Tradeweb Markets (TW) 26 Oct 232023 Q3 Earnings call transcript

Good morning, and welcome to Tradeweb's Third Quarter 2023 Earnings Conference Call.

As a reminder, today's call is being recorded and will be available for playback. To begin, I will turn the call over to Head of Treasury, FP&A and Investor Relations, Ashley Serrao. Please go ahead.

Thank you, and good morning.

the the our and highlights brief update. for who Billy provide today business review will for me call CEO, are Hult, a Joining the quarter

that I'd into who Furber, expectations you material, Sara will nonpublic this statements of and with the statements. review like such, our . We remind complying XXXX. the a in to certain Our to related of presentation website our results. Act of forward-looking who Statements will our financial during information under to Tom things, statements guidance initiatives; and relate and Private to, Pluta, may are little future President, constitute Reform Regulation disclosure disclosing other Securities within deeper meaning forward-looking the intend some and our Q&A as the growth events CFO, means FD. dive Litigation and obligations as among use a

differ could with our may presentation results contained materially in periodic Information earnings forward-looking results statements. forward-looking SEC. is from filed reports actual Actual differ and cause factors statements these that the release, from concerning to

Information is on our these reconciliations and will presentation. today's call, data. non-GAAP measures, earnings in market including certain as non-GAAP presentation. as in and measures our addition, regarding certain earnings and to is Information industry reference GAAP well including market data, sources In measures we regarding release industry

let over Now Billy. call me turn the to

that joining the you history. and of everyone, for Thanks, quarter quarter team thank morning, extremely third revenue in second I generated Ashley. proud earnings Good our our Tradeweb best our call. am

markets. many across gains share our profitable showcase to continued quarter This of

shop not clients We're proposition link building all-weather believe for and clients in variety manage is continuing platform on one-stop immune that by our value environments. the to While we increasingly our add macro an laser-focused our of electronically. we to risk products a enhancing helps also are our backdrop, business

to a double-digit grow, uncertain an revenue continue client macro and Diving risk growth backdrop. return quarter, drove into the which appetite despite to activity third

history currency Specifically million basis EBITDA basis for up the X, constant points year-over-year basis to revenues of XX.X% our $XXX of XX a in reported quarter XXXX. quarter on were by Slide a on relative record and adjusted third and XX.X% expanded margins a any third on

revenue We continue with during of the margin on to and to months point expenses -- we of first first to XXXX, X revenue adjusted balance our annual XX increase translating growth a X of relative basis to an months the X% in growth basis XX.X% XXXX. EBITDA

led and credit way, revenue XX% Turning growth, XX% our to and X. accounting for Slide of the respectively. rates

across growth global revenues European across credit. credit driven our record record corporate investment share including the continued swaps across U.S. by were Specifically, strong grade and our across and and bonds U.S. returning the Similarly, record were business. market credit, in rates quarterly by mortgage electronic business and revenues led government growth high-yield

were growth. its retail a organic produced highest to markets in in a derivatives which X% fell partially ETF industry fueled in deposit revenues quarterly growth ever, growth institutional Equities offset second due decline equity and continued certificate revenue by strong double-digit Money repos. of volumes, revenue franchise by our

APA market by as driven continue which reporting a and strong data well Finally, data enjoy robust to product revenues our proprietary as were third-party growth products, pipeline by revenues.

RFQs new achieved and Slide dig Tom main ETFs our a swaps. interest into by to to revenue U.S. had growing protocol with Starting institutional our areas, daily ever, streaming Revenues record, and and global institutional to turn X quarter provide increasing growth our eclipsing focus Turning Treasuries. a I of over X. rate on U.S. update deeper it brief will credit and volume Treasuries and U.S. industry led record our by adoption year-over-year that its driven and of XX% -- was volume by XX% of average this best across business offering.

The the Treasuries engagement grew high longer-dated strong. indicators business over revenues year-over-year. up XX% We our remains with Bloomberg. XXX% over daily average was business The versus of environment average Automation by continues important leading of continued more an market trades rate institutional treasury U.S. to with U.S. share be to retail achieved year-over-year. trades institutional healthy daily increasing XX% where institutional propel theme record year-over-year. quarterly AiEX than Client

produced growth by wholesale history, our record U.S. quarter business Our best our strong streaming led sessions protocols protocol. volumes across revenue Treasury's across in our its and

up we providers share over While volume has book limit the onboard initial quarters. the faced protocol average quarter-over-quarter deepening market order central team with to wallet and coming expect tough conditions, our in client XX% daily made liquidity progress more

industry Within and ETF tough equities, our a of volatility and equity price overall that rebalance lower minimize backdrop, faced market, market the activity. portfolio but -- dispersion a given business lack outperformed

wealth legacy During our complement added aggregators flagship the the quarter, trading increased beyond we trading, ETFs management demand brand our expand initiatives Other bear notional-based continue retail community. share-based to to and from equity ETF our to franchise to asset managers, for fruit. responding

driven Institutional a across double-digit volumes year-over-year equity up dramatic were convertibles. XX% options strong increase. nearly and derivatives ADR by revenues year-over-year, growth saw also

capitalize client as the ETF growth the just We on not the in across our benefits of ahead, resonate. to remains but our we business. well believe income solutions are continue pipeline story long-term fixed positioned strong Looking electronic equities, to secular

North trading across emerging credit data. performance American market Asian part swaps, growth in products. Revenues business, across Revenue basis market The strong basis. international government by our of XX.X% was bonds, growth and our growing on grew was driven constant which non-U.S. a European XX% is and swaps, to growth. European currency clients another and driven on component year-over-year European a on reported by adoption Moving

markets footprint acquisition, protocols. region. has capital debt excited across with a which of New offering our presence and the forward, Looking broaden client set complements into international expands our of presence deeper Tradeweb, diverse closing the we're and a Yieldbroker to deepens and comprehensive the to existing APAC our Similar business, rate Yieldbroker and our Australian Zealand product product clients

and the ground integration on the hit we'll next technology months. We consolidating be focusing with running the over XX have

the and are local clients significant with time Yieldbroker to spending further employees to we welcome that the stage set Tradeweb collaboration. Additionally, for talented with we

