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01/11 10:28
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates strong financial performance with record revenues, growth in emerging markets, and significant contributions from digital assets. The Q&A session reveals optimism about electronification trends, tokenization, and strategic investments, although management's vague responses on market volumes pose a slight concern. Overall, the company's positive revenue growth, strategic focus, and potential catalysts suggest a favorable stock price movement, likely in the positive range of 2% to 8% over the next two weeks.
Quarterly Revenue $509 million, up 13% year-over-year on a reported basis and 11% on a constant currency basis. Growth driven by strong client activity, international revenue scaling higher (25% year-over-year growth), and strategic initiatives in EM and APAC.
Adjusted EBITDA Margin 54.2% year-to-date, increased by 90 basis points compared to 2024 full-year margins. Expansion attributed to balancing growth investments and profitability.
Rates Revenue Year-to-date revenues up 23% year-over-year. Growth driven by organic growth across swaps, global government bonds, and mortgages. Majority of global rates products still trade over phone or chat, presenting significant electronification opportunities.
Equities Revenue Up 17% year-over-year, led by growth in global ETFs and equity derivatives. AiEX automation solution contributed significantly with average daily trades increasing over 90% year-over-year in European ETFs and 70% quarter-over-quarter in U.S. ETFs.
Global Swaps Revenue Record revenues with over 30% year-over-year growth. Growth driven by strong client engagement, favorable mix shift towards risk trading, and a 7% year-over-year increase in weighted average duration. European swaps revenues rose nearly 30% year-over-year.
Global Credit Revenue Low single-digit growth driven by strong double-digit growth in European credit and municipal bonds. U.S. credit revenues fell year-over-year, mainly due to retail corporate credit revenues down nearly 30% year-over-year.
International Revenue Up more than 30% year-over-year. Over half of overall revenue growth is from outside the U.S., with significant contributions from Asia and Europe. Emerging markets revenue pacing at over $100 million annually, nearly triple 2023 levels.
Money Markets Revenue Growth led by the addition of ICD and record quarterly revenues across global repos. ICD revenues were up 7% relative to the second quarter of 2025.
Other Revenues Grew over 50%, driven by contributions from emerging digital asset initiatives and $2.3 million earned from work with the Canton Network.
Digital Asset Initiatives: Other revenues grew over 50% due to contributions from emerging digital asset initiatives.
AiEX Automation Solution: Strong adoption across U.S. ETFs with AiEX average daily trades up 70% quarter-over-quarter.
Electronic Swaption Package Trading Protocol: Launched the first fully electronic swaption package trading protocol, enhancing transparency and efficiency.
International Revenue Growth: International revenues grew 25% year-over-year, driven by strategic initiatives in EM and APAC.
Emerging Markets Initiative: Annual revenue from emerging markets is pacing at over $100 million, nearly triple from 2023.
Saudi Arabia Bond Trading System: Launched the first electronic bond alternative trading system in Saudi Arabia.
Revenue Growth: Achieved $509 million in quarterly revenues, up 13% year-over-year.
Adjusted EBITDA Margins: Expanded by 54 basis points relative to Q3 2024.
Fee Adjustments: Introduced minimum fee floors and subscription fees for certain dealers.
Market Data Agreement Renewal: Renewed LSEG market data agreement for 3 years, increasing value by 9% annually.
Voice to Electronic Trading Shift: Continued shift from voice to electronic trading, with 30% of the cleared swaps market electronified.
Global Dealer Algorithmic Execution: Expanded dealer algorithmic execution capabilities, with more global dealer algos to be onboarded.
Low volatility and limited data: The market is experiencing unusually low volatility and limited fresh data, which are near-term headwinds for the company and the broader market. This environment makes it difficult for clients to position effectively, impacting trading volumes and revenues.
Shift towards voice-centric trading: The rise of voice activity in tandem with electronic trading is creating a mix shift that has weighed on U.S. Treasury market share. This trend is driven by extreme market conditions and low volatility, which favor more complex voice-centric package trades.
Decline in U.S. Treasury revenues: U.S. Treasury revenues decreased by 2% year-over-year due to weaker wholesale trends, which thrive in heightened volatility. This decline was partially offset by growth in institutional channels.
