Tradeweb Reports Fourth Quarter and Full Year 2019 Financial Results

FOURTH QUARTER 2019

  • Average daily volume (ADV) of $684.6 billion for the quarter increased 16.3%
  • Record quarterly ADV in US high-grade and high-yield credit; record market share for US high-grade TRACE volume of 15.8% and fully-electronic US high-grade TRACE volume of 7.3%
  • Revenues of $197.3 million increased 10.5% (11.7% on a constant currency basis)
  • Net income of $57.3 million for the quarter compared to $29.3 million for the prior year period
  • Adjusted EBITDA margin of 46.9% for the quarter compared to 36.6% for the prior year period
  • Declared quarterly cash dividend of $0.08 per share

FULL YEAR 2019

  • Record full year ADV of $725.4 billion increased 32.3%
  • Record full year ADV in US and European government bonds, mortgages, interest rate swaps, US high-grade and high-yield credit, credit derivatives, US and European ETFs, and repurchase agreements
  • Record revenues of $775.6 million increased 13.3% (15.1% on a constant currency basis)
  • Net income of $173.0 million for the year
  • Adjusted EBITDA margin of 45.5% for the year

NEW YORK--(BUSINESS WIRE)--Feb. 12, 2020-- Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today reported financial results for the quarter and full-year ended December 31, 2019.

Lee Olesky, Chief Executive Officer of Tradeweb Markets, said, “A strong fourth quarter contributed to another record year at Tradeweb. The resulting revenue growth, margin expansion and free cash flow generation underscore the power of Tradeweb’s model. Adoption of electronic trading is accelerating as market participants gain a deeper appreciation for the functionality, efficiencies, data and analytics it delivers. Record full-year average daily volume of $725 billion in 2019 demonstrates the extent to which innovation is driving Tradeweb’s growth within an expanding market. We’re excited about the opportunity ahead and remain focused on driving greater connectivity across the global markets and broad client network we serve.”

Fourth Quarter 2019

Gross revenue increased 10.5% (11.7% on a constant currency basis) compared to the prior year period to $197.3 million for the fourth quarter of 2019. Net income increased 95.4% compared to the prior year period to $57.3 million for the fourth quarter of 2019 due primarily to higher revenues. GAAP earnings per diluted share (Diluted EPS) for Tradeweb Markets Inc. was $0.25 for the fourth quarter of 2019.

Adjusted EBITDA margin increased to 46.9% for the fourth quarter of 2019 compared to 36.6% for the prior year period, representing an increase of 1,029 basis points (1,110 bps on a constant currency basis). Adjusted Net Income per diluted share (Adjusted Diluted EPS) was $0.26 for the fourth quarter of 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant

 

Select Financial Results

 

 

 

 

 

 

 

Currency

 

(dollars in thousands except per share amounts)

 

4Q19

 

4Q18

 

% Change

 

Growth(1)

 

Gross revenue

 

$

197,308

 

$

178,637

 

10.5

%

11.7

%

Rates

 

$

107,539

 

$

97,592

 

10.2

%

10.8

%

Credit

 

$

43,542

 

$

37,204

 

17.0

%

20.0

%

Equities

 

$

11,665

 

$

12,592

 

(7.4)

%

(5.4)

%

Money Markets

 

$

10,027

 

$

9,493

 

5.6

%

6.3

%

Market Data

 

$

19,361

 

$

16,733

 

15.7

%

15.9

%

Other

 

$

5,174

 

$

5,023

 

3.0

%

5.4

%

Net income (2)

 

$

57,278

 

$

29,307

 

95.4

%

%

Net income attributable to Tradeweb Markets Inc.(3)

 

$

41,329

 

$

 

%

%

Diluted EPS (4)

 

$

0.25

 

$

0.13

 

92.3

%

%

Non-GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (5)

 

$

92,441

 

$

65,308

 

41.5

%

45.6

%

Adjusted EBITDA margin (5)

 

 

46.9

%

 

36.6

%

1,029

bps

1,110

bps

Adjusted EBIT (5)

 

$

81,482

 

$

54,701

 

49.0

%

53.8

%

Adjusted EBIT margin (5)

 

 

41.3

%

 

30.6

%

1,068

bps

1,155

bps

Adjusted Net Income (5)

 

$

60,489

 

$

40,839

 

48.1

%

52.9

%

Adjusted Diluted EPS (5)(6)

 

$

0.26

 

$

0.18

 

42.2

%

46.7

%

  1. Constant currency growth is a non-GAAP financial measure that reflects growth for the period excluding the impact of foreign currency fluctuations. See "Non-GAAP Financial Measures" below for additional information.
  2. Net income for the fourth quarter of 2019 and 2018 was impacted by net depreciation and amortization expense of $18.9 million and $16.0 million, respectively, as a result of the Refinitiv Transaction and the subsequent revaluation of our balance sheet. See "Presentation" below for additional information regarding the Refinitiv Transaction.
  3. Represents net income less net income attributable to non-controlling interests.
  4. We present Diluted EPS for Tradeweb Markets Inc. for the fourth quarter of 2019 and for Tradeweb Markets LLC for the fourth quarter of 2018, as the Reorganization Transactions and the IPO were completed in April 2019. As a consequence, the Diluted EPS information for Tradeweb Markets Inc. and Tradeweb Markets LLC is not comparable. See “Presentation” and “Basic and Diluted EPS Calculations” below for additional information.
  5. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income and Adjusted Diluted EPS are non-GAAP financial measures. See "Non-GAAP Financial Measures" below and the attached schedules for additional information and reconciliations of such non-GAAP financial measures.
  6. We present Adjusted Diluted EPS for Tradeweb Markets Inc. for the fourth quarter of 2019 and for Tradeweb Markets LLC for the fourth quarter of 2018. Because Adjusted Diluted EPS includes certain tax related adjustments to reflect an assumed effective tax rate for all periods presented and, for the fourth quarter of 2019, assumes all equity interests of Tradeweb Markets LLC are exchanged for shares of Class A or Class B common stock, we believe that Adjusted Diluted EPS for Tradeweb Markets Inc. and Tradeweb Markets LLC are comparable.

“Diversification across products, protocols, client sectors and regions drove continued double-digit growth in total trading activity in the fourth quarter. New highs for volumes and market share in US credit reflect heightened client demand for advanced trading protocols such as portfolio trading, all-to-all trading and session-based trading. Rates cash and derivatives volumes surged on higher trading activity in mortgages and interest rate derivatives. AiEX automated trading accounted for more than a quarter of total institutional tickets across all products during the quarter as clients look for ways to improve workflows,” added Mr. Olesky.

Discussion of Results

Rates – Revenues from rates of $107.5 million in the fourth quarter of 2019 increased 10.2% compared to the fourth quarter of 2018 (10.8% on a constant currency basis). ADV in rates of $451.3 billion for the fourth quarter of 2019 increased 19.1% due mainly to increased trading activity in mortgages and interest rate swaps and swaptions.

Credit – Revenues from credit of $43.5 million in the fourth quarter of 2019 increased 17.0% compared to the fourth quarter of 2018 (20.0% on a constant currency basis). ADV in credit of $13.2 billion for the fourth quarter of 2019 increased 9.8% due mainly to new quarterly records for US high-grade and high-yield credit plus increased trading activity in European credit.

