Tradeweb Reports Third Quarter 2020 Financial Results
NEW YORK--(BUSINESS WIRE)--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 ended September 30, 2020.
$212.9 million quarterly gross revenues increased 5.9% (4.7% on a constant currency basis) year over year
$780.3 billion average daily volume (“ADV”), a decrease of 4.5% year over year. Quarterly records for TRACE share in U.S. High Grade Credit, U.S. High Grade Credit Fully Electronic, and U.S. High Yield Credit. Quarterly records for ADV in China Bonds and Repos
$47.0 million GAAP net income, a decrease of 3.1%, due to a higher tax rate and lower interest rates on cash balances. $69.9 million adjusted net income, an increase of 13.5% from the prior year period
47.4% adjusted EBITDA margin or $100.9 million adjusted EBITDA for the quarter compared to 46.5% or $93.4 million, respectively, for the prior year period
$0.19 diluted earnings per share (“Diluted EPS”) and $0.30 adjusted diluted earnings per share
$0.08 per share quarterly cash dividend declared
Lee Olesky, CEO of Tradeweb Markets:
“Tradeweb’s business performed exceedingly well in the third quarter, as increased adoption of electronic trading and heightened debt issuance helped fuel record TRACE share in U.S. credit and higher volumes in U.S. treasuries, European government bonds and mortgages. We also saw broader interest in a range of trading protocols and tools including electronic portfolio trading, anonymous A2A trading and automated execution. Throughout the quarter we continued to innovate for our clients, including the launch of a new trading platform for mortgage originators and the introduction of a new channel to help foreign investors gain access to the local Chinese bond market.”
SELECT FINANCIAL |
3Q20 |
|
3Q19 |
|
Change |
Constant
|
|||||||||||
(dollars in thousands except per share amounts)(Unaudited) |
|||||||||||||||||
GAAP Financial Measures |
|||||||||||||||||
Gross revenue |
$ |
212,870 |
|
|
$ |
200,981 |
|
|
5.9 |
% |
4.7 |
% |
|||||
Rates |
$ |
115,766 |
|
|
$ |
115,505 |
|
|
0.2 |
% |
(1.0) |
% |
|||||
Credit |
$ |
50,216 |
|
|
$ |
39,578 |
|
|
26.9 |
% |
25.4 |
% |
|||||
Equities |
$ |
11,857 |
|
|
$ | 12,333 |
|
|
(3.9) |
% |
(6.3) |
% |
|||||
Money Markets |
$ |
10,491 |
|
|
$ |
10,480 |
|
|
0.1 |
% |
(0.7) |
% |
|||||
Market Data |
$ |
18,598 |
|
|
$ |
16,914 |
|
|
10.0 |
% |
9.2 |
% |
|||||
Other |
$ |
5,942 |
|
|
$ |
6,171 |
|
|
(3.7) |
% |
(3.7) |
% |
|||||
Net income |
$ |
47,048 |
|
|
$ |
48,578 |
|
|
(3.1) |
% |
|
|
|||||
| Net Income attributable to Tradeweb Markets Inc.(2) | $ | 36,812 |
|
$ | 29,612 |
24.3 |
% |
||||||||||
Diluted EPS |
$ |
0.19 |
|
|
$ |
0.20 |
|
|
(5.0) |
% |
|
|
|||||
Non-GAAP Financial Measures |
|||||||||||||||||
Adjusted EBITDA(1) |
$ |
100,913 |
|
|
$ |
93,449 |
|
|
8.0 |
% |
5.8 |
% |
|||||
Adjusted EBITDA margin(1) |
47.4 |
% |
46.5 |
% |
+91 |
bps |
+51 |
bps |
|||||||||
Adjusted EBIT(1) |
$ |
90,015 |
|
|
$ |
83,096 |
|
|
8.3 |
% |
5.9 |
% |
|||||
Adjusted EBIT margin(1) |
42.3 |
% |
41.3 |
% |
+94 |
bps |
+50 |
bps |
|||||||||
Adjusted Net Income(1) |
$ |
69,939 |
|
|
$ |
61,627 |
|
|
13.5 |
% |
11.0 |
% |
|||||
Adjusted Diluted EPS(1) |
$ |
0.30 |
|
|
$ |
0.27 |
|
|
11.1 |
% |
7.4 |
% |
|||||
(1) |
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS and constant currency growth 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. |
|
(2) |
Represents net income less net income attributable to non-controlling interests. |
| ADV (US $bn)
(Unaudited) |
|||||||||
Asset Class |
Product |
3Q20 |
3Q19 |
YoY |
|||||
Rates |
Cash |
311 |
|
285 |
|
9.3 |
% |
||
|
Derivatives |
179 |
|
279 |
|
(35.8) |
% |
||
|
Total |
490 |
|
563 |
|
(13.0) |
% |
||
Credit |
Cash |
7 |
|
5 |
|
29.0 |
% |
||
|
Derivatives |
13 |
|
12 |
|
6.6 |
