01—Abstract
Summary
Summary of the 10-Q filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.
Tradeweb Markets Inc. reported first-quarter 2024 total revenue of $408.7 milliona, up from $329.2 million a year earlier, with operating income of $167.7 million versus $122.6 million and net income attributable to Tradeweb Markets Inc. of $126.1 million versus $87.9 million.
Diluted EPS was $0.59b compared with $0.42. Transaction fees and commissions rose to $335.5 million from $266.6 million, driven mainly by rates derivatives and U.S. and European corporate and government bonds. Adjusted EBITDA was $219.5 million, a 53.7% margin, and Adjusted Diluted EPS was $0.71 versus $0.54.
Cash flow from operations fell to $37.9 millionc from $70.8 million, reflecting increased cash used for deposits with clearing organizations. Free Cash Flow was $20.6 million versus $54.1 million. Cash and cash equivalents declined to $1.54 billion from $1.71 billion, and the company had no outstanding borrowings under its $500.0 million revolving credit facility.
The r8fin acquisition closed in January 2024 for $125.9 milliond in total consideration. A pending acquisition of ICD Intermediate Holdco 1, LLC (Institutional Cash Distributors) was agreed on April 5, 2024 for $785 million in cash, expected to close in the second half of 2024 and to be funded with cash on hand. The filing also notes a $0.10 per share quarterly dividend declared April 25, 2024, and a $676.1 million receivable and $646.6 million payable tied to U.S. Treasury failed settlements, all of which settled in April 2024.
02—Key points
Key Highlights
- Total revenue of $408.7 million, up 24.1% from $329.2 million in Q1 2023, with constant currency revenue growth of 23.8%.
- Operating income rose to $167.7 million from $122.6 million, and net income attributable to Tradeweb Markets Inc. was $126.1 million versus $87.9 million.
- Diluted EPS of $0.59 versus $0.42; Adjusted Diluted EPS of $0.71 versus $0.54.
- Adjusted EBITDA of $219.5 million with a 53.7% margin, up from 52.3%; Adjusted EBIT margin of 50.0%.
- Average daily volume across asset classes was $1.90 trillion, up 39.1% from $1.37 trillion, led by rates products (ADV up 44.7%).
- Operating cash flow fell to $37.9 million from $70.8 million, and Free Cash Flow was $20.6 million versus $54.1 million, mainly due to deposits with clearing organizations.
- Pending ICD acquisition for $785 million in cash, expected to close in the second half of 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 25, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $408.74M$329.25M | +24.1% |
| Operating Expenses | $241.06M$206.68M | +16.6% |
| Operating Income | $167.68M$122.57M | +36.8% |
| Interest Expense | $1.72M$449K | +282.6% |
| Net Income | $126.14M$87.86M | +43.6% |
| EPS (Basic) | $0.59$0.42 | +40.5% |
| EPS (Diluted) | $0.59$0.42 | +40.5% |
| Shares Outstanding (Basic) | 212.71M208.11M | +2.2% |
| Shares Outstanding (Diluted) | 214.66M210.14M | +2.1% |
05—Questions
Frequently Asked Questions
What drove the revenue increase in the first quarter of 2024?
Transaction fees and commissions increased $68.9 million to $335.5 million, primarily due to higher revenues from rate derivatives products, U.S. and European corporate bonds, and U.S. and European government bonds. Subscription fees also rose to $70.2 million, including $20.5 million of LSEG market data fees.
Why did operating cash flow decline year over year?
Net cash provided by operating activities was $37.9 million versus $70.8 million, a decrease of $32.9 million, primarily driven by increased cash used to fund deposits with clearing organizations, partially offset by higher net income and other working capital changes.
What is the status of the ICD acquisition?
On April 5, 2024, TWM LLC agreed to acquire ICD Intermediate Holdco 1, LLC for $785 million in cash, subject to customary adjustments. The acquisition is expected to close in the second half of 2024, subject to closing conditions and regulatory reviews, and will be funded with cash and cash equivalents on hand.
What is the company's capital return activity?
The company paid $21.3 million in dividends during the quarter, and declared a $0.10 per share dividend for the second quarter of 2024 on April 25, 2024. No shares were repurchased under the 2022 Share Repurchase Program during the quarter, leaving $239.8 million available for repurchase.
How much debt does the company carry?
As of March 31, 2024, the company had no outstanding indebtedness. Its $500.0 million unsecured revolving credit facility, which matures on November 21, 2028, had no borrowings outstanding, only $0.5 million in letters of credit.
06—Continue