Equities – Revenues from equities of $11.7 million in the fourth quarter of 2019 decreased 7.4% compared to the fourth quarter of 2018 (-5.4% on a constant currency basis). ADV in equities of $9.0 billion for the fourth quarter of 2019 increased 5.2% due mainly to a new quarterly record for convertibles, swaps and options.

Money Markets – Revenues from money markets of $10.0 million in the fourth quarter of 2019 increased 5.6% compared to the fourth quarter of 2018 (6.3% on a constant currency basis). ADV in money markets of $211.1 billion for the fourth quarter of 2019 rose 11.7% due to the continued growth of bilateral electronic trading in repurchase agreements.

Market Data – Revenues from market data of $19.4 million in the fourth quarter of 2019 increased 15.7% compared to the fourth quarter of 2018 (15.9% on a constant currency basis) due to the delivery of additional data under our market data license agreement with Refinitiv.

Operating Expenses – Operating expenses of $143.0 million in the fourth quarter of 2019 decreased 2.5% compared to the fourth quarter of 2018 and was impacted by a net depreciation and amortization expense of $18.9 million as a result of the Refinitiv Transaction and the subsequent revaluation of our balance sheet as well as non-cash stock-based compensation expense and payroll taxes of $2.7 million, which were related to the Special Option Award and post-IPO options awarded in 2019 and options exercised during the quarter, respectively. Excluding these items, as well as certain gains and losses, Adjusted Expenses were $115.8 million in the fourth quarter of 2019. Adjusted Expenses decreased 6.5% year over year primarily due to higher fourth quarter 2018 expenses associated with the timing of performance-related compensation expense. Please see "Non-GAAP Financial Measures" below for additional information.

Full Year 2019

Gross revenue increased 13.3% (15.1% on a constant currency basis) compared to the combined year ended December 31, 2018 to a record $775.6 million in 2019. Net income was $173.0 million in 2019. Net income in 2019 was impacted by net depreciation and amortization expense of $71.5 million as a result of the Refinitiv Transaction and the subsequent revaluation of our balance sheet as well as non-cash stock-based compensation expense and payroll taxes of $25.1 million, which were primarily related to the Special Option Award, as a result of the completion of the IPO during the second quarter of 2019, and options exercised in 2019, respectively. Diluted EPS for Tradeweb Markets Inc. was $0.54 and Diluted EPS for Tradeweb Markets LLC was $0.19 for 2019.

Adjusted EBITDA margin increased to 45.5% for 2019 compared to 40.8% for the combined year ended December 31, 2018, representing an increase of 471 basis points (530 bps on a constant currency basis). Adjusted Diluted EPS for Tradeweb Markets Inc. was $0.77 and Adjusted Diluted EPS for Tradeweb Markets LLC was $0.23 for 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Combined(1)

 

 

Successor

 

 

Predecessor

 

 

 

 

 

 

 

Year Ended

 

 

Year Ended

 

 

October 1, 2018 to

 

 

January 1, 2018 to

 

 

 

Constant

 

Select Full Year Financial Results

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

September 30,

 

 

 

Currency

 

(dollars in thousands except per share amounts)

 

2019

 

 

2018

 

 

2018

 

 

2018

 

% Change

 

Growth(2)

 

Gross revenue

 

$

775,566

 

 

$

684,408

 

 

$

178,637

 

 

$

505,771

 

13.3

%

15.1

%

Rates

 

$

434,197

 

 

$

379,233

 

 

$

97,592

 

 

$

281,641

 

14.5

%

15.7

%

Credit

 

$

162,154

 

 

$

139,656

 

 

$

37,204

 

 

$

102,452

 

16.1

%

19.5

%

Equities

 

$

46,912

 

 

$

40,939

 

 

$

12,592

 

 

$

28,347

 

14.6

%

18.5

%

Money Markets

 

$

40,392

 

 

$

34,741

 

 

$

9,493

 

 

$

25,248

 

16.3

%

17.2

%

Market Data

 

$

70,722

 

 

$

63,792

 

 

$

16,733

 

 

$

47,059

 

10.9

%

11.6

%

Other

 

$

21,189

 

 

$

26,047

 

 

$

5,023

 

 

$

21,024

 

(18.7)

%

(16.7)

%

Net income (3)

 

$

173,024

 

 

$

 

 

$

29,307

 

 

$

130,160

 

%

%

Net income attributable to Tradeweb Markets Inc.(4)

 

$

83,769

 

 

$

 

 

$

 

 

$

 

%

%

Diluted EPS (5)

 

$

0.19 (a) /
0.54 (b)

 

 

$

 

 

$

0.13 (a)

 

 

$

0.60 (a)

 

%

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Successor

 

 

Predecessor

 

 

 

Year Ended

 

 

October 1, 2018 to

 

 

January 1, 2018 to

 

Select Full Year Financial Results

 

December 31,

 

 

December 31,

 

 

September 30,

 

(dollars in thousands except per share amounts)

 

2019

 

 

2018

 

 

2018

 

Non-GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (6)

 

$

353,162

 

 

$

65,308

 

 

$

214,091

 

Adjusted EBITDA margin (6)

 

 

45.5

%

 

 

36.6

%

 

 

42.3

%

Adjusted EBIT (6)

 

$

311,397

 

 

$

54,701

 

 

$

184,859

 

Adjusted EBIT margin (6)

 

 

40.2

%

 

 

30.6

%

 

 

36.5

%

Adjusted Net Income (6)

 

$

230,935

 

 

$

40,839

 

 

$

137,327

 

Adjusted Diluted EPS (6)(7)

 

$

0.23 (a) /
0.77 (b)

 

 

$

0.18 (a)

 

 

$

0.64 (a)

 

* (a) Presents information for Tradeweb Markets LLC (pre-IPO period).

* (b) Presents information for Tradeweb Markets Inc. (post-IPO period).

  1. Represents the combined revenues of the successor and predecessor periods for the full year ended December 31, 2018. This combination was performed by mathematical addition and is not a presentation made in accordance with GAAP. Revenue accounts were not impacted by the Refinitiv Transaction or the application of pushdown accounting. See "Presentation" below for additional information.
  2. Constant currency growth is a non-GAAP financial measure that reflects growth for the period excluding the impact of foreign currency fluctuations. See "Non-GAAP Financial Measures" below for additional information.
  3. Net income for 2019 was impacted by net depreciation and amortization expense of $71.5 million as a result of the Refinitiv Transaction and the subsequent revaluation of our balance sheet as well as non-cash stock-based compensation expense and payroll taxes of $25.1 million, which were primarily related to the Special Option Award and options exercised in 2019, respectively. See "Presentation" below for additional information regarding the Refinitiv Transaction.
  4. Represents net income less net income attributable to non-controlling interests.
  5. We present Diluted EPS for Tradeweb Markets LLC for pre-IPO periods, as the Reorganization Transactions and the IPO were completed in April 2019. As a consequence, the Diluted EPS information for Tradeweb Markets Inc. and Tradeweb Markets LLC is not comparable. See “Presentation” and “Basic and Diluted EPS Calculations” below for additional information.
  6. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income and Adjusted Diluted EPS are non-GAAP financial measures. See "Non-GAAP Financial Measures" below and the attached schedules for additional information and reconciliations of such non-GAAP financial measures.
  7. We present Adjusted Diluted EPS for Tradeweb Markets LLC for pre-IPO periods. Because Adjusted Diluted EPS includes certain tax related adjustments to reflect an assumed effective tax rate for all periods presented and, for 2019, assumes all equity interests of Tradeweb Markets LLC are exchanged for shares of Class A or Class B common stock, we believe that Adjusted Diluted EPS for Tradeweb Markets Inc. and Tradeweb Markets LLC are comparable.

