TW - Earnings call 4 2023 | Tradeweb Markets Inc.

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Operator

Good morning, and welcome to Tradeweb's Fourth Quarter 2023 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 Treasury, FP&A and Investor Relations, Ashley Serrao. Please go ahead.

Ashley Serrao

Thank you, and good morning.

the highlights CEO, provide for business for will Hult, a today update. the review the me call Billy are who brief Joining quarter and

some dive Tom who Furber, our little who President, review and will results. Our deeper CFO, Pluta, will into growth financial Sara initiatives; our a

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

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

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

let turn to Now the Billy. over call me

William Hult

quarter XXXX the our revenue I growth. We earnings Thanks, revenue proud Ashley. best momentum Good the with morning, our of that everyone, diversity strong across for again joining am showcased extremely call. generated our Tradeweb and fourth quarter history you entered businesses. our of thank our and team in

a our train. against the to train past a businesses, And long the me in heard phone about talk you of in the of go. has way that many battle one-way as Many

is focused regularly markets of I've year trading work the customers difference forward and making with in priority. to a creating their understand tailwinds the waves. powerful, to be can to importance on how engaging are improve stressed past move as we in secular CEO, our Relationship a we need own And experience. building also While the our together

ecosystem. sets to We good to in on savvy Our one-stop products towards more are the the world markets. how and interact the in believe puts class skill This customer to our continue algorithmic value and adding spotlight take technology as more and by shop level they moving in they which directly the become want sophisticated next proposition with we way, a is multi-asset tech a and evolving to and investing linking continue geographies.

client drove quarter, continued activity revenue risk and grow, fourth the to into which growth. appetite Diving strong double-digit

basis a points of reported on the on fourth and quarter adjusted XXX Specifically a were basis XX XX.X% a Slide basis EBITDA record currency by XXXX. relative on XX.X% points X, of year-over-year up on constant on constant a currency reported million expanded revenues basis $XXX margins basis basis and and to

in revenues led corporate investment including record by by were Turning rates the way, across European our global revenue respectively. swaps strong Similarly, a bonds, to of government credit and XX% U.S. U.S. grade. across for double-digit growth muni market mortgages. quarterly and credit electronic and XX% X. revenues Record Rates Slide growth, were accounting credit revenue across driven the and and led share record trading,

growth also ETFs by deposit in of by our and and markets driven our equity other and to diversify institutional repos. retail fueled franchise Money a certificate was had grow our products. in and Equities growth record, efforts institutional organic continued

and our our by Finally, products, LSEG continue enjoy contract revenues were proprietary driven to which data robust growth. data market

Turning to Slide X.

approximately our and classes basis, strong The XX.X% points volumes constant margin generated into drove on Record scale of XX.X% currency adjusted XX growth. XX% capped year respectively. Our translated a earnings record across fourth results and a adjusted expansion record basis asset quarter growth by off XXXX. revenue reported top EBITDA and in line most

constant tradition Broadly, organic As clients, they investment. capabilities, our summed we up product our can scale, on new be productive XXXX more forging and highlight. focused maintain was numerous to and as initiatives our year continue with enhancing to placing bets growth adding accomplishments the existing table. of a new partnerships very

the On swaps. mortgage expanded meaningful completed capability we NASDAQ across global product platform our across integration acquisition, and the of income progress our our pool suite front, made fixed specified

swaps On to with platform side, credit, largest our clients. inroads client as the make continue our scale we and we mortgage

On all announced live our first our LSEG. went partnership phase FX of licensing our new Aladdin with our with expanded the collaboration FTSE the for completed FX agreement data Link front, with ], indices, we integration BlackRock's and [ hedging with

of spent $XXX in mix January of a cash million Yieldbroker we in equity acquisitions our and in August rXfin and of on XXXX. 'XX Finally,

believe for XXXX helped banner make investments future, not We have our positioned another us for only well also but the Tradeweb. year

we that deliver to hard Moving XXXX to the X. now. of years multiple have robust streak Slide for revenue worked growth continued

the come came while Specifically, from growth XX% our businesses. of revenue our our of still rates, majority other revenues from

X revenue our have nonrates with nearly businesses averaged over revenues. coming our Over XX% of growth international business, which fact, has overall XX% coming nearly since XX% revenue our from In we doubled last from the years, the XXXX. growth of that

fourth but year-over-year. quarter of European anchored are Asian business growth business XX% by revenue in excess revenues international produced Our our our

markets ahead, continue few more broadly Looking next years. become the our story will Pacific growth component Asia over emerging believe and a of we international to larger

and our leading focused protocols client are across our and footprint products. We domestic markets expanding on cross-selling

more innovation our over to $XXX investments first have Throughout continue cross-selling with critical in X XXXX. adjusted of success. those And of million as have future average have XX% help to markets last fruit, will expanded an In our invested years, been the Relentless which pay at the investments our acquisition, we to constant shape EBITDA we prioritized technology bear growing electronic since investment. Our which requires Yieldbroker being methodically. margins history, to initiatives the market, dividends has unlock recent believe we opportunities.

another XXXX investment Looking ahead, we be year. expect to

in and are remain building and our rates early credit, emerging of in concentrated franchise. out we markets stages Our heavily investments the

gains the given our of business market optimistic the of growth are our We share and about long-term pipeline across innovations. durability

