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 June 30, 2024.
$405.0 million quarterly revenues, an increase of 30.4% (30.8% on a constant currency basis) compared to prior year period
$1.9 trillion average daily volume (“ADV”) for the quarter, an increase of 48.3% compared to prior year period; quarterly ADV records in U.S. government bonds, fully electronic U.S. high yield credit and global repurchase agreements; record 18.8% share of fully electronic U.S. high grade TRACE
$136.4 million net income and $166.7 million adjusted net income for the quarter, increases of 33.8% and 34.7% respectively from prior year period
53.5% adjusted EBITDA margin and $216.5 million adjusted EBITDA for the quarter, compared to 52.5% and $163.1 million respectively for prior year period
$0.55 diluted earnings per share (“Diluted EPS”) and $0.70 adjusted diluted earnings per share for the quarter
$0.10 per share quarterly cash dividend declared
Billy Hult, CEO of Tradeweb:
“We delivered strong organic growth complemented by continued investment in our multi-asset class, global business, resulting in a 30.4% revenue increase year-over-year in Q2 2024. Tradeweb set quarterly ADV records in rates, money markets, and credit – where we also captured a record 18.8% share of fully electronic U.S. high grade TRACE. Markets continue to become increasingly interconnected, and our technology is helping to make that possible. Tradeweb recently became the first electronic trading platform to connect repo and IRS markets, and we expanded our partnership with FTSE Russell to produce benchmark U.S. treasury closing prices. In Q2 2024, we agreed to acquire ICD, an institutional investment technology provider for corporate treasury organizations, which would introduce Corporates as our fourth client channel. We also made a minority investment in Securitize, a leader in tokenizing real-world assets, and entered into a commercial agreement with blockchain infrastructure provider Alphaledger, reflecting our continued efforts to strategically place bets on technology that helps to advance our business. I'm proud of our strides this quarter and look forward to continually identifying new opportunities for our long-term growth.”
SELECT FINANCIAL RESULTS |
| 2Q24 |
|
| 2Q23 |
| Change | Constant Currency Change(1) | ||
(dollars in thousands except per share amounts)(Unaudited) | ||||||||||
GAAP Financial Measures | ||||||||||
Total revenue | $ | 404,951 |
| $ | 310,613 |
| 30.4 | % | 30.8 | % |
Rates | $ | 217,531 |
| $ | 160,354 |
| 35.7 | % | 36.4 | % |
Credit | $ | 111,324 |
| $ | 84,048 |
| 32.5 | % | 32.6 | % |
Equities | $ | 22,871 |
| $ | 22,146 |
| 3.3 | % | 3.8 | % |
Money Markets | $ | 18,045 |
| $ | 15,834 |
| 14.0 | % | 14.2 | % |
Market Data | $ | 29,227 |
| $ | 22,776 |
| 28.3 | % | 28.4 | % |
Other | $ | 5,953 |
| $ | 5,455 |
| 9.1 | % | 9.2 | % |
Net income | $ | 136,416 |
| $ | 101,939 |
| 33.8 | % |
|
|
| Net income attributable to Tradeweb Markets Inc. (2) | $ | 119,239 |
| $ | 89,082 |
| 33.9 | % | ||
Diluted EPS | $ | 0.55 |
| $ | 0.42 |
| 31.0 | % |
|
|
Net income margin |
| 33.7 | % |
| 32.8 | % | +87 | bps |
|
|
Non-GAAP Financial Measures | ||||||||||
Adjusted EBITDA (1) | $ | 216,533 |
| $ | 163,055 |
| 32.8 | % | 32.6 | % |
Adjusted EBITDA margin (1) |
| 53.5 | % |
| 52.5 | % | +98 | bps | +70 | bps |
Adjusted EBIT (1) | $ | 201,312 |
| $ | 148,797 |
| 35.3 | % | 35.0 | % |
Adjusted EBIT margin (1) |
| 49.7 | % |
| 47.9 | % | +181 | bps | +154 | bps |
Adjusted Net Income (1) | $ | 166,711 |
| $ | 123,749 |
| 34.7 | % | 34.5 | % |
Adjusted Diluted EPS (1) | $ | 0.70 |
| $ | 0.52 |
| 34.6 | % | 34.6 | % |
(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 |
| 2Q24 |
| 2Q23 | YoY | |
Rates | Cash | $ | 462 | $ | 345 | 34.1 | % |
| Derivatives |
