Delaware

001-38860

83-2456358

(State or Other Jurisdiction
of Incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

1177 Avenue of the Americas
New York, New York

10036

(Address of Principal Executive Offices)

(Zip Code)

Title of each class

Trading Symbol(s)

Name of each exchange on which
registered

Class A common stock, par value $0.00001

TW

Nasdaq Global Select Market

Exhibit
Number

Exhibit Description

99.1

Press Release of Tradeweb Markets Inc., dated May 7, 2020.

TRADEWEB MARKETS INC.

Date: May 7, 2020

By:

/s/ Douglas Friedman

Name:

Douglas Friedman

Title:

General Counsel

Constant

Select Financial Results

Currency

($ in thousands except per share amounts)

1Q20

1Q19

% Change

Growth  (1)

Gross revenue

$

234,606

$

186,792

25.6

%  

26.3

%

Rates

$

126,039

$

104,090

21.1

%  

21.9

%

Credit

$

53,978

$

39,435

36.9

%  

37.8

%

Equities

$

19,434

$

11,798

64.7

%  

66.2

%

Money Markets

$

11,208

$

9,562

17.2

%  

17.5

%

Market Data

$

18,562

$

16,903

9.8

%  

10.1

%

Other

$

5,385

$

5,004

7.6

%  

7.6

%

Net income

$

62,485

$

42,352

47.5

%  

 —

%

Net income attributable to Tradeweb Markets Inc.(2)

$

43,928

$

 -

 —

 —

%  

Diluted EPS (3)

$

0.25

(a)

$

0.19

(b)

31.6

%  

 —

%

Non-GAAP Financial Measures

Adjusted EBITDA (4)

$

119,650

$

80,347

48..9

%  

45.4

%

Adjusted EBITDA margin (4)

+799

bps

+678

bps

Adjusted EBIT (4)

$

108,747

$

70,053

55.2

%  

51.9

%

Adjusted EBIT margin (4)

+885

bps

+767

bps

Adjusted Net Income (4)

$

85,368

$

52,190

63.6

%  

51.0

%

Adjusted Diluted EPS (3)(4)(5)

$

0.37

(a)

$

0.23

(b)

60.9

%  

 —

%

(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)

Represents net income less net income attributable to non-controlling interests.

(3)

As a result of the Reorganization Transactions and the IPO completed in April 2019, certain earnings information is being presented separately for Tradeweb Markets LLC and Tradeweb Markets Inc.

a.

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

b.

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

(4)

For the definitions of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income and Adjusted Diluted EPS, see note 6 in “- Summary Historical and Pro Forma Consolidated Financial and Other Data.” For reconciliations to their most directly comparable financial measures presented in accordance with GAAP, see the tables below.

(5)

Adjusted Diluted EPS includes certain tax related adjustments to reflect an assumed effective tax rate for all periods presented and, for the three months ended March 31, 2020, assumes all LLC Interests are exchanged for shares of Class A or Class B common stock. As a result, we believe that Adjusted Diluted EPS for Tradeweb Markets Inc. and Tradeweb Markets LLC are comparable.

Three Months Ended

Three Months Ended

March 31, 2020

March 31, 2019

Revenues

Transaction fees

$

140,824

$

102,640

Subscription fees

34,483

34,445

Commissions

42,493

34,197

Refinitiv market data fees

14,628

13,616

Other

2,178

1,894

Gross revenue

234,606

186,792

Expenses

Employee compensation and benefits

90,520

77,273

Depreciation and amortization

37,176

33,503

Technology and communications

10,318

10,040

General and administrative

8,340

9,089

Professional fees

6,911

6,971

Occupancy

3,726

3,639

Total expenses

156,991

140,515

Operating income

77,615

46,277

Net interest income

699

858

Income before taxes

78,314

47,135

Provision for income taxes

(15,829)

(4,783)

Net income

$

62,485

$

42,352

Less: Net income attributable to non-controlling interests

18,557

Net income attributable to Tradeweb Markets Inc.