% |
||
|
Total |
20 |
|
17 |
|
13.7 |
% |
||
Money Markets |
Cash |
262 |
|
229 |
|
14.3 |
% |
||
|
Total |
262 |
|
229 |
|
14.3 |
% |
||
Equities |
Cash |
5 |
|
4 |
|
20.2 |
% |
||
|
Derivatives |
4 |
|
3 |
|
27.3 |
% |
||
|
Total |
9 |
|
7 |
|
23.0 |
% |
||
|
Total |
780 |
|
817 |
|
(4.5) |
% |
||
DISCUSSION OF RESULTS
Rates – Revenues from rates of $115.8 million in the third quarter of 2020 increased 0.2% compared to the third quarter of 2019 (-1.0% on a constant currency basis). ADV in rates of $490.1 billion for the third quarter of 2020 decreased 13.0% compared with the third quarter of 2019. Reduced rates volatility led to lower trading volumes in interest rate swaps. This was partially offset by strong trading activity in U.S. treasuries fueled by elevated issuance, and strong trading activity in mortgages as low rates drove new home sales and refinancing activity.
Credit – Revenues from credit of $50.2 million in the third quarter of 2020 increased 26.9% compared to the third quarter of 2019 (25.4% on a constant currency basis) as continued growth in portfolio trading and anonymous trading protocols helped drive TRACE High Grade market share to a record 17.7% (7.7% fully electronic) and TRACE High Yield market share to a record 4.8% (2.5% fully electronic). ADV in credit of $19.6 billion for the third quarter increased 13.7% over the prior year period.
Money Markets – Revenues from money markets of $10.5 million in the third quarter of 2020 increased 0.1% compared to the third quarter of 2019 (-0.7% on a constant currency basis). ADV in money markets of $261.6 billion for the third quarter of 2020 increased 14.3% due to record volume in bilateral repurchase agreements.
Equities – Revenues from equities of $11.9 million in the third quarter of 2020 decreased 3.9% compared to the third quarter of 2019 (-6.3% on a constant currency basis). ADV in equities of $9.0 billion for the third quarter of 2020 increased 23.0%, while strength in U.S. ETF trading was offset by lower volumes in European ETFs.
Market Data – Revenues from market data of $18.6 million in the third quarter of 2020 increased 10.0% compared to the third quarter of 2019 (9.2% on a constant currency basis) due to delivery of additional data under our market data license agreements with Refinitiv.
Other – Revenues from other of $5.9 million in the third quarter of 2020 decreased 3.7% compared to the third quarter of 2019 (-3.7% on a constant currency basis).
Operating Expenses – Operating expenses of $154.3 million in the third quarter of 2020 increased 8.1% compared to the third quarter of 2019 due to higher employee compensation and benefits expense, as well as higher depreciation and amortization expense. Adjusted Expenses were $122.9 million in the third quarter of 2020, an increase of 4.2% from the prior year period, primarily due to higher employee compensation and benefits expense resulting from increased headcount, as well as higher technology and communications expense, partially offset by lower general and administrative expense. Please see "Non-GAAP Financial Measures" below for additional information.
CAPITAL MANAGEMENT
- $677.4 million in cash and cash equivalents and a fully undrawn $500 million credit facility at September 30, 2020.
- Capital expenditures and capitalization of software development: $10.2 million.
- Free cash flow for the trailing twelve months ended September 30, 2020 of $380.0 million up 47.9%. See “Non-GAAP Financial Measures” for additional information.
- The Board of Directors of Tradeweb Markets Inc. declared a quarterly cash dividend of $0.08 per share of Class A common stock and Class B common stock. The dividend will be payable on December 15, 2020 to stockholders of record as of December 1, 2020.