| 787 |
| 429 | 83.4 | % |
| Total |
| 1,249 |
| 774 | 61.4 | % |
Credit | Cash |
| 17 |
| 11 | 58.5 | % |
| Derivatives |
| 13 |
| 8 | 53.8 | % |
| Total |
| 30 |
| 19 | 56.5 | % |
Equities | Cash |
| 10 |
| 10 | 0.2 | % |
| Derivatives |
| 11 |
| 9 | 19.9 | % |
| Total |
| 21 |
| 19 | 9.8 | % |
Money Markets | Cash |
| 622 |
| 484 | 28.4 | % |
| Total |
| 622 |
| 484 | 28.4 | % |
| Total | $ | 1,922 | $ | 1,297 | 48.3 | % |
DISCUSSION OF RESULTS
Rates – Revenues of $217.5 million in the second quarter of 2024 increased 35.7% compared to prior year period (increased 36.4% on a constant currency basis). Rates ADV was up 61.4% from prior year period, driven by strong volume in swaps/swaptions ≥ and < 1-year and record volume in U.S. government bonds. The addition of r8fin continued to contribute positively to wholesale volumes. European government bonds ADV was up 12.3% from prior year period, driven by market volatility and sustained primary issuance across Europe and the UK. Mortgages ADV was up 24.8%, reflecting robust to-be-announced (TBA) volumes led by heightened dollar roll and coupon swap activity as well as continued strong client adoption of our specified pool trading platform.
Credit – Revenues of $111.3 million in the second quarter of 2024 increased 32.5% compared to prior year period (increased 32.6% on a constant currency basis). Credit ADV was up 56.5% from prior year period, as strong U.S. credit volumes, including record ADV in fully-electronic U.S. high yield credit, reflected continued client adoption across Tradeweb products and protocols, including request-for-quote (RFQ), Tradeweb AllTrade® and portfolio trading. European credit ADV was up 19.7% from prior year period, driven by strong activity in portfolio trading and our unique dealer selection tool (SNAP IOI). We reported a record 18.8% share of fully electronic U.S. high grade TRACE, up 392 bps from prior year period, and a 7.6% share of fully electronic U.S. high yield TRACE, up 139 bps from prior year period.
Equities – Revenues of $22.9 million in the second quarter of 2024 increased 3.3% compared to prior year period (increased 3.8% on a constant currency basis). Equities ADV was up 9.8% from prior year period, driven by strong growth in equity derivatives while ETF market volumes remained muted as market volatility remained low.
Money Markets – Revenues of $18.0 million in the second quarter of 2024 increased 14.0% compared to prior year period (increased 14.2% on a constant currency basis). Money Markets ADV was up 28.4% from prior year period, led by record activity in global repurchase agreements and increased client adoption of Tradeweb's electronic trading solutions.
Market Data – Revenues of $29.2 million in the second quarter of 2024 increased 28.3% compared to prior year period (increased 28.4% on a constant currency basis). The increase was derived primarily from increased LSEG market data fees from the contract that was amended effective November 1, 2023 and proprietary third party market data revenue.
Other – Revenues of $6.0 million in the second quarter of 2024 increased 9.1% compared to prior year period (increased 9.2% on a constant currency basis).
Operating Expenses of $242.5 million in the second quarter of 2024 increased 24.8% compared to $194.3 million in prior year period, primarily due to an increase in incentive compensation expense tied to our financial performance, as well as an increase in headcount and related salaries and employee compensation and benefits to support our continued growth. During the quarter, we also incurred $2.9 million in incremental cash compensation expense and $0.3 million in accelerated stock-based compensation expense in connection with the departure of an executive effective September 30, 2024.
