

we products, and our high-yield. network is new and is grows in on been have our of we habits mantra has obviously Leading our significant clients and no and believe form to across add growing clients Our as advances across credit share all to technology runway getting our both platform high-grade more market different.

the their trades, using and now portfolio but It’s like net-spotting, innovations to are not traditional all-to-all. we protocols turn more to for trading. of also processing A electronify RFQs electronically to to innovated and leading trading clients recent platform years their few a spanning execute trades encouraging our just see platform increasingly ago, streams, today, variety we session with

fact the are also believe that are encouraged electronify volumes by our are about platform our We to in next We using speaks increasingly the this we taking blocks. clients platform the to progress level. transacting making

Bob that, turn our to to in financials more it let With discuss detail. me over

Bob Warshaw

Billy to the comparisons be prior-year noted. unless morning. Thanks, good All otherwise and will period

$XXX daily an on volumes Let up our overview X. record volumes We billion, XX%. me of with Slide reported of quarterly begin average

the can see growth was As broad-based. you

ADV credit to government Our derivatives new European European mortgages, investments ETFs. swaps, led in bonds, records Chinese and bonds,

volume Slide denominated basis. XX% quarterly increasing our growth, dollars, euros. just XX revenues into constant We provides gross and base performance. revenues of in from in of The our XX% I approximately currencies earnings our predominantly nearly a other strong described, translated than international XX% derived a XX% customers, currency and by summary of is on by revenue

classes, Trading revenues XX% by asset grow currency revenue basis related Fixed as XX% expected. four increased and as major on our to constant to continue a well.

X% rate continue primarily to reporting agreement. services, Refinitiv going our APA forward. increased by low-single a XX% We grew Other license data growth to business. data digit renewed information growth by due due market expect to the in market

nearly increased a currency of XX.X% Adjusted at came to we and XXX The by continuing basis. EBITDA reported of a scale. was $X.XX. basis points on constant benefit per All expanded margin adjusted share net margin from income in, in result diluted

In sum, per lays million. out fees [ph] trends XX% declined million our in the XX Slide per fee blended year-over-year.

swaps, tenor blended million Excluding fee duration stable lower fees was per actually per million our short year-over-year.

minute volume for decreased of a the average short reviewing due to trends spend Starting by rates, asset duration Let’s tenor with per fees X% underlying million rates class. swaps.

tenor in elevated million activity primarily fee duration up was swaps, short bonds. due year-over-year duration Excluding increase in mortgage and per to government

XX%. average quarter higher driven credit, decline fees was per primarily credit CDS activity. activity, much volumes. for a million and first to municipal quarter per activity trading CDS million lower Recall, timing increased third concentration tend the in a roll to seasonally of see fee higher which through by and carries of Continuing This

to average in to growth due the equities, X%. be increased slight Continuing ETFs. per There continued a to fees institutional up-trend million

fee markets range for has driven from while quarterly to wholesale hovering a and decline this within the million Fee institutional. per in decreased was money been million within Finally, X%. repo by per mix shift

base in of Refinitiv-related on both reported D&A grew our gains – award, of XX% currencies and other FX-related is acquisition approximately than to our XX change high no Slide expenses. details level, to our to option operating relating special invest expenses, At we Adjusted the and at has denominated in There stock-based continue sterling. losses, expense predominantly a and X% for recall, compensation about here. expense been excluding non-cash philosophy dollars, growth. certain

XXX Compensation in primarily X% a to constant compensation, on and an well or as benefits currency grew expense a grew to expense employees from performance-based due ago. basis. year XX.X%, increase X% XXX as Adjusted non-comp headcount

and technology higher increased third-party fees – Specifically, trading with volumes. associated communications

to and work fees offering. preliminary we fees public as associated for incurred amortization higher XXXX, expenditures slightly mostly initial decreased related due Professional cyber increased Depreciation to investments. security with capital in our

Slide guidance. XX details capital management our and

dividend CapEx earnings, spend dividend a the the our $XXX third and We this months about B cash Class trailing reached flow With per $XXX quarterly Class cash on policy quarter cash declared expect of First, equivalents, share. million still and holding position. on unrestricted Board A quarter’s $XX million in XXXX. and to ended to and $XX XX million cash of free We $X.XX million.