X. Slide to treasuries our into Tom brief provide U.S. turn deeper credit ETFs and global I interest over on to a and Turning dig and of main swaps. U.S. to focus areas, it update two rate will

leading achieved strong. ADV Starting and of record, we streaming increasing by by to institutional the of revenues U.S. long-dated record with quarter driven we of quarterly remains quarter gained quarter U.S. had where protocol business revenue plus that business, its market propel best treasuries Treasuries. Fourth retail offering. and our by grew business a achieved environment growing revenues high year-over-year. led share institutional The our new was fourth record across ever, our RFQ This adoption our XX% continued year-over-year. rate Bloomberg. The XX% share versus indicators institutional

year-over-year. be engagement and daily Client AiEX an AiEX institutional with important continues XXX% tickets utilizing increasing XX% functionality. over our institutional trades average to institutional XX% was up theme U.S. by healthy trade Automation average year-over-year of our daily with treasury than more

our by treasuries U.S. sessions in the produced and quarter Our volumes quarter led business best wholesale second protocol its protocol. record streaming for revenue our our across best history,

conditions ADV across our though Our holistic liquidity coming cloud as the deliver year-over-year, protocols. down tougher was they quarters central order X% wholesale providers more book strategy market onboarding focused the over on on limit team remains given a

XX% convertibles. year-over-year industry nearly expand market equity overall picking initiatives growth Other equity franchise ETF revenues outperformed Within were with year-on-year, with the continue by strong up business our quarter derivative fourth our activity revenues and up brand Fourth up. flagship our to institutional options bear equities, beyond double-digit fruit. ETF XX% to quarter across driven

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

With turn to over that, I will Tom. it

Thomas Pluta

Thanks, Billy.

trades credit market AiEX U.S. trends. XX% another average highest double-digit daily for quarterly XX% quarterly driven XX% surge We Turning at a European credit closer year-over-year. harvesting, derivatives our year-over-year see across continued to helped to credit, growth Automation in has block revenue X fully single-digit Muni industry Strong while Slide across continued growth produced record share with driven softer by pickup revenue to tax look increasing high market by and share. by a loss and IG, U.S. global was growth respectively. IG electronic credit. achieved

clients institutional our diverse business meet their to variety Our to of of continues that protocols continue with scale to provide a highs market as new across needs we a environments. set execution

strong Our primary to IG institutional growing XX% ABB growth off continues with double-digit year-over-year both across and with on focus high-yield. growing pay RFQ

growth portfolio ADV XX% the across over produced trading year-over-year, across quarter, IG trading. portfolio U.S. European ADV Overall, led record we In rose PT. fourth by and

were up buying the of comp, usage towards year-over-year of All billion with of of turn to credit complement second done their XXXX. continue XX% clients more in U.S. yielding the highest volume financial more get Our $XXX quarter to our PT percentage as a in in treasuries. Retail over revenues over their trade record XX% produced quarter volume. advisers focus products PT spread-based with since sophisticated

our responses number XX% year-over-year platform. broadening offering. network be the growth quarter, dealer XX% all-to-all on In increasing of and all-to-all over XX% we RFQ in out focused over trade number and fourth rose the grew Our over year-over-year. by responders to also of all on volumes XX% year-over-year while by the responses our The saw continues the team increased

where makers year-over-year. and and increase our inquiry volume XXX% to over was continued ETF market traded with wallet also We up engagement share

Finally, our while ADV sessions year-over-year produced growth. XX% grew year-over-year, XX% ReMatch over

channels. increasing ways markets, focused efficiently runway credit and the are clients and serving long remains X help our client positioned area, have DRFQ their responding and focused wallet and way We across technology, growth risk. recycle ahead Looking auto our the share protocols, in looking and like passive biggest believe more we across our of dealer at on all-to-all our ahead, us we a investing growing to our are algorithmic of U.S. we

post-trade Additionally, analytics the around we improving on are pre and data. focused

increased yield, collaboration our particular with with on grow network Aladdin our high engagement. replicate penetration client work more the drive IG believe we across had all-to-all and to to increasing we've can We we across to makers market have integration. our post a success focus ETF Specifically, do leveraging

Beyond continue multi-asset out we All collaboration for our In nondeliverable with expansion to [ in we package FX progress hedging FX efforts for the U.S. credit, our functionality steadily. swap forward and quarter, continue live build to trading. ] went EM fourth with

produced and record Moving European, U.S., XX. lower timing and drove traded record market on Central emerging results duration from direction and quarter as Bank rate market the The grew continued compression share vigorous despite an XX% a fourth year-over-year year-over-year on of global revenues end APAC impacts swaps clients Slide XX% saw with share Global as debate all to in revenues quarter swaps gains share across moves we curve, XX.X% the year-over-year. in the increased and activity record currencies. shorter market X% had of in to Overall, and record yield the Variable decrease across rose swaps revenues November. fourth duration swaps.

years, have penetration currencies Additionally, fastest across across over last active our user swaps. EM growth produced X strong growth double-digit the early-stage with happening we the into

protocol. market RFM to make swaps continue a progress We growing rapidly and across emerging

increased believe continued overall quarter for levels Our lot rising The with of over ADD another revenues of XX% still business quarter to year low the EM year-over-year. is adoption XXX% strong over and RFM protocol fourth record strong swaps year-over-year fourth increasing given off electronification, a year-over-year. our capped swaps there revenues to we swaps see grow with XXX% room our while

