A new quarterly record for average daily volume of
Record quarterly revenues of
Net income of
Adjusted EBITDA margin of 45.6%
Declared quarterly cash dividend of
Second Quarter Highlights
- A new quarterly record for average daily volume (“ADV”) of
$753.8 billion represented an increase of 39.6% - New quarterly records for ADV in interest rate swaps and mortgages
- A new quarterly record for U.S. high-grade credit which accounted for 12.4% of TRACE volume
- Double-digit, year-over-year increases in revenues from all four asset classes covering rates, credit, equities and money markets plus market data
- Net income of
$24.8 million , including net income attributable toTradeweb Markets Inc. of$12.8 million and GAAP earnings per diluted share (“Diluted EPS”) of$0.09 for the quarter - Adjusted EBITDA margin of 45.6%, Adjusted Net Income of
$56.6 million and Adjusted Net Income per diluted share (“Adjusted Diluted EPS”) of$0.25 for the quarter
Gross revenue increased 11.4% (13.2% on a constant currency basis) to a record
[1] The historical financial information and other disclosures contained in this press release relate to periods that ended both prior to and after the completion of the Reorganization Transactions (as defined below). See “Presentation” below for an explanation of the financial reporting of historical results.
Adjusted EBITDA increased 16.2% to
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Constant |
|
Select Financial Results ($ in |
|
Successor |
|
|
Predecessor |
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|
Currency |
|
||
millions except per share amounts) |
|
2Q19 |
|
|
2Q18 |
|
% Change |
|
Growth (1) |
|
||
Gross revenue |
|
$ |
190.5 |
|
|
$ |
171.0 |
|
11.4 |
% |
13.2 |
% |
Rates |
|
$ |
107.1 |
|
|
$ |
95.1 |
|
12.5 |
% |
13.9 |
% |
Credit |
|
$ |
39.6 |
|
|
$ |
34.1 |
|
16.2 |
% |
20.0 |
% |
Equities |
|
$ |
11.1 |
|
|
$ |
9.7 |
|
14.9 |
% |
19.3 |
% |
Money Markets |
|
$ |
10.3 |
|
|
$ |
8.5 |
|
21.9 |
% |
22.8 |
% |
Market Data |
|
$ |
17.5 |
|
|
$ |
15.7 |
|
11.5 |
% |
12.7 |
% |
Other |
|
$ |
4.8 |
|
|
$ |
7.9 |
|
(38.9) |
% |
(39.7) |
% |
Net income (2) |
|
$ |
24.8 |
|
|
$ |
38.9 |
|
(36.2) |
% |
(36.5) |
% |
Net income attributable to Tradeweb Markets Inc.(3) |
|
$ |
12.8 |
|
|
$ |
— |
|
— |
% |
— |
% |
Diluted EPS (4) |
|
$ |
0.09 |
|
|
$ |
0.18 |
|
— |
% |
— |
% |
Adjusted EBITDA (5) |
|
$ |
86.9 |
|
|
$ |
74.8 |
|
16.2 |
% |
18.9 |
% |
Adjusted EBITDA margin (5) |
|
|
45.6% |
|
|
|
43.8% |
|
+188 |
bps |
+217 |
bps |
Adjusted Net Income (5) |
|
$ |
56.6 |
|
|
$ |
48.4 |
|
17.0 |
% |
20.3 |
% |
Adjusted Diluted EPS (5)(6) |
|
$ |
0.25 |
|
|
$ |
0.23 |
|
8.5 |
% |
11.5 |
% |
- 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.
- Net income for the second quarter of 2019 included a non-cash, stock-based compensation expense of
$20.4 million related to the Special Option Award as well as a net impact on depreciation and amortization expense of$17.6 million as a result of the Refinitiv Transaction and the resulting revaluation of our balance sheet. See "Presentation" below for additional information regarding the Refinitiv Transaction. - Represents net income less net income attributable to non-controlling interests.
