Q2 2024 Tradeweb Markets Inc Earnings Call Transcript
Key Points
- Tradeweb Markets Inc (TW) achieved its best second quarter in history with a 30.4% year-over-year revenue growth.
- The company saw strong client activity and share gains, particularly in rates and credit, which accounted for 61% and 29% of revenue growth, respectively.
- Adjusted EBITDA margins expanded by 98 basis points relative to the second quarter of 2023.
- The acquisition of Yieldbroker and r8fin, along with the upcoming acquisition of ICD, is expected to add corporates as a fourth client channel.
- Tradeweb Markets Inc (TW) continues to innovate with new products and protocols, such as RFQ Edge and portfolio trading, which are gaining traction among clients.
- Despite strong overall performance, equities posted low single-digit revenue growth due to challenging industry volumes in the core ETF business.
- Average fees per million for cash credit decreased by 12% due to a mix shift away from munis and sessions trading.
- Adjusted expenses for the second quarter increased by 25.8% on a reported basis, driven by higher performance-related compensation, headcount, and severance costs.
- The integration of ICD is expected to temporarily push its adjusted EBITDA margin down to 47% to 49% due to initial investments in technology and marketing.
- The CLOB treasury business, acquired from Nasdaq, has not performed as well as expected and requires further investment and strategic focus.
Good morning and welcome to Tradeweb's second-quarter 2024 earnings conference call. As a reminder, today's call is being recorded and will be available for playback. To begin, Iâll turn the call over to Head of Treasury, FP&A & Investor Relations, Ashley Serrao. Please go ahead.
Thank you and good morning. Joining me today for the call are our CEO, Billy Hult, who will review our business results and key growth initiatives; and our CFO. Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing material, non-public information and complying with our disclosure obligations under Regulation FD.
I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements related to, among other things, our guidance and the ICD acquisition are forward
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