Slide Moving XX. to

back X-year XX%. last growth swaps From to We years, our macro of volatility we through seen our of growth CAGR rates X despite of [indiscernible] to X%. of despite shine revenue grown durability the revenues and an revenue rates industry and several at have strong volume variable since elevated banks. the the Over rates produced driving short-term evolving falling this X swaps have backdrop the growth a a environment highest risk-off continue COVID, to XXXX, failure

beginning third since X% XX the growth. of were clients prompting to positive negative revenue growth a quarter business XXXX, to revenues. XX with to the those double-digit year-over-year factors. produced market revenue dislocation X volatility XXXX fourth of growth of has fall of quarter the table caused swaps in The with to revenues to risk and excess in In quarters, related last off of extreme XX in the the the in producing drop due year-over-year quarters Market XX take year-over-year fact, XXXX revenue COVID X% quarters led

volumes in the global picked rates level the curves, the and has industry shape up debate year-over-year. of market of As XX% around yield rose

increase However, it's note which short-end to this of important we at levels. by been very driven has pickup that activity, monetize a low most in

and XX% longer on over greater fact, X than fees variable greater trades XX% our X on In swaps we years. dated generate of year trades than

years, volumes, the anything hike while rates, XX% since industry less on Bank which defined over XX%. longer-dated Based to grew over years started than short-dated data, X volumes industry LCH last are X only XXXX, as Central versus grew

a from as boost normalizes, ahead, the Looking believe longer-dated cyclical activity. should this curve standpoint, yield we

can In continue seeing are terms swaps, and to products we swaps. across of what make inflation across swaptions and control, we EM early inroads further success

year. We matter clients are multi-asset to also across solutions building coming our in on dividends. the The at expanding that looking is package presence swaps paying focus

market the workflows electronified, With there help lot while and fixed only income that manual a still can do global market grow. digitize we remains the broader about we XX% markets believe swaps the to client's

on of part to risk market. Sara, swaps the market let it is then fee on pass old our environment put as touch I to changes. the Clients Before million. and Compression and new trading risk natural me impact a collapse per the compression on

new Given do that mainly the traded compression order items earn pure of activity through not clients costs. we is reduce clients to put platform, that to meaningful we revenue primarily they in flow have for reducing operational amounts risk line that for related charge as

shift million fee by risk steady activity, risk being of the mix with last relatively over being the compression impacts calculation and the Stripping driven by per movement really has years clients. few which on put our duration, out been product

up alone XX flow, they for has put in increased volumes a their the become compression has to While driven platform has amount as stickiness have pickup isn't monetize. our revenues, Across compression which higher trading, top can picked to also it clients a risk risk led the of this essential workflow we compression material client through meaningful and platform.

X risk clients the last top over their our or ranking flow year. overall compression Additionally, have maintained improved

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

Sara Furber

Thanks, Tom, and morning. good

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

earnings provides our a of summary Slide XX quarterly performance.

of XX.X% As earlier, $XXX reported a million Billy basis were we this that recapped XX.X% on quarter, a and up record on basis. currency saw revenues constant year-over-year

revenues And other derived approximately of predominantly fourth quarter we in recall from base Specifically, international denominated in XX% revenue is our currencies XX% than euros. our of that dollars, approximately customers.

total revenues increased revenues XX% XX%. variable increased trading by Our and by

addition asset was Total fixed and revenue [indiscernible] and X% of currency revenues dealers driven by up treasury related were major protocols. to mortgage our specified new U.S. reported on constant basis. and X on across X.X% growth classes a our a fixed platform Rates the streams our pools

fixed which driven down fee Credit growth previously revenue the start the the revenues trading by X%. other was of quarter. dealer disclosed increases, we instituted were And at fourth

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

XXXX. from of XXX points adjusted year basis a XXXX basis on increased year points the full XX EBITDA constant and on by Full margin reported currency basis basis a XX.X%

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

our decreased shift blended XX% year-over-year, XX earnings Overall, from a quarter. credit due million per a additional cash this of fee in and and our per away Slide rates per million. equities fees to cash for cash decrease You primarily can see the fee detail performance regarding presentation million

primarily cash European up per million For rate per increase were million. in due to government bond the fees products, fee an X%,

emerging in long-tenor decline fees in increase offset per by markets, swaps, XX% to and growth our duration an were in was swaps For and due This year-over-year trades. protocol. partially million X% RFM an compression primarily down European

million shift to a offset an munis, million. European average in credit, per fee due fees per increase For by credit cash from decreased partially away mix X%

we a decreased for average by charge notional the and equities, fees an due increase not U.S. per Recall traded. cash in per share in given notional fee to reduction million, U.S., traded. value in million per share ETF X% For per

an money per U.S. X%, within average increased million. fees Finally, driven per fee million markets, by increase in CDs

the Slide of scalability our adjusted variable base margins. our us growth expenses. continue grow details XX At for to to allows level, high a nature and and expense invest

for XX.X% expenses compensation. on performance-related a XX.X% here. count basis increased basis. consistent philosophy head in XX.X% increases a We due currency have to and Compensation a constant fourth and maintained quarter increased Adjusted reported the on costs

movements $X.X philanthropy movements million of $XXX,XXX in the Unfavorable to to fourth increased in delta and fourth between unfavorable and versus marketing FX. a quarter over costs a decreased costs to And of fees. fourth legal and and quarter 'XX, communication and in XX.X%, primarily XX%, our quarter Professional infrastructure. fees strategy in increased FX investments in of a administrative pickup general of a the decrease in in and the 'XX adjusted data fees data million due previously communicated and $X.X Technology gain resulted due loss 'XX. 'XX higher due in mainly a

details reached our and equivalents. in spent trailing cash ended position flow cash cash of our January on On as we up return and XX cash cash for policy, XX this guidance. a XX% $XX XX the Slide capital for strong $XXX Free with in approximately position year. in management $X.X the capital months, and quarter We million billion fourth year-over-year. partial rXfin million consideration

software increased our $XX.X primarily CapEx This the Our higher our decrease million, income due spend. Fed of net was primarily interest interest management million Non-acquisition cash. higher of of and balances to $XX.X with more and efficient was driven driven higher for capitalized hikes investment to cash development the by the quarter and of a yields. timing due combination recent

the and already offset over the dividend and time. future program end periodically with share of quarter approximately stock, at the deployment. equity-related this $XXX.X there share during of along fourth The dilution buyback earnings, common And quarter's our the declared This leaves we an B Class repurchases under per dividend year-over-year. XXXX of of increase were in flow With authorized for generation A early $X.XX earnings Board the Board free year. quarter cash consistency XX.X% the a million Class no quarterly as of finally, our evaluates our