OTHER MATTERS
Updated Full-Year 2020 Guidance*
-
Adjusted Expenses: $495 - $505 million (lower half of range)
- Includes ~$5 million of technology & communications investments (data strategy and cybersecurity)
- Includes ~$7 - $8 million of G&A in Q4 excluding the impact of FX
- Acquisition and Refinitiv Transaction related depreciation and amortization expense: $110 million
- Assumed non-GAAP tax rate: 22.0%
- Capital expenditures and capitalization of software development: $45 - $50 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.
CONFERENCE CALL
Tradeweb Markets will hold a conference call to discuss third quarter 2020 results starting at 9:00 a.m. Eastern Time today, October 28, 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 3586933. After the conference call, an archived recording will be available at http://investors.tradeweb.com.
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 $780 billion in notional value traded per day over the past four fiscal quarters. For more information, please go to www.tradeweb.com.
TRADEWEB MARKETS INC.
|
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Transaction fees |
$ |
120,582 |
|
|
$ |
112,746 |
|
|
$ |
383,552 |
|
|
$ |
319,338 |
|
Subscription fees |
36,217 |
|
|
35,387 |
|
|
105,706 |
|
|
104,398 |
|
||||
Commissions |
39,593 |
|
|
37,590 |
|
|
120,201 |
|
|
108,200 |
|
||||
Refinitiv market data fees |
14,273 |
|
|
13,251 |
|
|
43,466 |
|
|
40,252 |
|
||||
Other |
2,205 |
|
|
2,007 |
|
|
6,658 |
|
|
6,070 |
|
||||
Gross revenue |
212,870 |
|
|
200,981 |
|
|
659,583 |
|
|
578,258 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Expenses |
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits |
83,967 |
|
|
79,644 |
|
|
263,353 |
|
|
252,912 |
|
||||
Depreciation and amortization |
38,857 |
|
|
35,133 |
|
|
113,952 |
|
|
102,928 |
|
||||
Technology and communications |
12,037 |
|
|
9,527 |
|
|
34,397 |
|
|
29,086 |
|
||||
General and administrative |
8,657 |
|
|
7,507 |
|
|
24,520 |
|
|
25,961 |
|
||||
Professional fees |
7,388 |
|
|
7,272 |
|
|
20,908 |
|
|
20,981 |
|
||||
Occupancy |
3,443 |
|
|
3,640 |
|
|
10,678 |
|
|
10,900 |
|
||||
Total expenses |
154,349 |
|
|
142,723 |
|
|
467,808 |
|
|
442,768 |
|
||||
Operating income |
58,521 |
|
|
58,258 |
|
|
191,775 |
|
|
135,490 |
|
||||
Net interest income (expense) |
(349) |
|
|
636 |
|
|
64 |
|
|
1,669 |
|
||||
Income before taxes |
58,172 |
|
|
58,894 |
|
|
191,839 |
|
|
137,159 |
|
||||
Provision for income taxes |
(11,124) |
|
|
(10,316) |
|
|
(39,898) |
|
|
(21,413) |
|
||||
Net income |
$ |
47,048 |
|
|
$ |
48,578 |
|
|
$ |
151,941 |
|
|
$ |
115,746 |
|
Less: Pre-IPO net income attributable to Tradeweb Markets LLC |
— |
|
|
— |
|
|
— |
|
|
42,352 |
|
||||
Net income attributable to Tradeweb Markets Inc. and non-controlling interests |
47,048 |
|
|
48,578 |
|
|
151,941 |
|
|
73,394 |
|
||||
Less: Net income attributable to non-controlling interests |
10,236 |
|
|
18,966 |
|
|
40,705 |
|
|
30,954 |
|
||||
Net income attributable to Tradeweb Markets Inc. |
$ |
36,812 |
|
|
$ |
29,612 |
|
|
$ |
111,236 |
|
|
$ |
42,440 |
|
|
|
|
|
|
|
|
|
||||||||
EPS calculations for post-IPO and pre-IPO periods (1) |
|
|
|
|
|
|
|
||||||||
Earnings per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.20(a) |
|
|
$ |
0.21(a) |
|
|
$ |
0.63(a) |
|
|
$ 0.19(b) / 0.30(a) |
||
Diluted |
$ |
0.19(a) |
|
|
$ |
0.20(a) |
|
|
$ |
0.60(a) |
|
|
$ 0.19(b) / 0.28(a) |
||
Weighted average shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
187,774,170(a) |
|
142,935,206(a) |
|
177,257,994(a) |
|
222,222,197(b) /
|
||||||||
Diluted |
194,955,695(a) |
|
151,362,643(a) |
|
185,026,108(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). |
|
|
See “Basic and Diluted EPS Calculations” and “Presentation” below for additional information |
TRADEWEB MARKETS INC.
