A new quarterly record for average daily volume of
Record quarterly revenues of
(23.4% on a constant currency basis)
Net income of
Adjusted EBITDA margin of 46.5%
Declared quarterly cash dividend of
Third Quarter Highlights
-
A new quarterly record for average daily volume (“ADV”) of
$815.0 billion represented an increase of 53.3% year over year -
During the quarter, a total of 13 trading days with greater than
$1 trillion in notional volume - New quarterly records for ADV in rates and credit derivatives, European government bonds, mortgages, European ETFs and Chinese bonds
- New quarterly records for U.S. high-grade and high-yield credit of 12.5% and 4.1% market share of TRACE volume, respectively, during the quarter
-
Net income of
$48.6 million , including net income attributable toTradeweb Markets Inc. of$29.6 million , and GAAP earnings per diluted share (“Diluted EPS”) of$0.20 for the quarter -
Adjusted EBITDA margin of 46.5%, Adjusted EBIT margin of 41.3%, Adjusted Net Income of
$61.6 million and Adjusted Net Income per diluted share (“Adjusted Diluted EPS”) of$0.27 for the quarter
Gross revenue increased 21.6% (23.4% on a constant currency basis) to a record
Adjusted EBITDA increased 40.3% to
|
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Constant |
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|
Select Financial Results |
|
Successor |
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|
Predecessor |
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|
Currency |
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|||
($ in millions except per share amounts) |
|
3Q19 |
|
|
3Q18 |
|
% Change |
|
Growth(1) |
|
|||
Gross revenue |
|
$ |
201.0 |
|
|
$ |
165.3 |
|
21.6 |
% |
23.4 |
% |
|
Rates |
|
$ |
115.5 |
|
|
$ |
92.6 |
|
24.7 |
% |
26.1 |
% |
|
Credit |
|
$ |
39.6 |
|
|
$ |
33.6 |
|
17.6 |
% |
21.0 |
% |
|
Equities |
|
$ |
12.3 |
|
|
$ |
8.5 |
|
45.4 |
% |
49.5 |
% |
|
Money Markets |
|
$ |
10.5 |
|
|
$ |
8.7 |
|
20.9 |
% |
22.0 |
% |
|
Market Data |
|
$ |
16.9 |
|
|
$ |
15.8 |
|
7.3 |
% |
8.2 |
% |
|
Other |
|
$ |
6.2 |
|
|
$ |
6.1 |
|
1.2 |
% |
1.2 |
% |
|
Net income (2) |
|
$ |
48.6 |
|
|
$ |
46.0 |
|
— |
% |
— |
% |
|
Net income attributable to Tradeweb Markets Inc.(3) |
|
$ |
29.6 |
|
|
$ |
— |
|
— |
% |
— |
% |
|
Diluted EPS (4) |
|
$ |
0.20 |
|
|
$ |
0.21 |
|
— |
% |
— |
% |
|
Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (5) |
|
$ |
93.4 |
|
|
$ |
66.6 |
|
40.3 |
% |
43.9 |
% |
|
Adjusted EBITDA margin (5) |
|
|
46.5% |
|
|
|
40.3% |
|
+620 |
bps |
+672 |
bps |
|
Adjusted EBIT (5) |
|
$ |
83.1 |
|
|
$ |
56.7 |
|
46.5 |
% |
51.0 |
% |
|
Adjusted EBIT margin (5) |
|
|
41.3% |
|
|
|
34.3% |
|
+701 |
bps |
+770 |
bps |
|
Adjusted Net Income (5) |
|
$ |
61.6 |
|
|
$ |
42.3 |
|
45.9 |
% |
50.3 |
% |
|
Adjusted Diluted EPS (5)(6) |
|
$ |
0.27 |
|
|
$ |
0.19 |
|
38.6 |
% |
42.9 |
% |
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 third quarter of 2019 was impacted by net depreciation and amortization expense of $18.3 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. |
|
3. |
Represents net income less net income attributable to non-controlling interests. |
|
4. |
We present Diluted EPS for Tradeweb Markets Inc. for the third quarter of 2019 and for Tradeweb Markets LLC for the third 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 third quarter of 2019 and for Tradeweb Markets LLC for the third 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 third 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. |
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, “Tradeweb’s focus on identifying market needs by collaborating with clients to deliver innovative new offerings, is driving the expansion of electronic trading. We set new records for trading activity in the third quarter in rates and credit derivatives, European government bonds, mortgages, European ETFs and Chinese bonds, reflecting growth from both organic initiatives at Tradeweb as well as a number of long-term secular trends. As we look ahead, we believe we are well positioned to continue to create value for our customers and shareholders.”