XXXX. Turning to guidance for

We to will $XXX adjusted $XXX to invest from continue million range expecting to million. and are in XXXX expenses

end impact we would line can margin as drive the this modest continue represent our growth we last Excluding on midpoint believe of compared the are be adjusted relative margin of We margins from increase investing the expense overall operating at and average we higher, future. range expansion acquisitions, expect range, focus to in with to balancing of incremental with EBITDA expansion to an year XXXX approximate the to this XX% either for and although expansion more margin XXXX.

half the to to revenue we environment. anticipated first last given of compared expect As investments the year, accelerate healthy

invest to and continue growth. We focus key markets areas long runway for future emerging credit rates the with for with as a

us also allows to invest sustain We continue platform. and that leading technology build our to in

Some investments scale, of price that take technology will but to these continue to to continues have some pipeline and we grow. a time innovation

fee effort be we expenses professional of levels expect continue consultants. above the technology to with augment We to quarter first our as 'XX

non-GAAP is For the purposes, year. forecasting ranges revenue towards our related to tax the tax XX.X% rate to The assumed from the increase primary our states. for XX.X% mix in tax rate higher of skewing driver

million development to $XX software CapEx. will to initiatives be and growth software be support and $XX development be related growth million. that and approximately will We maintenance CapEx to to approximately capitalized XX% on expect about XX% spent estimate We our

implies XX% rXfin. year-over-year The roughly CapEx of midpoint of and due increase, primarily our the to acquisitions a Yieldbroker guidance

with the the increase associated D&A, is XX% transaction-related we out Acquisition growth expected accounting, to and due other year-over-year. midpoint pushdown $XXX to approximately spend, M&A-related these investments Refinitiv which Excluding be would be and onetime million. adjust

with under we respectively. and revenues highlighted approximately to data new million master generated LSEG be $XX agreement $XX last continue the XXXX quarter, expect to we and XXXX million, As

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

William Hult

Sara. Thanks,

Tradeweb grow CEO, ample As and and the XXth continue second for see better embark One my to my build on as we to our markets year mantra opportunity at Tradeweb future. I year

in the [ Innovation, and we and are ]continues innovate transformation ways which to the January focused reported of that I On as collaboration excess income in to growth remain volumes our revenue are translated into January in we We D&A yesterday ahead. excited the to on to at catbird fixed of XX% ensuring be note, markets. seat continue about and core strong find as evolve year-over-year. road modernize our DNA, new the look we

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

Ashley Serrao

Billy. Thanks,

[Operator Instructions]

you now Operator, first question. take can our

Operator

Instructions] [Operator

Allen Our first of question will Christopher be from coming Citi.

Christopher Allen

I what which rXfin the under ask Tradeweb's client think bit Redfin's touch the could if the rates wonder there the futures to an base. a I opportunity Is offering current about to you set institutional little clients. radar. or this complement has from relative I perspective is gone on is wanted offering? to offering the and deal, How from cross-sell or opportunity value technology any EMS rate enhance

William Hult

to a voice. Sure. let Maybe good Chris, of a a question. for Good your Billy. putting it's quick Thanks little the bit hear question. start with frame second on for me a

be So in good time to it's starting a business. with, rates I the think

I it's time I conceptually smart the a a into to place actually in bet the business. of investing really strength. love our better Tradeweb rates idea think

concept. I important that's a think really

I would start kind So with that. of

of versus have, bond obviously, part second leadership think share, franchise Chris we a the you market position the of bond about that Bloomberg our record government market. the in long-dated If for terms government on

our record institutional share the market on is In basis, fourth now volumes overall January. an in over quarter, XX%

sets up So well, again, really a for real Macro kind of strength like core us. like to push our bets environment position into of of these strength. kind like

kinds The market kind the rate of and real environment. not going to are I what of think obviously, growing. are this to is thoughts we're entering those we the it's about macro environment, rate, that market, like, love banks real the the about it's debt X.XX%. of a in in market. The we real above X.XX%. sort in buyers XX-year of notes central That's going think X%. So Maybe about Maybe makes when the like concept,

the private now real perspective, the means of are that piece of the that intermediaries. our sort sector market So from

And environment us. really for good so that's a

obviously, high-touch a high-touch sort voice rXfin, always X about think we like i.e., when like for was big things. One is word flow, flow code So electronifying business. of like

So that clients electronifying leading-edge most and sophisticated smart, use. high-touch flow, biggest our algorithms important

in features of funds, into of experience. missing you marries tend kind of well, a cord, with These a I of to know concept piece nature. It's kind sort love very little back our We as be would the as really our client what in which bringing guys our of products. been bit multi-asset describe like well

love the So billion way sized that I we average we're kind think Chris, at of like daily in of the servicing market part world. about that in treasures alone, U.S. $XX volume.

it's it's big, So robust.

us And there, you is would which what we like build do, think, to I from kind forward. of we're like asset things to throw going going do do classes how expect

think, XXXX, rate XX% versus like of think government that of bonds, XXXX, And on expression interest the So used right? important it's EMSs. your in last We like XX% done to not the like question, just like of swaps volume future. European gets it's I like -- is I terms part the phone,

market. the functionality you an with access to and But along merge we the to see leverage futures is EMS across surface, our AiEX On reality the need that. EMSs protocols opportunities

fits it think us we really well. So

comes to As always, it down execution.