|
|||||||||||||
Reconciliation of Net Income to Adjusted EBITDA, Adjusted
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||
|
2020 |
2019 |
|
2020 |
|
2019 |
|
||||||
(in thousands) |
|||||||||||||
Net income |
|
$ |
47,048 |
|
$ |
48,578 |
|
$ |
151,941 |
|
$ |
115,746 |
|
Net interest income (expense) |
|
349 |
|
(636) |
|
(64) |
|
(1,669) |
|
||||
Depreciation and amortization |
|
38,857 |
|
35,133 |
|
113,952 |
|
102,928 |
|
||||
Stock-based compensation expense(1) |
|
1,816 |
|
1,995 |
|
10,308 |
|
22,398 |
|
||||
Provision for income taxes |
|
11,124 |
|
10,316 |
|
39,898 |
|
21,413 |
|
||||
Unrealized foreign exchange (gains) / losses |
|
1,492 |
|
(2,499) |
|
5,449 |
|
(1,215) |
|
||||
(Gain)/Loss from revaluation of foreign denominated cash(2) |
|
227 |
|
562 |
|
388 |
|
1,120 |
|
||||
Adjusted EBITDA |
|
$ |
100,913 |
|
$ |
93,449 |
|
$ |
321,872 |
|
$ |
260,721 |
|
Less: Depreciation and amortization |
|
(38,857) |
|
(35,133) |
|
(113,952) |
|
(102,928) |
|
||||
Add: Acquisition and Refinitiv Transaction related D&A(3) |
|
27,959 |
|
24,780 |
|
81,363 |
|
72,122 |
|
||||
Adjusted EBIT |
|
$ |
90,015 |
|
$ |
83,096 |
|
$ |
289,283 |
|
$ |
229,915 |
|
Adjusted EBITDA margin(4) |
|
47.4 |
% |
46.5 |
% |
48.8 |
% |
45.1 |
% |
||||
Adjusted EBIT margin(4) |
|
42.3 |
% |
41.3 |
% |
43.9 |
% |
39.8 |
% |
||||
(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 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 period. |
|
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Net Income to |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
Adjusted Net Income and Adjusted Diluted EPS |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
||||||||
(in thousands, except per share amounts) |
|||||||||||||||||
Earnings per diluted share(1) |
|
$ |
0.19 |
|
(a) |
$ |
0.20 |
|
(a) |
$ |
0.60 |
|
(a) |
$ 0.19 / 0.28 |
(b)/(a) |
||
Pre-IPO net income attributable to Tradeweb Markets LLC (1) |
|
— |
|
|
— |
|
|
— |
|
|
42,352 |
|
(b) |
||||
Net income attributable to Tradeweb Markets Inc.(1) |
|
36,812 |
|
(a) |
29,612 |
|
(a) |
111,236 |
|
(a) |
42,440 |
|
(a) |
||||
Net income attributable to non-controlling interests (1)(2) |
|
10,236 |
|
(a) |
18,966 |
|
(a) |
40,705 |
|
(a) |
30,954 |
|
(a) |
||||
Net income(1) |
|
$ |
47,048 |
|
(a) |
$ |
48,578 |
|
(a) |
$ |
151,941 |
|
(a) |
$ |
115,746 |
|
(b)/(a) |
Provision for income taxes |
|
11,124 |
|
|
10,316 |
|
|
39,898 |
|
|
21,413 |
|
|
||||
Acquisition and Refinitiv Transaction related D&A(3) |
|
27,959 |
|
|
24,780 |
|
|
81,363 |
|
|
72,122 |
|
|
||||
Stock-based compensation expense(4) |
|
1,816 |
|
|
1,995 |
|
|
10,308 |
|
|
22,398 |
|
|
||||
Unrealized foreign exchange (gains) / losses |
|
1,492 |
|
|
(2,499) |
|
|
5,449 |
|
|
(1,215) |
|
|
||||
Loss from revaluation of foreign denominated cash(5) |
|
227 |
|
|
562 |
|
|
388 |
|
|
1,120 |
|
|
||||
Adjusted Net Income before income taxes |
|
89,666 |
|
|
83,732 |
|
|
289,347 |
|
|
231,584 |
|
|
||||
Adjusted income taxes(6) |
|
(19,727) |
|
|
(22,105) |
|
|
(63,656) |
|
|
(61,139) |
|
|
||||
Adjusted Net Income |
|
$ |
69,939 |
|
|