- We present Diluted EPS for
Tradeweb Markets Inc. for the second quarter of 2019 and forTradeweb Markets LLC for the second quarter of 2018, as the Reorganization Transactions (as defined below) and the IPO were completed inApril 2019 . As a consequence, the Diluted EPS information forTradeweb Markets Inc. andTradeweb Markets LLC is not comparable. See “Presentation” and “Basic and Diluted EPS Calculations” below for additional information. - Adjusted EBITDA, Adjusted EBITDA 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.
- We present Adjusted Diluted EPS for
Tradeweb Markets Inc. for the second quarter of 2019 and forTradeweb Markets LLC for the second quarter of 2018. Because Adjusted Diluted EPS gives effect to certain tax related adjustments to reflect an assumed effective tax rate for all periods presented and, for the second quarter of 2019, assumes all equity interests ofTradeweb Markets LLC are exchanged for shares of Class A or Class B common stock, we believe that Adjusted Diluted EPS forTradeweb Markets Inc. andTradeweb Markets LLC are comparable.
Discussion of Results
Rates – Revenues from rates of
Credit – Revenues from credit of
Equities – Revenues from equities of
Money Markets – Revenues from money markets of
Market Data – Revenues from market data of
Other – Revenues from other of
Mr. Olesky added, “Growth in the second quarter was diversified across products, protocols, client sectors and regions. In absolute numbers, trading activity in interest rate swaps and repurchase agreements were the leading drivers of our overall volume growth year over year. At the same time, as a direct result of new initiatives, we are witnessing upticks in client interest in U.S. Treasuries, mortgages, U.S. credit, European ETFs and Chinese bonds. Furthermore, new trading technologies like our Automated Intelligent Execution (AiEX) tool are taking hold, to speed execution, lessen market risk, reduce human errors and create scale on the trading desk.”
Operating Expenses – Operating expenses of
Other Matters
Assets as of
Updated Full-Year 2019 Guidance*
- Adjusted expenses of
$460 - $475 million are expected to trend to the lower half of the range versus the midpoint - Assumed non-GAAP tax rate of 26.4%
- Capital expenditures and capitalization of software of
$42 - $48 million - Acquisition and Refinitiv Transaction related depreciation and amortization expense of
$98 million - Non-cash, stock-based compensation expense associated with the Special Option Award of
$1.6 - $1.7 million per quarter in the third and fourth quarters of 2019 - Eliminated guidance on full year net interest income of
$0.5 - $1.0 million ; future levels of interest income will fluctuate according to cash levels and reinvestment rates
*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
Conference Call
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 2019 guidance, and future performance, the 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 our prospectus filed with the
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
On
Non-GAAP Financial Measures
This release contains “non-GAAP financial measures,” including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Expenses and Free Cash Flow, which are supplemental financial measures that are not calculated and 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 and Adjusted EBITDA 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