'XX. as And is It's for focused the priority it's enter on a good very Chris. question. And so team Thanks, we us thanks, a top it.

Operator

question coming Barclays. be will next Budish from Our Ben of

Benjamin Budish

few little your expansion plans a more Billy, bit about next I was international the you talk if years. could for wondering

overview just sort perhaps Yieldbroker, little into digging from completed And does Can bit you prepared a here? to in alluded Where products? current you the from Asia. key are the tactically, does grow you've for where Australia the the work context, remarks a could of into of primary are the maybe a continent? an more that the What to bit talk rest of how maybe exposure? some give you bit little that that Now customers? And little of

William Hult

it's good As a question.

It's the let's always, for it always always very a So the way right? clients. like clients. us, straightforward. like about with about start second It's this like for

how So terms So we're exists our So right? the where decision-making always our the in going, always are global, been sort right? take we that's very been from strong formed has advantage build products, And formula, appetite clients this like of markets. always matrix okay cadence of do that it's now the for let's there, these demand local of presence right? in out there out U.S. for our

credit to credit. government kind like U.S. dollar So swaps, European European European governments, to of it's swaps to U.S.

So cadence Asian driving that's of Quick how shout instrumental. always has around or our about -- He's which because formula The experience. do our think of and They've always while, Head Enrico the a client been job. we in average. building just things team European been I is Bruni we're a things an once out, been business. done great

growth last think in XX% revenue international over I is business it our of the X years.

European the and world, kind historical be then ways, straightforward like competing been think us business say, So for two, sort a we a the in of which And of of really way, our and like two, a about of driving I region. EM focus. it's would big sort the which like part the would business APAC of in growing then kind X has

that think very I well for has worked us. formula

revenues, across across presence ETFs, XX% XX% up we're government quarter fourth swaps, products. we're products. were year-over-year year-over-year these So we're growing over those up revenues [indiscernible], In becoming our fourth bonds, across Asia, but quarter like their there over this

to continues work. of kind formula this like So

in our I a there like big right? footprint expands Yieldbroker up acquisition repo of credit way. bet Yieldbroker, placing into the Our through bet, XX% that concept talked year-over-year. Revenues about are of for strength, follows same a rates, like putting

this. feel said was the about I and can about you kind of So client of it client. like kind the how of I'm the it is momentum describing

like across penetration continued side, client the On and Europe Asia.

XX%, clients, and trading European So trading how year-over-year. were all international this, active XX% international were XX% That's products we up active North keep respectively. Asian monitoring clients up over American products

and this sort momentum is quite So which big of like kind that in numbers direction, of feel headed big about. we good

marketplaces EM, feel and that and competition need us about for a huge around mentioned EM support priority rates focus the a the is again, we really as have in to there. company, we'll desire I good

on So question, much. EM. very we're and thanks focused Good

Operator

Goldman Alexander question next be Blostein coming Our Sachs from will from

Alexander Blostein

of the the use little Lots around guys opportunity help broadly prospects I and out around you the across bit, put the frame But deck duration, just duration you if appreciate on amount discussion starts in expand? when helpful. the the extra call to disclosure is of per pretty a can million business definitely fee business you longer swap

Sara Furber

We Alex. like you and Sure, hear glad from the Sara. you. question, great it's slides. a thought to Nice It's be extra And helpful. would that I'm they

mostly just talking bit it impact on little about calls. context because couple So when mix, fee volume what this million with question, mix, The of per also on a fee doing per of frame made point so which kind duration, focus product but million in a were is impact a of me that. your on is I've Let we're to I'll business driven lesser by really businesses right? protocol,

two on the both the I when and areas. revenue main of benefit, are reason credit. you for per has this, kind biggest this, think investment-grade business swaps risk just of and impact for those know The everyone's actual And largely in to areas duration our it being based about we created million charge portfolio know where you but across fee state

the end we decreasing, remarks, has businesses been PDXX, kind DVXX, it's [ notional in particularly doing prepared trading in about talked have on been on in not volume a as duration short and more And definitely basis. charged So the swaps. our ] of clients

duration of a the to is call X% And if you and in the think it, impact and perfect obviously equal so a -- which flavor, give duration by impact XX world, dollar hold that extension if duration, you a else of try on this else swaps, being has knock-on you everything limit to you in I from, years just everything constant, increase impact to if or risk treated a being X%, would equal. can revenue, about X-year XX all say being

sort per X%. IG fee of could In million credit, by X-year in the increase extension same to credit institutional X% maturity

absolute rates. little impacted you that that the So level worth the terms mentioning that impact. duration, it's things also also gives of a of continuum of by in a move Probably of bit

the another about you But maybe to rates to way opportunity. XXX X%. the on the dollar putting of really fall created rise if could risk a X%. kind side, X% kind XX-year model by by together concept a so of the basis gets curve, across were And IG these of or being nice points that think and swap another same And in another

So there opportunity different a gives context variables. how mix about you or as think to that bit biggest, of hopefully, of the couple are to always a the for Business but being model duration. little

Operator

Craig be question America. next from Siegenthaler Our Bank coming of will of

Elias Abboud

have you rolling looks protocol makes classes? swaps? It RFM This And out Abboud asset is other looks It have maybe great since from fit a guys swaps is breaking team. like in volumes this evaluated tripled Craig's like out. there the for in Elias XXXX. What protocol it

