Tradeweb Markets (TW) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenues of $405 million, up 30.4% year-over-year, driven by strong client activity, share gains, and a risk-on environment.

• Net income attributable to the company increased 33.9% to $119.24 million, with diluted EPS of $0.55 and adjusted diluted EPS of $0.70, both up over 34% year-over-year.

• Closed acquisitions of Yieldbroker and r8fin; announced agreement to acquire ICD for $785 million, expected to close in Q3 2024, expanding corporates as a fourth client channel.

• Continued focus on technology, innovation, and expanding multi-asset trading capabilities, including investments in blockchain and partnerships with Securitize and Alphaledger.

• Average daily volume (ADV) reached $1.9 trillion, up 48.3% year-over-year, with records in U.S. government bonds, high yield credit, and global repos.

Financial highlights

• Q2 2024 revenue: $404.95 million (+30.4% year-over-year); six-month revenue: $813.69 million (+27.2%).

• Adjusted EBITDA was $216.5 million, up 32.8% year-over-year, with a margin of 53.5% (up from 52.5%).

• Free cash flow for the trailing twelve months was $721.7 million; cash and equivalents at $1.72 billion as of June 30, 2024.

• Net interest income rose to $21 million, supported by higher cash balances and yields.

• Adjusted diluted EPS for 6M24 was $1.41, a 31.8% increase from $1.07 in 6M23.

Outlook and guidance

• 2024 adjusted expense guidance raised to $830–$860 million, mainly due to ICD inclusion and business momentum.

• ICD expected to contribute ~$40 million in revenue over the next five months post-close, with initial adjusted EBITDA margin of 47–49%.

• CapEx and capitalized software development expected at $77–$85 million for 2024.

• 2024 adjusted EBITDA margin expansion expected to slightly exceed 2023 levels.

• LSEG Market Data Contract Revenue guidance at ~$80 million for 2024 and ~$90 million for 2025.