NEW YORK–(BUSINESS WIRE)–The first line under OTHER MATTERS, Updated Full-Year 2023 Guidance* should read: Adjusted Expenses: $670 – 695 million (instead of Adjusted Expenses: $670 – 659 million).
The updated release reads:
TRADEWEB REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS
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, 2023.
$328.4 million quarterly revenues, an increase of 14.4% (12.5% on a constant currency basis) compared to prior year period
$1.4 trillion average daily volume (“ADV”) for the quarter, an increase of 29.6% compared to prior year period; quarterly ADV records in fully electronic U.S. High Grade credit, global repurchase agreements, Chinese bonds and swaps/swaptions ≥ 1-year; record 16.6% share of fully electronic U.S. High Grade TRACE and a record 7.8% share of fully electronic U.S. High Yield TRACE
$111.6 million net income and $130.8 million adjusted net income for the quarter, increases of 36.9% and 22.8% respectively from prior year period
51.9% adjusted EBITDA margin and $170.4 million adjusted EBITDA for the quarter, compared to 51.0% and $146.3 million respectively for prior year period
$0.46 diluted earnings per share (“Diluted EPS”) for the quarter and $0.55 adjusted diluted earnings per share
$0.09 per share quarterly cash dividend declared; $4.9 million of shares repurchased
Billy Hult, CEO of Tradeweb:
“Tradeweb delivered record third-quarter revenues, as heightened focus on fixed income and a sustained period of high interest rates dominated institutional, wholesale and retail client sectors. Reflecting the breadth of Tradeweb’s business, our nearly 30% year-over-year increase in quarterly ADV was fueled by strong volumes in rates, credit, equities and money markets. We continued to grow market share in credit, where our record share of fully-electronic U.S. High Grade TRACE increased by 263 bps compared to the prior year period – and has more than quadrupled over the past five years. We made continued progress against our strategic growth priorities with the closing of the Yieldbroker acquisition during the third quarter. Today, we also announced a new licensing agreement with LSEG Data & Analytics (Refinitiv), allowing LSEG to distribute our market data while providing Tradeweb with increased revenue and flexibility as we grow our market data offering.”
|
SELECT FINANCIAL RESULTS |
|
3Q23 |
|
|
3Q22 |
|
Change |
Constant Currency Change(1) |
||||||
|
(dollars in thousands except per share amounts)(Unaudited) |
|
|
|
|
|
|
||||||||
|
GAAP Financial Measures |
||||||||||||||
|
Total revenue |
$ |
328,357 |
|
$ |
287,115 |
|
14.4 |
% |
12.5 |
% |
||||
|
Rates |
$ |
172,832 |
|
$ |
148,167 |
|
16.6 |
% |
14.6 |
% |
||||
|
Credit |
$ |
90,062 |
|
$ |
78,101 |
|
15.3 |
% |
13.8 |
% |
||||
|
Equities |
$ |
20,890 |
|
$ |
21,277 |
|
(1.8) |
% |
(4.8) |
% |
||||
|
Money Markets |
$ |
15,763 |
|
$ |
12,969 |
|
21.5 |
% |
20.0 |
% |
||||
|
Market Data |
$ |
22,956 |
|
$ |
21,222 |
|
8.2 |
% |
6.9 |
% |
||||
|
Other |
$ |
5,854 |
|
$ |
5,379 |
|
8.8 |
% |
8.8 |
% |
||||
|
Net income |
$ |
111,630 |
|
$ |
81,566 |
|
36.9 |
% |
|
|
||||
| Net income attributable to Tradeweb Markets Inc. (2) |
$ |
98,614 |
$ |
69,083 |
42.7 |
% | ||||||||
|
Diluted EPS |
$ |
0.46 |
|
$ |
0.33 |
|
39.4 |
% |
|
|
||||
|
Net income margin |