Other Matters

Assets as of December 31, 2019 included $460.7 million in unrestricted cash and cash equivalents. In 2019, Tradeweb generated $311.0 million of cash flow from operating activities and $266.5 million of Free Cash Flow. Please see "Non-GAAP Financial Measures" below for additional information.

Follow-On Offering

During the fourth quarter, Tradeweb Markets Inc. completed a follow-on offering of 19,881,059 shares of Class A Common stock at a price to the public of $42.00 per share, which includes the full exercise of the underwriters’ option to purchase an additional 2,593,181 shares. Tradeweb Markets Inc. used the proceeds of $810.0 million from the offering, net of underwriting discounts and commissions, but before estimated offering expenses, to purchase equity interests from certain existing owners. Refinitiv continues to own a controlling interest in Tradeweb following the offering.

Full-Year 2020 Guidance*

  • Adjusted expenses of $495 - $510 million

-­ Includes approximately $5 million of new investments, primarily in data strategy and cybersecurity

-­ Includes approximately $3 million of duplicative rent expense

  • Assumed non-GAAP tax rate of 22.0%
  • Capital expenditures and capitalization of software of $45 - $50 million
  • Acquisition and Refinitiv Transaction related depreciation and amortization expense of $110 million

*GAAP operating expenses and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement of foreign currency rates.

Dividend

The Board of Directors of Tradeweb Markets Inc. declared a cash dividend of $0.08 per share of Class A common stock and Class B common stock for the fourth quarter of 2019. The dividend will be payable on March 16, 2020 to stockholders of record as of March 2, 2020.

Conference Call

Tradeweb Markets will hold a conference call to discuss fourth quarter 2019 results starting at 8:30 a.m. Eastern Time today, February 12, 2020. A live, audio webcast of the conference call along with related materials will be available at http://investors.tradeweb.com. Alternatively, interested parties can access the call by dialing 866-221-1629 (U.S.) or +1 470-495-9175 (international) and entering passcode 3072418. After the conference call, an archived recording will be available at http://investors.tradeweb.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, our guidance, including 2020 guidance, and future performance, the industry and markets in which we operate, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions and future events are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the heading “Risk Factors” in documents of Tradeweb Markets Inc. on file with or furnished to the SEC, may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future performance and our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this release. In addition, even if our results of operations, financial condition, or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this release, they may not be predictive of results or developments in future periods. Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.

Presentation

The historical financial information and other disclosures contained in this press release relate to periods that ended both prior to and after the completion of the Reorganization Transactions and the IPO of Tradeweb Markets Inc. (unless the context otherwise requires, together with its subsidiaries, referred to as “we,” “our,” “Tradeweb,” “Tradeweb Markets” or the “Company”). The IPO closed on April 8, 2019. As a result of certain reorganization transactions (the “Reorganization Transactions”) completed in connection with the IPO, on April 4, 2019, Tradeweb Markets Inc. became a holding company whose only material assets consist of its equity interest in Tradeweb Markets LLC (“TWM LLC”) and related deferred tax assets. As the sole manager of TWM LLC, Tradeweb Markets Inc. operates and controls all of the business and affairs of TWM LLC and, through TWM LLC and its subsidiaries, conducts its business. As a result of this control, and because Tradeweb Markets Inc. has a substantial financial interest in TWM LLC, Tradeweb Markets Inc. consolidates the financial results of TWM LLC and its subsidiaries. The historical financial information contained in this press release relating to periods prior to and including March 31, 2019, which we refer to as the “pre-IPO period,” pertain to TWM LLC, the predecessor of Tradeweb Markets Inc. for financial reporting purposes. The historical financial information contained in this press release relating to periods beginning on April 1, 2019, and through and including December 31, 2019, which we refer to as the “post-IPO period,” pertain to Tradeweb Markets Inc. The pre-IPO period excludes, and the post-IPO period includes, our financial results from April 1, 2019 through April 3, 2019, which are not material.

On October 1, 2018, Refinitiv Holdings Ltd. (“Refinitiv”), which is controlled by certain investment funds affiliated with The Blackstone Group L.P., an affiliate of Canada Pension Plan Investment Board, an affiliate of GIC Special Investments Pte. Ltd. and certain co-investors, indirectly acquired substantially all of the financial and risk business of Thomson Reuters Corporation and Thomson Reuters Corporation indirectly acquired a non-controlling ownership interest in Refinitiv (collectively, the “Refinitiv Transaction”). As a result of the Refinitiv Transaction, as a consolidating subsidiary of Refinitiv, we accounted for the Refinitiv Transaction using pushdown accounting. Due to the change in the basis of accounting resulting from the application of pushdown accounting, the financial information for the period beginning on October 1, 2018, and through and including December 31, 2019, or the “successor period,” and the financial information for the periods prior to, and including, September 30, 2018, or the “predecessor period,” are not comparable. However, the change in basis resulting from the Refinitiv Transaction did not materially impact certain financial information. Accordingly, we present certain financial information for the year ended December 31, 2018 on a combined basis as the change in basis resulting from the Refinitiv Transaction did not materially impact such financial information and, we believe it provides a meaningful method of comparison to other periods. The combined financial information is being presented for informational purposes only and (i) has not been prepared on a pro forma basis as if the Refinitiv Transaction occurred on the first day of the period, (ii) may not reflect the actual results we would have achieved absent the Refinitiv Transaction, (iii) may not be predictive of future results of operations and (iv) should not be viewed as a substitute for the financial results of the separate periods presented in accordance with GAAP.

Non-GAAP Financial Measures

This release contains “non-GAAP financial measures,” including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Expenses and Free Cash Flow, which are supplemental financial measures that are not calculated or presented in accordance with GAAP. We make use of non-GAAP financial measures in evaluating our past results and future prospects. We present these non-GAAP financial measures because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

Management and our board of directors use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT and Adjusted EBIT margin to assess our financial performance and believe they are helpful in highlighting trends in our core operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Further, our executive incentive compensation is based in part on components of Adjusted EBITDA.

We use Adjusted Net Income and Adjusted Diluted EPS as supplemental metrics to evaluate our business performance in a way that also considers our ability to generate profit without the impact of certain items. Each of the normal recurring adjustments and other adjustments included in Adjusted Net Income and Adjusted Diluted EPS help to provide management with a measure of our operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.

We use Adjusted Expenses as a supplemental metric to evaluate our underlying operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.

We use Free Cash Flow to assess our liquidity in a way that considers the amount of cash generated from our core operations after expenditures for capitalized software development costs and furniture, equipment and leasehold improvements.