undrawn. interest interest to conjunction with offset $XXX million income remains currently we our relatively as incurred installed Interest by Recall, revolver year-over-year credit fees revolving Turning higher revolver and flat our that income remained to a in IPO, income. due facility. the was

our to expense our Of respect operating guidance is other With adjusted unchanged. note, guidance.

to expect to range. $XXX adjusted lower expenses trend our of to continue million We million end to $XXX

tax forecasting using the we non-GAAP assumed XX.X% are rate For of year. purposes, for

our your balance quarterly help in our We’ve count me price. to for Let calibrate for share sensitivity updated models XXXX fluctuations share our you of discuss count. share the

back it turn I’ll to now, And Lee.

Lee Olesky

Bob. Thanks,

We is making. are progress pleased with the Tradeweb

our $XXX environment October October We comparisons volumes given versus of Average Our that of tougher is XXXX. in asset an period released exceptionally volatile billion year-on-year, of increased results daily across slower this morning. a despite demonstrate classes. lot trading the there opportunity volume

XX% for high-grade first the credit, Of of note, the time. we’ve share market for set in new records overall exceeding U.S.

share records also set We in high-yield. for electronic

strike the growth the Looking investing balance ahead, and to right and between continuing business for across we future margin focused capitalize on expansion. are our opportunities

to remarks in conclude and thank that to contributed like I for quarter their Tradeweb. by for for effort their and colleagues the want my record my quarter, clients thanking business partnership another our I’d to

it With to back Ashley questions. for I’ll your turn that,

Ashley Serrao

Thanks, Lee.

back and end will Q&A now ask you at As to X:XX only. hop yourself into a time. reminder, Feel the can additional one question end. our free Eastern at limit Operator, please queue first to take questions question.

Operator

question comes Ari Ghosh first Our Suisse. Instruction] Credit from the [Operator line you. Thank of with

Ari Ghosh

everyone. Hey,

So Lee, first can you my question. take maybe

given potential to a on M&A, this So in with Thanks. it’s at update since now, months any Tradeweb. I capital how impacted you that change. or are a regard future restrictions been change ownership then few us if the And also LSE decision-making result was hoping there deployment as has could limitations announcement of the

Lee Olesky

did said the think this how us business before, affect it’s change at we’ve I ownership So, with for LSE us? Tradeweb. usual as

We’re continuing and best to Tradeweb shareholders. for the in all interest value maximize our act of

a irrespective history to marketplace for ownership. with of the our our have of improve We partnering outcomes customers,

at LSE’s Refinitiv strategy. philosophy or that change doesn’t So our change acquisition of all

our avenues to irrespective value fiduciary all evaluate course, a Board our responsibility of has maximize to ownership. Of

there restrictions, are of In any no terms restrictions.

way to the think I easiest things. characterize that’s

continue We to operate.

Ari Ghosh

color. the you. Appreciate Thank

Lee Olesky

thanks. Sure,

Operator

And O’Neill. from comes Thank Repetto of you. Sandler Richard with next line the our question

Richard Repetto

laid morning, expansion. I looks out pretty played like the my of, guess, good expenses, through months nine revenue It, sort is you that question by much margin or on out XXX points. overcoming and as planned have has grown Robert. Lee, Yes, basis and margins Billy, growth is

has do the that more But question non-comp down of you very than basis. benefiting sort we also, And like come comp the guidance? revenue more look what you should when down, – there ratio. conservative would if seemed you’re into then happen, It And scale? on anyway, there the – is that, the at is, slowed revenue Lee, on the my you that are comp is anything because is read ratio, that

Lee Olesky

have, we’ve think And in had – really a had Sure. the first related Good morning, a quarter I to answer business Yes, right. we Rich. model very strong months, last the Thanks to we question. nine – bit it’s the particular. the related is obviously, that for

here really most We’re deployment margins start is the world. revenue associated opportunities. the and always to I – the But, that, we assets improve. that. Bob respect off, to ahead think compensation growth There markets add the to go thing our with new investing with is earnings and of growth driving people But take for as cost a And around our that’s in directly. the

Bob Warshaw

said have other I add year increase that thing this is the been in that, think the hires what closely pretty of Lee number besides I’d to managing we in also employees.

