Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to Tradeweb’s First Quarter 2023 Earnings Conference Call.

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

To begin, I’ll turn the call over to Head of Treasury, FP&A & Investor Relations, Ashley Serrao. Please go ahead.

Ashley Serrao

Thank you, and good morning.

President, the the our and into highlights brief results. update; for who Billy provide some today will will business review who review our will for our Furber, growth me initiatives; call little CFO, CEO, are Hult, a dive and Joining a Pluta, Sara deeper who Tom the financial quarter our

Private Regulation material, FD. website during Litigation non-public Act use to like this intend the as disclosure statements and a Securities expectations, obligations of in our to such, events future you under and information Reform the remind within constitute disclosing I’d complying to the XXXX. relate statements that forward-looking of with We meaning means the and as Q&A certain may and presentation of

materially to, forward-looking our differ among may filed SEC. earnings periodic reports cause actual things, Actual results results with presentation the is factors in and could from from statements other forward-looking related that guidance these to statements. contained Statements are forward-looking statements. release, concerning Information our differ

our to certain measures sources today’s Information industry is these reference market presentation. reconciliations we earnings measures, will and as including release earnings regarding Information measures presentation. regarding addition, on market including as In industry well in call, data. is and data, non-GAAP non-GAAP certain GAAP and in our

earnings share $X.XX. of diluted reported per recap, this morning GAAP we To

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

the Now, call to over let Billy. turn me

Billy Hult

global our earnings in hikes, chaotic quarter first resulting crisis the juggled with Ashley. morning, their The joining our dynamics version volatility the during you liquidity of first own March as Fed dramatic curve, turmoil. level everyone, highest financial the and of and crisis fixed call. moves were market the market rate quarter Good clients since bank yield madness regional income for Thanks, thank and continued the

environment but some softer mixed the lack a many our ones we days extreme to to strong the bag of first quarter also had volatility clients as results, led Ultimately, led reducing risk. conviction and for

of also We in moments March. albeit migration, the during high saw to phone some reluctantly, stress

that by protocols, The and solving is that This is been data. everything connecting and trading have what at is challenging reality electronic chipping and solved our for hasn’t markets enhancing this new yet innovating we with many years available away that for opportunity. macro Amidst taking risk with income enter, backdrop, is exceptionally demand high will products remains We fixed believe our innings the hike be, of the to expected dialogue final central will at current rate our what return the levels. increase, as clients for cycle. banks and

into Slide XX% translated on of basis quarter EPS XX.X%. constant generated first basis to XXXX profitability to adjusted X.X% revenues points to million basis. year increased revenue of we of record currency relative adjusted margin full scale XX $XXX X.X% up X, revenue XXX out a Turning reported points headwinds, growth a Stripping on FX were year-on-year basis. our approximately and and growth EBITDA The by growth resulting the improved as

while growth, revenues Slide Rates Information this across again our XX% accounting money to and markets XX% and marked revenue the of the way, XX% Services. Credit, display of provided quarter, Turning our respectively, the once Markets growth. X, for on of was and Money growth credit diversity led Rates, record by

credit by and institutional swaps. by continued while strong Credit U.S. corporate Specifically, was ETFs. the global rates government by U.S. powered equities and business was across trading, growth Muni led was driven bonds

growth organic in a our record and revenue in institutional new set growth by fueled CD markets repos. Money continued retail franchise

incorporated Finally, to proprietary revenues is the the were execution make believe by it robust more important market data, information gets enjoy continue become especially trade increasingly growth. in way future. smarter We search data services going process which products, into third-party to driven to the

LSEG a We more help us have broadly. great to also partner distribute data in our

Slide a credit update U.S. despite into dig slightly. main declining Treasuries, U.S. increased X, to global to Starting by with our rate turn and XX% industry and year-over-year focus two volumes on Turning of I areas Tom provide to will Treasuries over and ETFs swaps. interest deeper brief revenues it U.S.

volumes industry offset on to retail PTFs channels than rate risk-taking. by in institutional our despite as industry grew Tradeweb, continued institutional a and the volumes challenging pullback Zooming the X%, attractive our volatility more actually while was Interestingly, reduced environment wholesale wholesale backdrop. business, but XX% grew in propel

institutional first year-over-year XXX% quarter trades continued rose U.S. important XX% daily banks active. record to increasing highs, year-over-year. theme average funds than hedge and average by daily being Specifically, to more trades AiEX an with with up Automation be Treasury particularly

our the integration located wholesale and our business milestone we as successfully acquisition engine with CLOB data volatility business migration NFI to as of technology the Last session the incumbent. to final our our we offering a center. matching legacy streaming month while respect our achieved business, the underperformed to completed Turning elevated strategically industry the of outperformed benefited the

of the Stepping pool new overall continue our offering. U.S focus to the The us clients liquidity CLOB of record think lead a track trading. customers on protocols on on-boarding improving of Treasury we the and of back, to blend to and different enhancing gives lot innovation evolution and optionality team electronic our by continues

pay ETF business Within equities, to decision dividends. years many our in ago invest to our continues

in Our the volumes. institutional during industry particularly slower clients despite U.S., the add quarter and grow continued to business,

never beyond fixed portfolio an are options, in stronger. management, our with value especially continuing has income in bearing important equity equity ADRs. playing proposition been convertibles, role our initiatives also expand funds, our ETFs, franchise to ETF Other increasingly With flagship momentum and fruit brand

strive is improve another adoption ETF the of example we clients with BlackRock ecosystem. recent iNAV collaboratively Europe, by as Moreover, launch with of our for innovate in ETFs calculations how to we immediate our

client well-positioned the on ahead, remains but as income the secular to believe our not our ETF of strong growth, electronic equities, capitalize the continue benefits solutions to across pipeline we just fixed business. in resonate. We Looking are

to strategic think a of the vein, yesterday is were Turning to one Areas X, wholesale, government Tradeweb grow believe footprint. APAC presence international excited Pacific base priority. Yieldbroker, interest our to would key markets. leading platform our to chapters and Australian derivatives about our rate beyond In We and intent acquire next institutional, this primary building client the Europe potential covering of Tradeweb, Asia of allow that a acquisition expand Slide trading further and as I EM. our focus and include we announce bond

