TW - Earnings call transcript Q3 2024

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Operator

Good morning, and welcome to Tradeweb's Third Quarter 2024 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.

who the our our growth business our Sara for who Billy initiatives; today financial CFO, review our will results Furber, me call CEO, are Hult, and results. Joining review will and key We of material intend our obligations nonpublic means FD. with disclosing under complying to Regulation website and a the disclosure use as information statements future like within Act such, the Q&A during to presentation this and as the of remind I'd meaning of and relate the you events to Private in constitute Reform expectations that forward-looking certain statements Litigation and may Securities XXXX. other our among to, related statements. are Statements things, guidance forward-looking results from Actual these materially differ forward-looking may statements. filed actual is the concerning that earnings SEC. presentation our Information differ reports from earnings results contained could with in forward-looking statements cause release, factors periodic to and

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

over me Billy. the call to let Now turn

William Hult

Thanks, call. Ashley. nearly record almost was remain themes driving million everyone, the few Good with over for best last quarter This previous surpassing in years revenue unchanged. our another Stepping XX% third quarter to thank back, the joining by you our morning, approach revenue. earnings $XXX and our results

our markets surging change expanding collaborate continue we offerings. we behavior, share swaps, our to higher First, as it or U.S. flagship drive of our our rapidly many electronify be clients in EM with credit to and market

note, continues cornerstone continue targeted closed business. accelerate the XX% acquisition trading. of trend away of And third, this YieldBroker Tradeweb ground strong from feedback the ICD and running with we of schedule. been resoundingly to our have and on the class rates capitalize Both formally to generated continue months family. our team and growth positive. has and On X growth revenue be we tracking execution. ahead in of we Almost to this acquisitions to are we the Second, and ahead August client the month, early welcomed of plan, They YieldBroker integration rXfin ICD revenues hit the completed multi-asset

it's intermediation as be make time to central of our to grow. banks from a business elections fixed continue great our monetary markets, trade policies the This and risk income lots think to retreat in to clients continue creates We loom and opportunities for markets diverge, money. global

client the fluctuates, environment focused by risk-on durable deepening talent, the our third we enhancing gains share our quarter, reported in technology. into Diving best basis. remain driving a on relationships growth by future year-over-year revenue a investing growth client on While and and hiring environment our XX.X% activity, strong drove the

basis third expanded XXX continue We EBITDA and profitability points for investing quarter balance to margins as XXXX. relative by to of the adjusted growth

Turning Slide to X.

market growth growth strength rates revenue aided and growth, Our with the supplemented repos. bonds global led government derivatives whereas ETF strong high-grade by and high led yield business, across European addition led in business of our municipal across markets was Money European and and global bonds solid by was aided second and posted across by mortgages double-digit by and Credit equity rXfin was of Equities our China YieldBroker. quarterly credit and posted also electronic bonds. driven business growth by our continued was share the ICD swaps, addition continued by in bonds U.S. growth highest also derivatives, primarily corporate and growth. U.S. in was by organic and U.S.

products. data contract in growth proprietary and revenues data market our Finally, by market data were driven LSEG

and I will global provide areas, interest to ETFs, by U.S. Turning and credit U.S. treasuries and X revenues year-over-year, Treasuries. quarter Starting our and deeper X. will records increased led brief our by of swaps. focus XX% Record a across rate institutional Slide with then U.S. I into wholesale on channels. third update dig client

Our RFQ+ adoption institutional our business protocols. of streaming saw and growing

more higher. various pools by of business as indicators gained and leading record onboarding share business share Bloomberg, institutional led the record quarter of wholesale be in theme and holistic our above continue quarterly protocols second grew treasuries market sessions strong, a adoption to record we by continues key Other The Automation and achieved we we remains and revenues XX% volume The U.S. CLOB, saw volumes our of continues AiEX consecutive double-digit particularly with protocol and streaming an on Within rXfin. XX% institutional liquidity over trend the space volumes prioritize liquidity which of equities, to to ETF our year-over-year. produced strategy. the trades While also Treasury U.S. XX% growing versus daily XX%. remains contribution area year-over-year. over our nearly focus, increasing important providers growth, deliver average enhancing our our of wholesale

Our our with efforts to flagship fruit, derivative increasing XX% franchise quarter equity continue nearly bear equity to expand beyond ETF revenues year-over-year. our institutional brand third

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

XX% Turning another revenue closer growth across European to a quarter and driven respectively. credit, and look XX% Strong U.S. was at growth strong for credit. year-over-year X for revenue by double-digit Slide

XX% IG trades our block second across IG, share market across strong average achieved by helped X%. and increasing surge electronic derivatives, U.S. bonds. to We over over also credit of AiEX revenue fully market double-digit share achieved highest credit global We continues Automation munis growth year-over-year. China daily with

share X%. market also We second achieved highest electronic nearly block high-yield high-yield market our fully share of with record

we quarter, a July. the new in of record high-yield X% During achieved monthly

revenue growth to mainly Year-to-date, was variable continues institutional business we driven our factors, adopt share. diverse estimate of by our institutional clients of nonmarket set XX% as U.S. Our over scale market protocols.

with average daily RFQ growing volume off XX% of pay institutional yield. across with portfolio volume XX% XX% over trading yield. on portfolio both high continues average growth over double-digit and XX% to across rose focus strong over over IG Moreover, high year-over-year growth across and year-over-year with trading IG daily growth primary Our growing