Thomas Pluta

the or question. thanks has markets and RFM in also request swaps. Yes, of Tom, in emerging for It's protocol lot swaps, but particularly the gained a developed popularity for market and market

one-sided ] price a for primary the and rather is to XA price where a is ask who Just not trade. they RFQ, want The asking the to information XA remind leakage a to you minimize not receiving market, know, benefit to in customer signaling that to an than price. a [ direction people this may

trades, XA benefit. streams, in where like need liquid demand markets treasuries, markets, impact EM there there's have U.S. for DM you cash or a or where RFM, in swaps trades there's smaller or example, price for trades real a to compared compared to larger compared larger no or bonds generally is less continuous but So to markets

For also for call winner's as in protocol, curse, benefit what that a avoiding picked There's we reason, it right? dealers the particularly a up has in EM.

they you that you So get of and cognizant more direction, you trade, particularly price got the to liquid when whole of win be in know dealers if how less manage that bunch the market. exiting asked a that trade,

protocol So the the the expanding dealers we we to been from and protocol. clients demand support have see as

For moving example, trading and is list towards swaps RFM. more

very And thoughtful impact think likelihood dealers can client maximize success. from but both support the see on way. when we we the do to and RFM we So products, side do in that a of the yes, to on demand expand so other

Operator

coming Our of question next will Michael Stanley. Cyprys from Morgan be

Michael Cyprys

a you fixed income seen over potential meaningful question the of a particularly last industry, to ETFs And We've growth the expect income of ETFs. be beneficiary Just couple years. a ETFs on rotation. across fixed

market see broadly and monetizing steps you talk this think ETFs and you 'XX. impacting the best here? is do taking can just income your business So about grow about you to more in Maybe here of impacting fixed how structure how continue set you're as this opportunity how the about talk some

William Hult

right question. I think ask thank sort that, you. like time the like absolutely of to the a so Yes. Billy. ETFs for Michael, it's question is And Thanks

the client as we But know it's has You story And was necessarily vertical our it describe was Tradeweb geographies, then platform XX% it's a like of think a right? from like horizontal sort right? -- as come I wouldn't businesses my were growth XXXX, I in I like now XX% think bit of what right? products from -- businesses But like right? known trading from in went I across that well. about kind actually almost perspective, would when and say half, rates us And a we has the reality been of big non-rates channels revenues very elevator going public, so and like number, of across XXXX, period. non-rate when of public. and well is always come little very pitch expansion, So our that That's it's

XXXX. that an an like and investment story. like didn't piece knowledge and spell expertise It's and F. like XXXX. ETFs not couldn't in we Obviously, like But our in ETFs huge is and domain E in of So unbelievable our a that execution T we have

viewed our and the and think partner of there, business were lot the we we out. for give a of all think around I figuring I that correct industry sense a team credit as I building opportunity, kind

seeing thing, we're trading of describe challenge of of traditional push this So train conventions. one-way of market is kind And as heavily is an sophisticated investing manual obviously, sort now would I I what that like are what expansion ETF including participants right? makers this market what almost to the this describe as kind would -- like like my instinct is

Market So income say right? we stuff. AUM big essentially and like of participants now a pricing ETF accurate kind bond, have would I are that pricing proud multiple derive all trends and sources, triple big techniques market up-to-date part a by These now of leading be that a are right? understand of. XXXX, indicators one-way the -- expects to we ETF to more fixed using player market on feel, I modeling to think,

and our makers They in monetize important operations globally doing institutional terms and of business piece way we're second, these remind all credit straightforward quick in just feel this business of important market day-to-day monetizing ETF are very really of well. And are that our players market good ETF really you a a We're to the of market of would our that's for I going for then of kind sort for side. how strong us making credit in that fundamentally as the we the credit on well. nature

of really going. it's we're where kind we've gotten how ETFs and about feeling So good here with

really is credit the big one. of piece a think I it

Operator

Moley Our piper next question be Patrick coming of will from Sandler.

Patrick Moley

the the some you color the that how size And the monetize give and relationship data be opportunity would on pricing closing strategy with was benefits time FTSE your I to to helpful any there? TAM can then line auction well. hoping share more on how there very us could details you as

William Hult

congratulations it's two like on Real -- Patrick, things. quick Billy.

the baby, had Repetto. world. coming of two because from congratulations question the heels had friend, on straightforward a the a you best in And it's definitely asking First, we Mr. HyperCamera heard our

from And congratulations the for Tradeweb a thanks So really question. team. good

the like bond you trade And It's You're close. trade complexity for market. my is talking you're government at little of, asking the to brain right? going about about at questions interesting, close, a bit like example,

all about what side But benchmark how in coin is liquidity. would through about smart engaging are obviously, sort funds right? then. bond these, moments innovation that in the obviously the hedge where the these for like that the efficiency. track macro describe we in market, we're And large, large the of of asset The of about was need almost other time government looking and question they now coin rXfin liquidity like rXfin first and these managers this is thread side other in are algorithms The the as

mentioned concept all so client. clients' before all the understanding It's the And I client those about needs. that the about it's

so around close. that's for the trade protocols at how And us built we've

our government you protocol going administrator U.K. treasuries, a filled We little prices. of our FTSE at well if works our exceptionally is have around data now valuable some an that we're currently our like third-party [indiscernible] to most hand end reference that have are you through European are provide FTSE important now a we would relationship more relative us. on clients accessing pretty and biggest, leveraging bonds, what Sara, tools list Clients straightforward that not price [indiscernible], describe trading official pricing. the kind as are where of but where where we they It's post-trade comments of closing the of to month, on where kind

Sara Furber

congrats, and can Patrick, as jump in there I Gilead Sure. mentioned.