On the would and communities. into penetration dealers, client deepen asset front, management this our fund, the hedge

the superannuation Australian assets, We are this particularly trading. acquisition of would pension world’s and let us holder seamless largest fifth excited that over-the-counter platform for a offer funds, international domestic

products an are be our remains cross-sell Financially, documentation, synergies and approval, and final closing integration Yieldbroker our upon and also The meaningful opportunity platforms. subject regulatory potential to deal customary would definitive to conditions there we believe of subject to stockholder reviews.

of effort The our expansion business. build substantial a EM to dimension other is our international

to formula new our the for that for invest client we fixed similar. decided and years dealer and existing of European one is income European platforms in many products traders. products by build out with network. and European We we the really Today, EM a ago leading believe back, Europe presence remarkably launching cross-selling are to deep Looking

a offering appointed as offering we we end, already our success this work have expanding is Emerging company, the our have great Head a to and gotten To to our all product network. product had The have first brand. a strong we of opportunity develop despite reality recently leverage to EM Markets and also that we

With opportunity growing is that we and billion substantial. of broader EM addressable levels a market of $X rapidly electronification, the excess in believe lower

emerging platform focused trade We clients a be market the and credit, will and to on both be believe developed ability our both instruments on one differentiator. we to rates will with ability EM provide and

to EM and believe when the years needs the respect dynamic similar entered several ago. we U.S. market competition. With competitive wants We to credit is very credit,

portfolio complementing a in in are our We complete trading forays interest set. with swaps credit product rate focused through on rates EM into and first

Our risk markets. and our currency in bond opportunity provide swaps offering developed dealers local with interest the rate bonds local complements currency local roadmap, rate hedge in to providing liquidity

currently in the live differentiator and onboarding collaboration and dealers team early our in will the months. currencies expect and is clients. investing An go technology, we coming We adding with are FXall, which

forward believe of be have promising we innovations quarters. voice help This on initiative We the we coming progress reporting clients. digitize further our to and pipeline a and our which workflows look a multi-year should enhancements in will for

provide swaps. credit it talk munis, Tom to that and over usual in growth will With rate promising our about initiative another I and on corporate updates turn interest to

Tom Pluta

revenue over the in Slide first Thanks, X, $XX to volumes. Today, Billy. our with amassed the launch subsequently XX% and have tax-exempt by offering. over institutional platform XX% a presence munis on building industry a are years munis leveraging growth and million we in annual nearly space Starting the retail represent quarter, in in an which tax-exempt strong leader with of we revenues,

Looking to in having first algorithm our ahead, soft we are space, by muni taxable into launch growth a quarter. presence completed expanding adding already dimension the another our institutional the muni

portfolio playing can as by AiEX position trade a net make at U.S. spotting, to leverage market munis We inroads like leading believe this spread to approaching our trading, are as bonds, here. a we strengths, taxable We Treasury. and to our in IG well

in share range. so sizeable million to currently believe invest muni annual to us. pie bonds. incremental dynamically X improve We fact while leveraging on X% add AiPrice that gain is volume opportunity in every to over $XX offering, million Tradeweb, electronification a X% the our prices of hovers market continue the done XX% five muni in overall we a front, data the trades approximately remains muni XX% revenue for the one approximately revenues, On to have of can by muni ahead only in predict We

a Slide to look Turning at X credit. for closer

trends credit with underlying mixed. revenue corporate with surge year-over-year. credit daily U.S. AiEX FX by global our softer China CDS, backdrop, were and trends was business continued and average headwinds. to coupled Europe, Growth offset industry quarterly munis credit global partially Despite automation set increasing record, trades overall XX% in mixed another in this While

XX% U.S. Normalizing year-over-year. year-over-year business Honing have three in grown FPM credit the grew related client would for duration in growing with by corporate across the headwinds institutional credit, our channels. U.S. year-over-year, business, on X% all IG revenue

double-digit was two robust given Our in tale cities, share. the investment yield high institutional but business grade growth in lower market a revenues pullback revenue of

pay underlying growing fixed focus to RFQ income. XX% remained the growing trading portfolio continued at record, volumes towards also and growing as institutional protocols, on year-over-year. volumes another XX% to Looking primary Retail credit continues double-digits advisors off with robust hit volumes grew more our while allocate year-over-year

a record billion produced with $XXX quarter AllTrade over volume. in

team XX% The on Our number saw growth and over In on aided anonymous XXX% the our of network increasing the year-over-year first all-to-all business. out by to part grew our year-over-year. quarter, be by number platform. in over continues focused dealer-RFQ responses the AllTrade volumes growing responses of the broadening

Our XX% one-way driving in flow. sessions that and ADV grew as a spike normalize the started month. despite over revenue record the volatility quarter rates we March reduced to the match with match in rates With said, had ended year-over-year

integration network made Aladdin onto data we growth. progress the and around to inventory/axes effort AiPrice of our dealer partnership, responding to and continued Moving in all helping AllTrade our meaningful look forward the integration all the quarter, and specifically

further we Looking to our electronify ahead, three we are to area and market. focus biggest client our remains positioned across way the liquidity the channels U.S. we as blend credit work like

swaps quarter variable strong despite a client our year-over-year global continues a reduction in described in quarter XX, one multi-year duration. swaps revenues environment. XX% on risk-off with as pick-up Moving The a as despite first the to X% rose story compression be activity and first Slide the in volumes can growth environment

team’s to XX.X% has with of swaps. franchise share client on our strength across service. share and the innovation global dollar and focus Market rose The swaps EM-denominated record been

focus a average XX% client to trades. Our in contributed daily our institutional increase

extreme not transition ending progressing are with clients trading managing the Our volatility, LIBOR but June. in dollar rate also through risk-free-rate only this they are

volume. compression and The factors increase combination one-year trade year-over-year related greater these a switch two in XX% of drove than