We buying U.S. volume, certificates continue AllTrade as on investments billion to and our this is leading resonating to complement up retail deposits. were year-over-year. towards a quarter to produced leading and over with credit innovation, up continue solid with user with over their to in of focus Retail year-over-year $XXX of clients, revenues credit XX% year-over-year. allocate over of over XX% XX% financial advisers growth treasuries

average number rose over XX% our be responses XX% per year-over-year. In focused broadening year-over-year. platform. XX% and responders volume all-to-all the AllTrade team network over grew quarter, year-over-year, of average grew offering dealer on The RFQ all-to-all and our the Specifically, third on the of daily our increasing inquiry number over to continues out the

also We to increase share and volume with with continue over makers wallet XX% our ETF year-over-year. market daily engagement up average

average grew year-over-year. sessions volume our XX% over Finally, daily

credit long alongside ample client ahead, like our way we positioned U.S. clients. remains a channels. across growth opportunity our and for we focus a area, have with to X believe key runway innovate Looking the We are we

them spotting Edge to auto During offering the growing quarter, offering on capabilities include based send partnering risk our with III efficiently of continue light expanded own our our dealer we Basel our help and recycle on net also see balance earn more are focused In adoption PT enhanced multi-client more RFQ to client money. considerations, and clients feedback, to offering. their we sheet of

the feedback progress are believe remain With dealer and liquidity away and had high on. responding pipeline companies positive, a around we focused been Aladdin clients initiating that well easily positioned sales Aladdin, are we of all-to-all we're on and yield, the on and strong at enhanced is and to opportunities. our which on that Phase We're integration, inquiries focused market efforts, X RFQ screen. Early client insurance managers, we monitor integration particularly We allows the focused hedge ETF all-to-all more making still success we of we've IG. has and asset the hiring chipping of very in the funds, to replicate on also have makers in

success our Beyond the East. U.S. with across continue America credit, expansion early client Latin Middle EM and efforts

product a way and develop each is key to relationships clients region, enter global dealers. be offering we As proving to with our

our out our build side, product focused expertise, product remain functionality. holistic FXall to the On leveraging enhancing on diverse emerging our we continuing market integration and with

with a Moving better risk macro X% to mix strong partially to swaps and X. towards of a market offset produced average Global Slide record driven a combination revenues continues revenues and shift response client record here All grew that currencies. in positive in gains by though reduction share weighted continued front given was Strength trading. environment, by The market engagement the to the rose to across be share macro are XX.X% global seeing in backdrop duration, and changing in, GXX on year-over-year flux. global XX% swaps EM-denominated we share macro environment. signs

the we During yields fall saw for given Central rate third Bank cuts. expectations quarter, the global

XX-year U.S., to from Japanese of third clients significantly gains basis our strong our For the quarter. and yields off. the level German suite continues example, yields same uncertainty during global drive with October, in continued client engagement pay of fell to market seen we have XX Yet across points XX and the continue quarter. currencies rise to those of end share This

saw that We of saw had XX third quarter, growth swaps currencies the that XX% During another XXX%. volume growth between XX currencies swaps we XXX%. and had year-over-year over volume

to swaps nonmarket the market was our addition that variable year-to-date, over share. driven estimate XX% favorable revenue factors, In mainly of growth institutional macro, by we

and provide our to As tailwind fee should to short-term as steepens, a rates million. curve fall expected risk-based further the are this volume yield per

based our a factors: a putting which of risk through and duration. driven amount level is yields As of is X or platform, by DVXX, the the reminder, on the is client the pricing

or on a risk-based X% basis rate could saw point to trade we this fall DVXX lead a X%. the in to XXX increases. per increases, million rates by As environment, increasing Based of the rates, fee a if drop duration current

million was if historical our about our X duration risk-based years, X% Additionally, our in current is year. X% a extends by levels about could about duration fee the risk-based years. per X when a increase to per Based see million fee we on duration

to emerging continue across market progress growing our make RFM we and Finally, swaps protocol. rapidly

of over still grow is we EM room quarter XX% given rose third believe there swaps year-over-year, and levels significant Our revenues the low electronification. to

year-over-year XXX% daily saw with nearly rise adoption RFM Our average protocol up. picking volume

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

looking into providing team forward market. and inroads buy-side into are with bilateral of the swaps market the initial solutions to and further make partnering clients is inroads key sell-side swaps to actively parts for swaps market. The cleared more We the

me let can while workflows swaps the swaps manual it With electronified, global to lot still discuss the grow. financials there we income And more with we market do our that, and our detail. a to market in remains clients' fixed digitize turn broader XX% about believe overall markets over to Sara help

Sara Furber

good Thanks, Billy, and morning.

As provides I comparisons noted. performance. go earnings through otherwise X prior of our the unless be a summary the will period, quarterly numbers, to all year Slide

As quarter, our constant revenue a on currency Billy We saw recapped is base earlier, quarter revenues denominated and third in basis euros. and of clients, currencies dollars, that this $XXX of were on million than XX% other revenues recall in a up our international approximately reported that XX.X% XX.X% approximately year-over-year basis. of derived predominantly record from we XX%

to primarily dealers fixed increased X%. major by XX% constant a driven by Credit on classes currency this revenues revenues asset revenues subscription new basis. increases other of up trading fixed Total X.X% increased XX%. was and variable And revenues addition X up related the by our and to trading fees were reported and revenue year. by Our our growth total were

revenues As our reported reflects it retail compared to Year-to-date when line full as to XX.X% reminder, adjusted this basis for tied technology a our performed margins. increased on year a periodic XXX EBITDA XXXX enhancements margin clients. points of basis fluctuates