See the attached schedules for reconciliations of the non-GAAP financial measures contained in this release to their most comparable GAAP financial measure. Non-GAAP financial measures have limitations as analytical tools, and you should not consider these non-GAAP financial measures in isolation or as alternatives to net income attributable to Tradeweb Markets Inc., net income, earnings per share, operating income, operating expenses or cash flow from operating activities or any other financial measure derived in accordance with GAAP. You are encouraged to evaluate each adjustment included in the reconciliations. In addition, in evaluating Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Expenses and Free Cash Flow, you should be aware that in the future we may incur expenses similar to the adjustments in the presentation of these non-GAAP financial measures. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, the non-GAAP financial measures contained in this release may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

We present certain growth information on a “constant currency” basis. Since our consolidated financial statements are presented in U.S. dollars, we must translate non-U.S. dollar revenues and expenses into U.S. dollars. Constant currency growth, which is a non-GAAP financial measure, is defined as growth excluding the effects of foreign currency fluctuations. Constant currency information is calculated by translating the current period and prior period’s results using the average exchange rates for 2018. We use constant currency growth as a supplemental metric to evaluate our underlying performance between periods by removing the impact of foreign currency fluctuations. We present certain constant currency growth information because we believe it provides investors and analysts a useful comparison of our results and trends between periods. This information should be considered in addition to, not as a substitute for, results reported in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies.

Tradeweb Social Media

Investors and others should note that Tradeweb Markets announces material financial and operational information using its investor relations website, press releases, SEC filings and public conference calls and webcasts. Information about Tradeweb Markets, its business and its results of operations may also be announced by posts on the Company’s accounts on the following social media channels: Instagram, LinkedIn and Twitter. The information that we post through these social media channels may be deemed material. As a result, we encourage investors, the media, and others interested in Tradeweb Markets to monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. These social media channels may be updated from time to time on our investor relations website.

About Tradeweb Markets

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 40 products to clients in the institutional, wholesale and retail markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves approximately 2,500 clients in more than 65 countries. On average, Tradeweb facilitated more than $720 billion in notional value traded per day over the past four fiscal quarters.

TRADEWEB MARKETS INC.
INCOME STATEMENT
Dollars in Thousands, Except Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

Successor

 

 

Predecessor

 

 

Predecessor

 

 

Three Months Ended

 

Year Ended

 

October 1, 2018 to

 

 

January 1, 2018 to

 

 

Year Ended

 

 

December 31,

 

December 31,

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

2019

 

2019

 

2018

 

 

2018

 

 

2017

Revenues

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Transaction fees

 

$

104,245

 

$

423,583

 

$

97,130

 

 

$

273,751

 

 

$

267,020

Subscription fees

 

 

34,333

 

 

138,731

 

 

33,052

 

 

 

107,130

 

 

 

144,409

Commissions

 

 

41,165

 

 

149,365

 

 

32,840

 

 

 

79,830

 

 

 

96,745

Refinitiv market data fees

 

 

15,383

 

 

55,635

 

 

13,467

 

 

 

36,851

 

 

 

50,125

Other

 

 

2,182

 

 

8,252

 

 

2,148

 

 

 

8,209

 

 

 

4,669

Gross revenue

 

 

197,308

 

 

775,566

 

 

178,637

 

 

 

505,771

 

 

 

562,968

Contingent consideration

 

 

 

 

 

 

 

 

 

(26,830)

 

 

 

(58,520)

Net revenue

 

 

197,308

 

 

775,566

 

 

178,637

 

 

 

478,941

 

 

 

504,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

76,545

 

 

329,457

 

 

80,436

 

 

 

209,053

 

 

 

248,963

Depreciation and amortization

 

 

36,402

 

 

139,330

 

 

33,020

 

 

 

48,808

 

 

 

68,615

Technology and communications

 

 

10,199

 

 

39,285

 

 

9,907

 

 

 

26,598

 

 

 

30,013

General and administrative

 

 

8,999

 

 

34,960

 

 

11,837

 

 

 

23,056

 

 

 

33,973

Professional fees

 

 

7,048

 

 

28,029

 

 

8,194

 

 

 

20,360

 

 

 

19,351

Occupancy

 

 

3,786

 

 

14,686

 

 

3,308

 

 

 

10,732

 

 

 

14,441

Total expenses

 

 

142,979

 

 

585,747

 

 

146,702

 

 

 

338,607

 

 

 

415,356

Operating income

 

 

54,329

 

 

189,819

 

 

31,935

 

 

 

140,334

 

 

 

89,092

Tax receivable agreement liability adjustment

 

 

33,134

 

 

33,134

 

 

 

 

 

 

 

 

Net interest income

 

 

704

 

 

2,373

 

 

787

 

 

 

1,726

 

 

 

685

Income before taxes

 

 

88,167

 

 

225,326

 

 

32,722

 

 

 

142,060

 

 

 

89,777

Provision for income taxes

 

 

(30,889)

 

 

(52,302)

 

 

(3,415)

 

 

 

(11,900)

 

 

 

(6,129)

Net income

 

$

57,278

 

$

173,024

 

$

29,307

 

 

$

130,160

 

 

$

83,648

Less: Pre-IPO net income attributable to Tradeweb Markets LLC

 

 

 

 

42,352

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Tradeweb Markets Inc. and non-controlling interests

 

 

57,278

 

 

130,672

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to non-controlling interests

 

 

15,949

 

 

46,903

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Tradeweb Markets Inc.

 

$

41,329

 

$

83,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS calculations for pre-IPO and post-IPO periods (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.26 (b)

 

$

0.19 (a) /
0.57 (b)

 

$

0.13 (a)

 

 

$

0.60 (a)

 

 

$

0.39 (a)

Diluted

 

$

0.25 (b)

 

$

0.19 (a) /
0.54 (b)

 

$

0.13 (a)

 

 

$

0.60 (a)

 

 

$

0.39 (a)

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

157,950,550 (b)

 

 

222,222,197 (a) /
148,013,274 (b)

 

 

222,221,628 (a)

 

 

 

215,365,920 (a)

 

 

 

215,568,635 (a)

Diluted

 

 

167,069,241 (b)

 

 

223,320,457 (a) /
156,540,246 (b)

 

 

222,243,851 (a)

 

 

 

215,365,920 (a)

 

 

 

215,568,635 (a)

  1. In April 2019, the Company completed the Reorganization Transactions and the IPO, which, among other things, resulted in Tradeweb Markets Inc. becoming the successor of Tradeweb Markets LLC for financial reporting purposes. As a result, earnings per share information for the pre-IPO period is not comparable to the earnings per share information for the post-IPO period. Therefore, earnings per share information is being presented separately for the pre-IPO and post-IPO periods.
  1. Presents information for Tradeweb Markets LLC (pre-IPO period).
  2. Presents information for Tradeweb Markets Inc (post-IPO period).

See “Basic and Diluted EPS Calculations” below for additional information.