Finally, announced to data their on business. will generates This we our for period more only but to also for data clients X Tradeweb, more later, with today, contract market a not revenue proprietary agreement distribute Sara years. touch significantly Refinitiv, data our flexibility of who will which our provides grow new

trading products. fixed update as additional We'll we that index make trading enhanced pricing, experience partnership inclusion upside more enhance with We broaden we as our we expand FTSE also on announced of products a benchmark initiative see also to and you to Separately, clients. Russell the build income progress. functionality across strategic

I will that, Tom. With to turn it over

Thanks, Billy.

variety clients were continued driven meet in increasing diverse with Honing closer Slide a gains for The by unattractive focus yield to over revenue year-over-year. strong softer credit on execution all by trends on Global that interest all our differentials by to double-digit Turning growth our a client of channel, AIX client of market a Automation set growth and XX% IG by European daily XX% X trades in share industry with at and Credit regardless their revenue U.S. revenue year-over-year XX% was environments. needs dampening credit, respectively. high-yield driven partially X protocols U.S. average across credit, and driven growth surge still providing credit. was munis across across continued Strong channels. client This across offset look of We was and corporate derivatives.

grow share is rising especially resonating wallet have sessions. we This with the our network, leading share our expand portfolio within to strategy dealer and across as respect continue and all-to-all trading to continue RFQ, we footprint to our across we RFQ and accomplished

also and volume traded XXX% up increase ETF market year-over-year. volume with XX% year-over-year our We share continue wallet was engagement up to where over makers, inquiry was and over

Finally, our high IG market second across share we highest achieved both and yield. block

industry to high X%, Our highs. U.S. to yield year-over-year, institutional credit over falling continues grew mixed business trends XX% IG volume new year-over-year. growing institutional scale but our with X% revenues Despite

primary double-digit high pay XX% ADV at IG yield. institutional to off, growing across with continues both and focus RFQ Looking our protocols, underlying growth strong with on growing year-over-year the

year-over-year, Retail ADV as revenues up and buying on U.S. PT. ADV focused low growth rose advisers record financial year-over-year Overall, across digits single by portfolio the In led we credit Treasuries. trading produced remain across were XX% trading. portfolio third quarter, European U.S. IG

record All quarter billion $XXX a with over volume. trade produced in

RFQ Our dealer team all-to-all on broadening in increasing volumes grew the to on over focused be growth offering. XX% year-over-year, our The aided number responses XX% the by network our year-over-year and AllTrade platform. of continues out

and rose over by number In -- year-over-year. and increased XX% quarter, XX% the all-to-all by nearly responses third of responders the

while Our year-over-year year-over-year, ADV produced grew ReMatch XX% growth. sessions XX% over

ahead of We Looking the of our way ahead, our have X a like growth runway area, focus and remains Credit are across positioned we long channels. biggest believe we U.S. client us. we

said innovation. Credit young the focused ripe further our led and the that further team enhancements The long I've product over to market. with market by a is clients share past, work the As growing further innovation electronically, on in remains we term, for as our electronify wallet is

progress local our U.S. in bond quarter after first expansion our we currency trade trade to first and efforts FXall Beyond September, bond currency EM our local continue saw collaboration. steadily. utilized One EM our completed we Credit, Mexican completing trade largest that our portfolio

revenues in volatile Slide Global record the X. environment -- a We quarter. to facing macro produced Moving swaps despite

with August. yield end traded compression quarter XX% swaps. the Despite XX% duration revenues XX.X% headwinds share the Overall, reduction duration as and elevated year-over-year, variable revenues third saw global and in across clients continued curve, U.S. rose record year-over-year. in record and The dollar-denominated shorter from swaps activity, increased materially which quarterly share market activity and lower improved on compression the in of XX% swaps September, to grew

grow automated first of to time the utilization the trading electronic to for expansion of continues adoption of Electronic the products trading. from

During the focused a saw first quarter, we time, electronically swaptions that we the clients for product on are trade electronifying. certain

of their seen across we've usage electronic expand their look protocols banks Additionally, to strategies.

seen increasingly look believe their same. they will expand different is electronically their all look global utilize to Finally, the trend our of but the hedge adoption as forward. clients, to across footprint Electronic across is different moving we've trading We automated trade clients flow swaps. macro funds more

focus is partner expand look Our to footprint. the they clients valued electronic our towards core their as be

across continue a Finally, to make emerging progress protocol. we swaps and growing rapidly market RFM

the increased is of there Our and a EM room levels year-over-year quarter we of XXX% believe revenues over still given swaps third electronification. to grow low lot

especially rise ADV year-over-year over picking saw business. European protocol RFM up, with our XXX% adoption across Our swaps

believe long-term cyclical we believe yield the the opportunity ahead, shape is duration. meaningful. swaps provide with clients the will tailwinds of curve extending the around potential revenue We recent start growth Looking to

to we the and me discuss swaps broader our With there market while less a Sara to than that we the let that, manual XX% more help income And clients' can in grow. digitize remains still markets it do detail. financials workflows believe our electronified, fixed market lot over global turn to with