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

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

due X%, Australian For fee government an increase cash per per fees rates million. in bonds average million primarily to were up products,

to activity. in due line decline Duration third For a was million relatively quarter long up with in per fees third 'XX average in were primarily the tenor of quarter 'XX. swaps, compression XX%,

from credit, munis. fees away cash shift million decreased For per X% to average due a mix

fee For million. relatively carry million per X% cash to which higher a average shift towards ETFs, increased due equities, EU a fees per mix

margins. invest million. to Finally, within due ICD money U.S. XX% scalability expense details grow a the and a our increased high in million per average our and increase base level, and fee to of inclusion growth markets, the variable expenses. At us continue slight per for nature XX allows fees of to repo Slide adjusted

consistent on a to Adjusted basis the vast constant maintained philosophy spending. currency third XX%, have increased variable compensation costs majority quarter on XX.X% here. a Adjusted XX.X% We discretionary reported grew basis. expenses the for and or a related

expense to from XX%, Just communication due communicated ICD. Technology over investments in performance-related XX%, consultants of technology XXXX intend accelerate was data technology of previously Adjusted XX% addition in XX% infrastructure, mainly in nearly due increase build support the as continue we operations the and and primarily increase new to costs an fees grew augment professional and to as we and hires scalability. which increased tech we our our efforts strategy to and our grow. incremental to

offset and a details our costs the fees the $X.X entertainment 'XX approximately Slide billion cash favorable free our cash professional On as resulted in management time in to that flow quarter increased third and reached quarter approximately to continue position cash $XXX in versus expect position third to expenses, by in strong trailing FX general the due a which policy, loss on 'XX. the our consulting and was months. million growth. we and over a in XX% to cash We in technology return guidance. of million third XX of travel more pickup administrative and equivalents $X.X quarter support grow gain an we and and spend ended $XXX,XXX marketing for in with movements capital overall Adjusted capital XX

of funded cash balances million of net our to $XX.X million with interest as due hand. ICD of $XXX Our lower income on acquisition recent decreased we cash

net our payment. was interest impacted TRA to income by in $XXX,XXX a expense accrued interest Additionally, related

of would Board quarterly our per have shares. $X.XX Excluding expense, of and which the this have the timing A a $X.XX. this sporadically would quarter's $XX.X adjusted declared interest been on net Class our interest occurs income and based earnings, TRA Class With million, payments, EPS dividend been B

$XXX our XXXX. million. continued expense $XXX guidance light updated business guidance of million we increasing to adjusted for In to momentum, the Turning strong are to

are margin midpoint currently investments levels. to in, future expect XXXX expansion forward. continue growth trending increased for with of our we these are opportunity the adjusted towards investments, seeing We XXXX invest to the going accelerated expect EBITDA Overall, range. to and we All continue to exceed

We Transaction-related continue with to pushdown out $XX expect CapEx now million. and increase be D&A, be which to software our we adjust for to capitalized about expected to development Acquisition $XX due to is Refinitiv million the $XXX associated and million XXXX. accounting,

to occupancy $XX agreement a continue XXXX, and and existing anticipated which headquarters, is higher LSEG York our XXXX. XXXX in expect other our generated leasing expected revenues the Including We of double be York New new City second we in for of commence activity we expect City quarter, New half second under rent XXXX. from million our office $X and half XX-year Last of July expenses the the XXXX million, million master with data to approximately to expected than to approximately lease signed respectively. be new $XX

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

William Hult

Thanks, Sara.

complexity. the and focused revolution. we balance, believe change thrive financial a technology not of and strategy in in a evolution We markets, company As on

our We to are our the footprint, a excited about outlook. future we class couple opportunities with about long-term month-end clients of multi-asset feel important engage trading to good growth and our expand to a relative days of October approximately in revenue theme. trending days, growth record to our are our at October, October XX% levels, up be diversity left The revenues which tend strongest remains With XXXX.

and across credit. strong mortgages, government seeing bonds, are We growth volume global repos corporate

October high-yield are share both levels. than Our and lower September trending IG

than Maguire years Board PT by Having Dan mainly lower are share think a being footprint him. to the of in also experience I of high-yield impact would welcome financial industry time, Directors. our Tradeweb. for XX am so Dan as confident at significant of highly our a long known like brings in services. he very make and I that of far and Daniel levels October. I IG more impacted of to innovation boundaries will broaden expand we Our

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

Ashley Serrao

will With Operator, Instructions] your Ashley first that, for question. our questions. now it to take I back turn can [Operator you

Operator

Instructions] from [Operator Citi. Allen question first Our comes of Chris

Christopher Allen

end. credit. enhanced to improved increasing front how dealer been trading to relative from had evolving on their here We've on Just algo developments as Tradeweb's wanted of out ask called to has in suite, enhanced We've questions just platform platform MarketAxess. specific their protocols, terms new

of catch-ups increased Some like others developments them position to block look look Tradeweb, these penetration. to for

how is positioned be would penetration Tradeweb are moving it for and So block you to increased up how stacking here hear great forward.