Challenges in U.S. credit market: Revenues in U.S. credit fell year-over-year, mainly due to a 30% decline in retail corporate credit revenues. This was driven by better relative yields in money markets and municipal bonds, leading to a shift away from retail credit.
Compression in European swaps: Total market share in swaps declined due to a significant reduction in European client-related compression volumes, which carry much lower fee rates. This has impacted overall revenue growth in the swaps segment.
Operational cost pressures: Increased expenses in technology, communications, and occupancy are putting pressure on margins. Investments in platform infrastructure, AI, and data are driving double-digit growth in technology and communication expenses.
Regulatory and geopolitical uncertainties: Geopolitical uncertainty and shifting regulatory frameworks are reshaping the market environment, posing challenges to strategic execution and client engagement.
Dependence on international markets: Over half of revenue growth is coming from international markets, which exposes the company to foreign exchange risks and regional economic uncertainties.
Emerging market challenges: While emerging markets are growing, they still face challenges such as geographic dispersion, pricing opacity, and operational inefficiencies, which have traditionally made voice trading the default.
Revenue Growth: 2025 revenue growth is trending approximately 9% higher relative to October 2024, despite low volatility and fewer data points. International revenue growth is nearly 20% year-over-year for October.
Market Data Agreement: The LSEG market data agreement has been renewed for three years, with a 9% annual increase in value effective November 1, 2025. This is expected to generate significant additional revenue.
Adjusted Expense Guidance: 2025 adjusted expense guidance has been tightened to $1 billion to $1.025 billion. Investments in technology, AI, and data infrastructure will continue, with double-digit growth in technology and communications expenses expected through 2026.
Adjusted EBITDA Margin: 2025 adjusted EBITDA margin is expected to exceed 2024 levels, though expansion will be more modest due to ongoing investments.
Global Swaps Market: The long-term growth potential for swaps remains significant, with only 30% of the cleared swaps market currently electronified. New initiatives, such as the first fully electronic swaption package trading protocol, are expected to drive growth.
Emerging Markets Revenue: Emerging markets revenue is pacing at over $100 million annually, nearly triple the 2023 level, with a total addressable market exceeding $1.5 billion.
Global Rates Revenue: Year-to-date revenues for Global Rates are up 23% year-over-year, with an estimated revenue TAM of nearly $500 million annually from new initiatives in voice-centric markets.
U.S. Credit Growth: U.S. credit remains a key growth initiative, with RFQ share expected to be the #1 driver of revenue growth going forward.
Technology Investments: Continued investments in platform infrastructure, AI, and data are planned, with a focus on enhancing trading efficiency and client experience.
Quarterly Dividend: The Board declared a quarterly dividend of $0.12 per Class A and Class B shares, up 20% year-over-year.
The earnings call summary indicates strong financial performance with record revenues, growth in emerging markets, and significant contributions from digital assets. The Q&A session reveals optimism about electronification trends, tokenization, and strategic investments, although management's vague responses on market volumes pose a slight concern. Overall, the company's positive revenue growth, strategic focus, and potential catalysts suggest a favorable stock price movement, likely in the positive range of 2% to 8% over the next two weeks.
The earnings call summary highlights strong financial performance with record revenue growth and market share gains, as well as positive client engagement and expansion plans. The Q&A section indicates analysts' positive sentiment towards new fees and cross-selling strategies, with management addressing concerns about volatility and regulatory impacts. Although some management responses were unclear, the overall outlook remains optimistic with a focus on innovation and growth. Considering the positive financial performance and strategic initiatives, the stock price is likely to experience a positive movement in the short term.
Tradeweb Markets Inc. reported record-high revenue growth, strong EBITDA margins, and increased dividends, indicating a robust financial performance. The company's strategic acquisitions and market share gains further support a positive outlook. While some uncertainties were noted in the Q&A, such as competition from Citadel, the overall sentiment remains optimistic due to strong client engagement and favorable market conditions. The positive dividend increase and strong revenue growth in emerging markets and global swaps contribute to a positive sentiment, likely resulting in a positive stock price movement over the next two weeks.
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