We clients risk back trades. toward to expect transition continue that will these

with make a of continue to over we quarter emerging to there grow. we first our and increasing is markets EM and RFM revenues in protocol. We believe Finally, still saw year-over-year, rapidly room progress across swaps lot XXX% record growing share the

meaningful. ahead, Looking is believe potential growth revenue the we swaps long-term

help the digitize we electronified, believe we and manual lot work global there to fixed market can a remains With income broader still market clients’ XX% markets swaps while the do only that our grow. flows

discuss with that, turn more And to financials over detail. in me Sara let it to our

Sara Furber

morning. good and Tom, Thanks

prior the period, through I be will year comparisons As numbers, go the to unless all otherwise noted.

when our We $X.X begin daily with tenor of first up up an XX% volume on average year-over-year, short XX. quarter me volumes and overview XX% trillion, nearly Let of Slide reported swaps. excluding

that another global Among categories more report, include eight product bonds, Perhaps munis, quarterly areas repos. the highest investment in XX four even strong year-over-year XX Areas quarterly government swaps, and activity ADV. include grade produced of seven their product notable, achieved our more hit monthly U.S. European credit, we XX%. second of of than records while growth volume growth the

a of XX performance. summary Slide quarterly provides our earnings

base in The first quarter and XX% international our approximately recall revenues than basis. gross growth We currency currencies customers, translated X.X% increasing revenue that a predominantly and constant derived on basis denominated is XX% X.X% our dollars, on euros. into volume a revenues by in other of reported of from approximately

to revenue increased and up X.X%. constant four currency asset major a X.X% basis. Total related classes on variable by were trading revenues X.X% by Our increased fixed down total our X.X% our and revenues

revenues other up were trading And XX%.

this fluctuates enhancements for tied As periodic our as performed reflects it a to reminder, revenues clients. line technology retail

on This constant margin quarter’s adjusted full currency a the of basis, XX.X% basis and year points basis a points by reported XXXX. on XX increased basis, XX from EBITDA

the Slide to on key the and fees for highlight of on million XX a per trends Moving quarter.

You can additional presentation regarding million our quarter. performance detail per this XX of the see Slide earnings fee on for

million. Overall, year-over-year, a fee decrease X% our per as mixed and long cash away in blended shift from million credit, fees a primarily of tenor per a swaps result decreased

million per X%. down futures, Excluding swaps lower and fees short tenor blended were fee our per million

rates cash towards our per due channel. million shift positive fees were XX%, up mix U.S. retail treasuries to primarily especially products, For in a

and For trades compression EM primarily RFM. and more were increase duration long tenor down due XX% million swaps, fees offset in per growth XX% which an lower to than swaps a in

U.S. X% yield away cash due offset shift down mostly from average high strong munis. a mix million credit, electronic growth per in decreased by Drilling on fees to fully

increased mix For cash fee ETFs. due XX% per equities, average positive by to a U.S. million higher million towards institutional fees per shift

Finally, million CDs towards shift XX% within a increased and money repos. mix per markets, global fees average by driven away from U.S.

our XX first to and on in and salaries. a basis for due Compensation compensation, the a details accruals quarter decreased and basis. constant X.X% expenses. payroll Slide on for lower X.X% currency reported Adjusted headcount increased which costs performance-related expenses variable taxes increases X.X% offset

information to due matters, expenses. compliance fees with consulting costs as increased Professional requests, higher legal and well as in mainly technology connection XX.X% higher regulatory including periodic

and increased Technology investments previously and costs increase administrative increased Adjusted to communication to in due an general due higher fees, costs data primarily and our travel communicated in entertainment. infrastructure. primarily data and strategy and

million movements in in FX a million quarter first $X.X quarter versus a first of XXXX addition, In XXXX. favorable in gain of resulted $X.X gain in the the

$XXX reached billion XX for XX capital million months. our cash in we Slide and guidance, capital with which management On ended first details remains and quarter trailing strong approximately $X.X free and position, unchanged. flow equivalents the position return and cash in cash our policy, cash a the

of net recent driven to of more of This and cash increased combination income $XX.X Fed higher interest balances our a higher management was primarily by interest hikes yields. and Our cash. due million efficient

Class capitalized a B A Board software quarterly and year-over-year, quarter of $XX.X $X.XX million, development CapEx primarily And dividend Class decrease earnings, to with spend. and quarter’s timing a the the per was of this for of our declared due investment X% share.

leaving regular $XXX million at end We program spent the under million $XX deployment of share the offsetting our buyback future dilution, for quarter.

back for remarks. Billy it turn I’ll Now concluding to

Billy Hult

Sara. Thanks,

of ahead continuing grow businesses have As credit flagship treasuries laser swaps, our runway chapter we a them. of many to lot about we and focused I are to U.S. of believe like Tradeweb, invest collectively that next on think of our

be wholesale, and institutional it we credit. on help Strategically, EM multiclient and linking other M&A will table, far are have clients fashion. by bets taxable more in munis so side using blending in like initiatives our a liquidity or to the placing done We find also unique a position we organic pools today, with in like our retail trade the and be that we presence, sector described our disciplined a of

religious across ADV, due growth monetize the driven a timing of digit firm’s an important building we the strongest have to couple volumes, the market. slower million of has tend the holidays our days trading month-end April are mid-single opportunity seeing and volatility to across seen continue currently proprietary our our out suite and by to Refinitiv which these revenue in in though industry per of also left being are lower data partially continuation primarily fee the also With partnership with of via We to our elevated be products. by days, April a start solutions.