William Hult

Yankees it's Chris, night. Billy. Sure. won last

in that in then a of lot. the ago, perspective, understand most always neck we're of in way? continuous the our of Do business. we credit? us as describe And of X on open about mood. When of credit or kind think of about And I really from I journey in and we're at or in, describe we're in the flash I of think I the today beginning our we how a sort sort business space. and as And of our you can markets, mood, Tradeweb I'm kind around IG good X to journey really the like I that the think good of So this kind started it neck credit a years That's right are think learning. kind Chris, that business, journey the when think about forward kind kind with we compete of and questions, business market some of leader says

protocols is RFQ that the when we're last volume Over the over XXX%. years, about up in, think X you our

-- XXX%. -- trading are numbers massive up over portfolio these Our like

our sessions has suite up done also well. over XXX%, extremely all-to-all Our and business is business, our

remains our from We do something, think, feedback unchanged. well. client that very perspective approach I respond very proud I'm very, of. We the So to

that's we really Edge, And promotes to block which portfolio top-tier offers launching so from RFQ analytics, call trading workflows. credit, trading, our perspective, in upsize, enhance and we which our what dealer continue

And a I perspective, think, crucial. strong we it's a So very our very of in around adoption I is sometimes from leaders process. way, this, say innovation, while clear kind are

providing improving user and that, block clients most do we our we've so And this sort advanced focused, what technology, focused technology. Team, around to dual of of our delivering of proud important and really, the them, super stay perform our to tackling around hard continues. area as like approach And continue kind there's analytics and we're really to built the of well. obviously, doing work best-in-class Chris, interface, delivering kind and in going really of this

So very question, appreciate and I thanks the much.

Operator

Our question Bill TD Cowen. comes from next Katz of

William Katz

disclosure. -- one know the clarification. all one I Maybe Appreciate just but just question,

in given around the your Billy, I make per that's the terms duration incremental. fee Just, and to want million of curve, just sure all commentary

X% broader get sticking in MarketAxess to potentially be And I up ICE expand maybe will to could to it address question that is private was make for does broader for just X% credit you And markets competitors, I with how just continue their markets, has algorithm plus that. a affect trading bigger then well. as I that heard the linked long-term role if capital of in growth? as the sure X% wondering a guess question on So moment. competition have X%. want I one is your just correctly. I to to the

William Hult

Sure. questions. All good

we to you So clarify that you. sure to make but one, just want take I first the

Sara Furber

-- you accurately. heard It's it

So you correct. And the maybe heard then want to credit? million private go to you fee is per

William Hult

comment and doing MarketAxess on ICE. a mean live on an have aware they're a it's for thought but think, into levered have credit like that. massive I And Yes. I've doing I the landscape, always given what that's of is competitive really retail a comment ICE, like but with good super a what and don't approach huge our have don't I us and business, about and I your the obviously, kind long I really what breathe advantage with time. of taken understand question. like Obviously, really really good be clients. feel we kind listen, of

And opportunities in stay really how moment, terms in themes then kind lines And hands. on from their on so on transparent you just most do adjacent pivot creating the on then That's of of like important like kind of a in kind new more that of and theme, clients credit like for execute of markets existing company's evolution of That's are. markets, this markets. business, kind focus front private this sort into of who well. paper we to

from private I combines an developments headlines. for think the have of sure State private our the and of kind ETF. one lots in I in of think Apollo's So eye public conjunction area, that And our we It of market is launch on perspective, Street. with credit

worth from following. saying. especially form worth I worlds would of Apart -- we is private executable think a say that's liquidity interesting first of credit firm and sort of provide in kind Apollo's watching of public which and around the of like it's is intraday to bids. converging, That's worth kind the what commitment

role And our think have in the that so sounds leading I kind a clients and in have happen to and market times lives the markets we breathes what trading. to in where that, Tradeweb secondary multiple and tended improve what very with fixed collaborating of as say play describing I'm to and markets income we seen I similar develop

this eyes from existing and get and us you in kind is businesses then what day on on marketplaces existing rigor expansion. So and our of out day the

happening eyes. what's with questions clearly space it. so in that And watching and good we're All appreciate open

Operator

Fellinger next from Richard Our comes question of Autonomous.

Richard Fellinger

you think ask growth start the margin we XX expansion as EBITDA you few about to think solid margin outlook, points basis expansion year. the last remains how years? about about expenses. Adjusted pretty on remind and Maybe just expense could versus the to us year-to-date longer-term next wanted I

Sara Furber

talk question, a Thanks Sara. helpful take I to your for it's expenses, think always Richard. Sure. about we When multiyear view. It's

averaged second, baseline out And we'll so to growth. about XX% if you from this take a 'XX look we just a at growth, for year year-over-year our 'XX, as historical

not really on would at a it's and investments we spend the on what you business and environment growth depends we're period, expense know, obviously, time lot of it this, you that making. growth the -- If is, depends that that linear, looked revenue

within of so an like things and XX% on 'XX as in and XX%, seen based X% of acquisitions. average we've example, environment And also that of certain lows years highs and

strong we're quarter, bring our it well to looking forward So think the the then top better environment XX%, about no in, the previously. that in some current forward, sense line performance expense about and average, we've and makes factor year acquisitions X historical I when strong talked you of but above seen example, we're investments given growth that we've we've this really made accelerated the

forward So think think the about is you our is expense helpful unpack the to I big things one biggest comp. growth that's typically of as of driver going

If the growth, example, discretionary as an you of quarter, variable. is comp XX% take this or

follow occupancy typically next as see flexibility One give performance-related the acquisition. into guidance the expense. higher ICD. hiring is obviously, whether our incremental you're That's We our around But factor continue call there's things which some and inclusion your our of cadence. there the $XX expense So of out second million our that's operating couple X you ICD. in out worth and out, a discretion did of in about thinking months we then about And of calling prepared is Obviously, really models. that it's XXXX quarter, to to model, compensation that new at are or we'll remarks.