Tom, good morning. and Thanks,

numbers, prior As to comparisons go unless be . through I all otherwise the will noted. the year period,

third our them Slide derivatives when XX of me with our report, an Among activity -- and reported volume categories Areas trillion, XX volumes strong $X.X Let up equity XX%. begin nearly X. in on U.S. quarter than of that credit, daily monthly average we up product overview include XX% of nearly We swaps, volume more of global year-over-year swaps. XX% bonds, year-over-year short-tenor excluding the growth and growth repos. include produced investment-grade China of We

provides XX summary earnings quarterly performance. a our Slide of

that international volume on currency basis. from other euros. is by XX.X% XX% approximately a We dollars, customers XX% in gross XX.X% in and than derived quarter reported revenues currencies constant revenue basis our third growth of on predominantly denominated increasing recall The of our revenues base translated and approximately into a

total was up streams the variable Treasury major Total Our a our revenues asset -- our X constant X.X% The on and protocols. revenues XX%. and by and were increased X.X% and revenues trading growth new revenues fixed increased Rates related driven on XX% dealers mortgage pools reported a to classes fixed specified CLOB currency of our addition platform basis. across by by U.S.

reported X%. The it periodic Credit growth start the And year tied our increases, third XX as for a revenues to currency disclosed a on of fixed enhancements reminder, technology trading the and dealer we basis quarter. revenues by on was EBITDA basis basis revenue which -- price the margin fluctuates line were of As instituted constant driven reflects from this XX.X% a points retail XXXX. at clients. fee Year-to-date, performed full other basis floor previously by increased up adjusted XX points the

XX Slide for Moving key on of to highlight the fees on million the quarter. per and a trends

a decreased regarding per can a credit due Slide cash mix million of equities quarter. earnings You shift presentation and X% per rates XX million additional fee fees blended in per cash performance see the million. Overall, away for our and our primarily detail to year-over-year, this decrease cash fee from

due fees fee were For continued positive per U.S. Treasuries. Treasuries X%, in also channel. up million per million cash rate fee primarily by higher a the mix U.S. our were products, retail aided towards per pickup shift to million

swaps, fees EM, XX% an compression and protocol. a by million to was primarily RFM due duration in growth European partially long-tenor XX%, swaps trades. For year-over-year per were decline down offset our This increase and in in

credit, For per a mix fees European credit from million X% by munis, million. per average decreased partially an due to in shift offset cash away fee increase

Recall And money million in million decreased fees towards U.S. a reduction a million by XX% away EU increase mix ETFs and a and charge per from an by CDs, offset For repos. shift per fee mix European U.S. to cash equities, higher traded. X%, a given shift finally, fees fee partially the notional due million average per shift in ETF traded. U.S., in per per away not share driven increased within value by for average notional markets, mix we from share per

details currency and our in grow of third expense performance-related XX.X% our philosophy here. basis Slide base a a allows At and reported There has on invest change adjusted variable costs quarter Adjusted XX.X% in growth scalability the our and continue basis. increased due head a constant to margins. and high expenses increases to count been expenses. for to for compensation. nature increased X.X% the Compensation on level, us no XX

higher to Technology and and data due communicated strategy primarily and fees previously our increased in data investments costs communication infrastructure.

XQ to resulted versus movements million in fees. Adjusted increased Unfavorable loss 'XX a costs fees in $X.X $X.X decreased due and general in to in a unfavorable a X.X%, and in decrease mainly in Professional legal consulting XQ administrative million gain due FX. FX 'XX. movements

in return and the XX% Slide with $X.X guidance. capital reached position nearly and On trailing in cash equivalents. Free capital cash XX we up XX policy, months, for our million management cash quarter $XXX details billion our position flow ended third approximately and cash strong a the year-over-year.

a As hand. we with acquisition yield our broker on funded reminder, cash

to This year-over-year. Fed interest capitalized combination the yields. of of Year-to-date, balances cash. non-acquisition capitalized more increased and and Non-acquisition for net development higher interest to income was million cash primarily of driven efficient recent of CapEx the X% and driven our $XX.X due a hikes management primarily Our by investment $XX.X up timing with software increase the is our was quarter development spend. due and software million, CapEx

$XXX.X share earnings, from planned B the per a of Class stock-based leaving declared With future spent Class our this program, Board And quarter's offset approximately quarterly under the deployment. for which dividend dilution opportunistic $X.X repurchases the buyback million stock. share and $X.XX we included at and compensation approximately common A quarter of million end plans, of finally, to

Turning to guidance items.

acquisition development and range now from $XXX expenses capitalized now are to $XX CapEx adjusted We acquisition. D&A, million software transaction-related $XX expect is million to pushdown the be to adjust to to XXXX our and the the $XXX million accounting, $XXX we the out Yieldbroker. with increase acquisition. be Refinitiv including increase to with Yieldbroker million, which Yieldbroker due due to associated We expected tightening now An million about due to

XX% For use to non-GAAP the we year. purposes, tax an rate between continue for XX% of and forecasting assumed

under agreement respectively. and generated new million Refinitiv the and be with approximately to $XX revenues And we expect million, XXXX finally, XXXX master data $XX

I'll for remarks. to Now concluding it back turn Bill

ever-changing and to of trading are Thanks, seeking solutions volatility. Sara. and navigate periods constantly In market market landscape, today's financial stress efficient participants reliable

did clients environment, problem to to with sit provide saw in first challenging inefficiencies solve the workflows. the teams their current our with While this year half down more real-time it opportunity a macro of

improvement, the the reliable to road that collaboration delivers continue -- of innovation. flexibility for that pain address a recipe We proven to ahead. points their clients product combination performance excited about to continually be the creates a I close product with perpetual to enhance and

of remains days global theme equity we to in repos. seeing couple a revenue rate our October, is tend of We With high our up -- be a revenue left interest as XXXX. diversity growth mid- corporate bonds, swaps, days, relative are global growth strong volume The overall strongest credit, to global government and to month-end October which teens across growth derivatives important trading

lower is high-yield September Our is September levels. higher IG share than share than while levels,

record for for Ashley turn will I would thanking volumes like business at remarks questions. Tradeweb. that, our their contributed With to to by conclude I for my and I the thank my best our that partnership their it quarter colleagues third back in clients and to your to and want quarterly quarter. efforts revenues

a.m. [Operator can our Billy. now XX:XX Instructions] Q&A question. you Thanks, take at Operator, first Time. will end Eastern