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 make use of 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
About
INCOME STATEMENT (UNAUDITED)
Dollars in Thousands, Except Per Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
||||||||
|
|
Three Months |
|
Six Months |
|
|
Three Months |
|
Six Months |
||||
|
|
Ended |
|
Ended |
|
|
Ended |
|
Ended |
||||
|
|
June 30, |
|
June 30, |
|
|
June 30, |
|
June 30, |
||||
|
|
2019 |
|
2019 |
|
|
2018 |
|
2018 |
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction fees |
|
$ |
103,952 |
|
$ |
206,592 |
|
|
$ |
91,030 |
|
$ |
181,169 |
Subscription fees |
|
|
34,566 |
|
|
69,011 |
|
|
|
37,647 |
|
|
73,973 |
Commissions |
|
|
36,413 |
|
|
70,610 |
|
|
|
27,553 |
|
|
55,436 |
Refinitiv market data fees |
|
|
13,385 |
|
|
27,001 |
|
|
|
12,081 |
|
|
24,318 |
Other |
|
|
2,169 |
|
|
4,063 |
|
|
|
2,704 |
|
|
5,622 |
Gross revenue |
|
|
190,485 |
|
|
377,277 |
|
|
|
171,015 |
|
|
340,518 |
Contingent consideration |
|
|
— |
|
|
— |
|
|
|
(19,297) |
|
|
(29,367) |
Net revenue |
|
|
190,485 |
|
|
377,277 |
|
|
|
151,718 |
|
|
311,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
95,995 |
|
|
173,268 |
|
|
|
68,407 |
|
|
139,977 |
Depreciation and amortization |
|
|
34,292 |
|
|
67,795 |
|
|
|
16,178 |
|
|
32,446 |
Technology and communications |
|
|
9,519 |
|
|
19,559 |
|
|
|
9,023 |
|
|
17,486 |
General and administrative |
|
|
9,365 |
|
|
18,454 |
|
|
|
7,153 |
|
|
13,670 |
Professional fees |
|
|
6,738 |
|
|
13,709 |
|
|
|
7,276 |
|
|
12,814 |
Occupancy |
|
|
3,621 |
|
|
7,260 |
|
|
|
3,519 |
|
|
7,241 |
Total expenses |
|
|
159,530 |
|
|
300,045 |
|
|
|
111,556 |
|
|
223,634 |
Operating income |
|
|
30,955 |
|
|
77,232 |
|
|
|
40,162 |
|
|
87,517 |
Interest income |
|
|
175 |
|
|
1,033 |
|
|
|
582 |
|
|
1,053 |
Income before taxes |
|
|
31,130 |
|
|
78,265 |
|
|
|
40,744 |
|
|
88,570 |
Provision for income taxes |
|
|
(6,314) |
|
|
(11,097) |
|
|
|
(1,847) |
|
|
(4,365) |
Net income |
|
$ |
24,816 |
|
$ |
67,168 |
|
|
$ |
38,897 |
|
$ |
84,205 |
Less: Pre-IPO net income attributable to Tradeweb Markets LLC |
|
|
— |
|
|
42,352 |
|
|
|
|
|
|
|
Net income attributable to Tradeweb Markets Inc. and non-controlling interests |
|
|
24,816 |
|
|
24,816 |
|
|
|
|
|
|
|
Less: Net income attributable to non-controlling interests |
|
|
11,988 |
|
|
11,988 |
|
|
|
|
|
|
|
Net income attributable to Tradeweb Markets Inc. |
|
$ |
12,828 |
|
$ |
12,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS calculations for pre-IPO and post-IPO periods (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.09 (b) |
|
$ |
0.19 (a)/ |
|
|
$ |
0.18 (a) |
|
$ |
0.39 (a) |
Diluted |
|
$ |
0.09 (b) |
|
$ |
0.19 (a)/ |
|
|
$ |
0.18 (a) |
|
$ |
0.39 (a) |
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
142,933,192 (b) |
|
|
222,222,197 (a)/ |
|
|
|
213,435,314 (a) |
|
|
213,435,314 (a) |
Diluted |
|
|
150,847,183 (b) |
|
|
223,320,457 (a)/ |
|
|
|
213,435,314 (a) |
|
|
213,435,314 (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- In
April 2019 , the Company completed the Reorganization Transactions and the IPO, which, among other things, resultedTradeweb Markets Inc. becoming the successor ofTradeweb 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. As a result, earnings per share information is being presented separately for the pre-IPO and post-IPO periods.- Presents information for
Tradeweb Markets LLC (pre-IPO period). - Presents information for
Tradeweb Markets Inc (post-IPO period).