any so, haven’t that our of sort active years to of cost make of we for And go investment purpose. while it’s hire we effort objectives, sure on as been

only at that’s the that. a part of sort well. people year numbers we’ve as so And XX core point. maybe think it for added, XX think some And pretty XXX, some it’s of this been like at I or And that’s I

looking are – And the how third we that only at third-party last we pretty parties. also closely the and to costs add is

consolidating we make to we and been things, this third the And is where of we’ve what examine most watching So might our not well. – continuing do can things internally which the costs we or being as part clearing parties that’s that like a as sure looking efficient between adjustments we making been can. and

Richard Repetto

Okay, thank you.

Operator

Thank you.

Our question from of Ken JPMorgan. with the next Worthington comes line

Ken Worthington

you swaps the hurt or year, rising use how for past, impact, meant the activity industry talk and the U.S. pace next traders the more? U.S. credit help on willingness to further in or in Thanks. higher If Can the levels, lower the existing industry-wide and morning. what a rates you hold which the the you or activity systems traders rate how can the – do pause markets about penetrate the and maybe environment U.S. levels at business? following activity Fed maybe is systems has levels for products new Good or

Lee Olesky

a been we month have October, towards was more in Tradeweb. themes. did those platforms, and while. Trading of it this month interaction growth, we at slower terms produced of digitization, less have vary blazing lot just a Good for automation XX% we’ve morning, we question. of a that doing all secular wind Ken. the and really Thank move that, witnessed look in time levels, this trading you across levels said a different in back points Yes, at trading the not environment, our of while Having efficient the electronification, year-on-year in of and

Those are don’t constants. extent. of any We that changing great any to see

credit. have U.S. swaps, different slightly tend some different have changes, in with will, different the It’s aggressively. immediately create a their swap you a business, asset if we costs see leads all trying in number really fact, accelerate of true market In anything, as they that to our if and continue that across reasons. market One they They in to of is people environments, participants a to accelerate. been classes, profitable to reduce more the to accelerating for MiFID regulatory do to of And what to the different and digitization, result is Europe II, more drive-by particular, segments trajectory, not It’s board. and undertake more automation. really

that, having swaps in still Now market. the you’re said

that [indiscernible] to-date. Just market electronic example, is as roughly an of

to I to of or more trading little picked a than that expect we like digitization environment. say bit looks October. steam anecdotally, faster slower occur of would to up more has it see November regardless more And So a occur, continue

even to get the up slower try of. number – too a all result Board was But pretty the market. volumes week-to-week, of we’re not as aware quarter-to-quarter really day-to-day, October on of across we the in the well just caught

forward they more efficient to their clients’ digitize things, move needs – can processes, We’re investing efficient to further more automate and have to much importantly, respond most business. on so more focused markets a to to

Ken Worthington

very you Thank Great. much.

Lee Olesky

Sure.

Operator

you. Thank

America. comes from the Carrier with next of Michael Bank Our of line question

Sameer Murukutla

actually for Michael. This Murukutla morning. Thanks Sameer taking question. for a my on good is Hey,

the what usual franchise? faster client seeing client You or continue But growth onboarding the and AiEX details users? what you’re kind then, across across has is from of to the you And see client slower business. on growing these products where fully what on been IRS Maybe transacting seeing look guess, historically, us you more are new healthy when side? adoption can give timeline to the from volumes I

Lee Olesky

of didn’t last I what Sameer. asking, were the hear Sorry, you part

Sameer Murukutla

how to on on-boarded Yes, the franchise? but just when they when generally across you’ve taken they’ve where the product – long get historically they’re fully as from clients, transacting first

Lee Olesky

Okay.

answer does vary. that because does right. me really it because that’s – It’s a first, one dangerous Let one, it generalize, to tough very

We have invest components. to with different thousands to of in and around of and shapes different a in they institutions us that are variety sizes the connected world, resources come

not And broad some as as others. are

which are Some do process. things the doing further AiEX, aggressively automates pushing obviously everything and to like just