Thank question comes from Instructions] with . much. of Craig very And [Operator you America. Siegenthaler our Bank first

to results bond we driving X back, that at been need which all currently year a market has impressive in the But this more we're your and I still market, even dealers tightening side. we think layoffs I When step expense take a makes today. buy think remember and of bear

So with your and has AiEX have what seeing been volumes And especially we're or trading pushback no-touch recently? the up less but base? across you there bonds, on fewer like been low-touch also, interested price and client [indiscernible] more in people

our been are our core collaboration in know very ways, kind banks. completely we our to of biggest question what with sort clients the coming clients real approach really how of would and for and lot I from. start well, and of And has you're Craig, years where as XX hearing for like thanks I much is biggest this you think a listen biggest the

to in collaboration and that ever. So right, a some has to of as big we we real-time partners of has describe would you're lot a a been kind And been recently, rough have And been question some of what and of as like forever theme roads headlines. for there central are bank our your the validity who it. company sort that's

roads actually et of side, would the banks, of sort at My markets roughest market the robust kind a been as if DCM way the and really instinct M&A cetera. And in capital of side, activity on actually, pretty the look like overall interestingly, global it's what has those side, capital is describe we biggest of from the you sort significant of sort healthy. the been the

question, concept more without less. do to this point one. That your always little from is being a with is bit a their said, of pressure And good a there perspective, of,

And from perspective, so I most the cheapest most way. becomes important like question with my and can bank the a how clients connect efficient in

instinct trades is for high-touch Our And theme less that has more from year. this plays migration well us aspect to to doing this like very obviously. low-touch a trades, for of kind central us, with been

like the AiEX putting bear on year-over-year XX% our the kind So this like where strong, numbers So intensity. Craig, across out board, numbers AiEX been flat have over we're our numbers. up, think, I interestingly, we're for year right? exceptionally like of out

On adoption believe Strong U.S., cross credit side, from were the and XX%. the in perspective high I average globally AiEX XX% it's like like XXs. low rate up daily an Europe, trades a like in

this headed. their most connecting markets most their important in That's I and allowing how one-way to we're role make through electronically. important is around it And clients train clients just large with the efficiently. are banks biggest, this most important So described -- really where dealers like like a think as plays to I've effect. algorithms

the the headline to quarter electronification. market the around last at talked alternative Citadel with Citadel straightforward rise continue little companies this like makers leading like a how and enter there's of marketplace, still We think around I around bit

to our trend continue think with and that's like one-way good partner I we with, think obviously, collaborate business. we a is for and that,

the of those again company, a to Are And picking up deliver adept most we've the always client end And fact. the day, you of we've you important conversation right? the banks? think the beginning. things our Are at out fees very are the excelled ways we're, figuring very, perspective, there, fee And is that. think I market you creating value? share? base all from I to The from the concept of navigated as pretty At

way. are perspective. going about is most So to and feel that listening for the we banks a and in where relationship fee with collaborating good we're from we feel an the having conversations lot always good And thanks the lead about overall we And important a question. with where

Thank you, Billy.

Benjamin with Budish Our next Barclays. question comes from

like wanted to XX%. investor similar of overall the electronic ask treasury saw of electronification, of estimates level looks from thinking October high has kind penetration bit gone DXC from prior question, specifically about sort little your the a market up on business. I kind a around I presentation, it

key going thoughts on sort your go what are how after And of kind level? that achievable getting what opportunity? there? market? the market the And far But the of are DXD to are How longer-term to relative that can you hurdles

asked a it Yes, super good question as I theme bit of question, Ben. when actually a excellent is similar of describing kind And an was little Craig that well.

focus client increasing electronification the question, If like way the of back which you list very interesting. in is the of I trade Sara Tom of without the major perspective, at Treasury when, and from the way which of first in side, would kind right what the kind office my about on top company, our be, and the priorities market, spoke is heard was dealer the particularly the of kind on we and of market the talked

kind that your look market To that's there, of XX% to from to need going. we where where bring That's from go, is market. this, take That XX% where is higher question, XX% up be start of take the and obviously think has the mortgage also right? is will we're treasury zone. levels this also wholesale would electronified on that I XX% which and of market at in the my TBA to can sort to around zone. in electronification where with perspective, should a side. the go I which go,

complex entering lot still that trades And reason into right? our is, up it get and the perspective to of kind as phone. a all, of trades, sort about done we about broken is XXXX, doing on AiEX why what like think more That's around the And begins I've a clients it's beginning the little A lot that of from do XXXX, down. pick that we're typically there the still address talked the why larger of phone as larger of trades kind in right? are of we're bit trades getting really concept of XXXX,

so government And roll aspects General is, we're focused about Do with terms like strong. forward momentum instinct of you trades little push protocols we'll get in Craig's dealing remain electronifying, how bit like pull around super if back how AiEX micro the are the clients. kind like of bond this conversation, to and things Absolutely. again, like group you roll is market trades, on the right? we of of really really that the larger to think our have a out we're to continuing to

are it's protocols, bit treasury I'm And making the I those of highly on Tom, so like mortgage sure from a than - as about different to get forgotten company perspective, a right? know, we I up, gig. you grew little highly market like like happy focused we guys of all engaged a more know. and

give add? on you if that, So want a perspective little happy to to Tom,

Yes.

