Tradeweb Markets Inc.

10/28/2021 | Press release | Distributed by Public on 10/28/2021 05:15

Q3 2021 Summary Financial Statements

Select Financial Results QTD

Tradeweb Markets Inc.
Select Financial Results (QTD)
September 30, 2021
(dollars in thousands, except per share amounts) Constant
Currency
3Q21 3Q20 % Change Growth
Total revenue $ 265,325 $ 212,870 24.6 % 23.9 %
Rates $ 139,418 $ 115,766 20.4 % 19.7 %
Credit $ 72,243 $ 50,216 43.9 % 43.2 %
Equities $ 16,457 $ 11,857 38.8 % 37.7 %
Money Markets $ 11,221 $ 10,491 7.0 % 6.4 %
Market Data $ 20,515 $ 18,598 10.3 % 9.2 %
Other $ 5,471 $ 5,942 (7.9) % (7.9) %
Net income $ 65,305 $ 47,048 38.8 %
Net income attributable to Tradeweb Markets Inc. $ 54,763 $ 36,812 48.8 %
Diluted EPS $ 0.26 $ 0.19 36.8 %
Non-GAAP Financial Measures
Adjusted EBITDA $ 132,946 $ 100,913 31.7 % 30.0 %
Adjusted EBITDA margin 50.1 % 47.4 % +270 bps +234 bps
Adjusted EBIT $ 121,079 $ 90,015 34.5 % 32.6 %
Adjusted EBIT margin 45.6 % 42.3 % +335 bps +298 bps
Adjusted Net Income $ 94,160 $ 69,939 34.6 % 32.7 %
Adjusted Diluted EPS $ 0.39 $ 0.30 30.0 % 30.0 %

Income Statement

Tradeweb Markets Inc.
Income Statement
September 30, 2021
(dollars in thousands, except per share amounts)
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Revenues (unaudited) (unaudited) (unaudited) (unaudited)
Transaction fees and commissions $ 206,316 160,175 629,513 503,753
Subscription fees 41,390 36,217 117,141 105,706
Refinitiv market data fees 15,002 14,273 45,045 43,466
Other 2,617 2,205 7,865 6,658
Total revenue 265,325 212,870 799,564 659,583
Expenses
Employee compensation and benefits 98,036 83,967 300,107 263,353
Depreciation and amortization 44,823 38,857 127,656 113,952
Technology and communications 14,747 12,037 42,248 34,397
General and administrative 9,561 8,657 21,809 24,520
Professional fees 8,897 7,388 28,993 20,908
Occupancy 3,733 3,443 11,104 10,678
Total expenses 179,797 154,349 531,917 467,808
Operating income 85,528 58,521 267,647 191,775
Tax receivable agreement liability adjustment - - - -
Net interest income (expense) (361) (349) (1,179) 64
Income before taxes 85,167 58,172 266,468 191,839
Provision for income taxes (19,862) (11,124) (53,365) (39,898)
Net income 65,305 47,048 213,103 151,941
Less: Net income attributable to non-controlling interests 10,542 10,236 35,165 40,705
Net income attributable to Tradeweb Markets Inc. $ 54,763 $ 36,812 $ 177,938 $ 111,236
Earnings per share attributable to Tradeweb Markets Inc. Class A and B common stockholders:
Basic $ 0.27 $ 0.20 $ 0.89 $ 0.63
Diluted $ 0.26 $ 0.19 $ 0.86 $ 0.60
Weighted average shares outstanding
Basic 202,238,122 187,774,170 201,029,196 177,257,994
Diluted 208,197,439 194,955,695 206,908,330 185,026,108