TRADEWEB MARKETS INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Dollars in Thousands, Except per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

Successor

 

 

Predecessor

 

Predecessor

 

 

 

Three Months

 

Year

 

October 1, 2018

 

 

January 1, 2018

 

Year

 

 

 

Ended

 

Ended

 

to

 

 

to

 

Ended

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

September 30,

 

December 31,

 

Reconciliation of Net Income to Adjusted EBITDA, Adjusted

 

2019

 

2019

 

2018

 

 

2018

 

2017

 

EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin

 

(in thousands)

 

Net income

 

$

57,278

 

$

173,024

 

$

29,307

 

 

$

130,160

 

$

83,648

 

Contingent consideration

 

 

 

 

 

 

 

 

 

26,830

 

 

58,520

 

Interest income, net

 

 

(704)

 

 

(2,373)

 

 

(787)

 

 

 

(1,726)

 

 

(685)

 

Depreciation and amortization

 

 

36,402

 

 

139,330

 

 

33,020

 

 

 

48,808

 

 

68,615

 

Stock-based compensation expense(1)

 

 

2,700

 

 

25,098

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

30,889

 

 

52,302

 

 

3,415

 

 

 

11,900

 

 

6,129

 

Unrealized foreign exchange (gains) / losses

 

 

(1,095)

 

 

(2,310)

 

 

263

 

 

 

(960)

 

 

(364)

 

(Gain) / loss from revaluation of foreign denominated cash(2)

 

 

105

 

 

1,225

 

 

90

 

 

 

(921)

 

 

(678)

 

Tax receivable agreement liability adjustment(3)

 

 

(33,134)

 

 

(33,134)

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

92,441

 

$

353,162

 

$

65,308

 

 

$

214,091

 

$

215,185

 

Less: Depreciation and amortization

 

 

(36,402)

 

 

(139,330)

 

 

(33,020)

 

 

 

(48,808)

 

 

(68,615)

 

Add: Acquisition and Refinitiv Transaction related D&A(4)

 

 

25,443

 

 

97,565

 

 

22,413

 

 

 

19,576

 

 

31,236

 

Adjusted EBIT

 

$

81,482

 

$

311,397

 

$

54,701

 

 

$

184,859

 

$

177,806

 

Adjusted EBITDA margin(5)

 

 

46.9

%

 

45.5

%

 

36.6

%

 

 

42.3

%

 

38.2

%

Adjusted EBIT margin(5)

 

 

41.3

%

 

40.2

%

 

30.6

%

 

 

36.5

%

 

31.6

%

  1. Represents non-cash stock-based compensation expense associated with the Special Option Award and post-IPO options awarded in 2019 and payroll taxes associated with exercises of such options during the applicable period.
  2. Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency.
  3. Represents income recognized during the applicable period due to changes in the tax receivable agreement liability recorded in the statement of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions which impacted our tax savings.
  4. Represents acquisition-related intangibles amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the Refinitiv Transaction and the application of pushdown accounting (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction).
  5. Adjusted EBITDA margin and Adjusted EBIT margin are defined as Adjusted EBITDA and Adjusted EBIT, respectively, divided by gross revenue for the applicable period.

The following is the calculation of Adjusted EBITDA and Adjusted EBITDA margin for the full year ended December 31, 2018. These non-GAAP measures were not materially impacted by the Refinitiv Transaction or the application of pushdown accounting. See “Presentation” above for additional information.

 

 

 

 

 

 

 

 

 

 

 

Adjusted

 

 

Adjusted

 

(dollars in thousands)

 

EBITDA(1)

 

 

EBITDA Margin(1)

 

January 1, 2018 to September 30, 2018

 

$

214,091

 

 

 

42.3

%

October 1, 2018 to December 31, 2018

 

 

65,308

 

 

 

36.6

%

Full Year Ended December 31, 2018

 

$

279,399

 

 

 

40.8

%

  1. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by gross revenue of $684.4 million for the full year ended December 31, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

Successor

 

 

Predecessor

 

Predecessor

 

Three

October 1,

January 1,

 

 

 

Months

 

Year

 

2018

 

 

2018

 

Year

 

 

 

Ended

 

Ended

 

to

 

 

to

 

Ended

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

September 30,

 

December 31,

 

Reconciliation of Net Income to

 

2019

 

2019

 

2018

 

 

2018

 

2017

 

Adjusted Net Income and Adjusted Diluted EPS

 

(in thousands)

 

Earnings per diluted share(1)

 

$

0.25

(b)

$

0.19
0.54

(a) /
(b)

$

0.13

(a)

 

$

0.60

(a)

$

0.39

(a)

Pre-IPO net income attributable to Tradeweb Markets LLC (1)

 

 

 

 

42,352

(a)

 

29,307

(a)

 

 

130,160

(a)

 

83,648

(a)

Add: Net income attributable to Tradeweb Markets Inc. (1)

 

 

41,329

(b)

 

83,769

(b)

 

 

 

 

 

 

 

Add: Net income attributable to non-controlling interests (1)(2)

 

 

15,949

(b)

 

46,903

(b)

 

 

 

 

 

 

 

Net income

 

$

57,278

(b)

$

173,024

(a)(b)

$

29,307

(a)

 

$

130,160

(a)

$

83,648

(a)

Provision for income taxes

 

 

30,889

 

 

52,302

 

 

3,415

 

 

 

11,900

 

 

6,129

 

Contingent consideration

 

 

 

 

 

 

 

 

 

26,830

 

 

58,520

 

Acquisition and Refinitiv Transaction related D&A(3)

 

 

25,443

 

 

97,565

 

 

22,413

 

 

 

19,576

 

 

31,236

 

Stock-based compensation expense(4)

 

 

2,700

 

 

25,098

 

 

 

 

 

 

 

 

Unrealized foreign exchange (gains) / losses

 

 

(1,095)

 

 

(2,310)

 

 

263

 

 

 

(960)

 

 

(364)

 

(Gain) / loss from revaluation of foreign denominated cash(5)

 

 

105

 

 

1,225

 

 

90

 

 

 

(921)

 

 

(678)

 

Tax receivable agreement liability adjustment(6)

 

 

(33,134)

 

 

(33,134)

 

 

 

 

 

 

 

 

Adjusted Net Income before income taxes

 

 

82,186

 

 

313,770

 

 

55,488

 

 

 

186,585

 

 

178,491

 

Adjusted income taxes(7)

 

 

(21,697)

 

 

(82,835)

 

 

(14,649)

 

 

 

(49,258)

 

 

(47,122)

 

Adjusted Net Income

 

$

60,489

 

$

230,935

 

$

40,839

 

 

$

137,327

 

$

131,369

 

Adjusted Diluted EPS (1)(8)

 

$

0.26

(b)

$

0.23
0.77

(a) /
(b)

$

0.18

(a)

 

$

0.64

(a)

$

0.62

(a)

  1. In April 2019, the Company completed the Reorganization Transactions and the IPO. As a result, certain earnings information is being presented separately for Tradeweb Markets LLC and Tradeweb Markets Inc.
    1. Presents information for Tradeweb Markets LLC (pre-IPO period).
    2. Presents information for Tradeweb Markets Inc. (post-IPO period).
      • See the “Basic and Diluted EPS Calculations” table below for additional information.
  2. For post-IPO periods, represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of all outstanding LLC Interests for shares of Class A or Class B common stock.
  3. Represents acquisition-related intangibles amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the Refinitiv Transaction and the application of pushdown accounting (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction).
  4. Represents non-cash stock-based compensation expense associated with the Special Option Award and post-IPO options awarded in 2019 and payroll taxes associated with exercises of such options during the applicable period.
  5. Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency.
  6. Represents income recognized during the applicable period due to changes in the tax receivable agreement liability recorded in the statement of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions which impacted our tax savings.
  7. Represents corporate income taxes at an assumed effective tax rate of 26.4% for all periods presented applied to Adjusted Net Income before income taxes. For pre-IPO periods, this adjustment assumes Tradeweb Markets LLC was subject to a corporate tax rate for the periods presented.
  8. Due to the Reorganization Transactions and the IPO completed in April 2019, shares outstanding during the year ended December 31, 2019 represent shares of TWM LLC (pre-IPO period) and shares of Class A and Class B common stock of Tradeweb Markets Inc. (post-IPO period).