described it well. Billy think I

after. that areas are I think going at you specific yet we're treasuries be some and to the electronified look if of that

larger the like trades. multi-leg tips strips. it's always, As deep It's and trades off-the-runs rates illiquid products. and And securities size across it's

time. -- plans constantly continue think push these over that we will treasury and the of trades. to clients have popular very that's think trade futures a electronically, our versus encouraging for each grow that We with do swaps, to cash further size areas swap versus blocks, the asset and we're in example, little for we threshold and So

XX% treasury Billy XX% that's are executed been AiEX mentioned treasury it's rapidly. now tickets XX% to our AiEX, about U.S. and by our That's growing of of volumes.

small clients large algorithmically them we've trades via So down executing seen into increasingly, and AiEX. pieces and break more take

lot ways that. there's So a of attack to

[indiscernible] and continuing securities market have off-the-run liquid On Treasury solutions, deep have that's like things that these dealers spreads do execute solutions and for U.S. working make we to to feel will sweep the algorithmic product their electronically. to trades, grow. offset more And trades it we risk, very swap are cash efficiently basis the allows the that we that and like ways we cross efficient on wholesale on

at grow So all these you confident we that I the think we look trading. if electronic are share of will of taken to efforts together, continue DXC

question, your for Ben. Thanks

That thorough. was . very

Okay.

Our Bond Rosenblatt comes Securities. next with from Andrew question

discussions a the you with the give and of from you operating integrate? your recent thinking across revenue can -- recent profile maybe about Tradeweb terms space. close the months given bit cash acquisitions as picture, transaction, up position some run and to guidance picked margin And and of in in strength growth? Yieldbroker us bigger rate M&A dealmaking of a augment how increasing further flow, are you organic And

XX% obviously, acquisition. are question. sense months the for million we're those you that It's Andrew, of don't $X.X Yieldbroker, year-over-year. it's it, from our with really To approximately a hear owned Sara. On and Yieldbroker, the pleased nice to were for you. revenues Why I start about Thanks with we've that? give up

as acquisition, the is which rate about we're a excited post things about albeit margins, Yieldbroker margin. integration already post would of be it, our a just So that we can business I that XX accretive think of lasts run is And one the corporate XX% how technology expect say has begun, overall give a for we transaction. to sense small the operating our you is. The about period, think to months. about we

your color enough gives terms modeling. of just you in that hopefully, So

scale levels. increased. of quarter I opportunistic. be we've our mentioned versus and Billy of M&A, The about call, the M&A has earnings last on company can like positioning We terms the question broader and been this your think think On focus in historical increasing the we bandwidth our

ability and really well. think at I doesn't double-digit mean remain increased, we also do as the confident time to ability our that drive our multiple growth same aren't we confident in So as has organic to things

The capital allocation about remain waterfall that we always talk the same.

first, So talking on the then repo our sheet. and dividends obviously balance when you're and cash inorganic share then about organic,

as we strategic about is, which and of can think framework. really think helpful But we it We franchise, I that X embedded be think ways. to is think about we question about financial things and your about in one framework think how M&A the our in priorities

strategic a from to perspective, starts always with, So our it win. is it right

Tradeweb add We're ways we're portfolio focused where base a base. client we acquiring. things to there and are revenue that lots value can on diversifying great our and has of

great And think the the added Yieldbroker. road with add we new back relationships corporates client new we it funds. and think macro that to you history, whether You are just as hedge retail I growing that's wholesale even or further the or us still in things enter saw client systematic saw that client that forward, way places banks channel channel deepening like look regional channels a and the in down even going with so add and like segments, be acquisitions

increasing classes space asset futures. rate We're also a our always or regions. for the TAM, franchise. treasury or on new obviously focused or where we like We're products have like We looking looking -- adjacent strong we

our we're businesses. at that across broad accelerates market time a really and that technology very new then And we to on leverage lastly, looking can of focused portfolio

the financial leverage obviously, sure to lot they'd opportunities are I the market revenue ways of and that our enhance growth operating accretive can We're on CFO, where there. inorganic strategically, increase medium then think of being probably always making focused term. a over and those or be And focused discipline are So come both there priorities on they framework.

probably. that. think Billy count I can on So can you And

Sara, You're on, -- spot and on. spot

are one with network of about way the Yieldbroker, are pension jazzed pretty the the gets we things Yieldbroker of where talking market the we as that superannuation really globally network of about our and specifically client us quite kind ability concept, always excited into the about footprint described. and to funds. everybody client in you And knows, is obviously, that As they exact the fifth fund acquisition. which, largest has this about cross-sell us the that talk

all correct make So you points. the

much the very Thanks question. for

Thanks, Andrew.

Piper Moley comes with Our from next . Sandler. question Patrick

of is I potential know getting SEC spoken to But I the just had about one on for clearing issuing regulation. past. seems it in like you've treasuries. a final And maybe this closer cash rule

updated thoughts is the see on on your What expect an markets And get you of more have on and just the something broadly. maybe year? the do then we this impact business here to Tradeweb's think this. update before hoping was I you just end the treasury to So probability

very a timely yes, and Patrick, question.