it headquarters in an have, that next rent moving $X in in footprint we've York will larger half year of overlap New We and given the the next expect those million And lines. are highlighted second year. uptick the as to our about

of obviously and want is would just muted committed the that flexibility, that margin we leverage slightly the expansion We some record a of more margin the We're balance out, with growth I called given kind we've things still maintain to years. track demonstrated I lot have expect the but do business, Beyond expect that, scaling throughout to that. of be to given say operating what I of we will for the to investing platform. expansion.

helps, formalize guidance So we'll quarter. next hopefully, and that obviously expense

Operator

of Our Goldman next from Blostein comes question Alex Sachs.

Alexander Blostein

for talk per bit interest I that a shifting compression around There very cross strong. business. a up and wanted to a can are Obviously, currents trading fee well. swap trends clearly business. down in things the little kind rate of million is in Duration of volume swing about number as and minute

put fee per -- do over I X $X growth guess, all algorithm So maybe there here? on to in, in you comments business you year. swaps million X the your years? this over X How think the but next revenue guys in over broader up about, trajectory in from And

William Hult

Yes. question, you. Thank Really Alex. good

very electronified. the point, potential the starting like of confident maybe XX% starting I So that would about with say, growth market currently long-term of Only that. like business, is

leaves And out of kind of of so that central how room about from our perspective, casting, plenty for we think expansion there.

business, company. good flows new as focus playbook clients kind company, the fluctuations be they're the becomes is to So of of a driving like a further our of and like but sort onboard by question rather our I don't you're the want existing question client to for concerned with globally. out of big growth into electronifying than the because of really focus your that like area revenue understanding say continuing

growth I that And so initiatives for would several of kind organic highlight you.

the say would inroads we've I First, the EM. and success had that in

That's for per big pretty works the I for million. for I workflow growth replicating and Interestingly, kinds that. that that give then a deal. sophisticated a way for these request Second protocol us. think team say credit It's of higher works that is tremendous clients' them in initiatives understanding a fee of and big carry a a market most protocol, the one. thing RFM I micro really international amount would that

haven't like If we think the of instinct influence say a could to I at for level, a end instinct about remarks, house them that increase that obviously boosting But kind in would the a million longer view yet. second, And focus we observed So my of I clients kind specific moving the duration clients the duration. Alex. potentially would several end on I and think my of you see continue is outlook called may out on I factors way. per in decline, back rates And the kind maybe of the To curve. prepared link macro more is, shorter I of it trading forward. your interest address fee what sort of of the question to is, some curve,

of outlook kind negatively highlight and you. I correlated. rate So would to duration And obviously, additionally, then that are the

want or you XXX, So than the bond that don't to the better I know as into bond fall, same tenor but increases. I rates duration of go like do.

one maybe important in in October is growth so risk the XX% year-over-year. I strong seeing seeing revenue far are of over more with of swaps trading things think could say excess we I

sure that So I you of want describe I to a in make very to way. like straightforward kind

So very heading stay of kind XXXX. into about optimistic the outlook continue to

know this. flow. a was trades part of of talked We about into kind kind a and certain strategic kind into clients You That move of risk on sort of their to our compression 'XX. get trading lot throughout get of more

And way do worked. able been we've that to so perspective, has the from that our

move of don't trades those that kind strategy the I we kind think paid sure dictates making of from when of a So the market that of sort has from back real that. tactical That's away off. handle us we

Alex, feeling them and answered good that questions. I the business, the about trajectory appreciate of So I Hopefully, well.

Sara Furber

this but is just what of think algorithm. it I'd add Alex, as kind in Billy made highlighting because I helps his quantify point this just Billy remarks,

If about by business, to about you X-year in that XX maybe talked duration X%. swaps going global XX if our increase in duration per from million you increases fee think drops, rate and increase

basis by mentioned, magnitude. that And of to drop points, X%. I think, So it X% XXX he similarly, prepared rates some gives you of sense his in what remarks,

So see you forward flexibility around going and the the moves. strength sort those underlying can of

Operator

Michael from Stanley. comes question next Morgan Our Cyprys of

Michael Cyprys

I just about wanted to ICD. ask

be With steps closed, a you able sort as of might fruit then to next any years? with deal slower of the some be a might move or just bit on revenue the business for funds was lower? more the offset be expected low-hanging might achieve? accelerate harder now ICD opportunities of couple money hoping versus over some of I take what to the aspects bit of years? path of look demand you rate the near could to help next growth this to take how couple might contribute a expect term, the over earnings be and And the what elaborate out What bit potential to you you to to longer What

Sara Furber

to firms. the really to see fruit accelerate, talked opportunity an we think we've about force clients reach to sort as or it more bucket, of know Great. into I really with domestically the said In but and Thanks management I this given X and of low-hanging the really across footprint family ICD's internationally for we more in pleased so seamless so buckets. closed expand part the penetrate falls as our to this, the management financial our to Tradeweb team since and of have we collaboration much Look, been reiterate, our transition pleased particular, quarter, with opportunities ICD team. question. a be really that near-term globally last well It's sales we're the deal.