AiEX going with slightly save that are move deck will that of and It on the trading to of growth could workflow. volumes been activity. the tends right. several clients respect the the automation are number to the it. in in done, terms first, those of activity just It more ramp that years. costs, You to to looking see in focus using the percentages trading to continues those and up that are more pace our for further more of of these the to is AiEX resources on being automation with of or be levels sophisticated automation clients It’s

we’ve of we’ve just this what the was And very to they eliminate different this basically care criteria can the these enough few he for where doing RFQ markets the active size. a use. it’s first think based clients it across Billy a on characteristics we’ve about we great had that people it, to programming and in given is AiEX is when in completely make to to they’re tool a they that automate process that of saying, number – clicks, algorithm clicks. the to so fill a about way I to are clients is select get With rules-based now click and done fond mouse buttons which a few dealers think to do hard given the the really click automation and started

grow I – sort these continue to leads and and to expect continue into terms automated will everything see in thing place goes like else technology tools. and the of with start the we the one to the invest next that thing. that but that with of in sophistication next we also take-up, It’s we it

active rise got markets very that as very, markets AiEX in Europe, we’re got We credit the globe. it actually to in rates trading we’ve in really and with in pleased the the very time expect activity over and obviously in our sophisticated. So in across automated credit markets, just well. We’ve to more continue become U.S.

Sameer Murukutla

Thanks again.

Operator

Thank you.

comes question next of from the UBS. with line Alex Kramm Our

Alex Kramm

everyone. good Hey, morning,

other much So, side the less others dealer dealers Just you for how much feel but helpful. on And be to also be you I there? that then business, on in there share continue or in also still are But talked I I some good the Xth side. would wanted maybe you active to know the a the quarter, can third do in would to to the have which the really about mean business the second. than color anything the penetration, just areas also particular here quarter electronic in is market shift you like credit mean gains good participation you any quarter-to-date the retail institutional in fully about. on pretty slide contributing Thanks. of growth? that terms that out? talk point Are

Lee Olesky

had October, outperformance at in was The volume significant look we XX% credit. you When IG, XX% yield. in growth high Yes. year-on-year in Sure.

X.X% to growth up market, XX% for the was market. of yield market activity, great pure well, reported high October that which X.X% some nearly share TRACE was in Our of electronic of as

making are gains credit. we in So

network growing. Our is

just is not right. one technology our thing think resonating. It’s I now,

this the a were – we the very complete market. trading, It’s first over a which portfolio on to this all So introduce It’s is focus to all. ago. have year we

second out our meaningful Europe. We’re just We RFQ business. already We have traditional rolled on iteration that. in of still it

very business growing suite that’s nicely. a have We

the desire highlight. we’re market’s So we driver really on particular competition. one franchise response would focused There isn’t building to our for that in

across versus expect cases a to introducing a to playing terms would We’re portfolio to us everything to really continue the market, next of the some that. in do incumbent functionality the of board. in gap it’s great But you and and example bit the role being really of leadership doing innovating close the

have automation trading, role providers. market growth is that of I just It’s markets our think we liquidity But providing will client the bringing significant out the the other industry. taking to a the provider or approach which a session-based thing this that board. space, we generation portfolio segment, we particular leadership of one in segments setting client liquidity of which particular retail thing into any across the is that the which it’s rolled very trading not all we across believe latest wholesale or the portfolio play in is or have, comprehensive and institutional is electronification to for income of a from the midpoint any group trading, one price allow really liquidity kind that

Alex Kramm

All you. right. Helpful. Thank

Lee Olesky

Sure.

Operator

you. Thank

of line Our from Kyle the comes Voigt with KBW. next question

Kyle Voigt

Hey, Thanks for question. taking question good just Maybe for my morning. Billy. a

planning LiquidityEdge treasury is offering first of that next of MarketAxess half cash the its DXC in the year. So market into launch to segment

unique today. offer doesn’t wondering, to they segment that the that or there Just offer that is offering Tradeweb anything about protocol

offering get to your versus any of trying of differentiation a Just launch. ahead sense that

Billy Hult

a this Obviously We’ve Sure. the bit some a market the along. question. good amount about strategy of [indiscernible] the important the is of our That was for workflow clients. in scenes a of we talking been call validation this tremendous at little look to sort nail a our fact this we’ve reality that most as The basic behind government done with just on level. very all work

what we’re for sort think have to we leading timing and of kind that we But what creating that this exactly workflow in may they of can’t their is what of and I that are a do. and we’ve XXX% we kind feel we space. now them done around innovation know credit money really and and about this efficiency we is We’re good saving the speak

Kyle Voigt

Thank you.