|
34.0 |
% |
|
28.4 |
% |
+559 |
bps |
|
|
||||
|
Non-GAAP Financial Measures |
||||||||||||||
|
Adjusted EBITDA (1) |
$ |
170,360 |
|
$ |
146,334 |
|
16.4 |
% |
16.5 |
% |
||||
|
Adjusted EBITDA margin (1) |
|
51.9 |
% |
|
51.0 |
% |
+92 |
bps |
+181 |
bps |
||||
|
Adjusted EBIT (1) |
$ |
155,772 |
|
$ |
133,114 |
|
17.0 |
% |
17.2 |
% |
||||
|
Adjusted EBIT margin (1) |
|
47.4 |
% |
|
46.4 |
% |
+108 |
bps |
+192 |
bps |
||||
|
Adjusted Net Income (1) |
$ |
130,794 |
|
$ |
106,491 |
|
22.8 |
% |
23.0 |
% |
||||
|
Adjusted Diluted EPS (1) |
$ |
0.55 |
|
$ |
0.45 |
|
22.2 |
% |
22.2 |
% |
||||
|
(1) |
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted Net Income, Adjusted Diluted EPS and constant currency change 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 |
|
3Q23 |
|
3Q22 |
YoY |
||||
|
Rates |
Cash |
$ |
361 |
$ |
324 |
11.5 |
% |
|||
|
|
Derivatives |
|
492 |
|
329 |
49.7 |
% |
|||
|
|
Total |
|
853 |
|
653 |
30.7 |
% |
|||
|
Credit |
Cash |
|
13 |
|
9 |
39.6 |
% |
|||
|
|
Derivatives |
|
17 |
|
20 |
(15.3) |
% |
|||
|
|
Total |
|
30 |
|
29 |
2.1 |
% |
|||
|
Equities |
Cash |
|
9 |
|
9 |
7.7 |
% |
|||
|
|
Derivatives |
|
9 |
|
7 |
34.8 |
% |
|||
|
|
Total |
|
19 |
|
16 |
19.7 |
% |
|||
|
Money Markets |
Cash |
|
522 |
|
401 |
30.3 |
% |
|||
|
|
Total |
|
522 |
|
401 |
30.3 |
% |
|||
|
|
Total |
$ |
1,424 |
$ |
1,099 |
29.6 |
% |
|||
DISCUSSION OF RESULTS
Rates – Revenues of $172.8 million in the third quarter of 2023 increased 16.6% compared to prior year period (14.6% increase on a constant currency basis). Rates ADV was up 30.7% from prior year period, as heightened interest rate volatility drove record volume in swaps/swaptions ≥ 1-year. U.S. and European government bonds reported double-digit ADV increases from prior year period, supported by sustained rates market volatility, while Mortgages ADV was up 7.3% reflecting increased trading activity across institutional, wholesale, and retail client sectors.
Credit – Revenues of $90.1 million in the third quarter of 2023 increased 15.3% compared to prior year period (13.8% increase on a constant currency basis). Credit ADV was up 2.1% from prior year period, as strong U.S. credit volumes reflected continued client adoption across Tradeweb protocols, including request-for-quote (RFQ), Tradeweb AllTrade® and portfolio trading. European Credit ADV was up 34.4% from prior year period, while our share of fully electronic TRACE for U.S. High Grade was a record 16.6%, up 263 bps from prior year period, and U.S. High Yield was a record 7.8%, up 240 bps from prior year period.
Equities – Revenues of $20.9 million in the third quarter of 2023 decreased 1.8% compared to prior year period (4.8% decrease on a constant currency basis). Equities ADV was up 19.7% from prior year period, driven by strong U.S. ETF wholesale activity, while institutional client engagement remained robust. European ETF volumes reflected declining overall market volumes.
Money Markets – Revenues of $15.8 million in the third quarter of 2023 increased 21.5% compared to prior year period (20.0% increase on a constant currency basis). Money Markets ADV was up 30.3% from prior year period, led by record activity in global repurchase agreements and continued client adoption of Tradeweb’s electronic trading solutions.