Clearing expansion and priority SEC remains Fed. as as of the Treasury well a Treasury U.S. the U.S. York the for top Central New So the

FICC, So be November released it in in still not it chance Treasury that to gets the need is out is happening. the connected of the is to rule a coming. will Risk implementation the have on type do like changes participants house, of Conference, be a X to Annual operationally. the updated, X be updated, There to and XX have rule the ruling released expect U.S. complexity final of X to to models next before to which and that. waterfalls systems default new months. lot funds, clearing this management weeks. It's We be to things

maybe get would repo maybe first. hedge get in don't say, by a X about clients it about talking and But years. be getting differences years, client think of The staged Others how be PTFs it of of phase-in like will of to later. start period. that focus opinions this regardless significant of there to clearing this they'll sort all coming. on is it but be think go will in industry some X form, SEC precise U.S. to the clearing potentially funds staged, to types will then that. and Others So done it type, done getting the treasury There years other is " stages. let's take are of try "Hey, to The may number done X a think

grow. will about the for trades confident how easier should credit and without the should Tradeweb, As and protocol this continue adopted when all to to it impacts question reasons, that house, submit checks us. anonymous be like the settlement as things e-trading directionally cleared that, pretty obvious a risk rule we're encouraged being to trades for lot be increase to more far clearing positive centrally with

when did the dollar So we market to clearing. and moved this -- central observe swap

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of the really And very be the we've bunch regulatory quickly like rate the would the we navigating historian, our in thing at good of a the becoming a I'll Tradeweb interest global are add swap center risk job done only really that business. obviously just markets wins big frontline in and

implemented to around that and a beneficial something how question. ultimately strong straightforward good brings the consistently we've us involved a into regulation been marketplace significant really the regulation ability plays gets again, be something ultimately had feel how around will makes around expertise Tom again our And issues voice these us in. that to the has out, we like have that so this be thanks want for that outcome for And and

Yes. color. That's . great

Yes. .

question Daniel Jefferies. comes Fannon from Our with next

an just hoping was you given suite uncertain your these Can macro of would but discuss your love some product high-level what the Feels perspective. to get I ideal Billy, growth? highest the backdrop. lot trends, perspective to October be -- like a see would is the environment showing for

a best. And of question but it's -- a question. for like pretty do Dan, but like actually perfectly, it's kind sort known to I'm nonanswers, I'll Yes, that tough of my that's answer good not

We're products channels. and client globally in different XX X

affected part business businesses our that always obvious to are be out to an and outlook. different that's by trying environment, the So best ultimately a like environment what because kind of these point, figure can is sort different of make of differently

the overall I an I curve which XX% upward our an the of positive perspective, trade all, which would concept Dan, is longer of clients which the on just is think yield First in sloping right? obviously seen to our end curve, of the say, time, increases your to business, duration, leads of general, question, from for

and of our has normal direction perspective, would thing around like market say would market around I describe something of market us, kind like beneficial volatility, what cadence normal I a and thing is the sort that like been that Second the normal to of becomes healthy right? of as but is perfectly to exactly market having from something just difficult volatility, also debate say almost that spurs what

this the crisis things. so bit take risk the make bank pandemic to when earlier talked And or and of to be off. the system describing to a and little regional shocks tend we back can forth in like as dysfunction there market the point, the kind around And of about obvious year, happened an clients I'm setbacks be

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with is what terms our And in so we're I off control region. And of you. BOJ business, to of that taken play outcomes seeing third healthy that the in very But curve that right? a dynamic has for sort of the out describe would yield kind would be that

is But without question, really from environment. our perspective, a this good

And into #X And the that time, business world the my in always of of so the sort electronic perspective, very environment what always me always priority continued market in. of the aware aware businesses from at like are in. you like company. all same of then this migration these consciously phone around remains picking well share this from But of hear we up are we

of So an that thank . balance. interesting you. question it's and an it's And excellent kind you asked

. Thanks Great.

Kyle next which with question. Voigt from by stand our Please for KBW. is

to extreme spiking follow-up of So last -- their of years a We've and the over few of kind since we've with had levels lot maybe October back just in move index end ball with and question. highest pockets long respect the pandemic with the banking hitting the crisis,and now Dan's rates 'XX a seen higher.

if I don't you more the swaps provide October really you what mid- teens the you're business the volumes. total on comment if market. company bit interest curious whether could seeing seeing just can seeing high I terms you're of in there that of rate obviously kind swaps in a know on above we're the specifically? on color was set you to for strong

there's for creating better just of then strong any also really alongside whether if volumes deleveraging demand on could or And evidence hedging? you comment just simply whether this is these

Great. Kyle. Yes.

had during the definitely the we've that one regional in volatility So tightening move last had to about the seen this with during in $XXX of currently, been we've banking And most have years the it's hit, spikes, this think, have XXX the Fed over million. But index X XXX including we've moved year VAW range current I when levels consistent aggressive cycle. big crisis XXX. the what of time of sort March this

our large are hedging on desks current business. been consistent highlighted the more their some large and activity we levels So We're bank volatility that delivered prudent have practices -- for as healthy hedging. seeing feel focused of regional banks, management, are swaps the trading do trading risk they're obviously, very in doing

The an dispersion is be there's start anymore, going hikes extended other wide going the whether on inflation, they whether forward thing, whether of they're views think, path positive very Fed or hold on cutting the will to I soon around still a period.

views will So that, that to comes of activity data a point different because as react of and continue have high there people of levels think I lot out. every

as fund really seen well hedge on far the on very we it. I rates community trends. We those the think -- of question has As the haven't done been extended -- and in higher the steepening move The deleveraging, curve. this about They've

healthy there's a So activity still of all from segments. various amount client our

good steepening think staggering. I had the curve on steepening of And over the point a months. is the massive curve and pretty We've disinversion last a your one. X

points about this X months against a basis If just look XXX that's from broad moved over measure, X say, very treasuries, in X-year XXX morning. XX-year negative you at curve to

is duration positive seeing for we're that course, curve, for curve us of steeper trades the which, of extension as allowing the of is out So well.