Non GAAP Income Statement

Tradeweb Markets Inc.
Non GAAP Income Statement
September 30, 2021
(dollars in thousands, except per share amounts)
Three Months Ended September 30,
2021 2020
Revenues:
Fixed $ 58,530 $ 51,627
Variable 80,888 64,139
Total Rates 139,418 115,766
Fixed 6,501 5,938
Variable 65,742 44,278
Total Credit 72,243 50,216
Fixed 2,222 2,528
Variable 14,235 9,329
Total Equities 16,457 11,857
Fixed 4,023 4,101
Variable 7,198 6,390
Total Money Markets 11,221 10,491
Refinitiv 15,002 14,273
Other 5,513 4,325
Total Market Data 20,515 18,598
Fixed 5,471 5,942
Variable - -
Total Other Fees 5,471 5,942
Total Fixed Revenues 97,262 88,734
Total Variable Revenues 168,063 124,136
Total revenues 265,325 212,870
Expenses:
Employee compensation and benefits 95,681 82,151
Depreciation and amortization 11,867 10,898
Technology and communications 14,747 12,037
General and administrative 9,420 6,938
Professional fees 8,798 7,388
Occupancy 3,733 3,443
Total Adjusted Expenses 144,246 122,855
Adjusted Operating Income 121,079 90,015
Net interest income (expense) (361) (349)
Adjusted Income before taxes 120,718 89,666
Adjusted Provision for income taxes (26,558) (19,727)
Adjusted Net Income $ 94,160 $ 69,939
Adjusted diluted earnings per share $ 0.39 $ 0.30
Adjusted diluted weighted average shares outstanding 238,729,372 234,468,941
Adjusted EBITDA margin 50.1% 47.4%
Adjusted EBIT margin 45.6% 42.3%
Adjusted EBT margin 45.5% 42.1%
Adjusted Net Income margin 35.5% 32.9%

Adjusted EBITDA

Tradeweb Markets Inc.
Reconciliation of Net Income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBIT and Adjusted EBIT Margin
September 30, 2021
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(dollars in thousands)
Net income $ 65,305 $ 47,048 $ 213,103 $ 151,941
Acquisition transaction costs 459 - 5,186 -
Net interest (income) expense 361 349 1,179 (64)
Depreciation and amortization 44,823 38,857 127,656 113,952
Stock-based compensation expense 1,995 1,816 11,181 10,308
Provision for income taxes 19,862 11,124 53,365 39,898
Foreign exchange (gains)/losses 141 1,719 (4,742) 5,837
Tax receivable agreement liability adjustment - - - -
Adjusted EBITDA $ 132,946 $ 100,913 $ 406,928 $ 321,872
Less: Depreciation and amortization (44,823) (38,857) (127,656) (113,952)
Add: D&A related to acquisitions and the Refinitiv Transaction 32,956 27,959 92,799 81,363
Adjusted EBIT $ 121,079 $ 90,015 $ 372,071 $ 289,283
Adjusted EBITDA margin 50.1 % 47.4 % 50.9 % 48.8 %
Adjusted EBIT margin 45.6 % 42.3 % 46.5 % 43.9 %

Adjusted Diluted EPS

Tradeweb Markets Inc.
Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS
September 30, 2021
(in thousands, except per share amounts)
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Earnings per diluted share $ 0.26 $ 0.19 $ 0.86 $ 0.60
Net income attributable to Tradeweb Markets Inc. $ 54,763 $ 36,812 $ 177,938 $ 111,236
Net income attributable to non-controlling interests 10,542 10,236 35,165 40,705
Net income 65,305 47,048 213,103 151,941
Provision for income taxes 19,862 11,124 53,365 39,898
Acquisition transaction costs 459 - 5,186 -
D&A related to acquisitions and the Refinitiv Transaction 32,956 27,959 92,799 81,363
Stock-based compensation expense 1,995 1,816 11,181 10,308
Foreign exchange (gains)/losses 141 1,719 (4,742) 5,837
Tax receivable agreement liability adjustment - - - -
Adjusted Net Income before income taxes 120,718 89,666 370,892 289,347
Adjusted income taxes (26,558) (19,727) (81,596) (63,656)
Adjusted Net Income $ 94,160 $ 69,939 $ 289,296 $ 225,691
Adjusted Diluted EPS $ 0.39 $ 0.30 $ 1.22 $ 0.97