Market Data – Revenues of $23.0 million in the third quarter of 2023 increased 8.2% compared to prior year period (6.9% increase on a constant currency basis). The increase was derived primarily from increased proprietary third party market data and trade reporting services (APA) revenue.
Other – Revenues of $5.9 million in the third quarter of 2023 increased 8.8% compared to prior year period (the same percentage increase on a constant currency basis). The increase was derived primarily from increased software development and implementation revenue on behalf of certain clients.
Operating Expenses of $203.6 million in the third quarter of 2023 increased 10.5% compared to $184.3 million in prior year period due to: higher expenses related to employee compensation and benefits associated with higher headcount and incentive compensation and commission tied to our operating performance, higher technology and communications expenses related to continued investment in our data strategy and infrastructure, higher professional fee expenses due to increased legal and other costs related to acquisitions and higher depreciation and amortization expenses, driven by increases in investment in our infrastructure and expenses relating to the assets acquired in connection with the Yieldbroker acquisition.
Adjusted Expenses of $172.6 million increased 12.1% (8.5% increase on a constant currency basis) compared to prior year period due to higher expenses related to employee compensation and benefits, higher technology and communications expenses and higher depreciation and amortization. Please see “Non-GAAP Financial Measures” below for additional information.
RECENT HIGHLIGHTS
October 2023
- Announced new licensing agreement with LSEG Data & Analytics (Refinitiv), allowing LSEG to distribute our market data while providing Tradeweb with increased revenue and flexibility.
- Announced strategic partnership with FTSE Russell to develop the next generation of fixed income pricing and index trading products. The collaboration is focused on expanding benchmark pricing, broadening index inclusion and enhancing trading functionality across fixed income products.
Third Quarter 2023
- Closed acquisition of Yieldbroker, a leading Australian trading platform for Australian and New Zealand government bonds and interest rate derivatives covering the institutional, wholesale and primary markets.
- Collaborated with FXall, LSEG’s leading electronic platform for global currency products, to launch Tradeweb’s FX Swap Workflow multi-asset digital solution, which links trading workflows in local currency EM bonds and FX swaps through a single user interface.
- Published our third annual 2022 Corporate Sustainability Report and our inaugural Task Force on Climate-Related Financial Disclosure (TCFD) Report.
- Announced that institutional clients executing Japanese Yen swaps on Tradeweb’s Multilateral Trading Facilities (MTFs) and SEFs can clear their transactions via the Japan Securities Clearing Corporation (JSCC).
- Recognized in numerous awards celebrating our company, as well as our outstanding and diverse talent, including: European Women in Finance, Excellence in Trading Platforms – Mélanie Hazan (Markets Media), European Women in Finance, Individual Achievement – Elodie Cany (Markets Media), 40 Innovators in Financial Markets – Billy Hult (TabbFORUM), Asia Risk Awards, OTC Platform of the Year (Risk.net), Asia Risk Awards, Buy-Side Trading System of the Year (Risk.net), Covered Bond Awards, Best Electronic Trading Platform (GlobalCapital), HFM Asia Services Awards, Most Disruptive Technology Solution (With Intelligence), Best Financial Services Companies to Work for (U.S. News & World Report), Best Workplaces for Innovators (Fast Company).