Operator

you. Thank

comes question the Ken Rosenblatt. Our line of Hill from with next

is now line open. Your

Ken Hill

morning. good Hey,

dig morning. wanted I area the volume on one release So to in this

growth You in Chinese guys credit and month-over-month some European on saw nice bonds.

So hoping really seeing what for you can China to kind currently you’re markets get the how and there to any competitors? lastly, continue barriers increase of anything And keep that as mind understanding then strategy those at those of outline again portfolio? pricing maybe U.S. entry and And kind to then your you’re broader overall versus for portion to a from in just to a first the continuing yourself differentiate of in second, perspective

Lee Olesky

Sure. were always Well appealing It’s the with Ken. China we $XX to for We third the debt outstanding. XXXX. connect it’s – thanks obviously question, in market. trillion our Chinese We invest to very, assets are the out back to a institutions bond importantly in into throw of assess the largest market. the connect decisions the large first world of – By as an count, of still very stages to more this very in market in I as early that in they caution Connect, more the debt. foreign their but like evolution we also Bond

So with opportunities we’re respect interest growth with in in though, business We in said in long-term profitable to recent momentum the grows. and months outlook investor China We’ve a seen obviously our already do strong take and very China today. that interest particular. as

continue. we’ve opened and a our index got ground advantage. approach catalyst. in first-mover – invested with the is up as we’ve Shanghai. people to happening will our phase-in capitalize recent a in So inclusion with on We office term in Clearly This the there on boots the

developed prices continue with dealers. onshore But invest we’ve over We out to very CFETS transparency, popular Tool we integrated enhance pre-trade there. to by Messaging streaming the the iDeal with rolled just that’s

China network bigger expand can to referred money authorities. to to allows continuing of and that’s offshore, entirely will the a timeline move sort but and into the up that’s come to opportunity when trading, China, our more southbound really we that’s We’re government where liberalizes as

as electronic the I digitize, come is incredibly a they participants world we common around and is just well think they to as we’re these markets mover market making are of in and as positioned respect in the perhaps connect the what doing they the first with be that continue markets with online, of to China, rest sure trading.

Ken Hill

you. Thank

Lee Olesky

Sure.

Operator

Thank you.

next Ari line with of Credit Ghosh from comes the Our question Suisse.

Ari Ghosh

there. taking Hi, my Thanks for follow-up.

either one adoption and growth well, of quick Is most you here clients are be really customers? or Slide Thanks. in or client color ramp stats European on AiEX U.S. Any would Just from on growth overseas that Asian and have X. markets this greater primarily you the helpful. from seeing that’s

Billy Hult

AiEX. important you a phone to a through now innovation thing this was Yes, I and get on most it’s would moment markets – it’s sophisticated is most – where think time market think with is think there again lightbulb most our AiEx is when a say, clients, when as I like where point about is good electronically would and in like AiEX described question. volatile, just Lee the this trading it’s and in well, maybe moment it’s and they reverse global the important from I the

Now and trading touches they sort of trend more are markets, across the more that this all regions. volatile in is electronically a the

Ari Ghosh

again. Thanks

Operator

you. Thank

the from Sandler comes line question Repetto next O’Neill. of with Our Richard

Richard Repetto

round I’m but here, not still I’ll this, a Hey, The second the the this it. I ask got sure answer you’ll – Since Lee, on is question. secondary. follow-up it’s

takeaways the few of there’s you? selling just they – banks what that other or of The somewhere out an XX% the there. million know secondary the of was from overall but the, sell that all. what think, tell I You only at a And it around million, $XX.X did have we my of or Was didn’t any it And question size or about banks sold what I amount? calculations guess, sold, know somewhere I the there. is, could or XX our sold did deal I guess around to they issue are it them full calculate out not the by you? $XX.X of tell

Lee Olesky

sort Thanks, that prefaced Rich. to Yes, one of as that’s – a that’s you tough I us think – for answer.