IG Board services Troy to human Directors, like and I would our levels capital brings than while who high of while first QX our than expertise, diversity. Board’s XX X. Board as our leadership joined of financial welcome also our quarter experience independence to Troy close share higher March Board, is to is more and increasing yield years Our also to of share Dixon levels. global

We are industry deep our delighted of to have Board. knowledge his the on benefit

remarks contributed like Tradeweb. to thank partnership business colleagues for thanking I efforts the clients and my their would my by to I volumes record in our for the want and conclude at revenues quarterly their quarter, that and to

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

Ashley Serrao

Billy. Thanks,

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

Operator

[Operator Repetto Instructions] from Piper will you. Thank of Sandler. come Our first Rich question

is open. line Your

Rich Repetto

and Sara, Billy, morning, Good Yes. Tom.

XX% five and question, also pages a on the reducing counting. do get a Anyway. congrats from congrats the quarter. eight quarter. but who’s to record remarks prepared serious Billy, a That’s on reduction, Billy. I First, down And down

multi-channel the and happened the all with you have bank, that and quarter impacted impacts with crisis, that Especially the bank going So with your kind How’s bank, what the volatility to in how’s all Billy? any, And Suisse given impacted? have business model, the forward? then with business, how in have the Deutsche you do business Credit what of and treasury the credit it Bank. to that so expected expect quarter, you first the

Billy Hult

and reading hear second. say Tom have Rich, bit. the a I prepared and little new it was you time the to decisions. the figured In last sometimes you seat, cut a saw Yes, I’ll voice, decisions easy hard And and sometimes back I course. during remarks, Sara it for quick your right of When great have Warren to Peace just

So that followed that question under think bit I question, you’re and of a of effects an to easy knock decisions but your there’s it. to me. little But a direct question, from some on interesting obviously asking and sort

answer it then spirit. in to try I’ll So right broadly the and

no obviously SVB. start to To a with, as company, exposure

time. know really The well, you been a time. for back for As is Rich, of long good [indiscernible] the markets from lived they reality very partner really and a pulled for long in always Tradeweb that breathed had a Tradeweb had kind has

the smaller the much receded government credit, they in player government become from a had and had markets. market, So market European U.S. bond bond the mortgage

of impact would right? interconnected. needed we in just Tradeweb but of a more is So the and not no all March, on these that but breathes of knock of reminder, spirit healthy in interconnected, significant what think of that that highlight, tone happened direct kind say, effects sentiment where interestingly, kind lot is and of some a of that. kind I are about it, lives sort real I not I question, all of of of kind But like So, we’re markets will the going and around your the middle like

knock a flourished. that a all just days let have we say think about Tradeweb we now. the me about that in in trading markets, we this, those effects, that’s kind the on the of with reminder When in position lot like we March, So think leading rates

businesses. Our business record had in did our days significantly well. We rates

in really I that time. And charts moment I of proud was super important extremely in I we was in did leading company performed think government position bonds, bond well. having stressful the how market off at environments. I for think our us government business think that the

say that in the impact a some is, well, So lunch, lunch. direct right? of there free describe of would this that, would the no those and I in the like moves no being What was moves. there marketplace. exceptionally expression there’s I pain as There’s around free

what a expect. a would a environment and through in clients moments, our of resulted of in to that little is a think off sizes reduction Some moves in would everyone a way significant trade challenging expect, losses some risk and that and have went I reaction bit which you more you where

we more for bit sure a moved So a of off little environment. into risk

I would of starting Big of more income approaching you, a describe I when environment, sort up really with and a of we’re would step fixed as back, we are for little us, platforms, picture of way and normal and in, describe rates, that of equilibrium the I curve, is getting when as I the income into – closer clarity environment concept is that us. obviously the and environment. starting kind we that trading what cycle say hike is well are I late bit to new for this the so new good taking obviously really would that higher Rich, steeper a with then sort of yield say feel around getting what new environment the We to that exceptionally this strongly And rate a describe for sets cadence as right? fixed innings

company can And our So and the we we build us. to to feeling that way, to and understanding are innovate obviously that things even think, will staying to moment hopefully, things a perspective, close the we historically with innovations be your your can continuing control. levels And can to is control from as maybe the that these you voice, a have as if in very partnering right, can of job we set continue for as a significant how the focusing done on second do marketplaces. know environment hear good that also customers this for to with remarks, Rich, are good we has shorter question, about really new going good our up we success. get line prepared by and question. build we And and our in I of clients I

Rich Repetto

super you. Thank helpful. Thanks. was That

Billy Hult

Yes.

Operator

for moment question. next One you. Thank our please

next from question will Bank. of come Bedell Brian Our Deutsche

Your line is open.