So it's dependent I'd is on build. that not if is because fruit, there low-hanging the low-hanging fruit technology say probably

more near And that's obviously, So already term. that's underway.

products The is we're tapping second expanding on portal Tradeweb putting available. them making product our offering cross-sell where and really piece ICD's into and their

That the start like U.S. first Treasuries things would underway. we're going is So that be to build with.

the go next first half We expect year. live that in of to

longer dialogue There number little have and robust So buying the interest The good ICD surveys in treasuries. you wait want bit XX% build. clients have with quite done. been specific. U.S. to a we've do because that that of is of news expressed clients technology that's is flash for the actually a

based client both are we're that with it basis coordinated hoping building teams really having they're not on that an building on a dialogue it So base. the informed We're interested. and

So I'd to say those pockets opportunities are maybe to the X biggest accelerate. around highlight

The mute second part feel you down, about moves, is, your do how the which obviously growth. rates rate coming of does question

saying is look The of between offer market around of bank actually a those back money higher. money premium the think are is trends, corporate liquidity. industry increases a to way and This what the is counterintuitive. because reprice deposits faster longer interesting decline. sometimes the And actually expect on rates making funds relative markets deposits little have money treasurers short-term cut, are rates duration. markets market a a I demand you'd money get if you it, as bit another is lower that and bank there we and for deposits funds couple trends, see as decision typically One

impact. money we rates as markets see some actually does in attractive obviously, So typically and lower, that acquire mute be more But AUM rate of that declining are the environment.

and biggest typically having demand corporates the see on healthy. is is stable markets of we business how cash secular yield, health we go-to We generation. probably this and think underlying of driver money think the are a it's think the and cash around corporate excess think liquidity performs, there. the option we that's basis, pretty for I corporates And the fundamentally,

So overall, obviously, on but really eyes I open the think wide excited, environment.

a think pursue. lot we of I have levers to

Operator

from Fannon LLC. Our of next comes Dan Jefferies question

Daniel Fannon

protocol on question has increasing. Competition within trading. a Billy, this portfolio been

have some trades certain for doing industry You free. participants

level, While thinking pricing about hasn't changed headline you time? how at are a over pricing pressure

William Hult

competition of. get competition. Yes. Good we were And would if when market. the don't landscape the competition good kind win. through we that the chased, market the clients ones iron, I being know we importantly, sharpens the We is for the I we're like most think and world. And There that that's expression you is say iron good competitive better it's say kind the for about Like how think of ones question. now is chasing.

share. built lead know creation and competition is kind win we innovation, you brand, areas on value of off and our no us guard. And aim well, I catches So very that's of think, as to and how

from thing fee space in I everything, fee the to stating fix. unique landscape we is maybe rely or perspective, items that net And about learned line I for prices we to think, thoughtful Bloomberg in have that moment trade. for pricing. create. for they rate holidays, a being uses on bit, been, we we've you what such execute little customization, able and pay a technology unique value and as like the the Maybe holidays the we to a as think to very describe would we appreciate like quite the functionality important the against portfolio when competing think willing workflow charging Unique -- a and spotting. obviously, In my I trading, most obvious that's short-term have think clients are the that

kind straightforward. feel of will that rationalize we of about fee holidays. So grow good to -- where say, instinct our down, is very pricing their the Dan, is, pricing these of competitive eventually Maybe out would deep landscape kind I kind is my of and say model

I think would of that's kind what expect. we

significantly. poised And that portfolio so our I the here from increase to stay think, thing, and important perspective, appreciate is to to trading is

the So about there's market. volume bigger to going competitive be quite plenty to going of in It's slice gets. is our be expression instinct And think I a is be the shared big. that to pie our

your analytics and adoption, So kind laser-like position. we continued -- future it all. our around good to perspective trading, our kind feel like of to use said focus end good in portfolio cases on of state of work Obviously, in I to question. of about this going about more continue advancements like from which the is be like better hear voice and adoption, last Good question, the the

Operator

from Our next question Kyle KBW. of Voigt comes

Kyle Voigt

have cash ICD flexibility. capital no with on excess the still closed, So debt, you now balance sheet,

there you on classes still could -- And notable in for platform? of synergy asset can could you about the ICD? process also about like with be and we're where talk future you share your or willingness also, feel any the deployment while As the thinking you there whether but M&A, still broader are capital Tradeweb there segments client if M&A to execute integrating are under-penetrated, where

William Hult

acquisitions rigor to for worked me going of first adding sort Sure. a more going X through And a Sara, kind and I a like those follow of be little you're done give you're the me. Sara going sort ton is opportunities. in a to kind of Thanks, to the of the at organization amount to things integrating of Kyle. as for want doing credit tremendous us. to of thing That's kind of then I of I kind them years And way Excellent say question. to different bit want of we've that couple leads of over very really works hard last think and like

of cash. would with I our remains So is strong, to of obviously, kind M&A preferred saying, our of -- be continue to growth kind be going organic as really start use

creating a on solid the think and we maybe of little I bit And deals value. executing track quite are or record quietly so a beneath efficiently these surface, building

of that's around which my Sara that And schedule. not ahead YieldBroker added integration, whether the to so point a that's company, has or dimension is the

we I progressing also big for think rXfin us, one is than integration is expected. faster a and that

of to So kind future enhance acquisition to that's it's to teams ICD's that sales of have very experience. think the excited business. Sara up strongly close Long continue very for past mentioned, like the important bets this about. quickly term, and growth, obviously, about these kind like The company, kind feel client very bets strategic of to we crucial bets are propelling Those make quarter. something ICD to efforts ramped expand I

you for it a Let second. to hand maybe me

Sara Furber

I at beyond market. also think remain I'd same We're we Thanks. deals on both acquisitions. an can integration, exploring on time. It active but in at obviously do highlight I active we things would the appreciate the basis, we that. an market. Yes. very focused outright say is inorganic that look we