$

43,928

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

Earnings per share

Basic

$

0.26 (a)

$

0.19 (b) 

Diluted

$

0.25 (a)

$

0.19 (b)

Weighted average shares outstanding

Basic

166,234,749 (a)

222,222,197 (b)

Diluted

174,517,244 (a)

223,320,457 (b)

(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 Inc. (post-IPO period).

b)

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

Reconciliation of Net Income to Adjusted EBITDA, Adjusted

Three Months Ended

Three Months Ended

EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin

March 31, 2020

March 31, 2019

(in thousands)

Net income

$

62,485

$

42,352

Net interest income

(699)

(858)

Depreciation and amortization

37,176

33,503

Stock-based compensation expense(1)

3,497

 —

Provision for income taxes

15,829

4,783

Unrealized foreign exchange (gains) / losses

1,164

(293)

Loss from revaluation of foreign denominated cash(2)

198

860

Adjusted EBITDA

$

119,650

$

80,347

Less: Depreciation and amortization

(37,176)

(33,503)

Add: Acquisition and Refinitiv Transaction related D&A(3)

26,273

23,209

Adjusted EBIT

$

108,747

$

70,053

Adjusted EBITDA margin(4)

51.0

%

43.0

%

Adjusted EBIT margin(4)

46.4

%

37.5

%

(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. Represents non-cash stock-based compensation expense associated with the Special Option Award discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation”  in the 2019 Form 10-K, incorporated by reference in this prospectus, 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 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)

For the three months ended March 31, 2020 and 2019, Adjusted EBITDA margin increased compared to the prior year period by 799 basis points, or 678 basis points on a constant currency basis. For the three months ended March 31, 2020 and 2019, Adjusted EBIT margin increased compared to the prior year period by 885 basis points, or 767 basis points on a constant currency basis. The changes in Adjusted EBITDA margin and Adjusted EBIT margin on a constant currency basis, which are non-GAAP financial measures, are defined as the changes in Adjusted EBITDA margin and Adjusted EBIT margin excluding the effects of foreign currency fluctuations. Adjusted EBITDA margin and Adjusted EBIT margin excluding the effects of foreign currency fluctuations are calculated by translating the current period and prior period’s results using the average exchange rates for the prior period. We use the changes in Adjusted EBITDA margin and Adjusted EBIT margin on a constant currency basis as supplemental metrics to evaluate our underlying margin performance between periods by removing the impact of foreign currency fluctuations. We believe that providing changes in Adjusted EBITDA margin and Adjusted EBIT margin on a constant currency basis provide useful comparisons of our Adjusted EBITDA margin and Adjusted EBIT margin and trends between periods.

Reconciliation of Net Income to

Three Months Ended

Three Months Ended

Adjusted Net Income and Adjusted Diluted EPS

March 31, 2020

March 31, 2019

(in thousands)

Earnings per diluted share(1)

$

0.25

(a)

$

0.19

(b)

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

 —

42,352

Net income attributable to Tradeweb Markets Inc. (1)

43,928

 —

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

18,557

 —

Net income

$

62,485

$

42,352

Provision for income taxes

15,829

4,783

Acquisition and Refinitiv Transaction related D&A(3)

26,273

23,209

Stock-based compensation expense(4)

3,497

 —

Unrealized foreign exchange (gains) / losses

1,164

(293)

Loss from revaluation of foreign denominated cash(5)

198

860

Adjusted Net Income before income taxes

109,446

70,911

Adjusted income taxes(6)

(24,078)

(18,721)

Adjusted Net Income

$

85,368

$

52,190

Adjusted Diluted EPS (1)(7)

$

0.37

(a)

$

0.23

(b)

(1)

 As a result of the Reorganization Transactions and the IPO completed in April 2019, certain earnings information is being presented separately for Tradeweb Markets LLC and Tradeweb Markets Inc.

(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 held by non-controlling 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 discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation”  in the 2019 Form 10-K, incorporated by reference in this prospectus, 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 corporate income taxes at an assumed effective tax rate of 22.0% and 26.4% applied to Adjusted Net Income before income taxes for the three months ended March 31, 2020 and March 31, 2019, respectively.

(7)

Due to the Reorganization Transactions and the IPO completed in April 2019, shares outstanding during the three months ended March 31, 2019 represent shares of TWM LLC (pre-IPO period) and shares outstanding during the three months ended March 31, 2020 represent shares of Class A and Class B common stock of Tradeweb Markets, Inc. (post-IPO period). For a summary of the calculation of Adjusted Diluted EPS, see “Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding”  below.

Reconciliation of Diluted Weighted Average Shares Outstanding to

Three Months Ended

Three Months Ended

Adjusted Diluted Weighted Average Shares Outstanding

March 31, 2020

March 31, 2019

Diluted weighted average TWM LLC shares outstanding

 —

223,320,457

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

174,517,244

 —

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

57,644,547

 —

Adjusted diluted weighted average shares outstanding

232,161,791

223,320,457

Adjusted Net Income (in thousands)

$

85,368

$

52,190

Adjusted Diluted EPS

$

0.37

$

0.23

(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.