Operating Expenses – Operating expenses of
Other Matters
Assets as of
Follow-On Offering
Full-Year 2019 Guidance*
-
Adjusted expenses of
$460 - $475 million are expected to trend to the lower half of the range - 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 -
Fourth quarter non-cash stock-based compensation expense associated with options of approximately
$2 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
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 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
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 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 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, 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
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
About
TRADEWEB MARKETS INC. |
|
|
|
|
|
|
|
|
INCOME STATEMENT (UNAUDITED) |
||||||||
Dollars in Thousands, Except Per Share Data |
||||||||
|
Successor |
Predecessor |
||||||
|
Three Months |
Nine Months |
Three Months |
Nine Months |
||||
|
Ended |
Ended |
Ended |
Ended |
||||
|
September 30, |
September 30, |
September 30, |
September 30, |
||||
|
2019 |
2019 |
2018 |
2018 |
||||
Revenues |
|
|
|
|
|
|
|
|
Transaction fees |
$ |
112,746 |
$ |
319,338 |
$ |
92,582 |
$ |
273,751 |
Subscription fees |
|
35,387 |
|
104,398 |
|
33,157 |
|
107,130 |
Commissions |
|
37,590 |
|
108,200 |
|
24,394 |
|
79,830 |
Refinitiv market data fees |
|
13,251 |
|
40,252 |
|
12,533 |
|
36,851 |
Other |
|
2,007 |
|
6,070 |
|
2,587 |
|
8,209 |
Gross revenue |
|
200,981 |
|
578,258 |
|
165,253 |
|
505,771 |
Contingent consideration |
|
— |
|
— |
|
2,537 |
|
(26,830) |
Net revenue |
|
200,981 |
|
578,258 |
|
167,790 |
|
478,941 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
79,644 |
|
252,912 |
|
69,076 |
|
209,053 |
Depreciation and amortization |
|
35,133 |
|
102,928 |
|
16,362 |
|
48,808 |
Technology and communications |
|
9,527 |
|
29,086 |
|
9,112 |
|
26,598 |
General and administrative |
|
7,507 |
|
25,961 |
|
9,386 |
|
23,056 |
Professional fees |
|
7,272 |
|
20,981 |
|
7,546 |
|
20,360 |
Occupancy |
|
3,640 |
|
10,900 |
|
3,491 |
|
10,732 |
Total expenses |
|
142,723 |
|
442,768 |
|
114,973 |
|
338,607 |
Operating income |
|
58,258 |
|
135,490 |
|
52,817 |
|
140,334 |
Net interest income |
|
636 |
|
1,669 |
|
673 |
|
1,726 |
Income before taxes |
|
58,894 |
|
137,159 |
|
53,490 |
|
142,060 |
Provision for income taxes |
|
(10,316) |
|
(21,413) |
|
(7,535) |
|
(11,900) |
Net income |
$ |
48,578 |
$ |
115,746 |
$ |
45,955 |
$ |
130,160 |
Less: Pre-IPO net income attributable to Tradeweb Markets LLC |
|
— |
|
42,352 |
|
|
|
|
Net income attributable to Tradeweb Markets Inc. and non-controlling interests |
|
48,578 |
|
73,394 |
|
|
|
|
Less: Net income attributable to non-controlling interests |
|
18,966 |
|
30,954 |
|
|
|
|
Net income attributable to Tradeweb Markets Inc. |
$ |
29,612 |
$ |