We several continue investments to we've in minority space and digital explore there. completed, particularly that partnerships the

I'm lot I have there's bought to in the More no there broadly, think capital near term. in of on really I So those. well record. of all well just are change. really levers, we focus management, integrating of execute the terms broken and feel obviously, we on a like is our a bandwidth But what

philosophy no there's in change our So here.

it for dividends. investing priority second, in the First see and organically those buybacks priority follow then we've with business cash. talked top about. opportunities is M&A, that we we and And

accretion we'll cash free On the We've said going the over dilution earnings look and we that be forward. XX% eye repurchases Obviously, stock-based from I growth then opportunistic to dividend flow the and typically thoughtful there. guess to to and want I of couple in continues of the cash buyback, factor on by dividend, our growth, evaluate offset that free last philosophy, they factors. But I be our compensation. with strong earnings a increased Board towards same strategy just on number And we'll dilution. to our we've continue given expect an that EPS at use as clearly, years, based flow with

Operator

Our next Sandler. of Patrick comes Piper from Moley question

Patrick Moley

Q&A had just remarks talked swaps. seeing I on the rates you prepared one in and a business. your Billy, here on strength in you're bit little the in

and pick the about the that rates was that you're across I you then just rate across velocity what the environment you say just markets? on outlook, maybe the franchise? up given additionally, And seeing your and could broadly, of expand would seeing talk So rest hoping you're

William Hult

question. Yes, Patrick, good

So in in like to I very think time of that it's be rates a business. say we a good clear way. kind the And

market have that about You they fact, of kind of think are that a markets the in you kind the environment were. the debt rate banks and not growing. obviously, real the are buyers Central

is it And so private growing. back sector intermediation while is

us. environment And a so we good that's think for

up more rate up one obviously, XX% think why those up makers are business intermediation -- the velocity up in like the up track, volumes, to perspective, that's the continue that the businesses. continuing the point revenues and it's highlighted all, -- to of players with continued it in protocol. historically, banks. in play convergence a volumes in are engine alternative strength factor market you're revenue's business over obviously thanks good around And risk to was My volumes modernized if a of growing or of firms 'XX, kind to and I have market a our Citadel you space community, Plus a then a continue sort And lot the the to around, space. these has Variable up in From very would of XX%. so are XX%. These going which market of in think rates like the more to I strong us strong of the going significant be make These strongest continued to like indicators gas of big I've the buy-side more would of around instinct of of the swap the increase velocity pretty going signs revenues a lead like which with we're XX%. sophistication that's the into is velocity. it for which banks. version treasury XX%. the Mortgage make is an I and amplify I third that to past. AiEX variable are continue our to quarter obviously over thing Interest to XX%. important been Variable close market kind over role continue up question. level sort our for the in is to like of

Operator

Benjamin comes from of Our next question Budish Barclays.

Benjamin Budish

I ask wanted business. to about the mortgage

it? you're to of little are then continued in the least sort there in a to And So picking business XX-year sort bit. you rates what at see average under Can seen how important as of talk have generally come been the the you back It kind surface? a like up. business October, decline in that of life looks rate about rates falling. is growth We've seeing

of drivers about think kind in mortgages you other is important? Or to -- important for are that do particular? the So think what

William Hult

strong the I channel. think we as describe think or very say enter of maybe And the then into straightforward will think question. we business Ben. Obviously, or And of more, expectation good It's about want like well, our drop when you as increase. mortgage very of what in, convexity kind I hedging. straightforward. that that rates a to drop that's leadership things, know dealer or kind a it you I zone is, as It's would Two have kind about wholesale channel is the a think importantly, obviously, as volume whether client not or rates role that's of kind how of we in

forward. our users driving a And so increase for going in And we the see volume that we swap of of sort would end from a kind market. think has force mortgage further volumes swaps expect into to

space. but do, you on kind you plus try know to would little all swap hard it's into like that be amplification maybe straightforward cylinders, world bit of an a guys of than So volume say hit mortgage the a of a thing where obviously, can maybe in combination And I I to a better then do.

that, a are credit. perspective, which pools, think reputation a I on effort important opportunity of around tend foundation going pools, perspective, the we around specified portfolio and the They we more we've to of done think around offer to an as that There and market lot There's as mortgage company to us to our replicate from sort overall market. exists do continued of work that trading have lists. ability think given as of in trade of business. there, have have piece is what from some company, a a for our lists aspects strong, a that and we concept an that in that, strong we're bid

Operator

comes question Ken Worthington from of next Our JPMorgan.