     

The following table summarizes the calculation of Adjusted Diluted EPS for the periods presented:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Predecessor

 

 

 

 

 

 

Pre-IPO Period

 

Post-IPO Period

 

 

 

 

 

 

 

 

 

 

 

Three

 

 

 

 

 

 

 

 

 

 

 

 

 

Months

 

Year

 

Year

 

October 1, 2018

 

 

January 1, 2018

 

Year

 

 

Ended

 

Ended

 

Ended

 

to

 

 

to

 

Ended

Reconciliation of Diluted Weighted Average Shares Outstanding to

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

 

September 30,

 

December 31,

Adjusted Diluted Weighted Average Shares Outstanding

 

2019

 

2019

 

2019

 

2018

 

 

2018

 

2017

Diluted weighted average TWM LLC shares outstanding

 

 

 

 

223,320,457

 

 

 

 

222,243,851

 

 

 

215,365,920

 

 

212,568,635

Diluted weighted average shares of Class A and Class B common stock outstanding

 

 

167,069,241

 

 

 

 

156,540,246

 

 

 

 

 

 

 

Assumed exchange of LLC interests for shares of Class A or Class B common stock (1)

 

 

64,479,008

 

 

 

 

74,279,741

 

 

 

 

 

 

 

Adjusted diluted weighted average shares outstanding

 

 

231,548,249

 

 

223,320,457

 

 

230,819,987

 

 

222,243,851

 

 

 

215,365,920

 

 

212,568,635

Adjusted Net Income (in thousands)

 

$

60,489

 

$

52,190

 

$

178,745

 

$

40,839

 

 

$

137,327

 

$

131,369

Adjusted Diluted EPS

 

$

0.26

 

$

0.23

 

$

0.77

 

$

0.18

 

 

$

0.64

 

$

0.62

 
  1. Assumes the exchange of all outstanding LLC Interests for shares of Class A or Class B common stock, resulting in the elimination of the non-controlling interests and recognition of the net income attributable to non-controlling interests.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

Successor

 

 

Predecessor

 

Predecessor

 

 

Three

 

 

 

 

 

 

 

 

 

 

 

Months

 

Year

 

October 1, 2018

 

 

January 1, 2018

 

Year

 

 

Ended

 

Ended

 

to

 

 

to

 

Ended

 

 

December 31,

 

December 31,

 

December 31,

 

 

September 30,

 

December 31,

Reconciliation of Operating Expenses to Adjusted Expenses

 

2019

 

2019

 

2018

 

 

2018

 

2017

Operating Expenses

 

$

142,979

 

$

585,747

 

$

146,702

 

 

$

338,607

 

$

415,356

Acquisition and Refinitiv Transaction related D&A(1)

 

 

(25,443)

 

 

(97,565)

 

 

(22,413)

 

 

 

(19,576)

 

 

(31,236)

Stock-based compensation expense(2)

 

 

(2,700)

 

 

(25,098)

 

 

 

 

 

 

 

Unrealized foreign exchange gains / (losses)

 

 

1,095

 

 

2,310

 

 

(263)

 

 

 

960

 

 

364

Gain / (loss) from revaluation of foreign-denominated cash(3)

 

 

(105)

 

 

(1,225)

 

 

(90)

 

 

 

921

 

 

678

Adjusted Expenses

 

$

115,826

 

$

464,169

 

$

123,936

 

 

$

320,912

 

$

385,162

  1. Represents acquisition-related intangibles amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the Refinitiv Transaction and the application of pushdown accounting (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction).
  2. Represents non-cash stock-based compensation expense associated with the Special Option Award and post-IPO options awarded in 2019 and payroll taxes associated with exercises of such options during the applicable period.
  3. Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Successor

 

 

Predecessor

 

Predecessor

 

 

Year

 

 

October 1, 2018

 

 

January 1, 2018

 

Year

 

 

Ended

 

 

to

 

 

to

 

Ended

Reconciliation of Cash Flows from Operating Activities to

 

December 31,

 

 

December 31,

 

 

September 30,

 

December 31,

Free Cash Flow

 

2019

 

 

2018

 

 

2018

 

2017

Cash flow from operating activities

 

$

311,003

 

 

$

112,556

 

 

$

164,828

 

$

224,580

Less: Capitalization of software development costs

 

 

(28,681)

 

 

 

(7,156)

 

 

 

(19,523)

 

 

(27,157)

Less: Purchases of furniture, equipment and leasehold improvements

 

 

(15,781)

 

 

 

(9,090)

 

 

 

(6,327)

 

 

(13,461)

Free Cash Flow

 

$

266,541

 

 

$

96,310

 

 

$

138,978

 

$

183,962

 

TRADEWEB MARKETS INC.
BASIC AND DILUTED EPS CALCULATIONS (UNAUDITED)
Dollars in Thousands, Except per Share Data

The following table summarizes the basic and diluted earnings per share calculations for Tradeweb Markets LLC (pre-IPO period):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

Successor

 

 

Predecessor

 

Predecessor

 

 

Three Months Ended

 

October 1, 2018 to

 

 

January 1, 2018 to

 

Year Ended

 

 

March 31,

 

December 31,

 

 

September 30,

 

December 31,

EPS: Pre-IPO net income attributable to Tradeweb Markets LLC(1)

 

2019

 

2018

 

 

2018

 

2017

 

 

 

(in thousands, except share and per share amounts)

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-IPO net income attributable to Tradeweb Markets LLC

 

$

42,352

 

$

29,307

 

 

$

130,160

 

$

83,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average LLC Interests outstanding - Basic

 

 

222,222,197

 

 

222,221,628

 

 

 

215,365,920

 

 

212,568,635

Dilutive effect of equity-settled PRSUs

 

 

1,098,260

 

 

22,223

 

 

 

 

 

Weighted average LLC Interests outstanding - Diluted

 

 

223,320,457

 

 

222,243,851

 

 

 

215,365,920

 

 

212,568,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Basic

 

$

0.19

 

$

0.13

 

 

$

0.60

 

$

0.39

Earnings per share - Diluted

 

$

0.19

 

$

0.13

 

 

$

0.60

 

$

0.39

 
  1. Earnings per share and weighted average shares outstanding for the pre-IPO periods have been computed to give effect to the Reorganization Transactions, including the amendment and restatement of the fourth amended and restated limited liability company agreement of Tradeweb Markets LLC to, among other things, (i) provide for a new single class of common membership interests in Tradeweb Markets LLC (“LLC Interests”) and (ii) exchange all of the original members’ existing membership interests for LLC Interests.