42,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS calculations for pre-IPO and post-IPO periods (1) |
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic |
$ |
0.21 (b) |
$ |
0.19 (a) /
|
$ |
0.21 (a) |
$ |
0.60 (a) |
Diluted |
$ |
0.20 (b) |
$ |
0.19 (a) /
|
$ |
0.21 (a) |
$ |
0.60 (a) |
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
142,935,206 (b) |
|
222,222,197 (a) /
|
|
219,165,997 (a) |
|
215,365,920 (a) |
Diluted |
|
151,362,643 (b) |
|
223,320,457 (a) /
|
|
219,165,997 (a) |
|
215,365,920 (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. |
|
|
a. Presents information for Tradeweb Markets LLC (pre-IPO period). |
|
|
b. 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 |
|
|
Predecessor |
|
||||||||
|
|
Three |
|
Nine |
|
|
Three |
|
Nine |
|
||||
|
|
Months |
|
Months |
|
|
Months |
|
Months |
|
||||
|
|
Ended |
|
Ended |
|
|
Ended |
|
Ended |
|
||||
|
|
September 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
||||
Reconciliation of Net Income to Adjusted EBITDA, Adjusted |
|
2019 |
|
2019 |
|
|
2018 |
|
2018 |
|
||||
EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin |
|
(in thousands) |
|
|||||||||||
Net income |
|
$ |
48,578 |
|
$ |
115,746 |
|
|
$ |
45,955 |
|
$ |
130,160 |
|
Contingent consideration |
|
|
— |
|
|
— |
|
|
|
(2,537) |
|
|
26,830 |
|
Interest income, net |
|
|
(636) |
|
|
(1,669) |
|
|
|
(673) |
|
|
(1,726) |
|
Depreciation and amortization |
|
|
35,133 |
|
|
102,928 |
|
|
|
16,362 |
|
|
48,808 |
|
Stock-based compensation expense(1) |
|
|
1,995 |
|
|
22,398 |
|
|
|
— |
|
|
— |
|
Provision for income taxes |
|
|
10,316 |
|
|
21,413 |
|
|
|
7,535 |
|
|
11,900 |
|
Unrealized foreign exchange (gains) / losses |
|
|
(2,499) |
|
|
(1,215) |
|
|
|
407 |
|
|
(960) |
|
(Gain) / loss from revaluation of foreign denominated cash(2) |
|
|
562 |
|
|
1,120 |
|
|
|
(466) |
|
|
(921) |
|
Adjusted EBITDA |
|
$ |
93,449 |
|
$ |
260,721 |
|
|
$ |
66,583 |
|
$ |
214,091 |
|
Less: Depreciation and amortization |
|
|
(35,133) |
|
|
(102,928) |
|
|
|
(16,362) |
|
|
(48,808) |
|
Add: Acquisition and Refinitiv Transaction related D&A(3) |
|
|
24,780 |
|
|
72,122 |
|
|
|
6,513 |
|
|
19,576 |
|
Adjusted EBIT |
|
$ |
83,096 |
|
$ |
229,915 |
|
|
$ |
56,734 |
|
$ |
184,859 |
|
Adjusted EBITDA margin(4) |
|
|
46.5 |
% |
|
45.1 |
% |
|
|
40.3 |
% |
|
42.3 |
% |
Adjusted EBIT margin(4) |
|
|
41.3 |
% |
|
39.8 |
% |
|
|
34.3 |
% |
|
36.5 |
% |
1. |
Represents non-cash stock-based compensation expense associated with the Special Option Award and the post-IPO options awarded in 2019. |
|
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 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. |
Adjusted EBITDA margin and Adjusted EBIT margin are defined as Adjusted EBITDA and Adjusted EBIT, respectively, divided by gross revenue for the applicable. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
||||||||
|
|
Three |
|
Nine |
|
|
Three |
|
Nine |
||||
|
|
Months |