Brian Bedell

Great. swaps? within benefiting Thanks. frame your least portfolios, stick And for theme on folks. that just in morning, potential timing at with Thanks. potential interest then, Good their the banks Or is hedging on in there salesforce Billy, any of the March. rate of with having increase of this what’s and your terms usage of And the magnitude securities maybe for way of potentially to in that? you Maybe bank view to the topic conversations them to guys? is increase banks

Billy Hult

challenges good a around positions. becomes it. market rates implications It’s of perspective right? and clearly to And extremely management, higher the mortgage around – clear it’s of some the sort some was, And hedging it’s in question. market and like think, I bond Yes, relation the Brian risk to like of the news, everyone how the functioned government there’s around headline the functioned

It’s over we a a little remember I for bit right? robust an things the little central markets of important bit to a rate and interest a what from would’ve clearing. liquid premise it’s transparent, center are opaque very, some so say you of would And as significantly of bunch years. market, that component extremely that very an into combining let’s to of sure, described and a interesting it’s past around very it a front has market moment gone back-alley there’s important swap here, question. the market has is, So topical where an changed What kind

the And around Tradeweb, us the role you business that to connect to significant strong of know there. a very And play has marketplace better marketplace very the leadership and role a for robust potential with It’s dots that played regional we our easy a as around around and well, transition. and that pretty have front community, obviously network a that a pretty rate have dealer swap us, clients interest is doubt, would I We Brian, getting so for center community. product for within say, easily. management focus big, without risk

is is be is going Our Tom’s a They are exceptionally to time our understanding a calls. on this market excellent. side. is always And markets. big do great push where with about perspective my perspective language excellent, job sales what important of sales to from topic that business and are mind force We these Connecting, probably Sara’s most and on the clients. these of talk moment a the your you force think perspective, risk that the of having we and management I discuss can important the at in clients top don’t

So thanks it’s a big focus the for question. And us. for

Operator

question. One our next you. Thank please moment for

next Our Goldman Alexander come will question from of Blostein Sachs.

Your line is open.

Alexander Blostein

where migration. to we get Hey Thanks everybody. really [ph] FI are and Good update on hoping with your thoughts was an morning. for the I question. Tom,

started of how’s are you far? to been get guys that how market to quarter. within what importantly, in in point more about data from the April, think client And that some and in I maybe center that opportunity has and But And you later in were supposed at context the that so going share response thinking market the new improve field? time.

Tom Pluta

that hear you. the share say market Good I’ll guess morning, position our Alex. right order we’re Great to limit our is thing book, about with important very first technological been our milestone and accelerated news completed our data and you’ve that actually we’re on very migration improve it. we about to hard in The hearing not satisfied it center from XX. club is working March Yes, central good now, I

the us. happy very that’s to Carteret data is rest center the industry behind and of Secaucus, moved we So where the located from

and So that at sort right properly. does sure center calibrate time models now of testing working data everything’s clients make take are the now their coding some up and to new

the dealers tell us from they this of PTFs. and migration on club. a to many expect us our And for here So reengage range clients rebuild did wide with we liquidity to do from specifically were waiting

we’re that a now, at working the hard first we’re to we prospects time. have right that of working and So additionally significant that add for list

the that growing we over the building do liquidity of expect So be this liquidity and this course year. we’ll

final that an and trading the of our The includes I’ll session another of which made is business Dealerweb which club organizational with our streams mention thing rest Dealerweb, change, we also combines based protocol. with – the rest Dealerweb

leverage will the our businesses sales this existing to the liquidity focusing other better dealer provider across us with allow force of on and it. relationships benefit So broader

optimistic the And continue turning to to for years structure very expect. point be is market here. start that So change and evolve a us strategic we’ll club the and we’ll this we important treasury the that from we’re be as will will continues final say ahead grow U.S. we as in is, I’ll a – asset thing

Billy Hult

And Alex, this is Billy.

structure on, talked serious And about, institutional concept, the one and as these we’ve first for Tom other market our is wholesale they’re word the business. occur, would like the have ability I been in at and is and blend the was, I in that the is framed comes like our end, perfectly. March again, happening exactly are, that well, mean, only these events thing I considerations middle not feels to around getting frequently, add perfectly think of of we liquidity of kind Just, that the if Tom the is And occurred overused. have describing sure, up not almost if unprecedented The things thing marketplace. of we feels events – that that more XXX% that business it this between the

– we the company. we absolutely that. spot that end to doubt the to would around the say same be blend bit around are like happening feel us fragility that best no of that and the they leading us a that are exceptionally And the set would market up trends enormous for beneficiaries leading is day, well system as able the are leaders the clients present can of we to our little the as at do an of be focus benefit describe receive. what as the of to the I And of kind That’s possible of on at time, structure. the we liquidity there’s a And

Tom’s And from point. my thanks, just that’s Alex. so comment And on follow

Operator

please next One you. our Thank moment for question.

Voigt come of line next KBW. Our question from of Kyle will the

line Your open. is

Kyle Voigt

market a Maybe contract believe on expires XXXX. current the question data Hi, Refinitiv at good some Sara in point business. I for morning. the data

if ability potentially renegotiate and way out XXXX. think your provide that how of the wondering that frame look to could ahead potential we a Just more contract bit from expiration, any as should we renegotiation about also regarding to contract upside you color revenue

Sara Furber

and expires right. All Kyle. Thanks quarter this fourth year the extension. Good morning, The actually contract in of has a questions. year for one then the

detail, to still definitely think but I bit framework. the it’s I with a go So of help a lot little can through early

negotiation companies, the first obviously that teams would it’s length I constructive. spending The the lot well is thing been arms time an it’s of between have together. And say very quite working together a but

ago. years the is, use in of data of teams and best think terms we can then five more going the where the together case are identifying I And through that using if the example cases the partnership anything was partner more and

So if the of anything, solid a indicator think partnership. I real that’s

the If generally was you market has I positive. this together has only data, in and years franchise, put of think more gotten data classes increased. for step the back, a the an data amount five environment about And our asset overall ago we’re speaking, take producing contract

this early for I XXXX. to is we a So of number a shape We be it’s kind but think positive. little think think it’ll constructive, bit

improving topic say most hard to overall of on data, maybe I’d lot we’re of us. into But far Refinitiv terms also nice have And we growth our and a away their by first we contract, from work just data data the primary of business. clients proprietary a execution beyond and growing and value for while the the focus. deliver that and that’s contract. really of in products trading obviously We’ve the our that market Refinitiv seen in

I up stream XX% And a actually bit on revenue that actually you currency XX% think in year-over-year, a the quite constant first quarter basis. saw is and

quarter, increased pricing SONIA, the continuing our we’ve a the about bond that saw continuing products of then past iNAV products, and new in to talked pricing across So business we’re avenues. as traction AI we’re products seeing growth well innovate on. this corporate for Munis, We of some as on spectrum driving different

going on line. of So on quite a constructive things that us are overall that there make lot

you for question. thank So the

Operator

Bond, Securities. Thank you. from question Instructions] [Operator Rosenblatt Andrew will come The next

Your is line open.