The following table summarizes the basic and diluted earnings per share calculations for Tradeweb Markets Inc. (post-IPO period):

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

Year Ended

EPS: Post-IPO net income attributable to Tradeweb Markets Inc.

 

December 31,

 

 

December 31,

(in thousands, except share and per share amounts)

 

2019

 

 

2019

Numerator:

 

 

 

 

 

 

 

Post-IPO net income attributable to Tradeweb Markets Inc.

 

$

41,329

 

 

$

83,769

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares of Class A and Class B common stock outstanding - Basic

 

 

157,950,550

 

 

 

148,013,274

Dilutive effect of equity-settled PRSUs

 

 

2,675,831

 

 

 

2,464,137

Dilutive effect of options

 

 

6,442,860

 

 

 

6,062,835

Weighted average shares of Class A and Class B common stock outstanding - Diluted

 

 

167,069,241

 

 

 

156,540,246

 

 

 

 

 

 

 

 

Earnings per share - Basic

 

$

0.26

 

 

$

0.57

Earnings per share - Diluted

 

$

0.25

 

 

$

0.54

TRADEWEB MARKETS INC.
GROSS REVENUES BY ASSET CLASS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

$ Change

 

% Change

 

 

 

Variable

 

Fixed

 

Variable

 

Fixed

 

Variable

 

Fixed

 

Variable

 

Fixed

 

Revenues

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Rates

 

$

57,145

 

$

50,394

 

$

47,868

 

$

49,724

 

$

9,277

 

$

670

 

19.4

%

1.3

%

Credit

 

 

38,231

 

 

5,311

 

 

31,976

 

 

5,228

 

 

6,255

 

 

83

 

19.6

%

1.6

%

Equities

 

 

9,272

 

 

2,393

 

 

10,949

 

 

1,643

 

 

(1,677)

 

 

750

 

(15.3)

%

45.6

%

Money Markets

 

 

6,221

 

 

3,807

 

 

6,040

 

 

3,453

 

 

181

 

 

354

 

3.0

%

10.3

%

Market Data

 

 

 

 

19,361

 

 

 

 

16,733

 

 

 

 

2,628

 

15.7

%

Other

 

 

 

 

5,173

 

 

 

 

5,023

 

 

 

 

150

 

%

3.0

%

Gross revenue

 

$

110,869

 

$

86,439

 

$

96,833

 

$

81,804

 

$

14,036

 

$

4,635

 

14.5

%

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Combined(1)

 

 

Successor

 

 

Predecessor

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

Year Ended

 

 

October 1, 2018 to

 

 

January 1, 2018 to

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

December 31, 2018

 

 

December 31, 2018

 

 

September 30, 2018

 

$ Change

 

% Change

 

 

 

Variable

 

Fixed

 

 

Variable

 

Fixed

 

 

Variable

 

Fixed

 

 

Variable

 

Fixed

 

Variable

 

Fixed

 

Variable

 

Fixed

 

Revenues

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Rates

 

$

232,423

 

$

201,774

 

 

$

181,051

 

$

198,182

 

 

$

47,868

 

$

49,724

 

 

$

133,183

 

$

148,458

 

$

51,372

 

$

3,592

 

28.4

%

1.8

%

Credit

 

 

141,343

 

 

20,811

 

 

 

119,217

 

 

20,439

 

 

 

31,976

 

 

5,228

 

 

 

87,241

 

 

15,211

 

 

22,126

 

 

372

 

18.6

%

1.8

%

Equities

 

 

38,515

 

 

8,397

 

 

 

34,443

 

 

6,496

 

 

 

10,949

 

 

1,643

 

 

 

23,494

 

 

4,853

 

 

4,072

 

 

1,901

 

11.8

%

29.3

%

Money Markets

 

 

25,461

 

 

14,931

 

 

 

20,843

 

 

13,898

 

 

 

6,040

 

 

3,453

 

 

 

14,803

 

 

10,445

 

 

4,618

 

 

1,033

 

22.2

%

7.4

%

Market Data

 

 

 

 

70,722

 

 

 

 

 

63,792

 

 

 

 

 

16,733

 

 

 

 

 

47,059

 

 

 

 

6,930

 

10.9

%

Other

 

 

 

 

21,189

 

 

 

40

 

 

26,007

 

 

 

 

 

5,023

 

 

 

40

 

 

20,984

 

 

(40)

 

 

(4,818)

 

(100.0)

%

(18.5)

%

Gross revenue

 

$

437,742

 

$

337,824

 

 

$

355,594

 

$

328,814

 

 

$

96,833

 

$

81,804

 

 

$

258,761

 

$

247,010

 

$

82,148

 

$

9,010

 

23.1

%

2.7

%

  1. Represents the combined results of the successor and predecessor periods for the full year ended December 31, 2018. This combination was performed by mathematical addition and is not a presentation made in accordance with GAAP. Revenue accounts were not impacted by the Refinitiv Transaction or the application of pushdown accounting. See “Presentation” above for additional information.

TRADEWEB MARKETS INC.
AVERAGE VARIABLE FEES PER MILLION DOLLARS OF VOLUME

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

 

 

December 31,

 

December 31,

 

YoY

 

 

 

2019

 

2018

 

% Change

 

Rates

 

$

2.03

 

$

2.04

 

(0.8)

%

Rates - excluding short-tenor swaps (less than 1 year)

 

$

2.24

 

$

2.11

 

6.0

%

Credit

 

$

46.17

 

$

42.49

 

8.7

%

Equities

 

$

16.12

 

$

20.19

 

(20.2)

%

Money Markets

 

$

0.47

 

$

0.52

 

(8.9)

%

Total Fees per Million

 

$

2.59

 

$

2.66

 

(2.6)

%

Total Fees per Million - excluding short-tenor swaps (less than 1 year)

 

$

2.76

 

$

2.72

 

1.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

Year Ended

 

 

 

 

 

December 31,

 

December 31,

 

YoY

 

 

 

2019

 

2018

 

% Change

 

Rates

 

$

1.89

 

$

2.04

 

(7.4)

%

Rates - excluding short-tenor swaps (less than 1 year)

 

$

2.21

 

$

2.15

 

2.9

%

Credit

 

$

37.98

 

$

37.42

 

1.5

%

Equities

 

$

19.52

 

$

17.55

 

11.2

%

Money Markets

 

$

0.47

 

$

0.47

 

0.6

%

Total Fees per Million

 

$

2.40

 

$

2.59

 

(7.2)

%

Total Fees per Million - excluding short-tenor swaps (less than 1 year)

 

$

2.66

 

$

2.67

 

(0.4)

%

TRADEWEB MARKETS INC.
AVERAGE DAILY VOLUME

 

 

4Q19

 

4Q18

 

YoY

 

 

ADV

 

Volume

 

ADV

 

Volume

 

ADV

Asset Class

Product

(in $ mm)

 

(in $ mm)