Adjusted Expenses of $203.6 million in the second quarter of 2024 increased 25.8% (increased 27.0% on a constant currency basis) compared to prior year period primarily due to higher expenses related to adjusted employee compensation and benefits, including $2.9 million in incremental cash compensation expense in the second quarter of 2024 in connection with the departure of an executive effective September 30, 2024. Please see "Non-GAAP Financial Measures" below for additional information.
RECENT HIGHLIGHTS
Second Quarter 2024
- Announced definitive agreement to acquire Institutional Cash Distributors (“ICD”), an institutional investment technology provider for corporate treasury organizations trading short-term investments, for $785 million, subject to customary adjustments, which will add Corporates as our fourth client channel alongside Institutional, Wholesale and Retail. The closing of the acquisition is subject to customary closing conditions and regulatory reviews.
- Announced organizational changes, including the addition of Amy Clack, who will join Tradeweb in August 2024 as Chief Administrative Officer (CAO), overseeing operations, business integration, risk and corporate services. In addition, Tradeweb announced that President Thomas Pluta will leave the Company and its Board of Directors, effective September 30, 2024.
- Agreed with Alphaledger, a leading provider of blockchain infrastructure for fixed income assets, to jointly develop innovative products leveraging Alphaledger's blockchain technology.
- Invested $10 million as part of $47 million strategic funding round led by BlackRock for Securitize, a leader in tokenizing real-world assets.
- Served as network participant in the launch of Global Synchronizer, the Canton Network's decentralized interoperability infrastructure. The Canton Network is a public-permissioned blockchain network designed with the privacy and controls essential to facilitate the exchange of regulated financial assets.
- Entered into a $159.2 million lease for Tradeweb's new NYC headquarters, expected to commence in mid-2025 with an expected initial lease term of approximately 16 years.
- Launched an enhanced functionality for RFQ trading in U.S. credit markets; “RFQ Edge” deploys Tradeweb's advanced portfolio trading analytics to its RFQ protocol to deliver a more powerful list trading experience for U.S. credit and ETF traders.
- Expanded strategic partnership between Tradeweb and FTSE Russell to produce benchmark closing prices for the U.S. Treasury markets.
- Became the first electronic trading platform to make overnight index swap (OIS) curves available during the repo trade negotiation process, helping institutional clients assess the price competitiveness of different repo rates across different currencies and maturities.
- Awarded two framework agreements to provide Electronic Trading Platforms to the European Central Bank (ECB) and other Eurosystem National Central Banks, after successfully participating in the procurement procedure organized by the ECB.
- Recognized in numerous awards celebrating our company, as well as our outstanding and diverse talent, including: 40 Top Innovators (TabbFORUM); Asset Management Awards - Best Data & Technology Provider and Rising Star in Asset Services (AsianInvestor); Inside Market Data & Inside Reference Data Awards - Most Innovative Market Data Project (WatersTechnology); Women in Finance Asia Awards - Excellence in ETFs - Keri Neo (Markets Media); Markets Choice Awards - Best Company (Markets Media)
CAPITAL MANAGEMENT
- $1.7 billion in cash and cash equivalents and an undrawn $500 million credit facility at June 30, 2024
- $785 million acquisition of ICD is expected to close in the third quarter of 2024, subject to the satisfaction of customary closing conditions and regulatory reviews and the purchase price, subject to customary adjustments, is expected to be funded with cash on hand
- Free cash flow for the trailing twelve months ended June 30, 2024 of $721.7 million, up 13.7% compared to prior year period. See “Non-GAAP Financial Measures“ for additional information
- Cash capital expenditures and capitalized software development in the second quarter 2024 of $16.6 million (excludes amounts paid at closing for acquisitions)
- $239.8 million remained available for repurchase pursuant to the share repurchase program authorization as of June 30, 2024. No shares were repurchased during the second quarter of 2024
- $0.3 million in shares of Class A common stock were withheld in the second quarter of 2024 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 $0.10 per share of Class A common stock and Class B common stock. The dividend will be payable on September 16, 2024 to stockholders of record as of September 3, 2024
OTHER MATTERS
Updated Full-Year 2024 Guidance*
- Adjusted Expenses: $830 - 860 million
- Acquisition and Refinitiv Transaction related depreciation and amortization expense: $158 million
- Assumed non-GAAP tax rate: ~ 24.5% - 25.5%
- Cash capital expenditures and capitalized software development: $77 - 85 million
- LSEG Market Data Contract Revenue: ~$80 million (~$90 million in 2025)
The guidance has been revised to reflect higher expenses and expenditures in light of strong business momentum, the anticipated closing of ICD during the third quarter of 2024 and recently announced management changes. Assumed non-GAAP tax rate and LSEG Market Data Contract Revenue guidance is unchanged from the prior quarter guidance.