|
Months |
|
|
Months |
|
Months |
||||
|
|
Ended |
|
Ended |
|
|
Ended |
|
Ended |
||||
Reconciliation of Net Income to |
|
September 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
||||
Adjusted Net Income and Adjusted Diluted EPS |
|
2019 |
|
2019 |
|
|
2018 |
|
2018 |
||||
Earnings per diluted share(1) |
|
$ |
0.20 (b) |
|
$ |
0.19 (a)/
|
|
|
$ |
0.21 (a) |
|
$ |
0.60 (a) |
Pre-IPO net income attributable to Tradeweb Markets LLC (1) |
|
$ |
— |
|
$ |
42,352 (a) |
|
|
$ |
45,955 (a) |
|
$ |
130,160 (a) |
Add: Net income attributable to Tradeweb Markets Inc. (1) |
|
|
29,612 (b) |
|
|
42,440 (b) |
|
|
|
— |
|
|
— |
Add: Net income attributable to non-controlling interests (1)(2) |
|
|
18,966 (b) |
|
|
30,954 (b) |
|
|
|
— |
|
|
— |
Net income |
|
$ |
48,578 (b) |
|
$ |
115,746 (a)(b) |
|
|
$ |
45,955 (a) |
|
$ |
130,160 (a) |
Provision for income taxes |
|
|
10,316 |
|
|
21,413 |
|
|
|
7,535 |
|
|
11,900 |
Contingent consideration |
|
|
— |
|
|
— |
|
|
|
(2,537) |
|
|
26,830 |
Acquisition and Refinitiv Transaction related D&A(3) |
|
|
24,780 |
|
|
72,122 |
|
|
|
6,513 |
|
|
19,576 |
Stock-based compensation expense(4) |
|
|
1,995 |
|
|
22,398 |
|
|
|
— |
|
|
— |
Unrealized foreign exchange (gains) / losses |
|
|
(2,499) |
|
|
(1,215) |
|
|
|
407 |
|
|
(960) |
(Gain) / loss from revaluation of foreign denominated cash(5) |
|
|
562 |
|
|
1,120 |
|
|
|
(466) |
|
|
(921) |
Adjusted Net Income before income taxes |
|
|
83,732 |
|
|
231,584 |
|
|
|
57,407 |
|
|
186,585 |
Adjusted income taxes(6) |
|
|
(22,105) |
|
|
(61,139) |
|
|
|
(15,155) |
|
|
(49,258) |
Adjusted Net Income |
|
$ |
61,627 |
|
$ |
170,445 |
|
|
$ |
42,252 |
|
$ |
137,327 |
Adjusted Diluted EPS (1)(7) |
|
$ |
0.27 (b) |
|
$ |
0.23 (a) /
|
|
|
$ |
0.19 (a) |
|
$ |
0.64 (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. |
|
|
a. Presents information for Tradeweb Markets LLC (pre-IPO period). |
|
|
b. 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 the post-IPO options awarded in 2019. |
|
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 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. |
|
7. |
Due to the Reorganization Transactions and the IPO completed in April 2019, shares outstanding during the nine months ended September 30, 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 three and nine months ended
|
|
|
|
|
Pre-IPO Period |
|
Post-IPO Period |
|
|
|
|
|
|
||
|
|
Three |
|
Nine |
|
Nine |
|
Three |
|
Nine |
|||||
|
|
Months |
|
Months |
|
Months |
|
Months |
|
Months |
|||||
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|||||
Reconciliation of Diluted Weighted Average Shares Outstanding to |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|||||
Adjusted Diluted Weighted Average Shares Outstanding |
|
2019 |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|||||
Diluted weighted average TWM LLC shares outstanding |
|
|
— |
|
|
223,320,457 |
|
|
— |
|
|
219,165,997 |
|
|