Andrew Bond

the the Hey, good cross-sell will and revenue more can acquisition speak to you the Billy, synergies Yieldbroker morning, specifically create? a opportunities little

Billy Hult

it. you in and some a hear that, be and we’re we for to you and there’s And to kind looking to stronger to that Sure. us Andrew, forward talk with time going detail do and kind of want definitely more about of around the of to financials it.

I like which about of little a able The on and is region, obviously been priority most me concept way, is the to the hear excited talk the has it table table, continuing for APAC which straightforward put kind footprint business existing big and product our we’ve about always on rates in We’ve client deepens bit, on international a very So what now our bunch build our about our it, this the very us. in been expands care we’re the talked importantly about. we very, business complements of for can bets to another way bet a us. footprint

instinct with will to about very ways of comprehensive good – marketplace, swaps, more inflation requests click linked set in feel a bonds, our a approach have in has trade. offering, quote a of protocols, we which lot for sync requests government securities, from with is feels market, us diverse for cultural the Yieldbroker product There to From really obviously, a and be but fit it. they

all There’s this. a really good fit around of

to a in and rates I between Electronification bonds million. We’re going I New X% about $XXX say Zealand is what would somewhere to million comment XX% only make that swaps. in Andrew range you, were is, smaller $XXX excited. believe somewhere the size of wallet kind we government Australian wallet Australian size If and that of to

headed to So all this about question. with for And to good as the more of about and to us where feeling we’re thanks really you economics some the to progresses. and looking forward the numbers looking this – attached definitely talking

Operator

question come from Instructions] will you. of O’Shaughnessy Patrick next Our [Operator Thank Raymond James.

Your line is open.

Patrick O’Shaughnessy

about some Hey, your attention paying good we noise that fee in shift the we due or should per important to? reported mix that morning. it How be see numbers? million movements are just trends should underlying to Is we think there

Sara Furber

I as the per I you on client and an really important Tom asset fee say think as million love obviously and that per and variable about but mix, Sara. business about Patrick, within think are It’s million, the I as big frame last other I million fee protocol variables really with noise, asset biggest well not fee don’t variables anything. would Hey our can per it’s And particularly impact products to that certain Billy start being then Why hate class. number. within shift move the mix think and a and metric. to when really add that definitely or do the it’s the what the classes, duration channel over around is year driver moves

to it’s they’re trends, into is trends, think but I overall, more think a So little a word short-terms things probably long-term important and just trends, I Tradeweb. function you what and think kind I When maybe about short-term, of. the that episodic remember it isn’t separated about of than for three bit long-term

of lot of is positive we’ve positive the it’s retail retail One has quite averages. proven million, side which a a has our per some already, durable, clearly fee channel. obviously client of the other and in be The about a equation I versus been given but talked impact to mix. impact realized our rate

alluded Duration I the certainly has this last been the say around and I’d headwind. to year over second duration. thing, a was

credit million. in and per that fee seen swaps You’ve

I about at for actually headwind you million. where that’s flips stage a think potentially and think per stabilizing fee as that to we’re long-term trend a long-term now the tailwind

control the that about as is is think things long-term Munis, are of well, for what’s some million markets then we and talked the businesses growth important remarks in us. one thing, probably emerging growth about maybe as newer the last of of we initiatives, higher which per initiatives most prepared And the both things those in like our fee

ones So the be be paying trends, when the sort attention to. that long-term think would those of big would about I you

fee talking short-term, most April perspective, some in seeing million to about from we’re that a positive we’ve On particularly episodic, I’d say a first million. of fee activity per the the tends just short-term per and of recently tenor that in seen long good reduced lot that’s a – be swap, like obviously therefore the compression the is we’re activity if for like news swaps compression quarter. longer

we and the the that So helps. quite separate generally, episodic Hopefully I like just think where it’s pieces, short-term important about are. we’re long-term to but constructive

Operator

of [Operator Instructions] Allen Thank from come question Chris next you. Citi. Our will

open. is line Your

Chris Allen

of Wanted Good Maybe rates to the details morning, provide and there. the the any haven’t and growth the thoughts opportunities guys you of all penetration if provided. products on some backs mortgage you to. could you you everyone. appreciate that opportunities and of specified focus business, Really an update talked on the growth pools – on structural the expansion didn’t

U.S. mortgage a desk. of keys what business the improvement Treasury the there the into physically in traded to for then And electronification is What with trading run translate within are potential would terms business? and you the that off is that

Tom Pluta

quick and of let with then little of the a a question in they’re runs and into Cool. start on you? versus the excellent good voice and the I’ll specified me we’ll questions. to Hey sort transition the your and bit mortgage the really think E So because second I’ll off Chris, pool, – how landscape interesting I are margins points

had time into wholesale side has like us the gets a of We’ve that sort long marketplace. kind been role side kind by leading voice of specified the in leading, pool and mortgage We TBA very for lives some on time, market, this to then combination feel side. digitizing side the the make this The negotiated. like meaningful highly always electronifying a both right push market and on spreadsheets done which for of cumbersome, again is and oriented, institutional of

as our BlackRock some in the us a pass markets regarded mean behalf industry of advisory picking Bank. through of strength are begin our Signature kind FDIC with just lot. for got market I to Those moments the perspective liquidating SVB important financial the that and from We we’re the way interesting, marketplace on the validation, you the would to describe around in what group and

similar we’ve it concept important going which again it come a is spotting is when feel slowly, and back there we a can pools to hedging it’s to pool trades specified specified comes very the and on in work bit net very, about, the comfortable talked change. The thing. how are It terms come this that behavior like credit. that And of quite of protocols us aspects feel some marketplace little to way to and net built in actually but

us. for focus product a is this So

and question, our it’s and I and off this. To around really approach your around interesting a margins runs think the one