*GAAP operating expenses and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement of foreign currency rates. Expense guidance assumes an average 2024 Sterling/US$ foreign exchange rate of 1.24 and includes completed M&A transactions as well as the expected closing of the ICD acquisition in the third quarter of 2024. Guidance amounts for cash capital expenditures and capitalized software development excludes amounts paid at closing for acquisitions.
CONFERENCE CALL
Tradeweb Markets will hold a conference call to discuss second quarter 2024 results starting at 9:30 AM EDT today, July 25, 2024. 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/n8n9p3bv/
- To join the call via phone, please register in advance here: https://register.vevent.com/register/BI10fde228f4fd46c686f35483a283443e. 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 50 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 70 countries. On average, Tradeweb facilitated more than $1.7 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. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||
|
| Three Months Ended |
| Six Months Ended | ||||||||||||
|
| June 30, |
| June 30, | ||||||||||||
|
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
Revenues | (dollars in thousands, except per share amounts) | |||||||||||||||
Transaction fees and commissions |
| $ | 330,475 |
|
| $ | 246,461 |
|
| $ | 665,926 |
|
| $ | 513,059 |
|
Subscription fees |
|
| 50,746 |
|
|
| 45,748 |
|
|
| 100,427 |
|
|
| 90,122 |
|
LSEG market data fees |
|
| 20,581 |
|
|
| 15,461 |
|
|
| 41,081 |
|
|
| 31,055 |
|
Other |
|
| 3,149 |
|
|
| 2,943 |
|
|
| 6,256 |
|
|
| 5,626 |
|
Total revenue |
|
| 404,951 |
|
|
| 310,613 |
|
|
| 813,690 |
|
|
| 639,862 |
|
|
|
|
|
|
|
|
|
| ||||||||
Expenses |
|
|
|
|
|
|
|
| ||||||||
Employee compensation and benefits |
|
| 137,236 |
|
|
| 103,924 |
|
|
| 280,323 |
|
|
| 218,417 |
|
Depreciation and amortization |
|
| 49,936 |
|
|
| 45,887 |
|
|
| 99,273 |
|
|
| 91,291 |
|
Technology and communications |
|
| 24,230 |
|
|
| 18,701 |
|
|
| 45,540 |
|
|
| 36,268 |
|
General and administrative |
|
| 12,755 |
|
|
| 11,072 |
|
|
| 23,609 |
|
|
| 24,992 |
|
Professional fees |
|
| 13,324 |
|
|
| 10,666 |
|
|
| 25,124 |
|
|
| 21,842 |
|
Occupancy |
|
| 4,976 |
|
|
| 4,028 |
|
|
| 9,649 |
|
|
| 8,151 |
|
Total expenses |
|
| 242,457 |
|
|
| 194,278 |
|
|
| 483,518 |
|
|
| 400,961 |
|
Operating income |
|
| 162,494 |
|
|
| 116,335 |
|
|
| 330,172 |
|
|
| 238,901 |
|
Interest income |
|
| 21,511 |
|
|
| 15,576 |
|
|
| 42,571 |
|
|
| 28,516 |
|
Interest expense |
|
| (542 | ) |
|
| (467 | ) |
|
| (2,260 | ) |
|
| (916 | ) |
Other income (loss), net |
|
| — |
|
|
| (456 | ) |
|
| — |
|
|
| (115 | ) |
Income before taxes |
|
| 183,463 |
|
|
| 130,988 |
|
|
| 370,483 |
|
|