On methodology. strong and validate we we the need with we trusted makes good third-party have partner sense FTSE It to side, administrators a valued to partner with that to and look look, BPCI. I have And relationship continue benchmark, them. would just to really that and in order say, with a

I European a of across we working we we benchmark about the them Billy think relationship with going U.S. track that as have bonds. record government expansion the and products. And think Treasury referenced, see as of new on U.K. forward,

that So we're information we there's mids to adding working in the bid-ask things products. already on that use

a AI potential muni have benchmark. We pricing becoming

establishing benchmark there overnight. already the with we So a a benchmarks record doesn't partner good worth happen had track have in noting, works are number a other a Probably with. of

realize for this So and revenue just of that. we see can opportunity our to this here. to through strong time. is proprietary be a sales in growth But certainly, lot already cycle the continue going take products, and And data and some realized enhancing we've third-party

Operator

from will Fannon Dan be Jefferies. coming question next of Our

Daniel Fannon

say, have if as is the does in, the that on there you way could about that and of market market? think that, you opportunity to backdrop. within you your investment-grade current And Maybe about is high-yield. anything kind the your structural talk that limit ability grow market share Question

William Hult

yield making more made spread. been in our are thing IG or to has little on no Dan, trade a so gains. significant more And One we yield uneven. for recent bit But in doesn't gains sure. in progress years share impediments our high have high market steady with structural note, there slower

to gap have competitive as So it net that all-to-all more advantage And where is isn't we therefore, the clients on a we responder in and factor additionally, are use narrowing focused high less here in in tend IG. our hedging yield net because liquid, the spotting network. is

So and were making have investing adding good in We've inroads number that in things. past. a been we in of what high clients absent to our network that significant network, yield we've been the client been in doing

clients optimistic high-yield our which boost about help I'm progress 'XX So in on adding in the been results. large will hadn't past, that there

from Additionally, hiring hiring in our hired client are network We to and clients. continue more we've been in that we our existing will needle 'XX, more XXXX, expanding move and credit delivering salespeople. in the

very we've responders the The platform, third growth on seen responses. and focus area expanding strong in of is and the responders

anonymous For example, our in were responses up year-over-year. XX% high-yield,

making gains we're there. So

and Aladdin Phase all-to-all access an use automation completed And RFQ phases. on should data for from Phase on X, in initiate then able our point XXXX, that we final inventory last year us playing is this clients comes online field in allows the also was help and good tools. would recently the in clients that working respond guess the completed within to progress the the be Aladdin X level made Aladdin which I Phase there. we with focused in into further inquiries dealer Aladdin I X, right as getting will We're high-yield on integration Tradeweb thing to to And also X and Aladdin. right dashboard. through partnership, Aladdin

continued III, see Phase XX and II we the next Phase those all we the over expect with expect be and to progress. to complete So months investments,

have in are more we been results will that forward. on has progress we're yield while plan high the limited, faceted going multi which we So yield optimistic executing do a and

Operator

Bond coming Rosenblatt Securities. will of our be Andrew question next And from

Andrew Bond

of growth volume that today. competitors Tradeweb is access of that the to primary more same relative said, in That the didn't innovative it growth given one others portfolio trading see taking continues be seriously. are and continues out really market opportunity it credit and early drivers play to to

market the mentioned more XX last investing times protocol they're is access their win try heavily call think to and about week, more than on to was I last share.

potential competition, just other portfolio about feel offering the and trading in and you any utilize do heightened So given your your to of positioning the how business. around moat parts your

William Hult

grow for with area be of growth to and portfolio volume. We're had growth record continue of in Andrew, trading as portfolio to PT from the PT achieved over expect record growth we the heard, provides yes, a do market monthly January, for given market continues also $XX lot We of you PT optimistic huge about a that the share us. protocol, success clients. so to read in story trading efficiencies volumes another PT, had is in the pointed fourth the the and as and a -- quarter it market you we as as you in out, billion and

is in And of gain still from coming share remember, lot the a the phone.

we the market grow. that will part So overall think of

and U.S. do provide market for to we peers spotting millions clients leading more As And treasury that's the our overall, you and something have moat, moat we think clients. as right asked to far But forward. saves our competitive expect our clients. to net compete moves there, our led by our that a we that ability to as starts and good innovate. It that's competition, is fully strong, for connect business gets and about efficient

continue constantly on in functionality iterating first-mover and PT. our that the advantage. by we Additionally, improving to have leverage we

a examples. I'll give few So

We line items. It we and X,XXX going of entire provides now, accommodate That increases we're trades list portfolio capacity right in trading does to Right to client infrastructure, that will in rolling significantly. we're better And grow also of execution dealer of able speed the be greater analytics. are the capacity. That portfolio can and What provide clients. of now. our do? process it revamping out for process the

as far and as we provide thing, post-trade Second clients. as analytics. as to TCA that data innovations, we're well expanding pre-trade

to valuable think working us. access make it's thing can position functionality, they the around will that And is occur market the wholesale as solutions providing with again, trade, our a high-touch So leverage them electronic final that sticky well. in we're residual we portfolio on where after market-leading clients that

So we trade block of that residuals, a the look call dealers that will PT goes trades after think execute PT through to market.

protocol optimistic the we're So about overall.