Wtd Avg Shares Outstanding

Tradeweb Markets Inc.
Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding
September 30, 2021
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Diluted weighted average shares of Class A and Class B common stock outstanding 208,197,439 194,955,695 206,908,330 185,026,108
Assumed exchange of LLC interests for shares of Class A or Class B common stock 30,531,933 39,513,246 30,756,925 48,397,598
Adjusted diluted weighted average shares outstanding 238,729,372 234,468,941 237,665,255 233,423,706
Adjusted Net Income (in thousands) $ 94,160 $ 69,939 $ 289,296 $ 225,691
Adjusted Diluted EPS $ 0.39 $ 0.30 $ 1.22 $ 0.97

Adjusted Expenses

Tradeweb Markets Inc.
Reconciliation of Operating Expenses to Adjusted Expenses
September 30, 2021
(dollars in thousands)
Three Months Ended September 30, Nine Months Ended September 30,
Reconciliation of Operating Expenses to Adjusted Expenses 2021 2020 2021 2020
Operating Expenses $ 179,797 $ 154,349 $ 531,917 $ 467,808
Acquisition transaction costs (459) - (5,186) -
D&A related to acquisitions and the Refinitiv Transaction (32,956) (27,959) (92,799) (81,363)
Stock-based compensation expense (1,995) (1,816) (11,181) (10,308)
Foreign exchange (gains)/losses (141) (1,719) 4,742 (5,837)
Adjusted Expenses $ 144,246 $ 122,855 $ 427,493 $ 370,300

Free Cash Flows

Tradeweb Markets Inc.
Reconciliation of Cash Flows from Operating Activities to Free Cash Flow
September 30, 2021
(dollars in thousands)
Trailing Twelve Months Ended September 30, 2021
Reconciliation of Cash Flows from Operating Activities to Free Cash Flow
Cash flow from operating activities $ 526,072
Less: Capitalization of software development costs (33,995)
Less: Purchases of furniture, equipment and leasehold improvements (14,720)
Free Cash Flow $ 477,357

Basic & Diluted EPS

Tradeweb Markets Inc.
Basic and Diluted EPS Calculations
September 30, 2021
(in thousands, except share and per share amounts)
Three Months Ended September 30, Nine Months Ended September 30,
EPS: Net income attributable to Tradeweb Markets Inc. 2021 2020 2021 2020
Numerator:
Net income attributable to Tradeweb Markets Inc. $ 54,763 $ 36,812 $ 177,938 $ 111,236
Denominator:
Weighted average shares of Class A and Class B common stock outstanding - Basic 202,238,122 187,774,170 201,029,196 177,257,994
Dilutive effect of equity-settled PRSUs 2,146,473 2,584,192 2,000,005 2,371,727
Dilutive effect of options 3,516,893 4,402,391 3,609,906 5,264,106
Dilutive effect of RSUs 295,951 194,942 269,223 132,281
Weighted average shares of Class A and Class B common stock outstanding - Diluted $ 208,197,439 $ 194,955,695 $ 206,908,330 $ 185,026,108
Earnings per share - Basic $ 0.27 $ 0.20 $ 0.89 $ 0.63
Earnings per share - Diluted $ 0.26 $ 0.19 $ 0.86 $ 0.60

Rev by Asset Class QTD

Tradeweb Markets Inc.
Revenue by Asset Class (QTD)
September 30, 2021
(dollars in thousands)
Three Months Ended Three Months Ended
September 30, 2021 September 30, 2020 $ Change % Change
Variable Fixed Variable Fixed Variable Fixed Variable Fixed
Revenues
Rates $ 80,888 $ 58,530 $ 64,139 $ 51,627 $ 16,749 $ 6,903 26.1 % 13.4 %
Credit 65,742 6,501 44,278 5,938 21,464 563 48.5 % 9.5 %
Equities 14,235 2,222 9,329 2,528 4,906 (306) 52.6 % (12.1) %
Money Markets 7,198 4,023 6,390 4,101 808 (78) 12.6 % (1.9) %
Market Data - 20,515 - 18,598 - 1,917 - 10.3 %
Other - 5,471 - 5,942 - (471) - (7.9) %
Total revenue $ 168,063 $ 97,262 $ 124,136 $ 88,734 $ 43,927 $ 8,528 35.4 % 9.6 %