| 266,386 |
|
Provision for income taxes |
|
| (47,047 | ) |
|
| (29,049 | ) |
|
| (90,685 | ) |
|
| (62,254 | ) |
Net income |
|
| 136,416 |
|
|
| 101,939 |
|
|
| 279,798 |
|
|
| 204,132 |
|
Less: Net income attributable to non-controlling interests |
|
| 17,177 |
|
|
| 12,857 |
|
|
| 34,417 |
|
|
| 27,194 |
|
Net income attributable to Tradeweb Markets Inc. |
| $ | 119,239 |
|
| $ | 89,082 |
|
| $ | 245,381 |
|
| $ | 176,938 |
|
|
|
|
|
|
|
|
|
| ||||||||
Earnings per share attributable to Tradeweb Markets Inc. Class A and B common stockholders: |
|
|
|
|
|
|
|
| ||||||||
Basic |
| $ | 0.56 |
|
| $ | 0.42 |
|
| $ | 1.15 |
|
| $ | 0.84 |
|
Diluted |
| $ | 0.55 |
|
| $ | 0.42 |
|
| $ | 1.14 |
|
| $ | 0.83 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
| ||||||||
Basic |
|
| 213,162,158 |
|
|
| 211,569,728 |
|
|
| 212,936,015 |
|
|
| 209,847,153 |
|
Diluted |
|
| 214,895,947 |
|
|
| 213,156,753 |
|
|
| 214,778,342 |
|
|
| 211,659,814 |
|
TRADEWEB MARKETS INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) | ||||||||||||||||
|
| Three Months Ended |
| Six Months Ended | ||||||||||||
Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin |
| June 30, |
| June 30, | ||||||||||||
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
| |
|
| (dollars in thousands) | ||||||||||||||
Net income |
| $ | 136,416 |
|
| $ | 101,939 |
|
| $ | 279,798 |
|
| $ | 204,132 |
|
Merger and acquisition transaction and integration costs (1) |
|
| 3,650 |
|
|
| 1,212 |
|
|
| 7,264 |
|
|
| 1,797 |
|
Interest income |
|
| (21,511 | ) |
|
| (15,576 | ) |
|
| (42,571 | ) |
|
| (28,516 | ) |
Interest expense |
|
| 542 |
|
|
| 467 |
|
|
| 2,260 |
|
|
| 916 |
|
Depreciation and amortization |
|
| 49,936 |
|
|
| 45,887 |
|
|
| 99,273 |
|
|
| 91,291 |
|
Stock-based compensation expense (2) |
|
| 531 |
|
|
| 585 |
|
|
| 1,714 |
|
|
| 1,435 |
|
Provision for income taxes |
|
| 47,047 |
|
|
| 29,049 |
|
|
| 90,685 |
|
|
| 62,254 |
|
Foreign exchange (gains) / losses (3) |
|
| (78 | ) |
|
| (964 | ) |
|
| (2,362 | ) |
|
| 1,834 |
|
Tax receivable agreement liability adjustment (4) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other (income) loss, net |
|
| — |
|
|
| 456 |
|
|
| — |
|
|
| 115 |
|
Adjusted EBITDA |
| $ | 216,533 |
|
| $ | 163,055 |
|
| $ | 436,061 |
|
| $ | 335,258 |
|
Less: Depreciation and amortization |
|
| (49,936 | ) |
|
| (45,887 | ) |
|
| (99,273 | ) |
|
| (91,291 | ) |
Add: D&A related to acquisitions and the Refinitiv Transaction (5) |
|
| 34,715 |
|
|
| 31,629 |
|
|
| 69,082 |
|
|
| 63,246 |
|
Adjusted EBIT |
| $ | 201,312 |
|
| $ | 148,797 |
|
| $ | 405,870 |
|
| $ | 307,213 |
|
Net income margin (6) |
|
| 33.7 | % |
|
| 32.8 | % |
|
| 34.4 | % |
|
| 31.9 | % |
Adjusted EBITDA margin (6) |
|
| 53.5 | % |
|
| 52.5 | % |
|
| 53.6 | % |
|
| 52.4 | % |