Here’s off the what the electronified. I would institutional side treasuries, say, reminder that is run market quite the on in

pretty the I would usage Your is of brokerage around and marketplace, wholesale say point there. voice kind sticky little a bit

an there it to approach way kind to get businesses of I describe interesting terms taken is, in a activity of pretty into our I these meaningful around a from of kind for to you, able perspective, pragmatic marketplaces. would we think how voice forward been we’ve is we’ve be that I built think in How exists. as this while, understanding all And this we’ve are of willing moved that say these activity voice can we’ve and business

don’t to like clearly, stay to we into and in businesses forever ever. say voice that our businesses voice pretty choice. get And preferred not It’s going I’m

been where pretty and we we’ve an to have approach that into are excellent, protocol our off business, continue migration migration successful. gentlemen two wholesale around And excellent brokerage the us. in who a has an runs highly runs the that launch important they voice working to manages been We to able team off is E known traditional are from the leading on excellent. well suite are businesses our from And electronics voice of

ongoing role margins where happy is better it’s why the going the we’re reason to conversation. very and to time. Sara around for it’s play And to is us more me is the leadership are time where and headed because attached headed know remind And an us, that’s to that we it’s to it from and of important which work

So it’s and asking astute an it. a thanks pretty quite big for area focus, actually of question,

Operator

Daniel next from Instructions] Jefferies Our you. [Operator Fannon come will LLC. Thank question of

is open. line Your

Daniel Fannon

morning. Good Thanks.

transactions. yield the complete strategically helpful Just then you knowing as to question broader specifics on M&A broker use be kind strategy, do might kind economics. terms and your the give you on guys think get to in of framework of more financially just to those you through M&A But hurdles both walk a can’t as of you

Billy Hult

Yes, good question.

bit but I I little sets are of this asked, really a kind headed clarity up that we use into. curve look, businesses, the feels environment hikes. on end feel of concept equilibrium, as the of Rich good about around the our and that to us. rate higher the new We that rates, well we the deeper think with good first environment more expression So really – mentioned question that organic for

the a bit more forward, of be M&A. we on fits That being feel back broker, to is little we that past, this, opportunity concept like yield I obviously about the exceptionally the fit when around M&A well something aggressive like think bets about more it’s broker I we we’ve obviously into good concept important, more said, in think bets because matters. it, as putting table be said cultural mentioned – a a this come and were to talking yield we on table, to of the we going the going and are

expensive time network into take or longer a on a a difficult of Adding for have – that to more own acquiring would us we time matters. matters piece getting a of and on would our build have period technology that more

think that’s about kind we of So how it.

of lean that the strong positions well have There’s for to security, I’m if edge Sara thing a environment we can bonds, a we’re macro for is think to space, to an want in on I strong we our way. going kind in in going really ourselves backed in. macro much to this expand create the backdrop global swaps, that time continue mortgage framework. be the bit rate interest around on us we government macro this Great other that leading plays that to footprint would little financial to a so to the right? going kick world that say, The We

Sara Furber

really of to kind the framework, strategic that I think well said on on just compliment side. financial the

M&A the allocate in always second put lot how on reminder as still Just focused growth of the organic we we top dividends. Organic are purchases the come and initiatives a a M&A we and capital. waterfall of is have a before would on share at table. growth to context,

framework, to the On I financial we want be really think disciplined.

the doesn’t don’t deal to a size of great want mean nice be that having that cash but cash of disciplined. balance, quite free great have and business we flow We fortune a produces a

we but we’re our other at we’re on And so where of invested capital talking variables, we’re have return clearly, excess opportunities, of or focused framework looking about cost M&A on number yield a capital. whether a of in broker

be in a growth And looking And the that we complement Strategic, all Billy ultimately accretive talked XX% culture, we’re for things medium-term. of kind of have of our that the if about being benchmark market are the acquisition lead And news is ideas acquisitions the and to and are obviously that over going strategy. and becoming but to think more take good with, targets more look, we want anything, environment things evaluate is, longer consistently. such that I attractive. the if the we excess a

look sides that hopefully, at a gives we of equation. of you how the both sense So

Operator

Thank you. from next Instructions] will question Kramm The [Operator UBS. of Alex come

open. is line Your

Alex Kramm

obviously the of phone how a going it you the I’m used at the electronic may This and word be in some of from company. you Hey, picture, think reluctantly. to the little March, move to back everyone. But this made you big right to about beginning saw prepared hello I comment, Billy, remarks, the your obviously volume the is long-term but Yes. bit because, asking obviously, phone mission

would a bit So to I little just more. out love flush it

But is this actually that this most where before all, did you haven’t this back and like, you in can happen. something armed go of to to and First times is that obviously, to said client happened see reluctantly, since actually something you And in that unique And seen of solve what say just was more March can is learn this? that? hey, is it. we this your allowing like you even how then,

if it I’m maybe was out overplaying specific could I guess, was for about I it. what or just come this, actually more unique of So something looking

Billy Hult

– no, Its not. you’re

your kind asked hear thinking well, answer well. still a we in that We in, really the we in get the questions businesses get to that that you’re look, going competitor really of in a where the we know that actually win battle, biggest And and a I embedded question bit, think time moments reminder a phone, think. Alex, are It’s in of questions lot are little moments about those about step you – we these – where it right? lot we what is competitive like there back then bluntly, in we quarter of landscape we maybe super You’re a as take always there and time battle. are

that would going or in the say, the would the high of middle of it it you Some I describe define credit say, it for in particularly happened for were well, yield market. happened I in you if I to really mostly markets, March.