 

(in $ mm)

 

(in $ mm)

 

 

Rates

Cash

267,716

 

16,639,376

 

240,080

 

14,729,907

 

11.5%

U.S. Government Bonds

77,007

 

4,774,459

 

79,091

 

4,824,576

 

(2.6)%

European Government Bonds

19,643

 

1,257,179

 

20,134

 

1,308,730

 

(2.4)%

Mortgages

167,952

 

10,413,002

 

138,929

 

8,474,693

 

20.9%

Other Government Bonds

3,113

 

194,735

 

1,925

 

121,907

 

61.7%

Derivatives

183,554

 

11,551,786

 

138,855

 

8,709,145

 

32.2%

Swaps/Swaptions ≥ 1Y

138,753

 

8,739,588

 

125,140

 

7,849,237

 

10.9%

Swaps/Swaptions < 1Y

44,165

 

2,772,698

 

13,122

 

823,773

 

236.6%

Futures

637

 

39,500

 

592

 

36,136

 

7.6%

Total

451,270

 

28,191,162

 

378,935

 

23,439,052

 

19.1%

Credit

Cash

6,000

 

373,837

 

4,323

 

268,001

 

38.8%

U.S. High-Grade

3,213

 

199,230

 

2,064

 

125,876

 

55.7%

U.S. High-Yield

357

 

22,123

 

269

 

16,421

 

32.6%

European Credit

1,299

 

83,111

 

1,171

 

76,100

 

10.9%

Municipal Bonds

217

 

13,426

 

292

 

17,831

 

(25.9)%

Chinese Bonds

849

 

51,812

 

484

 

29,013

 

75.7%

Other Credit Bonds

65

 

4,135

 

44

 

2,761

 

49.9%

Derivatives

7,218

 

454,130

 

7,711

 

484,383

 

(6.4)%

Swaps

7,218

 

454,130

 

7,711

 

484,383

 

(6.4)%

Total

13,218

 

827,967

 

12,034

 

752,384

 

9.8%

Money Markets

Cash

211,131

 

13,211,134

 

188,938

 

11,689,227

 

11.7%

Repurchase Agreements

192,990

 

12,083,967

 

168,690

 

10,450,000

 

14.4%

Other Money Markets

18,141

 

1,127,167

 

20,248

 

1,239,227

 

(10.4)%

Total

211,131

 

13,211,134

 

188,938

 

11,689,227

 

11.7%

Equities

Cash

4,548

 

291,040

 

5,202

 

330,282

 

(12.6)%

U.S. ETFs

2,974

 

190,355

 

3,918

 

246,862

 

(24.1)%

European ETFs

1,573

 

100,685

 

1,283

 

83,420

 

22.6%

Derivatives

4,442

 

284,298

 

3,343

 

212,662

 

32.9%

Options/Convertibles/Swaps

2,628

 

168,190

 

964

 

62,377

 

172.6%

Futures

1,814

 

116,108

 

2,379

 

150,285

 

(23.7)%

Total

8,990

 

575,338

 

8,544

 

542,944

 

5.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

4Q19

 

4Q18

 

YoY

 

 

ADV

(in $ mm)

 

Average

Daily Trades

 

ADV

(in $ mm)

 

Average

Daily Trades

 

ADV

 

Total

684,609

 

51,411

 

588,451

 

47,020

 

16.3%

 

 

2019

 

2018

 

YoY

 

 

ADV

 

Volume

 

ADV

 

Volume

 

ADV

Asset Class

Product

(in $ mm)

 

(in $ mm)

 

(in $ mm)

 

(in $ mm)

 

 

Rates

Cash

276,592

 

69,226,217

 

225,608

 

56,318,282

 

22.6%

U.S. Government Bonds

80,487

 

20,121,700

 

70,129

 

17,462,137

 

14.8%

European Government Bonds

22,232

 

5,668,809

 

19,682

 

5,038,567

 

13.0%

Mortgages

170,264

 

42,565,880

 

133,810

 

33,318,664

 

27.2%

Other Government Bonds

3,610

 

869,829

 

1,987

 

498,913

 

81.7%

Derivatives

213,053

 

53,645,508

 

128,415

 

32,307,333

 

65.9%

Swaps/Swaptions ≥ 1Y

140,914

 

35,516,302

 

110,185

 

27,732,742

 

27.9%

Swaps/Swaptions < 1Y

71,541

 

17,979,965

 

17,656

 

4,431,785

 

305.2%

Futures

597

 

149,241

 

573

 

142,806

 

4.1%

Total

489,645

 

122,871,725

 

354,023

 

88,625,615

 

38.3%

Credit

Cash

5,654

 

1,419,081

 

4,222

 

1,057,403

 

33.9%

U.S. High-Grade

2,815

 

703,652

 

1,788

 

445,312

 

57.4%

U.S. High-Yield

323

 

80,811

 

245

 

60,936

 

32.1%

European Credit

1,276

 

325,500

 

1,306

 

334,248

 

(2.2)%

Municipal Bonds

242

 

60,601

 

273

 

67,940

 

(11.2)%

Chinese Bonds

931

 

231,698

 

550

 

133,639

 

69.2%

Other Credit Bonds

67

 

16,820

 

61

 

15,328

 

10.1%

Derivatives

9,123

 

2,302,118

 

8,436

 

2,128,806

 

8.1%

Swaps

9,123

 

2,302,118

 

8,436

 

2,128,806

 

8.1%

Total

14,777

 

3,721,199

 

12,658

 

3,186,209

 

16.7%

Money Markets

Cash

213,209

 

53,706,377

 

173,743

 

43,462,916

 

22.7%

Repurchase Agreements

194,831

 

49,107,259

 

152,319

 

38,118,466

 

27.9%

Other Money Markets

18,378

 

4,599,118

 

21,424

 

5,344,450

 

(14.2)%

Total

213,209

 

53,706,377

 

173,743

 

43,462,916

 

22.7%

Equities

Cash

4,405

 

1,114,738

 

4,495

 

1,134,074

 

(2.0)%

U.S. ETFs

2,816

 

709,651

 

3,330

 

835,909

 

(15.4)%

European ETFs

1,589

 

405,087

 

1,165

 

298,165

 

36.4%

Derivatives

3,391

 

858,029

 

3,303

 

828,492

 

2.7%

Options/Convertibles/Swaps

1,689

 

429,336

 

999

 

249,365

 

69.1%

Futures

1,701

 

428,693

 

2,303

 

579,127

 

(26.1)%

Total

7,795

 

1,972,767

 

7,798

 

1,962,566

 

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

YoY

 

 

ADV

(in $ mm)

 

Average

Daily Trades

 

ADV

(in $ mm)

 

Average

Daily Trades

 

ADV

 

Total

725,426

 

51,218

 

548,221

 

41,626

 

32.3%

To access historical traded volumes, go to https://www.tradeweb.com/newsroom/monthly-activity-reports/.

Source: Tradeweb Markets Inc.

Investors
Ashley Serrao, Tradeweb + 1 646 430 6027
Ashley.Serrao@Tradeweb.com

Media
Jonathan Mairs, Tradeweb +1 646 430 6176
Jonathan.Mairs@Tradeweb.com