- Presents information for
See “Basic and Diluted EPS Calculations” below for additional information.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Dollars in Thousands, Except per Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
||||||||||
|
|
Three |
|
|
Six |
|
|
Three |
|
|
Six |
|
||||
|
|
Months |
|
|
Months |
|
|
Months |
|
|
Months |
|
||||
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
||||
Reconciliation of Net Income to Adjusted EBITDA |
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
||||
and Adjusted EBITDA Margin |
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
||||
Net income |
|
$ |
24,816 |
|
|
$ |
67,168 |
|
|
$ |
38,897 |
|
|
$ |
84,205 |
|
Contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
19,297 |
|
|
|
29,367 |
|
Interest income, net |
|
|
(175) |
|
|
|
(1,033) |
|
|
|
(582) |
|
|
|
(1,053) |
|
Depreciation and amortization |
|
|
34,292 |
|
|
|
67,795 |
|
|
|
16,178 |
|
|
|
32,446 |
|
Stock-based compensation expense associated with Special Option Award |
|
|
20,403 |
|
|
|
20,403 |
|
|
|
— |
|
|
|
— |
|
Provision for income taxes |
|
|
6,314 |
|
|
|
11,097 |
|
|
|
1,847 |
|
|
|
4,365 |
|
Unrealized foreign exchange (gains) / losses |
|
|
1,577 |
|
|
|
1,284 |
|
|
|
(399) |
|
|
|
(1,367) |
|
(Gain) / loss from revaluation of foreign-denominated cash (1) |
|
|
(302) |
|
|
|
558 |
|
|
|
(411) |
|
|
|
(455) |
|
Adjusted EBITDA |
|
$ |
86,925 |
|
|
$ |
167,272 |
|
|
$ |
74,827 |
|
|
$ |
147,508 |
|
Adjusted EBITDA margin (2) |
|
|
45.6 |
% |
|
|
44.3 |
% |
|
|
43.8 |
% |
|
|
43.3 |
% |
- Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency.
- Adjusted EBITDA margin is defined as Adjusted EBITDA divided by gross revenue for the applicable period.
|
|
Successor |
|
|
Predecessor |
||||||||||
|
|
Three |
|
|
Six |
|
|
Three |
|
|
Six |
||||
|
|
Months |
|
|
Months |
|
|
Months |
|
|
Months |
||||
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
||||
Reconciliation of Net Income to |
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
||||
Adjusted Net Income and Adjusted Diluted EPS |
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
||||
Earnings per diluted share (1) |
|
$ |
0.09 (b) |
|
|
$ |
0.19 (a)/ |
|
|
$ |
0.18 (a) |
|
|
$ |
0.39 (a) |
Pre-IPO net income attributable to Tradeweb Markets LLC (1) |
|
$ |
— |
|
|
$ |
42,352 (a) |
|
|
$ |
38,897 (a) |
|
|
$ |
84,205 (a) |
Add: Net income attributable to Tradeweb Markets Inc. (1) |
|
|
12,828 (b) |
|
|
|
12,828 (b) |
|
|
|
— |
|
|
|
— |
Add: Net income attributable to non-controlling interests (1)(2) |
|
|
11,988 (b) |
|
|
|
11,988 (b) |
|
|
|
— |
|
|
|
— |
Net income |
|
$ |
24,816 (b) |
|
|
$ |
67,168 (a)(b) |
|
|
$ |
38,897 (a) |
|
|
$ |
84,205 (a) |
Provision for income taxes |
|
|
6,314 |
|
|
|
11,097 |
|
|
|
1,847 |
|
|
|
4,365 |
Contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
19,297 |
|
|
|
29,367 |
Acquisition and Refinitiv Transaction related D&A(3) |
|
|
24,133 |
|
|
|
47,342 |
|
|
|
6,557 |
|
|
|
13,063 |
Stock-based compensation expense associated with Special Option Award |
|
|
20,403 |
|
|
|
20,403 |
|
|
|
— |
|
|
|
— |
Unrealized foreign exchange (gains) / losses |
|
|
1,577 |
|
|
|
1,284 |
|
|
|
(399) |
|
|
|
(1,367) |
(Gain) / loss from revaluation of foreign denominated cash(4) |
|
|
(302) |
|
|
|
558 |
|
|
|
(411) |
|
|
|
(455) |
Adjusted Net Income before income taxes |
|
|
76,941 |
|
|
|
147,852 |
|
|
|
65,788 |
|
|
|
129,178 |
Adjusted income taxes(5) |
|
|
(20,312) |
|
|
|
(39,033) |
|
|
|
(17,368) |
|
|
|
(34,103) |
Adjusted Net Income |
|
$ |