215,365,920 |
Diluted weighted average shares of Class A and Class B common stock outstanding |
|
|
151,362,643 |
|
|
— |
|
|
151,158,760 |
|
|
— |
|
|
— |
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 |
|
|
230,651,648 |
|
|
223,320,457 |
|
|
230,447,765 |
|
|
219,165,997 |
|
|
215,365,920 |
Adjusted Net Income (in thousands) |
|
$ |
61,627 |
|
$ |
52,190 |
|
$ |
118,255 |
|
$ |
42,252 |
|
$ |
137,327 |
Adjusted Diluted EPS |
|
$ |
0.27 |
|
$ |
0.23 |
|
$ |
0.51 |
|
$ |
0.19 |
|
$ |
0.64 |
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 |
|
|
Predecessor |
||||||||
|
|
Three |
|
Nine |
|
|
Three |
|
Nine |
||||
|
|
Months |
|
Months |
|
|
Months |
|
Months |
||||
|
|
Ended |
|
Ended |
|
|
Ended |
|
Ended |
||||
|
|
September 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
||||
Reconciliation of Operating Expenses to Adjusted Expenses |
|
2019 |
|
2019 |
|
|
2018 |
|
2018 |
||||
Operating Expenses |
|
$ |
142,723 |
|
$ |
442,768 |
|
|
$ |
114,973 |
|
$ |
338,607 |
Acquisition and Refinitiv Transaction related D&A(1) |
|
|
(24,780) |
|
|
(72,122) |
|
|
|
(6,513) |
|
|
(19,576) |
Stock-based compensation expense(2) |
|
|
(1,995) |
|
|
(22,398) |
|
|
|
— |
|
|
— |
Unrealized foreign exchange gains / (losses) |
|
|
2,499 |
|
|
1,215 |
|
|
|
(407) |
|
|
960 |
Gain / (loss) from revaluation of foreign-denominated cash(3) |
|
|
(562) |
|
|
(1,120) |
|
|
|
466 |
|
|
921 |
Adjusted Expenses |
|
$ |
117,885 |
|
$ |
348,343 |
|
|
$ |
108,519 |
|
$ |
320,912 |
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 the post-IPO options awarded in 2019. |
|
3. |
Represents foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency. |
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|||
|
|
Nine |
|
|
Nine |
|||
|
|
Months |
|
|
Months |
|||
|
|
Ended |
|
|
Ended |
|||
Reconciliation of Cash Flows from Operating Activities to |
|
September 30, |
|
|
September 30, |
|||
Free Cash Flow |
|
2019 |
|
|
2018 |
|||
Cash flow from operating activities |
|
$ |
190,465 |
|
|
$ |
164,828 |
|
Less: Capitalization of software development costs |
|
|
(21,200) |
|
|
|
(19,523) |
|
Less: Purchases of furniture, equipment and leasehold improvements |
|
|
(8,567) |
|
|
|
(6,327) |
|
Free Cash Flow |
|
$ |
160,698 |
|
|
$ |
138,978 |
|
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
|
|
Successor |
|
|
Predecessor |
|||||
|
|
Nine Months |
|
|
Three Months |
|
Nine Months |
|||
|
|
Ended |
|
|
Ended |
|
Ended |
|||
|
|
September 30, |
|
|
September 30, |
|
September 30, |
|||
|
|
2019 |
|
|
2018 |
|
2018 |
|||
EPS: Pre-IPO net income attributable to Tradeweb Markets LLC(1) |
|
|
||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
Pre-IPO net income attributable to Tradeweb Markets LLC |
|
$ |
42,352 |
|
|
$ |
45,955 |
|
$ |
130,160 |
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
Weighted average LLC Interests outstanding - Basic |
|
|
222,222,197 |
|
|
|
219,165,997 |
|
|
215,365,920 |