CAPITAL MANAGEMENT
- $1.5 billion in cash and cash equivalents and an undrawn $500 million credit facility at September 30, 2023
- Free cash flow for the trailing twelve months ended September 30, 2023 of $645.1 million, up 16.2% compared to prior year period. See “Non-GAAP Financial Measures” for additional information
- Non-acquisition cash capital expenditures and capitalization of software development in the third quarter 2023 of $17.9 million
- Invested $69.6 million in the acquisition of Yieldbroker, net of cash acquired
- During the third quarter of 2023, as part of its share repurchase program, Tradeweb purchased 65,054 shares of Class A common stock, at an average price of $75.28, for purchases totaling $4.9 million. As of September 30, 2023, a total of $239.8 million remained available for repurchase pursuant to the share repurchase program authorization
- $7.8 million in shares of Class A common stock were withheld in the third quarter of 2023 to satisfy tax obligations related to the exercise of stock options and vesting of restricted stock units and performance-based restricted stock units held by employees
- The Board declared a quarterly cash dividend of $0.09 per share of Class A common stock and Class B common stock. The dividend will be payable on December 15, 2023 to stockholders of record as of December 1, 2023
OTHER MATTERS
Updated Full-Year 2023 Guidance*
- Adjusted Expenses: $670 – 695 million
- Acquisition and Refinitiv Transaction related depreciation and amortization expense: $128 million
- Assumed non-GAAP tax rate: ~24% – 25%
- Cash costs of non-acquisition capital expenditures and capitalized software development: $56 – 63 million
Full-Year 2024 & 2025 Revenue Guidance Related to the Refinitiv Market Data Contract
- 2024 Revenues: ~ $80 million
- 2025 Revenues: ~ $90 million
*GAAP operating expenses and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement of foreign currency rates. Expense guidance assumes an average 2022 Sterling/US$ foreign exchange rate or 1.24.
CONFERENCE CALL
Tradeweb Markets will hold a conference call to discuss third quarter 2023 results starting at 9:30 AM EDT today, October 26, 2023. A live, audio webcast of the conference call along with related presentation materials will be available at https://investors.tradeweb.com/events-and-presentations.
- To join the call via audio webcast, click here: https://edge.media-server.com/mmc/p/g22t4gez/
- To join the call via phone, please register in advance here: https://register.vevent.com/register/BIe3255f53031643bcabc94aed666618ed. Registered participants will receive an email confirmation with a unique PIN to access the conference call.
An archived recording of the call will be available afterward at https://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 more than 2,500 clients in more than 65 countries. On average, Tradeweb facilitated more than $1.2 trillion 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 |
|
Nine Months Ended |
|||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME |
|
September 30, |
|
September 30, |
|||||||||||||
|
Dollars in Thousands, Except Per Share Data |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Revenues |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|||||||||
|
Transaction fees and commissions |
|
$ |
263,485 |
|
|
$ |
228,015 |
|
|
$ |
776,544 |
|
|
$ |
717,489 |
|
|
|
Subscription fees |
|
|
46,361 |
|
|
|
41,342 |
|
|
|
136,483 |
|
|
|
124,337 |
|
|
|
Refinitiv market data fees |
|
|
15,460 |
|
|
|
15,370 |
|
|
|
46,515 |
|
|
|
46,354 |
|
|
|
Other |
|
|