– there’s in how step like, question little involved the happens trade, environments It negotiation or market around If stressed be that trades in XXXX this negotiation is there a right? either that a you real actual of, backwards ask still occurs. yourself in an the have feeling that extremely should

minimum do things is we, trades have there negotiated the we a the extremely an that And so end negotiation. that or at one of day, is expectation remain capture focused on at a of that get the least at how

solve what And that as time protocols, clients, approach spend of takeaways. understand a roll businesses get that’s this keep been good so learn and to point in expect and sleeves, all build keep occurred, we’re going we’ll you continue and these building would things do. up And you of to our gotten why question. do what time And which we to and better exactly to we’re for some that’s it’s is And we’ve with going that. and behavior that’s do, to these because improving able some then that us we with period we how how

Operator

of Morgan Thank Instructions] Mike next from [Operator Cyprys Stanley. come question Our you. will

open. Your line is

Mike Cyprys

overall back for the commentary XX% just business. to to you I think some Wanted Hey, Tom’s accelerating here? from And taking to you do guess, the cited. over early that to Clearly, morning. with electronification the expanding the strategy how about to you see penetration for time? that asset on days Thanks XX% munis? marketplace class your could of just speak Where broadly if just circle in good do as you question. more muni

Tom Pluta

did Hi, you as is XX% this Mike. about to highlight, Good morning. XX% I market Yes, only electronified. mention

quite So retail you space. know, that increasing early optimistic have electronification been from ahead. as but in retail business, offering market, a and about institutional interest journey we’ve we’re institutional investors into we expanded historically growth very the a seen has and market, our This the

Additionally, while munis, now as exclusively historically, well. munis exempt we launched focused just on tax we’ve taxable

like taxable significant spotting to in we Now things our trade a so advantage to trading business, extremely think and net-net munis on as that that is leverage this for us be we’ll spread effective in able protocols portfolio which credit, addition specifically, AiEX.

that on benefit large price we quite exempt X there that market into The we’re principles a issuers, given taxable. electronic and tax market, and expanded point will AI recently this generally offering able a be different fragmented we’ll million it’s of muni final develop munis number both out think from to we’ve our the that munis. there’s make And trading, So across I’ll confident of about electronically. bonds very this it’s is

universe this and clients there. assist large issues help will dispersed out pricing that So of

we’re we’re continued overall, bullish get our on strong So in growth plan there. And to class. asset on executing quite the

Operator

The [Operator come next of Ken Worthington question Instructions] will Thank you. JPMorgan. from

Your line is open.

Ken Worthington

to squeezing for ETFs questions grow. my taking Hi, Fixed income me continue in. can and thanks

principal credit We’re intersection of seeing the electronic firms ETF Jane market driving making. and like and via Flow trading algos actively

ETFs then if I first, this more you’ve block to your strategic your a things to we’re know and benefit sky, liquidity on market and Are if think through evolution do platform, the I on you business can these with better but pie compliment how risk? totally in ETFs. fixed that maybe So is this Tradeweb given capabilities the makers? seeing is built in recycling And so, flowing like, great there income elsewhere

Billy Hult

that plan going to That XXXX. trillion a study And industry is – BlackRock by of And $X recent been Fixed part years. is Hey, in be the now market strong already we points they Ken. $X.X growing Yes, growing that be business particular widely will were ETFs and recent rapidly trillion. in that’s ETF as been expected since we’re growing morning. Good have growth income continue. a a introduced to are. look, rapidly that fantastic the big into we business to

success us. a been It’s story for

revenues but hedge and And either four Our in trading last big on have success. a rates own credit. done synergies, protocol as Clients annually been we’ve the trading block your grown ETF XX% innovations there about move question our large market can the by the or the their risk yes, makers over on pointed to years. you underlying out, also sizes, securities can have platform

there’s there So we’re definitely synergies that seeing.

think you – benefit the And and $XXX of as innovating from we’re pushing us So I quarters we both to on well a the positioned business think and growth, in we traditional lot for will and continually dealers, revenue grow focus coming for cross summary, secular including names there. to in non-traditional we we’re it, the and highlighted. continue from us, with million growth there’s here, this mark have

Operator

Thank you. of [Operator of Our Siegenthaler come Instructions] will Bank next Craig question from America.

Your line is open.

Craig Siegenthaler

to few Good months. going update on collaboration, get the in be wanted think morning, an is live going a We everyone. FXall which to I

think you market also of options? hedging market for the client how emerging the bond so potential about and do pace And addressable

Billy Hult

one Hi, thanks. that as take I well. can

market into we’re again, that hedge of the sort to emerging mean FX bonds execute yes, underway. with So market and the credit to opportunity emerging our We is markets developed market that also bonds, do clients one stop emerging I as grow emerging there’s markets only beginning it space. think do we not allows project shopping and business, approach. Initially, expand the but within

updates we doing and we’ll focused on for of So you. are in ahead the further have all that, quarters

Operator

Billy Thank Hult you. see in turn conference queue. the like I I further to back for no to remarks. the closing questions now would

Billy Hult

all this morning. very you joining us much for Thank

you out everyone day. and Thank Sameer a much. please great the you reach to If to have And have questions, follow-up team. feel Ashley, free any very

Operator

This participating. concludes you today’s for all conference call. Thank

You may have day. now disconnect pleasant and a

Tradeweb Markets (TW) 27 Apr 232023 Q1 Earnings call transcript