that You for with know continue to We investors long have have the that is, It’s the nice us. we that always, say time know challenging best offerings we equity of to it’s see us a I to that the lock-ups I’d of been it’s with had been what year, in – sort be thing. IPOs the answer secondary screens end with my and and market world from offering. and secondary respect on a very this

we’re So at performed sold investments we’ve proud going in own up respect XX have the they whatever as quite through today, and of let $XX. to we’re shares well we’re Tradeweb. at how of XX% view I terms from another think as the firm to our for its or we at so million achieved decision with that do results going where to this IPO secondary, investors open everything, we Every alone makes – their

really the it’s hard think you it’s comment to – public banks I on or have are public are particular information. numbers correct, So, they do why

know, we the that head. think That’s the a don’t right it’s XX is the of roughly over shares. right, exactly sold I ballpark. but in right know in XX% range. – million I XX at top I my little million

that decent of modest to occurred an was quite of off a at well. time stress in it the offering went amount markets a So, a that equity

old at to making like trading, we out We’re their their than the how it, are, more much that new – of like stock own is of it. speeds still both new but the only hard investors, a and on decisions, length where investment, we everyone’s few comment weeks we it’s really investors,

Richard Repetto

very much, it. you Thank Lee. Got

Operator

Thank you.

Alex the with comes next UBS. from question Our of Kramm line

Alex Kramm

again. hello Hey,

I marketplace like those kind to you it’s opinion, Seems market on showing and don’t that crowd, credits. what I with more more, your about evaluating guys market or on of well? business the wondering or in the your and in follow-up general, much making proprietary if does so keep are part seeing that just credit anything conversations, degree you another hearing as just Thank up. actually just reading more them actually for know of it’s do or customer across business, If how base? maybe did the you. Just

Lee Olesky

a great So, Alex, question. yes, it’s

role bunch play treasury So market, going variety fundamentally the the obviously sort years in are clients in a ours actives identified without need to are rising to a important important they clients and markets. question, of they of we the of them, ago. And of a have so

understand in I how and think to the good market credit the of these of We direction we have about nature our can feel going all of an going connectivity credits with they’re trades, types forward. of based structure kind terms on really clients. influence of

the relationship important and we years going think going overall to an they’re has them with and play us our grown, developed over with And forward. role

Alex Kramm

maybe Okay. on And here, the we’re in mode then just secondarily, follow-up volume just October release. since

a decent October think morning, but a made seems the the be the I mix but pretty this felt positive I like it to at know comment of slower, they release shift seems that terms amount when in I volume, little have looked Lee this too.

actually, maybe So not maybe think the anything quarter? may here, this you that pretty wrong been how have of the month solid and you. Thank revenue getting a why remainder about

Lee Olesky

you’re volumes think in mix what were I impacts right Yes, the it assessing relative how us. and to

third billion the $XXX a up happening as I plus, XX% thing that versus where think volatility see that’s on were a markets before in from where out slower environment the gone that’s the a really across that’s bit things –we’re we’ve are trading a number to general so down clearly we slowed and and My the right, Brexit have down. volumes but macro with billion, the all little just October, comments Fed correct comments, plus $XXX a result, quarter fact brought and assessment. of

and and when swings and trading as then for macro going focused share, is, our thing yes, it us, products is, more said but volumes, market right. think looking it though environment about of I trading. new we’re kind before, I a rolling we’re at a our it, environment back think October interesting is know was most in there What there slower less probably changes, to have is trade the we we’re on I innovating, times there’s

not of a more year-on-year only which versus So kind is the great reasonable measure month-to-month. – growth, that’s

board. So the market but great, almost growth gaining we’re across share, was year-on-year also the

sure good I’m as the and volumes to I think standpoint, So a look, us look good month in of it it was the everyone for a quite environment landscape market. a other us performance see platforms, our and exchanges was at else revenue relative actually month in competitive relative a a strong relative slower to you trading terms from from our that was month standpoint. the holistically, you and and revenue for among It’s

we’re So pleased.

with pleased We’re it.

We’re just slower observation. it in Yes, October. the making market was a

Alex Kramm

Thank you. enough. Fair

Lee Olesky

Yes.

Operator

Thank you.

Michael of the from question Carrier Bank with next line of Your comes America.

Sameer Murukutla

related Sameer for question A again. this Hey, the is follow-up. Thanks taking to M&A.

closed XXXX. transactions think I five since around you’ve

being the think CodeStreet I most recent.

