Tradeweb Markets (TW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 30.4% year-over-year to $405 million, driven by strong client activity, share gains, and growth in rates and credit asset classes.

• Net income increased 33.8% to $136.4 million, with adjusted EBITDA up 32.8% to $216.5 million and margin at 53.5%.

• Completed r8fin acquisition in January 2024; announced $785 million ICD acquisition, expected to close in Q3 2024, expanding client channels.

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

• Continued focus on technology, innovation, and expanding multi-asset trading capabilities, including investments in blockchain and digital assets.

Financial highlights

• Q2 2024 revenue: $404.95 million (+30.4%); six-month revenue: $814 million (+27.2%).

• Adjusted EBITDA margin expanded to 53.6% year-to-date, up from 52.4% in 6M23.

• Diluted EPS was $0.55; adjusted diluted EPS was $0.70, both up over 34% year-over-year.

• Free cash flow for the trailing twelve months was $721.7 million, with $1.72 billion in cash and equivalents at quarter-end.

• Net income for 6M24 was $279.8 million, with adjusted net income of $334.6 million.

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.

• Guidance reflects higher expenses due to business momentum, ICD acquisition, and management changes.