X deliver last comments significant the we've X.X% shift. big to environments, the those add environments. income now as back significant of through Billy's had of -- continuing to from years, Tradeweb range The I growth, volatility, COVID X.X% the We've The revenue significant to make period, is to volume So through on other point bank and is question cutting macro rates X Fed up wide in had curve surged. inflation would over yield only growth from last QE and QT. really is to failures been general We've But all a growth. that and

got the products asset a XX that's said, world around think various as classes I the Billy channels. So in testament client we've across to, and

over benefit a to So key going diversification and I through us over see macro I we're think remains that strength forward. for and the cycles continuing think differentiating

first to be, focus, that business, the going be on going and like to Like at the this very it. is to concept going it's focus working back we're concept about -- question us keep we really the done, And as treasury the dealer first to still of the the is of keeps energized that client and company thing it's the client a are. kind of like dealer being XXXX XX% business as XX% of electronic, as

strongly of live focus going these clients. that breathe forward we is do. our in we upside That's through collaboration what that kind And we you. all thank terms our to so important feel that continue electronify of that the so described and markets be in we of most going And to with about

comes question from Goldman with next Sachs.. Alexander Our Blostein

continue swaps. over course last the the look, pretty building to on global to upside based October as maybe And volumes quarter. CEF the this surprise and looks the the of on data, around well. awesome obviously question So just

noise that, highlighted So given in you've cetera, volumes is obviously, there's compression et the LIBOR in volatility the a bit of a that past. but quite part of transition, been

and but I talking sort environment? transitory clients is sort of it's the been versus protocols, of trends recent sort expansion more the volume know expansion of dissect with you that and what could help So difficult, things frame about you've of of

So and could us fee that per seeing look extension million of question, in help related, but would per it fee of frame and know when sort then today as any we out? are to comes way extent helpful. to duration separate I And framework that swap what a million, that kind we help market to the be

hear Sure. Great from and question great you, to Alex.

the in flows lot. a activity, of So compression business, course and ebbs around normal moves and

you're all We far right, transition, of That's a we all kind peak been on continue might XX. thought completed June have was activity. that But increases. from LIBOR As done. of as that which see the to

the risk with is some books, and large led macro manage compressions the on on hedge significant put we've very that doing onboarded and that's as What a of happens been amount risk what through risk compression clients the the recently, books with seen then through they have Generally, old to we've trading off compression. uptick. trades us funds

greater For swaps. say, than risk XXX% greater growth example, and in activity in the X-year third saw ADV year-over-year ADV versus, compression quarter, X-year we in trading XX% than

definitely So elevated. very

significant as leads it Sara. more compression So I volumes. in to that an trading generally, on on would it, paid guess less pass I'll describe obviously a guess, But FM. to the but increase it what get is The negative the more I impact to is impact obviously FPM Yes, good. for good. business we offset is I

was I think, it Tom, put. well

is fee really of terms which an a million, metric, per output. obviously in it's complicated think I

It fluctuates revenue a obviously growth. We on focused on quarterly are basis.

. try I'll more a So color. give to little you bit

than million, X greater fee even volatile. the plus year swaps, per third was swap quarter So X-year relatively through so

and and it October So had a million. it on compression August, activity negative elevated has And in in higher, we obviously, we in decrease followed a is in But saw remaining rebound activity then lows a is compression September. per September. which in impact fee

and positive we duration incredibly like of of would and and trading, That said, of been duration trading the October, in signs curve. per there's longer things factor on the million also more fee particularly is an be on end seeing important volatility the that duration risk increasing are

Tom said, focused of want So our we see clients on overall, trading revenues, fee as we're and impacted overall remains like strong. And which per our on to those million things. platform, by obviously, both

little was how other a call the And for, we specifically protocol right? we of Europe, request for And micro we right? to while breathe marketplace, and with with that's as European market, engage the one on trade Tom community, a a launched your the in fund kind you as live and marketplace. word these, for or what really macro the which ability like head client describe know, that ago Alex, understanding mentioned swaps, so side of trading with So code we a protocols, like clients

habit really up compression picking things wound trade. is activity. to sort of share of from how the that themselves We market but that then style clients, describing onboarded and feed Tom on protocol, some up clients there. And the launching that led those which was and those of the importantly, as from

company. as ability this that focus create trading a constant we mimic intense So that an is of sort to workflow really protocols real have

Kramm UBS next . comes from Our call Alex with

missed your around, new All asked to for paraphrasing about I've good. data don't opportunities. why the interested here, anybody And I'm there unless but second. but in your I has it, don't we particularly I'm a more proprietary pursue go commentary agreement, freedom think

And kind maybe any have idea in in past? able greatest do? about initiatives what you're not So would than of now remind you Refinitiv? can what you thing you us today to you you the the now just more have that's easier things think can had through And place pursue, TAM be the maybe if that obviously, those [indiscernible] you for

it. we get asked question, prepared preparation No that We than like more we so might for were XSara. thinking have of one pages is X

question. this take a So great is you

pleased Yes. deal. new really Look, Thank about data the you. we're

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only really importantly, of our new data a the line with so not that third-party to grow line And but our is lot cases, flexibility. ability grow use

through the So which can is prices, example also think closing of to are our we came will out, going monetize perfect own. do some out on of yesterday came some announcement a we selling do that where and which I it FTSE that Refinitiv

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in with is is But I'd just of excess line, we're obviously, growing add one focus third-party other Refinitiv which point, away our this. from add pleased the want which is data primary growing that well client is multiples I And don't of of outcomes. in anything. our mind how know if value to to monetize you execution we better digits deliver it. in double

Stand by next we have Citi. with for our question. And Allen Chris

credit. Maybe one on just

is highest share You What keys across are both currently? share to block there? that the the second and noted Any color kind hybrid of where yield. gaining more high on market

maker opportunities And current also just material kind penetrate and the to how business on they your market deeper? curious side, to are ETF any of

early across in the Chris, of achieve still as yes, block relatively our penetrating far as second trading block terms it's market, IG the high and we quarter. efforts, in third yield credit our block highest the but did share

Our by really that's it's as for block now portfolio protocol efforts well really suited market. after are a right going led trading the

gets to that's So dealer efficiently most also we're to clients, on to continuing big and can the -- also And size inventories ways focus as deliver where access done.