56,629 |
|
|
$ |
108,819 |
|
|
$ |
48,420 |
|
|
$ |
95,075 |
Adjusted Diluted EPS (1)(6) |
|
$ |
0.25 (b) |
|
|
$ |
0.23 (a) / |
|
|
$ |
0.23 (a) |
|
|
$ |
0.45 (a) |
- In
April 2019 , the Company completed the Reorganization Transactions and the IPO. As a result, certain earnings information is being presented separately forTradeweb Markets LLC andTradeweb Markets Inc. - Presents information for
Tradeweb Markets LLC (pre-IPO period). - Presents information for
Tradeweb Markets Inc. (post-IPO period).
- Presents information for
See the “Basic and Diluted EPS Calculations” table below for additional information.
2. For the post-IPO period, 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 to the closing date of the Refinitiv Transaction).
4. Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency.
5. Represents corporate income taxes at an assumed effective tax rate of 26.4% for the three and six months ended
6. Due to the Reorganization Transactions and the IPO completed in
The following table summarizes the calculation of Adjusted Diluted EPS for the three and six months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-IPO Period |
|
Post-IPO Period |
|
|
|
|
|
|
||
|
|
Three |
|
Six |
|
Six |
|
Three |
|
Six |
|||||
|
|
Months |
|
Months |
|
Months |
|
Months |
|
Months |
|||||
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|||||
Reconciliation of Diluted Weighted Average Shares Outstanding to |
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||
Adjusted Diluted Weighted Average Shares Outstanding |
|
2019 |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|||||
Diluted weighted average TWM LLC shares outstanding |
|
|
— |
|
|
223,320,457 |
|
|
— |
|
|
213,435,314 |
|
|
213,435,314 |
Diluted weighted average shares of Class A and Class B common stock outstanding |
|
|
150,847,183 |
|
|
— |
|
|
150,847,183 |
|
|
— |
|
|
— |
Assumed exchange of LLC interests for shares of Class A or Class B common stock (1) |
|
|
79,289,005 |
|
|
— |
|
|
79,289,005 |
|
|
— |
|
|
— |
Adjusted diluted weighted average shares outstanding |
|
|
230,136,188 |
|
|
223,320,457 |
|
|
230,136,188 |
|
|
213,435,314 |
|
|
213,435,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income |
|
$ |
56,629 |
|
$ |
52,190 |
|
$ |
56,629 |
|
$ |
48,420 |
|
$ |
95,075 |
Adjusted Diluted EPS |
|
$ |
0.25 |
|
$ |
0.23 |
|
$ |
0.25 |
|
$ |
0.23 |
|
$ |
0.45 |
- 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 |
|
|
Predecessor |
||||||||||
|
|
Three |
|
|
Six |
|
|
Three |
|
|
Six |
||||
|
|
Months |
|
|
Months |
|
|
Months |
|
|
Months |
||||
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
||||
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
||||
Reconciliation of Operating Expenses to Adjusted Expenses |
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
||||
Operating Expenses |
|
$ |
159,530 |
|
|
$ |
300,045 |
|
|
$ |
111,556 |
|
|
$ |
223,634 |
Acquisition and Refinitiv Transaction related D&A(1) |
|
|
(24,133) |
|
|
|
(47,342) |
|
|
|
(6,557) |
|
|
|
(13,063) |
Stock-based compensation expense associated with Special Option Award |
|
|
(20,403) |
|
|
|
(20,403) |
|
|
|
— |
|
|
|
— |
Unrealized foreign exchange gains / (losses) |
|
|
(1,577) |
|
|
|
(1,284) |
|
|
|
399 |
|
|
|
1,367 |
Gain / (loss) from revaluation of foreign-denominated cash(2) |
|
|
302 |
|
|
|
(558) |
|
|
|
411 |
|
|
|
455 |
Adjusted Expenses |
|
$ |
113,719 |
|
|
$ |
230,458 |
|
|
$ |
105,809 |
|
|
$ |
212,393 |
- 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 to the closing date of the Refinitiv Transaction).
- Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency.
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
||
|
|
|
|
Six |
|
Six |
||
|
|
|
|
Months |
|
Months |
||
|
|
|
|
Ended |
|
Ended |
||
Reconciliation of Cash Flows from Operating Activities to |
|
|
|
June 30, |
|
June 30, |
||
Free Cash Flow |
|
|
|
2019 |
|
2018 |
||
Cash flow from operating activities |
|
|
|
$ |
76,973 |
|
$ |
65,027 |
Less: Capitalization of software development costs |
|
|
|
|
(13,914) |
|
|
(12,765) |
Less: Purchases of furniture, equipment and leasehold improvements |
|
|
|
|
(3,793) |
|
|
(3,125) |
Free Cash Flow |
|
|
|
$ |
59,266 |
|
$ |
49,137 |
GROSS REVENUES BY ASSET CLASS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
June 30, 2019 |
|
|
June 30, 2018 |
|
$ Change |
|
% Change |
|
||||||||||||||
|
|
Variable |
|
Fixed |
|
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
||||||
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rates |
|
$ |
56,743 |
|
$ |
50,320 |
|
|
$ |
45,307 |
|
$ |
49,829 |
|
$ |
11,436 |
|
$ |
491 |
|
25.2 |
% |
1.0 |
% |
Credit |
|
|
34,337 |
|
|
5,262 |
|
|
|
29,102 |
|
|
4,975 |
|
|
5,235 |
|
|
287 |
|
18.0 |
% |
5.8 |
% |
Equities |
|
|
9,195 |
|
|
1,921 |
|
|
|
7,907 |
|
|
1,764 |
|
|
1,288 |
|
|
157 |
|
16.3 |
% |
8.9 |
% |
Money Markets |
|
|
6,674 |
|
|
3,648 |
|
|
|
5,012 |
|
|
3,455 |
|
|
1,662 |
|
|
193 |
|
33.2 |
% |
5.6 |
% |
Market Data |
|
|
— |
|
|
17,544 |
|
|
|
— |
|
|
15,737 |
|
|
— |
|
|
1,807 |
|
n/a |
|
11.5 |
% |
Other |
|
|
— |
|
|
4,841 |
|
|
|
14 |
|
|
7,913 |
|
|
(14) |
|
|
(3,072) |
|
(100.0) |
% |
(38.8) |
% |
Gross revenue |
|
$ |
106,949 |
|
$ |
83,536 |
|
|
$ |
87,342 |
|
$ |
83,673 |
|
$ |
19,607 |
|
$ |
(137) |
|
22.4 |
% |
(0.2) |
% |
AVERAGE DAILY VOLUME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q19 |
|
2Q18 |
|
YoY |
|
||||
(in $ mm) |
|
ADV |
|
Volume |
|
ADV |
|
Volume |
|
ADV |
|
Rates |
|
511,912 |
|
32,144,241 |
|
351,828 |
|
22,441,356 |
|
45.5 |
% |
Credit |
|
12,217 |
|
766,367 |
|
11,791 |
|
746,841 |
|
3.6 |
% |
Equities |
|
7,120 |
|
445,568 |
|
6,919 |
|
440,504 |
|
2.9 |
% |
Money Markets |
|
222,595 |
|
14,022,433 |
|
169,553 |
|
10,829,843 |
|
31.3 |
% |
Total |
|
753,844 |
|
47,378,609 |
|
540,091 |
|
34,458,544 |
|
39.6 |
% |
AVERAGE VARIABLE FEES PER MILLION DOLLARS OF VOLUME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YoY |
|
|
|
2Q19 |
|
|
2Q18 |
|
|
% Change |
|
||
Rates |
|
$ |
1.77 |
|
|
$ |
2.02 |
|
|
(12.4) |
% |
Credit |
|
$ |
44.80 |
|
|
$ |
38.97 |
|
|
15.0 |
% |
Equities |
|
$ |
20.64 |
|
|
$ |
17.95 |
|
|
15.0 |
% |