Adjusted EBIT margin (6) |
|
| 49.7 | % |
|
| 47.9 | % |
|
| 49.9 | % |
|
| 48.0 | % |
(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 six months ended June 30, 2024, this adjustment also includes $0.3 million of non-cash accelerated stock-based compensation expense and related payroll taxes associated with our departing President. |
(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 |
| Six Months Ended | ||||||||||||
Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS |
| June 30, |
| June 30, | ||||||||||||
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
| |
| (dollars in thousands, except per share amounts) | |||||||||||||||
Earnings per diluted share |
| $ | 0.55 |
|
| $ | 0.42 |
|
| $ | 1.14 |
|
| $ | 0.83 |
|
Net income attributable to Tradeweb Markets Inc. |
| $ | 119,239 |
|
| $ | 89,082 |
|
| $ | 245,381 |
|
| $ | 176,938 |
|
Net income attributable to non-controlling interests (1) |
|
| 17,177 |
|
|
| 12,857 |
|
|
| 34,417 |
|
|
| 27,194 |
|
Net income |
|
| 136,416 |
|
|
| 101,939 |
|
|
| 279,798 |
|
|
| 204,132 |
|
Provision for income taxes |
|
| 47,047 |
|
|
| 29,049 |
|
|
| 90,685 |
|
|
| 62,254 |
|
Merger and acquisition transaction and integration costs (2) |
|
| 3,650 |
|
|
| 1,212 |
|
|
| 7,264 |
|
|
| 1,797 |
|
D&A related to acquisitions and the Refinitiv Transaction (3) |
|
| 34,715 |
|
|
| 31,629 |
|
|
| 69,082 |
|
|
| 63,246 |
|
Stock-based compensation expense (4) |
|
| 531 |
|
|
| 585 |
|
|
| 1,714 |
|
|
| 1,435 |
|
Foreign exchange (gains) / losses (5) |
|
| (78 | ) |
|
| (964 | ) |
|
| (2,362 | ) |
|
| 1,834 |
|
Tax receivable agreement liability adjustment (6) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other (income) loss, net |
|
| — |
|
|
| 456 |
|
|
| — |
|
|
| 115 |
|
Adjusted Net Income before income taxes |
|
| 222,281 |
|
|
| 163,906 |
|
|
| 446,181 |
|
|
| 334,813 |
|
Adjusted income taxes (7) |
|
| (55,570 | ) |
|
| (40,157 | ) |
|
| (111,545 | ) |
|
| (82,029 | ) |
Adjusted Net Income |
| $ | 166,711 |
|
| $ | 123,749 |
|
| $ | 334,636 |
|
| $ | 252,784 |
|
Adjusted Diluted EPS (8) |
| $ | 0.70 |
|
| $ | 0.52 |
|
| $ | 1.41 |
|
| $ | 1.07 |
|
(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 six months ended June 30, 2024, this adjustment also includes $0.3 million of non-cash accelerated stock-based compensation expense and related payroll taxes associated with our departing President. |
(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 25.0% applied to Adjusted Net Income before income taxes for the three and six months ended June 30, 2024 and 24.5% for the three and six months ended June 30, 2023. |
(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. |
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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