3,051 |
|
|
|
2,388 |
|
|
|
8,677 |
|
|
|
7,559 |
|
|
|
Total revenue |
|
|
328,357 |
|
|
|
287,115 |
|
|
|
968,219 |
|
|
|
895,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Expenses |
|
|
|
|
|
|
|
|
|||||||||
|
Employee compensation and benefits |
|
|
116,016 |
|
|
|
102,720 |
|
|
|
334,433 |
|
|
|
330,601 |
|
|
|
Depreciation and amortization |
|
|
46,559 |
|
|
|
44,778 |
|
|
|
137,850 |
|
|
|
133,998 |
|
|
|
Technology and communications |
|
|
19,733 |
|
|
|
16,816 |
|
|
|
56,001 |
|
|
|
48,626 |
|
|
|
General and administrative |
|
|
6,700 |
|
|
|
6,892 |
|
|
|
31,692 |
|
|
|
24,806 |
|
|
|
Professional fees |
|
|
10,479 |
|
|
|
9,400 |
|
|
|
32,321 |
|
|
|
25,832 |
|
|
|
Occupancy |
|
|
4,132 |
|
|
|
3,699 |
|
|
|
12,283 |
|
|
|
10,857 |
|
|
|
Total expenses |
|
|
203,619 |
|
|
|
184,305 |
|
|
|
604,580 |
|
|
|
574,720 |
|
|
|
Operating income |
|
|
124,738 |
|
|
|
102,810 |
|
|
|
363,639 |
|
|
|
321,019 |
|
|
|
Net interest income (expense) |
|
|
17,465 |
|
|
|
3,413 |
|
|
|
45,065 |
|
|
|
3,507 |
|
|
|
Other income (loss), net |
|
|
(1,907 |
) |
|
|
— |
|
|
|
(2,022 |
) |
|
|
— |
|
|
|
Income before taxes |
|
|
140,296 |
|
|
|
106,223 |
|
|
|
406,682 |
|
|
|
324,526 |
|
|
|
Provision for income taxes |
|
|
(28,666 |
) |
|
|
(24,657 |
) |
|
|
(90,920 |
) |
|
|
(63,915 |
) |
|
|
Net income |
|
|
111,630 |
|
|
|
81,566 |
|
|
|
315,762 |
|
|
|
260,611 |
|
|
|
Less: Net income attributable to non-controlling interests |
|
|
13,016 |
|
|
|
12,483 |
|
|
|
40,210 |
|
|
|
40,219 |
|
|
|
Net income attributable to Tradeweb Markets Inc. |
|
$ |
98,614 |
|
|
$ |
69,083 |
|
|
$ |
275,552 |
|
|
$ |
220,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Earnings per share attributable to Tradeweb Markets Inc. Class A and B common stockholders: |
|
|
|
|
|
|
|
|
|||||||||
|
Basic |
|
$ |
0.47 |
|
|
$ |
0.34 |
|
|
$ |
1.31 |
|
|
$ |
1.08 |
|
|
|
Diluted |
|
$ |
0.46 |
|
|
$ |
0.33 |
|
|
$ |
1.30 |
|
|
$ |
1.06 |
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|||||||||
|
Basic |
|
|
211,618,475 |
|
|
|
205,721,162 |
|
|
|
210,444,082 |
|
|
|
204,767,261 |
|
|
|
Diluted |
|
|
213,491,634 |
|
|
|
208,329,469 |
|
|
|
212,276,908 |
|
|
|
207,748,037 |
|
|
|
TRADEWEB MARKETS INC. |
|||||||||||||||||
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||||||||||
|
Dollars in Thousands, Except per Share Data |
|||||||||||||||||
|
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin |
|
September 30, |
|
September 30, |
|||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
||
|
|
|
(dollars in thousands) |
|||||||||||||||
|
Net income |
|
$ |
111,630 |
|
|
$ |
81,566 |
|
|
$ |
315,762 |
|
|
$ |
260,611 |
|
|
|
Merger and acquisition transaction and integration costs (1) |
|
|
4,614 |
|
|
|
43 |
|
|
|
6,411 |
|
|
|
40 |
|
|
|
Net interest (income) expense |
|
|
(17,465 |
) |
|
|
(3,413 |
) |
|
|
(45,065 |
) |
|
|
(3,507 |
) |
|
|
Depreciation and amortization |
|
|
46,559 |
|
|
|
44,778 |
|
|
|
137,850 |
|
|
|
133,998 |
|
|
|
Stock-based compensation expense (2) |
|
|
525 |
|
|
|
2,675 |
|
|
|
1,960 |
|
|
|
13,839 |
|
|
|
Provision for income taxes |
|
|
28,666 |
|
|
|
24,657 |
|
|
|
90,920 |
|
|
|
63,915 |
|
|
|
Foreign exchange (gains) / losses (3) |
|
|
(6,076 |
) |
|
|
(3,972 |
) |
|
|
(4,242 |
) |
|
|
(6,306 |
) |
|
|
Tax receivable agreement liability adjustment (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
Other (income) loss, net |
|
|
1,907 |
|
|
|
— |
|
|
|
2,022 |
|
|
|
— |
|
|
|
Adjusted EBITDA |
|
$ |
170,360 |
|
|
$ |
146,334 |
|
|
$ |
505,618 |
|
|
$ |
462,590 |
|
|
|
Less: Depreciation and amortization |