Money Markets |
|
$ |
0.48 |
|
|
$ |
0.46 |
|
|
2.8 |
% |
Total FPM |
|
$ |
2.26 |
|
|
$ |
2.53 |
|
|
(10.7) |
% |
BASIC AND DILUTED EPS CALCULATIONS (UNAUDITED)
Dollars in Thousands, Except per Share Data
The following tables summarize the basic and diluted earnings per share calculations for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
||||||||
|
|
Three Months |
|
Six Months |
|
|
Three Months |
|
Six Months |
||||
|
|
Ended |
|
Ended |
|
|
Ended |
|
Ended |
||||
|
|
June 30, 2019 |
|
June 30, 2019 |
|
|
June 30, 2018 |
|
June 30, 2018 |
||||
EPS: Pre-IPO net income attributable to Tradeweb Markets LLC(1) |
|
|
|||||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-IPO net income attributable to Tradeweb Markets LLC |
|
|
|
|
$ |
42,352 |
|
|
|
38,897 |
|
|
84,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average LLC Interests outstanding - Basic |
|
|
|
|
|
222,222,197 |
|
|
|
213,435,314 |
|
|
213,435,314 |
Dilutive effect of equity-settled PRSUs |
|
|
|
|
|
1,098,260 |
|
|
|
— |
|
|
— |
Weighted average LLC Interests outstanding - Diluted |
|
|
|
|
|
223,320,457 |
|
|
|
213,435,314 |
|
|
213,435,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
|
|
|
$ |
0.19 |
|
|
$ |
0.18 |
|
$ |
0.39 |
Earnings per share - Diluted |
|
|
|
|
$ |
0.19 |
|
|
$ |
0.18 |
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS: Post-IPO net income attributable to Tradeweb Markets Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Post-IPO net income attributable to Tradeweb Markets Inc. |
|
$ |
12,828 |
|
$ |
12,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of Class A and Class B common stock outstanding - Basic |
|
|
142,933,192 |
|
|
142,933,192 |
|
|
|
|
|
|
|
Dilutive effect of equity-settled PRSUs |
|
|
2,214,480 |
|
|
2,214,480 |
|
|
|
|
|
|
|
Dilutive effect of options |
|
|
5,699,511 |
|
|
5,699,511 |
|
|
|
|
|
|
|
Weighted average shares of Class A and Class B common stock outstanding - Diluted |
|
|
150,847,183 |
|
|
150,847,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.09 |
|
$ |
0.09 |
|
|
|
|
|
|
|
Earnings per share - Diluted |
|
$ |
0.09 |
|
$ |
0.09 |
|
|
|
|
|
|
|
- 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 inTradeweb Markets LLC (“LLC Interests”) and (ii) exchange all of the original members’ existing membership interests for LLC interests.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190808005277/en/
Source:
Investor contact
Ashley Serrao, Tradeweb + 1 646 430 6027
Ashley.Serrao@Tradeweb.com
Media contact
Jonathan Mairs, Tradeweb +1 646 430 6176
Jonathan.Mairs@Tradeweb.com