$ |
61,627 |
|
|
$ |
225,691 |
|
|
$ |
170,445 |
|
|
Adjusted Diluted EPS(1)(7) |
|
$ |
0.30 |
|
(a) |
$ |
0.27 |
|
(a) |
$ |
0.97 |
|
(a) |
$ 0.23 / 0.51 |
(b)/(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 Inc. (post-IPO period). |
||
b) Presents information for Tradeweb Markets LLC (pre-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 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 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 and nine months ended September 30, 2020 and 2019, respectively. 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). Shares outstanding during the three and nine months ended September 30, 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. |
The following table summarizes the calculation of Adjusted Diluted EPS for the periods presented:
Reconciliation of Diluted Weighted Average
|
|
|
|
|
|
|
|
Pre-IPO Period |
|
Post-IPO Period |
||||||||||
|
Three Months
|
|
Three Months
|
|
Nine Months
|
|
Nine Months
|
|
Nine Months
|
|||||||||||
|
|
|||||||||||||||||||
Diluted weighted average TWM LLC shares outstanding |
|
— |
|
|
— |
|
|
— |
|
|
223,320,457 |
|
|
— |
|
|||||
Diluted weighted average shares of Class A and Class B common stock outstanding |
|
194,955,695 |
|
|
151,362,643 |
|
|
185,026,108 |
|
|
— |
|
|
151,158,760 |
|
|||||
Assumed exchange of LLC interests for shares of Class A or Class B common stock (1) |
|
39,513,246 |
|
|
79,289,005 |
|
|
48,397,598 |
|
|
— |
|
|
79,289,005 |
|
|||||
Adjusted diluted weighted average shares outstanding |
|
234,468,941 |
|
|
230,651,648 |
|
|
233,423,706 |
|
|
223,320,457 |
|
|
230,447,765 |
|
|||||
Adjusted Net Income (in thousands) |
|
$ |
69,939 |
|
|
$ |
61,627 |
|
|
$ |
225,691 |
|
|
$ |
52,190 |
|
|
$ |
118,255 |
|
Adjusted Diluted EPS |
|
$ |
0.30 |
|
|
$ |
0.27 |
|
|
$ |
0.97 |
|
|
$ |
0.23 |
|
|
$ |
0.51 |
|
(1) |
Assumes the full exchange of all outstanding LLC Interests held by non-controlling 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. |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Operating Expenses to Adjusted Expenses |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
(in thousands) |
||||||||||||||||
Operating Expenses |
|
$ |
154,349 |
|
|
$ |
142,723 |
|
|
$ |
467,808 |
|
|
$ |
442,768 |
|
Acquisition and Refinitiv Transaction related D&A(1) |
|
(27,959) |
|
|
(24,780) |
|
|
(81,363) |
|
|
(72,122) |
|
||||
Stock-based compensation expense(2) |
|
(1,816) |
|
|
(1,995) |
|
|
(10,308) |
|
|
(22,398) |
|
||||
Unrealized foreign exchange gains / (losses) |
|
(1,492) |
|
|
2,499 |
|
|
(5,449) |
|
|
1,215 |
|
||||
Loss from revaluation of foreign-denominated cash(3) |
|
(227) |
|
|
(562) |
|
|
(388) |
|
|
(1,120) |
|
||||
Adjusted Expenses |
|
$ |
122,855 |
|
|
$ |
117,885 |
|
|
$ |
370,300 |
|
|
$ |
348,343 |
|
| (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 Free Cash Flow |
|
Trailing Twelve Months
|
||
|
|
(in thousands) |
||
Cash flow from operating activities |
|
$ |
424,070 |
|
Less: Capitalization of software development costs |
|
(30,345) |
|
|
Less: Purchases of furniture, equipment and leasehold improvements |