|
|
(46,559 |
) |
|
|
(44,778 |
) |
|
|
(137,850 |
) |
|
|
(133,998 |
) |
|
|
Add: D&A related to acquisitions and the Refinitiv Transaction (5) |
|
|
31,971 |
|
|
|
31,558 |
|
|
|
95,217 |
|
|
|
95,088 |
|
|
|
Adjusted EBIT |
|
$ |
155,772 |
|
|
$ |
133,114 |
|
|
$ |
462,985 |
|
|
$ |
423,680 |
|
|
|
Net income margin (6) |
|
|
34.0 |
% |
|
|
28.4 |
% |
|
|
32.6 |
% |
|
|
29.1 |
% |
|
|
Adjusted EBITDA margin (6) |
|
|
51.9 |
% |
|
|
51.0 |
% |
|
|
52.2 |
% |
|
|
51.6 |
% |
|
|
Adjusted EBIT margin (6) |
|
|
47.4 |
% |
|
|
46.4 |
% |
|
|
47.8 |
% |
|
|
47.3 |
% |
|
|
(1) |
Represents incremental direct costs associated with the acquisition and integration of completed and potential mergers and acquisitions. These costs generally include legal, consulting, advisory, due diligence, severance and other third party costs incurred that directly relate to the acquisition transaction or its integration. |
|
|
(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 the exercise of such options. During the three and nine months ended September 30, 2022, this adjustment also includes $2.0 million and $9.4 million, respectively, of non-cash accelerated stock-based compensation expense and related payroll taxes associated with our former CFO and former CEO. |
|
|
(3) |
Represents unrealized gain or loss recognized on foreign currency forward contracts and foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency. |
|
|
(4) |
Represents income recognized during the applicable period due to changes in the tax receivable agreement liability recorded in the consolidated statement of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions which impacted our tax savings. |
|
|
(5) |
Represents intangible asset and acquired software amortization resulting from acquisitions and intangible asset amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the application of pushdown accounting to the Refinitiv Transaction (where all assets were marked to fair value as of the closing date of the Refinitiv Transaction). |
|
|
(6) |
Net income margin, Adjusted EBITDA margin and Adjusted EBIT margin are defined as net income, Adjusted EBITDA and Adjusted EBIT, respectively, divided by revenue for the applicable period. |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS |
|
September 30, |
|
September 30, |
|||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
||
|
|
|
(in thousands, except per share amounts) |
|||||||||||||||
|
Earnings per diluted share |
|
$ |
0.46 |
|
|
$ |
0.33 |
|
|
$ |
1.30 |
|
|
$ |
1.06 |
|
|
|
Net income attributable to Tradeweb Markets Inc. |
|
$ |
98,614 |
|
|
$ |
69,083 |
|
|
$ |
275,552 |
|
|
$ |
220,392 |
|
|
|
Net income attributable to non-controlling interests (1) |
|
|
13,016 |
|
|
|
12,483 |
|
|
|
40,210 |
|
|
|
40,219 |
|
|
|
Net income |
|
|
111,630 |
|
|
|
81,566 |
|
|
|
315,762 |
|
|
|
260,611 |
|
|
|
Provision for income taxes |
|
|
28,666 |
|
|
|
24,657 |
|
|
|
90,920 |
|
|
|
63,915 |
|
|
|
Merger and acquisition transaction and integration costs (2) |
|
|
4,614 |
|
|
|
43 |
|
|
|
6,411 |
|
|
|
40 |
|
|
|
D&A related to acquisitions and the Refinitiv Transaction (3) |
|
|
31,971 |
|
|
|
31,558 |
|
|
|
95,217 |
|
|
|
95,088 |
|
|
|
Stock-based compensation expense (4) |
|
|
525 |
|
|
|
2,675 |
|
|
|
1,960 |
|
|
|
13,839 |
|
|
|
Foreign exchange (gains) / losses (5) |
|
|
(6,076 |
) |
|
|
(3,972 |
) |
|
|
(4,242 |
) |
|
|
(6,306 |
) |
|
|
Tax receivable agreement liability adjustment (6) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
Other (income) loss, net |
|
|
1,907 |
|
|
|
— |
|
|
|
2,022 |
|