quite to focused we're to forward. So on we continue do and expect that, grow going

grow will that build X to penetration really in And solutions does overall, across put to continue volumes. I us think strong all channels a our client those position

market clearly, very come, continue On the ETF maker to income. strong side, in the and healthy very trend the is ETFs growth years and ETF, will fixed and in for particularly

with the we we cash and the question. ETF continue it's market. seen today, of XX% but growing ETF see our do grow sector to forward. market around the that be a grow. for interaction seen of to us we've I thanks We've believe credit for continuing And grow, XX%, that So makers market and share will going our think volumes

comes Worthington JPMorgan. next our question And Kenneth with from

CLOB to I Treasury business. wanted ask about the

share prepared competition the come fierce you mentioned And remarks. in providers go? new on, to that currently? is would Tradeweb's the as where market expect You I guess liquidity where

the on price? factors driving share? are competition, they other then with leading are And there fierce Or

you was I run think CLOB the more then, markets? off guess, dominant Treasury in on-the-run lastly, the NFI, And sort I in how do the versus competing see Tom, of the off-the-run

get we earlier center the migration so -- the Ken, year. data did this through

existing lot As more There's ones. of begin April take been narrow against you That time. bottom since focused has that positive, involved, clients trying priorities to does with share lot in think boarding balancing our feedback and all competitors. we have other firms. We been has of process calibrating client and of and the see know, technology coding to the did potential continually But with a team in the larger to and grow on a do then. on we gap these rise the our

business actives huge streaming In part the Run to business, significantly. which Treasury addition, other our continues it our wholesale on as of our we the U.S. call is -- grow protocol,

integrate allows So us those clients. of opportunities to provide And X liquidity give -- different combination protocols the increasingly, offerings to the these we clients we're to to wholesale actives alternatives our great X to market. try access

So as far as it's factors I that. think share, driving

a at it's as what providing and at looking just focused across the opposed business on. I else, something CLOB we're complete looking or at think solution the active looking streams or to that's

off-the-run, But platform the on-the-run offering thanks As Ken. the far time being. versus as on-the-run our for question, an the question is for

Morgan from Our Cyprys next with Michael question comes Stanley.

the on game new question a and Basel capital proposal. bank III Just the requirements,

the in proposal for competitive with marketplaces where which just the activity opportunity thoughts to areas the might And electronic of benefit slated terms of operate see any move Tradeweb proposal you might to towards for how sort how volumes, And you curious liquidity, more Just most markets? impacting set you? the for potential impact the be landscape. potentially on

you. great to hear Michael, from

I is sort which out. So the capital think continues process about banks, on what yet think the the of and Essentially, the more about in end -- is implementing game Basel Dodd-Frank the and of came we've that it it's rules seen of since additional these the GFC finalizing charges we rules how prospect trend III

grow continue because can't So of markets. banks line these certainly income markets to what harder for that the they're and debt is, committed it's and in continued with to loads. growing unfortunately, fixed in means sheets, to deficits growth I their balance think grow

gaps. in already. to The probably other makers the So this will market emergence continue allows the the to them calling is nontraditional the continuing in But these what makers, fill as market systematic far continued are PTFs, huge market come because that factors market stop we market of I to think makers these in grow grow. of structure types and and as algorithmic should there for

oriented, of These they of quant-oriented. types trade data technology they're most heavily dealers, lead they business electronically. with and the they're

this development electronic the lead trends and grow, to these continue to to should continue should this share higher So grow the of market velocity. and

of to question banks tightening. we are belt going to line direct a in there's first concept go the and that And back what question the through very about got the that

in the the can of reality things. more completely exact electronic question, zone previous in in to and moving so the correlate market the the same Tom X One a we're that different And was question. off-to-on mentioned the wholesale We space. into concept space

company. themes. And question, winds for you of getting very a sheet we thing as bank I I describe would as And electronification of up worked These the process this bank company then reason intense inventories of the asked other would this is out. balance and massive us are a in that why levels say, that have credit focus inventories the focus for as on

comes Brian Bedell last And of question from with the DB. morning our

I be angle on color appreciate call, another guys My are on you so regulatory. on one all great of lot answers that will A the just Great. the giving.

Just potential between treasuries and scrutiny on view trading cash regulatory basis well. as this futures and on

on Just any of merits significant, I the portion guess have strategy that the within sense cash a your and viewpoint of volumes is? your treasury of

Brian. Sure.

highly runs hedge happening what's when market, is it. sell segments the they cheapened been they exists trade in not regulators during trade, trade has a cash funds . But overall, articles against healthy are had in, unwind growing a of size up the are little and markets. about, focused bit because they XXXX They've again, that off futures the we it's couple -- initial particularly, caused disruption up that that the cheapen these to written there's that come yes, a and value significantly futures and there's been growing. very obviously, So some the of of and to talking that think the basis buy that the the this, I on of about sponsored, will are a in treasuries point COVID there been where will perhaps the big shock

with is more really the So market. line because the other corrects inefficiencies the it to does cost lowers it it it's what keeping derivatives the of in in in and market borrowing U.S. treasuries Treasury

So to I market. think it's efficiency actually bringing efficiency. It's a relative value It trade. the brings

yes. shock, yes, unwinds have very for big And and But think things you it's market, the if overall, was like good the there another for that, I U.S. good very and government. it's

for CEO the session. Billy concludes it like now to question-and-answer this back I to remarks. Tradeweb And of Hult, turn would closing

Thank you this joining morning. much all very us for

very to obviously, free great you team. a much If questions, reach questions. Ashley, have please, for Sameer thanks any excellent have follow-up and day, out and feel Everyone, the our to

does This our session. conclude

now disconnect. may You