Dilutive effect of equity-settled PRSUs |
|
|
1,098,260 |
|
|
|
— |
|
|
— |
Weighted average LLC Interests outstanding - Diluted |
|
|
223,320,457 |
|
|
|
219,165,997 |
|
|
215,365,920 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.19 |
|
|
$ |
0.21 |
|
$ |
0.60 |
Earnings per share - Diluted |
|
$ |
0.19 |
|
|
$ |
0.21 |
|
$ |
0.60 |
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
|
|
|
|
|
|
|
|
|
|
Successor |
|||||
|
|
Three Months |
|
|
Nine Months |
||
|
|
Ended |
|
|
Ended |
||
|
|
September 30, |
|
|
September 30, |
||
|
|
2019 |
|
|
2019 |
||
EPS: Post-IPO net income attributable to Tradeweb Markets Inc. |
|
|
|||||
Numerator: |
|
|
|
|
|
|
|
Post-IPO net income attributable to Tradeweb Markets Inc. |
|
$ |
29,612 |
|
|
$ |
42,440 |
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
Weighted average shares of Class A and Class B common stock outstanding - Basic |
|
|
142,935,206 |
|
|
|
142,934,221 |
Dilutive effect of equity-settled PRSUs |
|
|
2,492,381 |
|
|
|
2,355,938 |
Dilutive effect of options |
|
|
5,935,056 |
|
|
|
5,868,601 |
Weighted average shares of Class A and Class B common stock outstanding - Diluted |
|
|
151,362,643 |
|
|
|
151,158,760 |
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.21 |
|
|
$ |
0.30 |
Earnings per share - Diluted |
|
$ |
0.20 |
|
|
$ |
0.28 |
TRADEWEB MARKETS INC. |
||||||||||||||||||||||||
GROSS REVENUES BY ASSET CLASS |
||||||||||||||||||||||||
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
$ Change |
|
% Change |
|
||||||||||||||
|
|
Variable |
|
Fixed |
|
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
||||||
Revenues |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Rates |
|
$ |
64,885 |
|
$ |
50,620 |
|
|
$ |
42,808 |
|
$ |
49,784 |
|
$ |
22,077 |
|
$ |
836 |
|
51.6 |
% |
1.7 |
% |
Credit |
|
|
34,417 |
|
|
5,161 |
|
|
|
28,526 |
|
|
5,116 |
|
|
5,891 |
|
|
45 |
|
20.7 |
% |
0.9 |
% |
Equities |
|
|
9,896 |
|
|
2,437 |
|
|
|
7,066 |
|
|
1,418 |
|
|
2,830 |
|
|
1,019 |
|
40.1 |
% |
71.9 |
% |
Money Markets |
|
|
6,743 |
|
|
3,737 |
|
|
|
5,089 |
|
|
3,578 |
|
|
1,654 |
|
|
159 |
|
32.5 |
% |
4.4 |
% |
Market Data |
|
|
— |
|
|
16,914 |
|
|
|
— |
|
|
15,770 |
|
|
— |
|
|
1,144 |
|
n/a |
|
7.3 |
% |
Other |
|
|
— |
|
|
6,171 |
|
|
|
26 |
|
|
6,072 |
|
|
(26) |
|
|
99 |
|
(100) |
% |
1.6 |
% |
Gross revenue |
|
$ |
115,941 |
|
$ |
85,040 |
|
|
$ |
83,515 |
|
$ |
81,738 |
|
$ |
32,426 |
|
$ |
3,302 |
|
38.8 |
% |
4.0 |
% |
TRADEWEB MARKETS INC. |
|||||||||
AVERAGE VARIABLE FEES PER MILLION DOLLARS OF VOLUME |
|||||||||
|
|
Three |
|
Three |
|
|
|
||
|
|
Months |
|
Months |
|
|
|
||
|
|
Ended |
|
Ended |
|
|
|
||
|
|
September 30, |
|
September 30, |
|
YoY |
|
||
|
|
2019 |
|
2018 |
|
% Change |
|
||
Rates |
|
$ |
1.79 |
|
$ |
1.97 |
|
(9.2) |
% |
Rates – excluding short-tenor swaps (less than 1 year) |
|
$ |
2.32 |
|
$ |
2.14 |
|
8.0 |
% |
Credit |
|
$ |
30.81 |
|
$ |
37.45 |
|
(17.7) |
% |