|
|
— |
|
|
|
Adjusted Net Income before income taxes |
|
|
173,237 |
|
|
|
136,527 |
|
|
|
508,050 |
|
|
|
427,187 |
|
|
|
Adjusted income taxes (7) |
|
|
(42,443 |
) |
|
|
(30,036 |
) |
|
|
(124,472 |
) |
|
|
(93,982 |
) |
|
|
Adjusted Net Income |
|
$ |
130,794 |
|
|
$ |
106,491 |
|
|
$ |
383,578 |
|
|
$ |
333,205 |
|
|
|
Adjusted Diluted EPS (8) |
|
$ |
0.55 |
|
|
$ |
0.45 |
|
|
$ |
1.62 |
|
|
$ |
1.40 |
|
|
|
(1) |
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. |
|
|
(2) |
Represents incremental direct costs associated with the acquisition and integration of completed and potential mergers and acquisitions. These costs generally include legal, consulting, advisory, due diligence, severance and other third party costs incurred that directly relate to the acquisition transaction or its integration. |
|
|
(3) |
Represents intangible asset and acquired software amortization resulting from acquisitions and intangible asset amortization and increased tangible asset and capitalized software depreciation and amortization resulting from the application of pushdown accounting to the Refinitiv Transaction (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 the exercise of such options. During the three and nine months ended September 30, 2022, this adjustment also includes $2.0 million and $9.4 million, respectively, of non-cash accelerated stock-based compensation expense and related payroll taxes associated with our former CFO and former CEO. |
|
|
(5) |
Represents unrealized gain or loss recognized on foreign currency forward contracts and foreign exchange gain or loss from the revaluation of cash denominated in a different currency than the entity’s functional currency. |
|
|
(6) |
Represents income recognized during the applicable period due to changes in the tax receivable agreement liability recorded in the consolidated statement of financial condition as a result of changes in the mix of earnings, tax legislation and tax rates in various jurisdictions which impacted our tax savings. |
|
|
(7) |
Represents corporate income taxes at an assumed effective tax rate of 24.5% applied to Adjusted Net Income before income taxes for the three and nine months ended September 30, 2023 and 22.0% for the three and nine months ended September 30, 2022. |
|
|
(8) |
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 and Adjusted Diluted EPS” below. |
The following table summarizes the calculation of Adjusted Diluted EPS for the periods presented:
|
Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted |
|
Three Months Ended |
|
Nine Months Ended |
|||||||||
|
|
September 30, |
|
September 30, |
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
||
|
Diluted weighted average shares of Class A and Class B common stock outstanding |
|
|
213,491,634 |
|
|
208,329,469 |
|
|
212,276,908 |
|
|
207,748,037 |
|
|
Weighted average of other participating securities (1) |
|
|
265,681 |
|
|
246,238 |
|
|
266,453 |
|
|
121,115 |
|
|
Assumed exchange of LLC Interests for shares of Class A or Class B common stock (2) |
|
|
23,080,571 |
|
|
28,750,603 |
|
|
24,179,583 |
|
|
29,667,383 |
|
|
Adjusted diluted weighted average shares outstanding |
|
|
236,837,886 |
|
|
237,326,310 |
|
|
236,722,944 |
|
|
237,536,535 |
|
|
Adjusted Net Income (in thousands) |
|
$ |
130,794 |
|
$ |
106,491 |
|
$ |
383,578 |
|
$ |
333,205 |
|
|
Adjusted Diluted EPS |
|
$ |
0.55 |
|
$ |
0.45 |
|
$ |
1.62 |
|
$ |
1.40 |
|
Contacts
Investor Relations
Ashley Serrao
+ 1 646 430 6027
[email protected]
Media Relations
Daniel Noonan
+ 1 646 767 4677
[email protected]