Three Months Ended

Three Months Ended

Reconciliation of Operating Expenses to Adjusted Expenses

March 31, 2020

March 31, 2019

(in thousands)

Operating Expenses

$

156,991

$

140,515

Acquisition and Refinitiv Transaction related D&A(1)

(26,273)

(23,209)

Stock-based compensation expense(2)

(3,497)

 —

Unrealized foreign exchange gains / (losses)

(1,164)

293

Loss from revaluation of foreign-denominated cash(3)

(198)

(860)

Adjusted Expenses

$

125,859

$

116,739

(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.

Reconciliation of Cash Flows from Operating Activities to

Trailing Twelve Months

Free Cash Flow

March 31, 2020

Cash flow from operating activities

$

289,245

Less: Capitalization of software development costs

(35,744)

Less: Purchases of furniture, equipment and leasehold improvements

(17,079)

Free Cash Flow

$

236,422

Three Months Ended

EPS: Net income attributable to Tradeweb Markets LLC(1)

March 31, 2019

(in thousands, except share and per share amounts)

Numerator:

Net income attributable to Tradeweb Markets LLC

$

42,352

Denominator:

Weighted average LLC Interests outstanding - Basic

222,222,197

Dilutive effect of equity-settled PRSUs

1,098,260

Weighted average LLC Interests outstanding - Diluted

223,320,457

Earnings per share - Basic

$

0.19

Earnings per share - Diluted

$

0.19

(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.

Three Months Ended

EPS: Net income attributable to Tradeweb Markets Inc.

March 31, 2020

(in thousands, except share and per share amounts)

Numerator:

Net income attributable to Tradeweb Markets Inc.

$

43,928

Denominator:

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

166,234,749

Dilutive effect of equity-settled PRSUs

2,038,422

Dilutive effect of options

6,221,549

Dilutive effect of RSUs

22,524

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

174,517,244

Earnings per share - Basic

$

0.26

Earnings per share - Diluted

$

0.25

Three Months Ended

Three Months Ended

March 31, 2020

March 31, 2019

$ Change

% Change

Revenues

Variable

Fixed

Variable

Fixed

Variable

Fixed

Variable

Fixed

(dollars in thousands)

Rates

$

75,541

$

50,498

$

53,650

$

50,440

$

21,891

$

58

40.8

%

0.1

%

Credit

48,575

5,403

34,358

5,077

14,217

326

41.4

%

6.4

%

Equities

17,100

2,334

10,152

1,646

6,948

688

68.4

%

41.8

%

Money Markets

7,137

4,071

5,823

3,739

1,314

332

22.6

%

8.9

%

Market Data

 —

18,562

 —

16,903

 —

1,659

 —

9.8

%

Other

 —

5,385

 —

5,004

 —

381

 —

7.6

%

Gross revenue

$

148,353

$

86,253

$

103,983

$

82,809

$

44,370

$

3,444

42.7

%

4.2

%

Three Months Ended

Three Months Ended

YoY

March 31, 2020

March 31, 2019

% Change

Rates

$

2.05

$

2.04

0.5

%

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

$

2.39

$

2.09

14.4

%

Credit

$

23.46

$

34.02

(31.0)

%

Equities

$

15.39

$

21.15

(27.2)

%

Money Markets

$

0.45

$

0.49

(8.2)

%

Total Fees per Million

$

2.65

$

2.62

1.1

%

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

$

2.93

$

2.67

9.7

%

Three Months Ended

March 31, 2020

March 31, 2019

ADV 

ADV

Volume

ADV

Volume

% Change

(dollars in millions)

Rates

$

590,773

$

36,867,838

$

429,226

$

26,357,344

37.6

%

Credit

32,997

2,070,811

16,386

1,010,037

101.4

%

Equities

17,793

1,111,272

7,771

479,937

129.0

%

Money Markets

256,193

15,948,560

192,264

11,771,636

33.3

%

Total

$

897,756

$

55,998,481

$

645,647

$

39,618,954

39.0

%

2020 Q1

2019 Q1

YoY

Asset Class

Product

ADV (USD mm)

Volume (USD mm)

ADV (USD mm)

Volume (USD mm)

ADV

Rates

Cash

U.S. Government Bonds

European Government Bonds

Mortgages

Other Government Bonds

Derivatives

Swaps/Swaptions ≥ 1Y

Swaps/Swaptions < 1Y

Futures

Total

Credit

Cash

U.S. High-Grade

U.S. High-Yield

European Credit

Municipal Bonds

Chinese Bonds

Other Credit Bonds

Derivatives

Swaps

Total

Money Markets

Cash

Repurchase Agreements (Repo)

Other Money Markets

Total

Equities

Cash

U.S. ETFs

Europe ETFs

Derivatives

Options/Convertibles/Swaps

Futures

Total

ADV (USD mm)

Average Daily Trades

ADV (USD mm)

Average Daily Trades

YoY

Total