Equities |
|
$ |
20.78 |
|
$ |
19.27 |
|
7.8 |
% |
Money Markets |
|
$ |
0.46 |
|
$ |
0.47 |
|
(1.9) |
% |
Total Fees per Million |
|
$ |
2.20 |
|
$ |
2.47 |
|
(10.9) |
% |
Total Fees per Million – excluding short-tenor swaps (less than 1 year) |
|
$ |
2.62 |
|
$ |
2.61 |
|
— |
% |
TRADEWEB MARKETS INC. |
||||||
AVERAGE DAILY VOLUME |
||||||
2019 Q3 |
2018 Q3 |
YoY |
||||
Asset Class |
Product |
ADV
|
Volume
|
ADV
|
Volume
|
ADV |
Rates |
Cash |
284,629 |
18,260,913 |
208,879 |
13,196,047 |
36.26% |
U.S. Government Bonds |
82,128 |
5,256,162 |
65,558 |
4,130,170 |
25.27% |
|
European Government Bonds |
23,373 |
1,542,540 |
17,745 |
1,153,418 |
31.72% |
|
Mortgages |
175,478 |
11,230,569 |
123,600 |
7,786,799 |
41.97% |
|
Other Government Bonds |
3,651 |
231,641 |
1,976 |
125,659 |
84.72% |
|
Derivatives |
278,749 |
18,044,201 |
133,693 |
8,514,786 |
108.50% |
|
Swaps/Swaptions ≥ 1Y |
148,195 |
9,610,603 |
104,080 |
6,635,855 |
42.39% |
|
Swaps/Swaptions < 1Y |
129,981 |
8,396,929 |
29,125 |
1,848,185 |
346.28% |
|
Futures |
573 |
36,669 |
488 |
30,745 |
17.44% |
|
Total |
563,379 |
36,305,114 |
342,572 |
21,710,832 |
64.46% |
|
Credit |
Cash |
5,437 |
352,688 |
3,950 |
251,695 |
37.64% |
U.S. High-Grade |
2,476 |
158,462 |
1,712 |
107,881 |
44.59% |
|
U.S. High-Yield |
328 |
20,973 |
230 |
14,461 |
42.77% |
|
European Credit |
1,203 |
79,409 |
1,098 |
71,357 |
9.60% |
|
Municipal Bonds |
226 |
14,433 |
256 |
16,134 |
-11.94% |
|
Chinese Bonds |
1,139 |
75,201 |
603 |
38,571 |
89.06% |
|
Other Credit Bonds |
65 |
4,209 |
51 |
3,291 |
26.12% |
|
Derivatives |
11,763 |
764,357 |
7,935 |
508,512 |
48.23% |
|
Swaps |
11,763 |
764,357 |
7,935 |
508,512 |
48.23% |
|
Total |
17,199 |
1,117,045 |
11,885 |
760,207 |
44.71% |
|
Money
|
Cash |
227,125 |
14,701,122 |
171,509 |
10,872,806 |
32.43% |
Repurchase Agreements (Repo) |
209,298 |
13,557,806 |
151,667 |
9,620,102 |
38.00% |
|
Other Money Markets |
17,827 |
1,143,316 |
19,842 |
1,252,704 |
-10.15% |
|
Total |
227,125 |
14,701,122 |
171,509 |
10,872,806 |
32.43% |
|
Equities |
Cash |
4,500 |
291,470 |
3,162 |
201,149 |
42.32% |
U.S. ETFs |
2,756 |
176,353 |
2,182 |
137,496 |
26.26% |
|
Europe ETFs |
1,744 |
115,118 |
979 |
63,653 |
78.12% |
|
Derivatives |
2,845 |
184,659 |
2,584 |
165,441 |
10.11% |
|
Options/Convertibles/Swaps |
1,275 |
83,721 |
1,253 |
81,194 |
1.73% |
|
Futures |
1,570 |
100,938 |
1,331 |
84,247 |
18.00% |
|
Total |
7,345 |
476,129 |
5,746 |
366,590 |
27.83% |
|
|
|
|
|
|||
ADV (USD mm) |
Average Daily
|
ADV (USD mm) |
Average Daily
|
YoY |
||
Total |
815,048 |
51,682 |
531,712 |
38,958 |
53.29% |
To access historical traded volumes, go to https://www.tradeweb.com/newsroom/monthly-activity-reports/.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191107005337/en/
Source:
Investors
Ashley Serrao, Tradeweb + 1 646 430 6027
Ashley.Serrao@Tradeweb.com
Media
Jonathan Mairs, Tradeweb +1 646 430 6176
Jonathan.Mairs@Tradeweb.com