Kenneth Worthington

activity activity maybe conviction from Is become weaker activity you it's year? industry for products sense. most levels levels -- So of Which it be increased better more the Hopefully, activity potential market offset you for year potential can been flagship across your able for greatest levels? potential year? have a think high-yield any do the as do And activity likely? that see makes high-grade, levels, you you to where are greater your challenged, possible? another if being year do share great here industry for you great for next classes. that see the seeing asset see to likely rates, next volumes for major Is How you it

Sara Furber

back we spend your a Yes. the any be environment. portfolio markets, the sure share businesses start we think gains interesting. great of in what market have do so of making with and in not that half at forecasting lot I'll to of But question. I on is it's I mean I I'm time performs want don't kind of business.

market us it environment rates think asset we've Billy market in to lot penetration, volumes. the confidence look kind a example, swaps. an in our that business increases it's increasing the new tremendous of we opposed mentioned market up through in for in I go share rates swaps things terms of as put clients, this, either through been the we That and a of client just but say said, that know from as the remarks, particular, and classes, of growth, of numbers XX% one gives I different when terms would adding come business in that at growth you of his existing has what

our so algorithm start business, market this try we industry how -- to about when And the the how can beyond what's and increase we market think to we that's we volumes. share us unpack causing grow just happening of in and what's above versus purely

And credit in as do well. could analogy so that you

that's think market from about away probably I volumes. healthy XX% those

I think Obviously, quite confidence. are that a of gives us growth up lot the so put rates And significant. we

basis. high, an on XX% or is And target well that incredibly over that so the depending rate a XX% still we growth double-digit range on long-term

William Hult

like that. I the think would of that mortgage it, more Sara. bit, as Ken, I we kind Sara a little get think sort volumes around little if where continued I'd way about pretty that's like strong like in volume to spot a say into of slow on, down, share next business. feeling sort the a your in year, is we And then hit question amplification of think market bit the of that

then is say we confident when Tradeweb, feel swap, think interest thing mentioned of the I doing these company we innovations to that you and think history pick where our go. space phone Other for the to our is rate of plus going sort around low think which on still think pretty sort both business in use pretty share volumes institutional around we of kind industry micro an business, all-in treasury I and into Sara both we're of there. amplification about up I the wholesale that being the would electronification take integration, market rXfin treasury regardless critical

market be to of little a would for up we that market us to share. both blueprint of that we ability around continue sort pick have think share, phone-based competitively So plus bit where the a

Sara Furber

specifically the And about. about one then we're -- crystal take doesn't I ones That's extremely ball. that to like just only I of confident the call EM. want talk say areas out a I'd

core consistent seen a EM in electronification have those the record We our franchise. terms is which of of the particularly markets, track at swaps, of

investment what So is we're market space Regardless $XX happens we'll on but or we're the inflation, where direction. capitalize and that market of business million, that clearly confident rates in headed. at run in rating with going that that one that our in space, electronification is extremely

Operator

Our from Kramm UBS. next comes of question Alex

Alex Kramm

call. Actually, in if single you've about, know it's quick I but that one know that question increase October adds, in revenue the is high I late you the an Because I organic think I before. clarified, think, XX% talked digits. number? in ICD housekeeping don't

maybe the really second but your know yes, just So so, But lot little attack. to the under a coming your and it have little X, last I the because clarify it just or quarters credit that's flattish. bring seems you're a have And the back come look a But from to a of is I share for been in that. at to RFQ, bit market you obviously I your if then earlier want all bit, doing AllTrade, back look shares call. detail over numbers if on market what more PT, those up X to credit commentary. in

really why up the PT? Or up outside given almost those or that you're like people XX%, those Thanks. segments institutional is clients, not in So of really take-up are think, contributing? signing not I investors traditional new happening

Sara Furber

take housekeeping I'll Sara. the question. It's

growth remarks that you strip at organic our highlighted rate. XX% growth rate. out we're the in looking acquisitions, But all-in is XX% even So an we if revenue

part. the So Billy on still transition to And October. I'll strong in other then maybe

William Hult

certainly Sure. the an me way that asking straight you good make and straightforward not that that than how a to a competition kind an I good call the never very I interesting perfectly the in anything And we made to very won, look, I in mood we was What opened view space. point, going I good say equally around question. are you're is that's mood. I really Yankees -- a the think, of put said, we when up lines. inroads because Alex, question, other I It's good and even would a kind of in in

the to form next So of kind then month I on want month kind versus don't a and theory you overread X of that.

kind these obviously think I protocols, different that track the And innovation think, quite are the the present works market record think I way we kind of I into is period. around able of good. to

a balanced that environment. view market wants strong more credit very the a have We

think of back these differentiated very equation. kind think we're and I really a is along looking job on have tell work. I of a company, and protocols myself some think I of always, to we've we're important sort spotting going well good to hedging. by, moment, for of aren't of not the maybe portfolio I that them you working. of we've your what's banks kind like that that in me and I into the that as were traditional through a mean, bring grow problems, for way I succeed kind always mentioned. room I what working net further ethos done to sort And Sara as the would a bringing say as that's the trading things ourselves Obviously, of we to If through want going live

so putting to develop feel for market be the resource to feel focus as how way to high strength And from put into good think a will And continues we're buy-side I quite benefit the a that client continuing us coming position the network where and things of about to at will a that welcome going the build And succeed from continue. going we're out the now to a We in our we we're forward think all-to-all allow comfortable always, to Great market think able big responder competition. continue questions, company. rate. remain to that's us and Obviously, I it. and we the look market to into to thank continue to you. resource as

Operator

over minutes. run XX the have We

Billy closing session. turn I question-and-answer will back now to CEO, it this Hult, the would like to for remarks. conclude So

William Hult

much great a morning. questions Great joining this all Great. group. very us you for Thank from

questions, if great team. follow-up to Yankees. the feel a always, Sarreo you. any you free to Thank and out have As reach Have Ashley everyone. Go day,

Operator

conclude does in for This you the conference. today's program. participation Thank your

may You disconnect. now

Tradeweb Markets (TW) 30 Oct 242024 Q3 Earnings call transcript