So think when on you enhanced details could be you of the via just that franchise, more look current state gaps products of protocol workflow the at M&A? us the can just distribution you any give

Lee Olesky

look Yes, Michael. Thanks, M&A. with Sure.

part us the staying our have world the around on we’re that’s rather what team great historically. we’ve reviewing We market development expanding so regions. very are a expand group place you for in big around doing next do, idea a network growth right, what to of the years we as offices in it’s going not than been at done the We on team our XX tackling the Tradeweb that are focus of that say are to that that is we’ve We where constantly such will expansion, odd what into is business for in options our I a we’ve focus with is strategy active which world tell management our and And at had based a these look sharp. different that a business different business like this. we network, segments

things. for in assessing does with out opportunities how constantly we’re our is always some client’s fit will pounce on there But If there this our we’ll play, a that is a clients technology workflow solve might those M&A. technology to non-organic technology eye we an assist CodeStreet market growth was move, if and there – overall toward some problem,

Sameer Murukutla

Thank you.

Operator

Thank you.

Repetto with question Richard Our of next Sandler from O’Neill. the comes line

Richard Repetto

could Lee. questions I keep guess I here, asking

So...

Lee Olesky

[indiscernible]. Yes,

Richard Repetto

So here. and – in doesn’t one the of And future movement the the portfolio Bill for sort electronics excited phase new out anyway, from you’re I hope it’s one a with new mentioned But well know I about you it like quarters come do and to it of it. trading and – on credit market.

why So your of to And to views What’s What ETF, think you could it it’s connect trading ETF the ICE’s I could but spurt do know you it you eventually will on you add will hub view ETFs or as well. competitor? so important? portfolio on? expand certainly sort as and on a also

Billy Hult

Rich, on questions, portfolio of good sort trading. So

would way sort market. in about wanted an that they been they for issue choose it and visit or the for of dealers time side one which lists out to the to Lee the to. respond the think long offer would would pick this how items with second, they I to is a clients fundamental the clients, Let’s us, there when on express that And of trades a a credit which send most frustration around tend has would around important those buyside problem other go the fact those and to

as innovations we fundamental is marketplace. priced trading of This obviously and was the list something the for one So is reality in more one, around almost toward in the that out to for that because that solving credit innovation came could now a the like is think being all all about need okay, move describe trading liquidity the that like portfolio almost X.X of need, around okay.

solved around and of there the portfolio is in out that of benefits kind kind the we’ve of come have to reality trading how this an led in we’ve and feeling workflow market of an a gone buyside of inefficiency and way we way. out this kind complicated back important I the as kind So the worked

of it’s important with resonated most and kind the clients So really credit. fundamentally

why it. you’re hearing about that’s much think so I

Richard Repetto

Any the ETF ICE’s comments on hub?

Lee Olesky

stage. a not lot at Yes, this

currently We’re there. not engaged

on space. as an to eye something the terms RFQ been tool confirmation, ETF a on have ago. it years to help have The respect it. keeping We We’re will competitive is block our of we’ve that don’t see in It’s direct a it’s that issue one think new leading at. in we innovation space create obviously introduced we’ll the today or redeem it. two where With I capacity eye look but we

in First in have U.S. we Europe and the now

a and markets evolution have is role I in into going linking market growing. think on quite ETFs an that’s The that trading we how interesting it’s and portfolio of it’s fundamentally, credit the

clients’ where our some So we and of is paid get we value. in step It’s into that that network can provide on for. problems we are that laser something for we can technology add always solves can where focused some our

Richard Repetto

Thank you.

Operator

Serrao of you. I’m to now questions this Relations, call showing I Corporate Ashley Development at Head Thank no U.S. further will closing time. remarks. back the over for turn Investor And and

Ashley Serrao

to up or free Thanks. We later for questions. with Thank dialing follow either appreciate you with all in today. time. the Bob myself on Feel

Lee Olesky

everyone. Thanks

Bob Warshaw

you. Thank

Operator

today’s this you Thank Ladies participating, now you and and concludes conference gentlemen, may for disconnect. call.

Tradeweb Markets (TW) 7 Nov 192019 Q3 Earnings call transcript