Fees per Million QTD

Tradeweb Markets Inc.
Fees per Million (QTD)
September 30, 2021
Three Months Ended September 30, YoY
2021 2020 % Change
Rates $ 2.15 $ 2.03 5.8%
Cash Rates $ 1.95 $ 1.83 6.5%
Rates Derivatives $ 2.42 $ 2.37 1.9%
Swaps / Swaptions Tenor (greater than 1 year) $ 3.73 $ 3.37 10.9%
Other Rates Derivatives $ 0.20 $ 0.25 (18.4%)
Credit $ 45.67 $ 34.89 30.9%
Cash Credit $ 144.48 $ 127.70 13.1%
Credit Derivatives and U.S. Cash 'EP' $ 6.16 $ 6.02 2.4%
Equities $ 15.20 $ 15.95 (4.7%)
Cash Equities $ 24.37 $ 20.25 20.3%
Equity Derivatives $ 5.23 $ 9.46 (44.7%)
Money Markets (Cash) $ 0.33 $ 0.38 (14.3%)
Total Fees per Million $ 2.70 $ 2.47 9.5%
Total Fees per Million excluding Other Rates Derivatives $ 2.97 $ 2.65 12.2%

Average Daily Volume QTD

Tradeweb Markets Inc.
Average Daily Volume (QTD)
September 30, 2021
2021 Q3 2020 Q3 YoY
Asset Class Product ADV (USD mm) Volume (USD mm) ADV (USD mm) Volume (USD mm) ADV
Rates Cash 337,167 21,632,199 311,033 19,951,302 8.40%
U.S. Government Bonds 124,578 7,972,973 86,956 5,565,202 43.26%
European Government Bonds 28,800 1,900,795 24,317 1,604,918 18.44%
Mortgages 180,033 11,522,093 195,986 12,543,075 -8.14%
Other Government Bonds 3,757 236,337 3,774 238,107 -0.46%
Derivatives 246,981 15,992,323 179,054 11,612,291 37.94%
Swaps/Swaptions ≥ 1Y 154,970 10,039,311 122,341 7,919,286 26.67%
Swaps/Swaptions < 1Y 91,240 5,903,695 56,317 3,667,678 62.01%
Futures 770 49,317 396 25,327 94.69%
Total 584,148 37,624,522 490,087 31,563,593 19.19%
Credit Cash 8,440 543,735 7,036 455,496 19.95%
U.S. High-Grade 4,371 279,755 3,821 244,569 14.39%
U.S. High-Yield 836 53,502 406 25,978 105.95%
European Credit 1,707 112,653 1,270 83,831 34.38%
Municipal Bonds 173 11,056 201 12,851 -13.96%
Chinese Bonds 1,233 78,893 1,277 84,292 -3.48%
Other Credit Bonds 121 7,876 61 3,975 98.33%
Derivatives 13,796 895,891 12,507 813,562 10.31%
Swaps 13,796 895,891 12,507 813,562 10.31%
Total 22,237 1,439,626 19,543 1,269,058 13.78%
Equities Cash 7,551 487,509 5,442 351,468 38.75%
U.S. ETFs 5,421 346,951 3,849 246,367 40.83%
Europe ETFs 2,130 140,558 1,592 105,101 33.74%
Derivatives 6,992 449,243 3,624 233,482 92.93%
Options/Convertibles/Swaps 3,559 229,356 1,188 77,469 199.49%
Futures 3,433 219,886 2,436 156,014 40.94%
Total 14,543 936,752 9,066 584,950 60.41%
Money Markets Cash 343,536 22,138,406 261,590 16,847,205 31.33%
Repurchase Agreements (Repo) 329,374 21,231,648 250,039 16,106,552 31.73%
Other Money Markets 14,162 906,758 11,551 740,653 22.60%
Total 343,536 22,138,406 261,590 16,847,205 31.33%
2021 Q3 2020 Q3 YoY
ADV (USD mm) Volume (USD mm) ADV (USD mm) Volume (USD mm) ADV
Total 964,464 62,139,306 780,286 50,264,805 23.60%