01—Abstract
Summary
Summary of the 8-K filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.
Tradeweb Markets Inc. (Nasdaq: TW) filed this Form 8-K on April 25, 2024 to furnish its press release (Exhibit 99.1) announcing financial results for the quarter ended March 31, 2024.
Revenue was $408.7 milliona, up 24.1% (23.8% on a constant currency basis) from the prior year period. Average daily volume (ADV) reached a record $1.9 trillion, up 39.1%, and the company reported a record 17.6% share of fully electronic U.S. High Grade TRACE. Net income was $143.4 million (up 40.3%) and diluted EPS was $0.59, compared with $0.42 a year earlier.
Adjusted EBITDA was $219.5 millionb, with a 53.7% adjusted EBITDA margin, and adjusted diluted EPS was $0.71. The company completed its acquisition of r8fin in January 2024 and agreed in April 2024 to acquire Institutional Cash Distributors (ICD) for $785 million, expected to close in the second half of 2024 and funded with cash on hand. The filing also notes $1.5 billion in cash and cash equivalents and an undrawn $500 million credit facility at March 31, 2024.
The Board declared a quarterly dividend of $0.10c per share. Updated full-year 2024 guidance includes Adjusted Expenses of $755 to $805 million (trending toward the top end of the range), a non-GAAP tax rate of approximately 24.5% to 25.5%, and LSEG market data contract revenue of approximately $80 million (approximately $90 million in 2025).
02—Key points
Key Highlights
- Total revenue of $408.7 million, up 24.1% year over year, with rates revenue of $214.1 million (up 25.6%) and credit revenue of $115.8 million (up 30.1%).
- Record average daily volume of $1.9 trillion, up 39.1%, with multiple asset-class ADV records set during the quarter.
- Net income of $143.4 million (up 40.3%) and diluted EPS of $0.59, versus $0.42 in the prior year period.
- Adjusted EBITDA of $219.5 million with a 53.7% margin, compared with $172.2 million and 52.3% a year earlier.
- Agreement to acquire Institutional Cash Distributors (ICD) for $785 million, subject to customary adjustments and closing conditions, expected to close in the second half of 2024.
- Full-year 2024 Adjusted Expenses guidance of $755 to $805 million, trending toward the top end of the range.
- Quarterly cash dividend of $0.10 per share declared, payable June 17, 2024 to holders of record as of June 3, 2024.
03—Questions
Frequently Asked Questions
What drove the increase in Tradeweb's first-quarter 2024 revenue?
Revenue rose 24.1% to $408.7 million. The filing attributes growth to rates revenue (up 25.6%), credit revenue (up 30.1%), money markets (up 13.4%), and market data (up 29.4%), the latter driven primarily by increased LSEG market data fees from a contract amended effective November 1, 2023. Equities revenue rose 3.2%, and Other revenue fell 5.4%.
What is the ICD acquisition and how will it be paid for?
Tradeweb signed a definitive agreement to acquire Institutional Cash Distributors (ICD), an institutional investment technology provider for corporate treasury organizations, for $785 million, subject to customary adjustments. The filing says the deal will add Corporates as a fourth client channel alongside Institutional, Wholesale and Retail. The purchase price is expected to be funded with cash on hand, and closing is expected in the second half of 2024, subject to customary conditions and regulatory reviews.
How much cash and liquidity did Tradeweb have at quarter end?
At March 31, 2024, the company reported $1.5 billion in cash and cash equivalents and an undrawn $500 million credit facility. It also had $239.8 million remaining under its share repurchase authorization, and it repurchased no shares during the first quarter of 2024.
What did Tradeweb's guidance for 2024 include?
Updated full-year 2024 guidance includes Adjusted Expenses of $755 to $805 million, trending toward the top end of the range; acquisition and Refinitiv Transaction related depreciation and amortization of $142 million; an assumed non-GAAP tax rate of approximately 24.5% to 25.5%; cash costs of non-acquisition capital expenditures and capitalized software development of $75 to $83 million; and LSEG market data contract revenue of approximately $80 million (approximately $90 million in 2025). The company stated it does not provide GAAP operating expense or tax rate guidance.
04—Continue