|
(13,698) |
|
|
Free Cash Flow |
|
$ |
380,027 |
|
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 Inc. (post-IPO period) and Tradeweb Markets LLC (pre-IPO period):
EPS: Post-IPO net income attributable to Tradeweb Markets Inc. |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
||||||||
Post-IPO net income attributable to Tradeweb Markets Inc. |
|
$ |
36,812 |
|
|
$ |
29,612 |
|
|
$ |
111,236 |
|
|
$ |
42,440 |
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator: |
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of Class A and Class B common stock outstanding - Basic |
|
187,774,170 |
|
|
142,935,206 |
|
|
177,257,994 |
|
|
142,934,221 |
|
||||
Dilutive effect of equity-settled PRSUs |
|
2,584,192 |
|
|
2,492,381 |
|
|
2,371,727 |
|
|
2,355,938 |
|
||||
Dilutive effect of options |
|
4,402,391 |
|
|
5,935,056 |
|
|
5,264,106 |
|
|
5,868,601 |
|
||||
Dilutive effect of RSUs |
|
194,942 |
|
|
— |
|
|
132,281 |
|
|
— |
|
||||
Weighted average shares of Class A and Class B common stock outstanding - Diluted |
|
|
194,955,695 |
|
|
|
151,362,643 |
|
|
|
185,026,108 |
|
|
|
151,158,760 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - Basic |
|
$ |
0.20 |
|
|
$ |
0.21 |
|
|
$ |
0.63 |
|
|
$ |
0.30 |
|
Earnings per share - Diluted |
|
$ |
0.19 |
|
|
$ |
0.20 |
|
|
$ |
0.60 |
|
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
EPS: Pre-IPO net income attributable to Tradeweb Markets LLC(1) |
|
|
|
|
|
|
|
Nine Months Ended |
||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
||||||||
Pre-IPO 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 period has 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. |
TRADEWEB MARKETS INC.
|
||||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
|
|||||||||||||||||||||||
|
|
September 30,
|
|
September 30,
|
|
$ Change |
|
% Change |
||||||||||||||||||||||||
Revenues |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
|
Variable |
|
Fixed |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||||||||||||||
Rates |
|
$ |
64,139 |
|
|
$ |
51,627 |
|
|
$ |
64,885 |
|
|
$ |
50,620 |
|
|
$ |
(746) |
|
|
$ |
1,007 |
|
|
(1.1) |
|
% |
|
2.0 |
|
% |
Credit |
|
44,278 |
|
|
5,938 |
|
|
34,417 |
|
|
5,161 |
|
|
9,861 |
|
|
777 |
|
|
28.7 |
|
% |
|
15.1 |
|
% |
||||||
Equities |
|
9,329 |
|
|
2,528 |
|
|
9,896 |
|
|
2,437 |
|
|
(567) |
|
|
91 |
|
|
(5.7) |
|
% |
|
3.7 |
|
% |
||||||
Money Markets |
|
6,390 |
|
|
4,101 |
|
|
6,743 |
|
|
3,737 |
|
|
(353) |
|
|
364 |
|
|
(5.2) |
|
% |
|
9.7 |
|
% |
||||||
Market Data |
|
— |
|
|
18,598 |
|
|
— |
|
|
16,914 |
|
|
— |
|
|
1,684 |
|
|
— |
|
% |
|
10.0 |
|
% |
||||||
Other |
|
— |
|
|
5,942 |
|
|
— |
|
|
6,171 |
|
|
— |
|
|
(229) |
|
|
— |
|
% |
|
(3.7) |
|
% |
||||||
Gross revenue |
|
$ |
124,136 |
|
|
$ |
88,734 |
|
|
$ |
115,941 |
|
|
$ |
85,040 |
|
|
$ |
8,195 |
|
|
$ |
3,694 |
|
|
7.1 |
|
% |
|
4.3 |
|
% |
Contacts
Investor Relations
Ashley Serrao + 1 646 430 6027
Ashley.Serrao@Tradeweb.com
Media Relations
Daniel Noonan + 1 646 767 4677
Daniel.Noonan@Tradeweb.com
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