01—Abstract
Summary
Summary of the 10-K/A filed March 4, 2020. Cited figures are marked; the original filing is the authoritative source.
Tradeweb Markets Inc. (Nasdaq: TW) filed this Amendment on Form 10-K/A for fiscal 2019, which amends and restates the Annual Report originally filed on February 21, 2020.
The amendment states that the Original Report was inadvertently filed in lieu of the final version because of a clerical error. Corrections include an omitted IDC Matter paragraph, conformed total assets and total equity figures in Selected Financial Data, an omitted Credit Risk subsection, right-of-use asset and capitalized software corrections, and corrections to deferred tax benefit and uncertain tax position amounts. Disclosures continue to speak as of the Original Report date.
For 2019, gross revenue was $775.6 milliona, up 13.3% from the combined 2018 total of $684.4 million. Net income was $173.0 million, Adjusted EBITDA was $353.2 million with a 45.5% margin, and Adjusted Net Income was $230.9 million. Average daily volume was $725.4 billion, up from $548.2 billion.
Cash flow from operations was $311.0 millionb and Free Cash Flow was $266.5 million. Cash and cash equivalents were $460.7 million at year end, and the company had no borrowings under its $500.0 million revolving credit facility. The filing highlights concentration and control risks.
The Refinitiv Owners control about 77.1% of combined voting power, and the company is a controlled company under Nasdaq rules. The pending LSEG Transaction, an all-share acquisition of Refinitiv for a total enterprise value of approximately $27 billionc, is expected to close in the second half of 2020. The IDC litigation seeks approximately $80 million in damages, and the Tax Receivable Agreement liability was $240.8 million at year end.
02—Key points
Key Highlights
- Gross revenue rose 13.3% to $775.6 million in 2019, driven by higher transaction fees ($423.6 million, up 14.2%) and commissions ($149.4 million, up 32.6%).
- Adjusted EBITDA was $353.2 million with a 45.5% margin; net income was $173.0 million.
- Average daily volume reached $725.4 billion in 2019 versus $548.2 billion in 2018, with Rates ADV of $489.6 billion.
- Cash flow from operations was $311.0 million and Free Cash Flow was $266.5 million; year-end cash was $460.7 million with no revolver borrowings.
- Refinitiv Owners hold about 77.1% of combined voting power, and the company relies on the controlled company exemptions under Nasdaq rules.
- The pending LSEG Transaction (all-share, total enterprise value about $27 billion) is expected to close in the second half of 2020.
- The IDC litigation seeks about $80 million in damages, with trial scheduled for October 2020 on surviving tort claims; the Tax Receivable Agreement liability was $240.8 million.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-K/AFY2019filed March 4, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $775.57M— | — |
| Operating Expenses | $585.75M— | — |
| Operating Income | $189.82M— | — |
| Net Income | $83.77M— | — |
| EPS (Basic) | $0.57— | — |
| EPS (Diluted) | $0.54— | — |
| Shares Outstanding (Basic) | 148.01M— | — |
| Shares Outstanding (Diluted) | 156.54M— | — |
05—Questions
Frequently Asked Questions
Why was this amended 10-K filed?
The company states that a clerical error caused the Original Report, filed February 21, 2020, to be filed in place of the final version. The amendment corrects several items, including an omitted IDC Matter paragraph, conformed total assets and total equity figures, an omitted Credit Risk subsection, and corrections to notes on right-of-use assets, capitalized software, and income taxes.
How did Tradeweb perform financially in 2019?
Gross revenue was $775.6 million, up 13.3% from the combined 2018 total of $684.4 million. Net income was $173.0 million, and Adjusted EBITDA was $353.2 million with a 45.5% margin. Net income attributable to Tradeweb Markets Inc. was $83.8 million.
What is the status of the LSEG Transaction?
London Stock Exchange Group plc agreed in August 2019 to acquire the Refinitiv business in an all-share transaction with a total enterprise value of approximately $27 billion. The filing says the transaction is expected to close in the second half of 2020 and that Tradeweb is expected to remain a standalone public company.
What litigation risks does the company disclose?
The IDC matter alleges breach of contract and misrepresentation with claimed damages of about $80 million; the court rejected that damages theory for the breach of contract claim, and trial on surviving tort claims is set for October 2020. The filing also describes Treasuries and Interest Rate Swaps antitrust litigation, and the company says it intends to vigorously defend these matters.
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