there's going I making innovate we there say compete dynamic second this I'm and The there about our like something on for and XX value points. is kind Tom exists. in competitive times would to Tom, optimistic of that times but to know great to mentioned to also quick sure is continue thing protocol we're provide Yes, only competition, ability were is obviously clients that a forward. And I follow where the a a call.

a the think connective that reality that both I I on thread phone. think real true the is both competitor companies credit very strongly and feel is the

to that that's really to strongly the way where to And that so created and we've the focus developed be from our has our has be. is perspective, trading this like balance always play we in like going market And allowed us portfolio leadership right going the significant role. protocols primary feel the

really we feel relinquishing that position and have role, strongly are We about that the not today. we

Operator

of our from And next UBS. be Kramm coming Alex question will

Alex Kramm

pretty proactively cyclical early wanted cyclical what's And a to, you talked But the in call, it's come you're home perspective. correctly, just of of heard I you I know your back excited the about the if to I about outlook. think, front late here. a part actually lot

importantly, you hear think for share double-click you just you Or that revenues. at view that's think and like more can don't maybe prevailing bad as negligible notion, impact I necessarily think But there's maybe revenues? a that that Sara would but rate the for kind as of on that you view, like all cut, about that. volumes. So on I on your rate do cuts get thoughts just side, your a budget to it's trading on rates do like on rate

William Hult

now, out X.X% this I that we're kind -- now environment kind was X% for like which I We Yes. good talking we're directionally, or And if real go before, concept saying into of again, like or rate laid rates. from X% this like about is think of like to real I is right? us. And we a here

then debt like in of this bank that concept of one. the playing concept I high-level important marketplace, not think, sort is role think, period. a way, really counterparty kind in of growing is the think the I of, central of a significant And I kind really is

that's or we good. kind market We back We of of We anyone of on JPMorgan. model steeper. has is like make think And the evolved so The kind like mean, Goldman love private sort there that's I point, of connecting a the differently an business to with end with obvious getting risk connecting reality being great curve PIMCO than BlackRock of the as the sort result. intermediaries. sector of real think expected. everything

think environment of the a rate you're we quite for there's feelings our no of sort in kind a know works. And whispers So you question that very, is from very where that never was but perspective stronger as exactly the or going, the plays of stronger that us. sort the this cut well

for of in right business our working last kind of second performed see a of us could of, think, exceptionally that the of of You half way curve, these macro well things perspective. from how steeper I year in the sort in all anticipation all that

Sara Furber

Yes. little bit. can translate even I I mean a back

type type obviously probably our better well, in revenue seeing that environment of in the where no January. And put of in excess saw really growth. does than we that swaps business quite volumes You really see up of debate, strong translate XX% place January. to we're

month, it clients X sense value type of place kind where we're that So of business. give and that it's for able a you to into does add translates how it environment, but of the

Operator

Kyle question coming will of Voigt next Our from be KBW.

Kyle Voigt

and margin for a commentary 'XX in just 'XX. less question margin Maybe expansion versus the expecting Sara on

even range. Just lower expense towards of start numbers the the work the seems you've margin the end that to XXXX, year given that higher expansion seen, difficult in to get it you the saw out guidance to to

depending So out we come of expenses help the environment. frame you'd wondering guidance come on where levels if for revenue above rate. kind end below persist to if just see to you that XX% where expect you'd scenarios there you And similar to at high revenue I'm range the laid January's the in the the relative expect range low are of or full to year in growth end

Sara Furber

now of Got expense Look, of thought growth, we it, Kyle, At a are benefit. midpoint this talking includes thanks range, acquisitions the just range some put for which the the into about of that reiteration XX% closed. everyone's we're the question. kind

acquisitions, expense growth XX%, much is that midpoint the looked which if track about of at the in historically. pretty Excluding is put you any of record line we've up sort

feel kind When you bets are think about investment pudding. XXXX, the I I back sure think that make And there. in the we margin is year invest the that's We're table to revenue think of really the on about philosophy to our no the through how there's we putting cycle in the to been to change balance we proof if trying constantly growth. were durable right play expansion, like in like

year for challenging revenue investments. expansion We margin were And in with deliver very of environment. accelerate in reasons. what of the really that more be had particularly We you're revenues lot some also a became where part towards to was seeing you environment the us for equally environment importantly, macro first to and the we those of the strong line the year back environment half much then seeing in January, an favorable, the of kind as able of more able when saw were

This with the it. And long just in expansion. an Billy's about in through line so expense growth still that that talked care margin we pacing do to we environment like. about term. expansion, invest is delivering environment margin revenues. We want but is an obviously, This

And prepared grow. we're either kind land, about We in sort grow, exactly land. trend of things environment end of comfortable combination it's we've talked obviously, you any where that guidance, on if but at about, the revenues what's cherry expenses talked think about our delivering the picking expansion, and of a of remarks to as look where you

performance have incentive compensation. We

fees, correlate variable so and revenue. is have and XX% -- which about those with We

direction, you too. frame? which we improves, little generally, to Hopefully, that expenses that later. So that obviously, going acquisitions, in spend bit us of on kind we could gives have you a of does you're a revenue big see But the as give help picture, have color. that either time But too, now environment or trend

Kyle Voigt

good. it's Yes,

Operator

concludes the closing remarks. Q&A turn session. that to back Thank today's ahead. Hult you. over like And to you. I Please Thank call Billy would go for

William Hult

Hi, everyone. this Thank you us very much for morning. joining

obviously, If great your you feel you thank free questions, time. out team. to to a the Ashley, day, any reach Everyone, and follow-up and have for so have Samir much

Operator

This concludes today's conference.

disconnect. all may You

Tradeweb Markets (TW) 6 Feb 242023 Q4 Earnings call transcript